GBCM has a paid-up capital of RO 6 million
MUSCAT -- The Sultanate's biggest brokerage firm Gulf Investment Services (GIS) yesterday announced the formation of a joint venture brokerage and investment services firm with Germany's Baader Wertpapierhandelbank (Baader Bank). "Gulf Baader Capital Markets (the newly formed company) will have a paid-up capital of RO 6 million. The new company bought the entire business and licences from GIS," Pradeep Asrani, Managing Director of Gulf Baader Capital Markets (GBCM) told reporters.
The tie-up will allow both institutions to expand the horizon of their activities and offer services on a global scale. GBCM, which commenced operation on January 1, 2008, provides a wide range of investment services, including brokerage, corporate finance advisory, asset management and access to global markets for its Omani clients.
Addressing a press conference here, Dr Hatem al Shanfari, Chairman of both GBCM and GIS said 70 per cent stake in the joint venture is held by GIS, with the remaining 25 per cent and 5 per cent ownership with Baader Bank and Silver Circle Overseas respectively. "Our joint venture with Baader Bank will allow us to have access to global investment products and services, while our new partners will be able to invest in capital markets in the Gulf states," noted Dr Al Shanfari.
"Now onwards, GIS will cease operation as a brokerage firm. It will function as a holding company," Asrani noted. Baader Bank and Silver Circle have invested RO 1.8 million to acquire 30 per cent stake in GBCM. Uto Baader, Chairman of Baader Bank, said the formation of the joint venture was part of his company's strategy to broaden growth outside of Europe into the Middle East region.
"We have been looking at markets like India and the Middle East for growth. The GCC countries, especially Oman, have achieved better growth in capital accumulation. We believe that Oman has the best norms on corporate governance," Baader noted. Although Omani bourse is not as big as Kuwait, it is much easier to make an entry. "As a 25 per cent stakeholder, we are the first brokerage company in Germany to have such access to the Gulf investment markets. We look forward to exciting times ahead for our European clients in the Gulf region through our collaboration with GIS," he added.
The formation of GBCM follows both companies' collaboration in taking a majority stake in a listed Indian stock broking company, Parsoli Corporation, which has recently been voted as the 'Best Islamic Brokerage' company for 2007 by Islamic Finance News. Baader Bank, one of the leading securities trading institutions in Europe, is a member of bourses like Berlin-Bermen, Frankfurt, Munich, Stuttgart, Paris, Zurich, Amsterdam and Vienna. "Baader Bank deals in 10,000 different securities from 60 countries across the world," said Baader.
Dr Al Shanfari said that since its formation more than 10 years ago, GIS has become one of the leading brokerage firms in Oman. "The company was the market leader on the Muscat Securities Market in terms of trading volume. Its financial performance was the best on record, and the shareholders wealth has appreciated impressively," he added. A team of well-experienced professionals and a dedicated management team helped GIS to achieve such tremendous growth.
By A E James
Oman Daily Observer 2008
