New Arab brokerage company to brave the ASE

The new public shareholding company will be based in Amman and will offer financial services in the Jordanian stock market, and beyond. But with the Amman Stock Exchange suffering the same downturn as the other bourses in the region, Al Mal will be hoping that a rally is just around the corner.

Partners and mergers

Al Mal Securities is the result of a merger between two Jordanian brokerage operations, Aman Securities and Osool Securities, and the purchasing of a strategic stake in the new entity by Dubai based investment company Al Mal Capital. Al Mal Securities will have a capital of $85 million and is intended to be one of four key strands in Al Mal Capital's developing brokerage operations.

Only a few days prior to the announcement of the Jordanian brokerage operation, Al Mal Securities in Dubai received the necessary approval to act as a brokerage in the main UAE markets; meanwhile, the Saudi Arabian Capital Market Authority has this week handed Al Mal Securities Saudi a brokerage licence. A further application, to the Dubai International Financial Exchange, is still pending.

Jordan and beyond

Naser Nabulsi, the Executive Chairman of Al Mal Capital, who says his company has bought a 33 per cent stake in the new venture, sees Al Mal Securities Jordan as one of the largest brokerage companies in the Levant and views the new operation, not only as an avenue to the Jordanian market, but as a springboard to regional ones such as Lebanon, Syria, Palestine and Iraq.

Earlier this year, Al Mal Capital enjoyed a rich seam of success in the Jordanian market, acting as the lead manager and book runner for the international tranche of real estate development company Tameer's share placement. Well over 150,000 Jordanian nationals and foreign investors bought into the IPO and the floatation was oversubscribed by 15 times.

The IPO raised an impressive $1bn for the 25 per cent stake in the company and foreign investors contributed 70 per cent of the funds, in what is the single largest capital raising event in Jordanian market history.

Market concerns

But, perhaps encouraged by the success of the Tameer IPO, Nabulsi's eagerness for a slice of the action in Jordan has not been dampened by the depressed state of the Amman Stock Exchange and other bourses in the region, telling reporters, "The correction in the markets had to happen. Far too many companies were over-valued, but we believe growth will come during the next 12 months and nobody went bankrupt, despite the downturn. We anticipate good returns."

Nevertheless, the slump in the markets must be a current concern, with the ASE slumping to below 6,300 points and hitting year long lows during the past week; indeed, the index has shed 22.5 per cent, or $6.1 billion, in value since the turn of the year.

Al Mal Capital's own inaugural UAE Equity Fund is finding the UAE markets a little hard going and, by the end of May, had declined by almost 4 per cent since its inception in early April, although it is still faring much better than the benchmark index.

But Al Mal Securities Jordan might be able to take some encouragement from figures released this week by Naser Nabulsi's former employers, Merrill Lynch. Its annual look at the number of global millionaires reveals that the net worth of the world's 8.7 million millionaires will increase by $11 trillion over the next four years, with $0.6 trillion of that generated in the Middle East region.

It would seem that, aside from the positive impact such liquidity will surely have on the local equity markets, investment companies and financial brokerage firms will have a healthy number of high net worth individuals to attract.