- Fourth Quarter Profits Increase By 190% to AED 107.2 Million Compared to the Same Quarter Last Year
- FY2006 Revenues Decline By 8.4% and Profits Decline By 27% from the Previous Year. Growth in Profits of 198% over the Past Five Years
- Return on Shareholders Equity Is 19% in FY2006 Despite Adverse Conditions in the Equity Markets Throughout the GCC during the Same Period
- Revenue Contribution By Main Business Lines Were 14% from Investment Banking, 11% from Brokerage, 9% from Asset Management, 56% from Associate Companies and Principal Trading and 10% Other
- Shuaa Capital Financial Year Ends in March of Each Year in Accordance with UAE Regulatory Requirements for Financial Institutions Other Than Commercial Banks
FINANCIAL & BUSINESS HIGHLIGHTS
- Revenues in FY2006 of AED 459 million compared to AED 501 million in FY2005, a decrease of 8.4%.
- Cost is AED 85 million in FY2006 compared to AED 61 million in FY2005, an increase of 39% primarily due to a rise in head count across businesses.
- Net profit in 4Q 2006 of AED 107.2 million ($29 million).
- Net profit for 12 months 2006 of AED 262 million ($71million) compared to AED 362 million ($98 million) in FY2005.
- SHUAA obtains approval from Central Bank of Qatar to raise its stake in Amwal to 47%. Amwal is the leading investment bank in Qatar.
- SHUAA was granted approval from the Capital Market Authority in Saudi Arabia for a full fledged investment banking license in the Kingdom to act as principal and as agent, provide management services, custody and investment advisory services.
- SHUAA has increased its equity stake in Emirates Securities to 95%, a leading brokerage company in the UAE.
- SHUAA sells its stake of 35% in Oman National Investment Holding (ONICH) to Dubai Financial, a subsidiary of Dubai Holdings.
- Headcount is up by 30% this year from 147 to 192.
The companys 12 months results ended 31 March 2007 witnessed an increase in revenues generated from its associate companies and from investment banking fees. There was also improved performance in income from trading investments. Income from asset management and brokerage were in line with budget for the year and reflect a return to normal levels of trading volumes and much lower performance fees after three years of strong gains in the GCC and Arab equity markets.
SHUAA Capital's Chairman, Mr. Majid Saif Al Ghurair, stated that SHUAA has done very well considering the market conditions in 2006. The year was marked by a long term strategic push into regional markets that aim to solidify SHUAAs position as the leading investment banking institution dedicated to the GCC markets.
Mr. Iyad Duwaji, Chief Executive Officer, said: While unprecedented negative performance in regional markets grabbed attention in 2006, the underlying fundamental story underpinning the growth in demand for financial services is still strong, and we have been hard at work expanding our geographic cover and increasing our market share in the face of many new players who entered the market last year.
SHUAA has been very active during FY2006, having completed three acquisitions in the GCC, and divested out of two. In addition, it completed AED 3.7 billion of investment banking mandates, introduced our first Shariah flagship Islamic fund, Arab Islamic Gateway Fund, as well as managing a number of funds on behalf of institutional clients and landed several new mandates within the investment management and portfolio management; while its brokerage was one of the top three in the UAE. Additionally, SHUAA Capital participated in two exciting opportunities that aim to create a partnership for the future and create access to the Indian market. Namely, it invested in a stake of 20% in Baer Capital Partners, a DIFC based entity with a broad mandate in investment management and private client businesses in India and GCC; and, also bought into Edelweiss Capital, a leading investment bank based in Mumbai in India.
SHUAA was recently granted a license from the Capital Market Authority in Saudi Arabia, the single largest market in the GCC, to operate as a full fledge investment banking institution. SHUAA is partnering with four prominent Saudi shareholders, Sara Trade Holding Company, Ibrahim A. Abunayyan and Bros., Al Mutlaq Group and Al Faisaliah Group Holding Company.
Commenting on the financial results, Mr. Kerim Mitri, Chief Operating Officer, said: Our performance for the year reflects a broader contribution from the growth of our new businesses. The surge in fees from investment banking advisory and syndicate mandates as well as revenues generated from associate companies resulted in a strong performance in the fourth quarter and for the year. By the same measure, our administrative and employee expenses also surged as a result of the expansion into the region and the growth of the underlying businesses. We have made significant effort in building up our human resources and developing the skills and training of our employees, in addition to investing in technology to support our strategy and business plan.
Mr. Mitri added, In the case of our asset management business, the primary markets of focus have been trading around the flat line for most of the second half of 2006, resulting in a decline in performance fees generated by this business. However, our assets under management grew as a result of many new institutional investors that are now eager to enter these markets due to the attractive valuations of the blue chips and the recent reforms introduced in the GCC markets. Overall, client assets under management surged during the second half of 2006 to reach AED 6.5 billion.
-Ends-
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Dana Budeiri SHUAA Capital Dubai,
UAE
Tel: +971 4 319 9712
e-mail:dbudeiri@shuaacapital.com
SAHARA Group PR Department
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Press Release 2007
