Saturday, Jan 20, 2007

RIYADH (Zawya Dow Jones)--Saudi Arabia's The Capital Group asserts that it has no plans to offer a stake in its newly announced joint venture with Morgan Stanley in the Saudi market in its initial public offering to local investors, Fahad Al Mubarak, TCG Chairman and Managing Director, told Dow Jones Saturday.

"We haven't determined the size or the shareholders' ownership in the new company. We will come to define all these details by the end of first quarter of 2007. TCG is entirely owned by its employees. We have no plans to offer a stake in the new company to the public," Al Mubarak said.

Morgan Stanley announced Jan. 17 its intention to enter into a joint venture agreement with The Capital Group. The joint venture will operate under the name of Morgan Stanley Saudi Arabia. However, a Saudi Capital Market Authority official said Saturday that the joint venture will need the regulator's approval.

"We haven't received any official request from the company yet. Any change in the structure of ownership in any licensed firm requires the approval of the CMA," Abdullah Al Qahtani, General Manager for licensing in CMA told Dow Jones.

Al Qahtani pointed out that they look at mergers case by case, and the regulator focus will bring the best qualified firms into the market.

Al Mubarak said that the benefit will mutual for both sides as the partnership with the renowned investment bank, which has international reach, will straighten TCG's relations with the international clients, while the local presence will provide rich offerings to Morgan Stanley in the Saudi market.

The Capital Group was founded by Dr. Fahad Al Mubarak in 2001, and holds licenses from the Capital Markets Authority in Saudi Arabia to offer investment advisory, investment banking, asset management and trading services. The new company will provide brokerage services which are expected to grow rapidly.

The Morgan Stanley statement said that Al Mubarak will remain as Chairman and Managing Director of the joint venture, which will initially employ 25 professionals.

-By Anees Al Qudaihi, Dow Jones Newswires; +966 1 2914872; anees.alqudaihi@dowjones.com

Copyright (c) 2007 ABQ Zawya Ltd.

(END) Dow Jones Newswires

20-01-07 1429GMT