COVID: Putting potential of Gulf bankers in context

Reuters reporters on Wednesday March 18th 2020, in an article titled ‘Coronavirus hits Gulf banks’ dealmaking ahead of Ramadan lull‘, are claiming that GCC deal-making activity and banks’ earnings are being negatively affected by the spread of the novel coronavirus and the recent COVID19 regulations. With the sources in the article making the assumption that regional markets will have weak or close to no activity in the months to come, leading up to September-October. This is inaccurate and misleading. These sources also claim that the month of Ramadan results in lack of market activity which is negatively affecting the financial and banking sector of the region, this shows the lack of context being given to regional market deal-making.

I believe this type of reporting is irresponsible and is the result of people who make claims without having real skin-in-the-game. Few perspectives need to be put in place and elaborated upon to clarify the seasonal activity and why some cycles seem quieter than others:

Private equity firms’ and Bankers’ sweet-spots.

Virtually all Bankers in the region are focused on middle and large market companies with transaction sizes greater than US$20 million (AED 73.4 million) and valuations of around US$50 million and up. Their rationale being that it takes the same amount of time to work on any transaction regardless of its size. According to these bankers, the payout of working on smaller deals is not worth the time they put into them. Though there’s a funding gap for small and medium enterprises (SME) of approximately US$26 billion in the Gulf region. There is an underserved market here, but not much willingness from most bankers to work on the consolidation of these deals. In times of uncertainty, banker mandates should adapt to market requirements, but for some reason most bankers cannot see the value as their oversight seems to be due to their ambitious mandates.

Business in Ramadan is ongoing, quietly.

In the Reuters article the reporter used the word “lull” to describe the regional business environment and financial activity during the month of Ramadan –bad choice of words. This misrepresentation of the Ramadan business environment by the reporters is due to them not having skin-in-the-game and relying on feedback from bankers that focus on large market [and to a certain extent, middle market] deals. From my perspective, Ramadan activity is vibrant and much more focused, as deal-makers continue to work quietly, business is conducted at night time. Most of our senior executives, decision makers and key beneficial owners hold their meetings in the evenings after Isha prayer. Ramadan is a month of strategic preparation and deal-flow is always available. The unfortunate truth is that banker appetite and mandates are not in-line with the SME gap mentioned above.

In conclusion, we need to consolidate or gather the SME deal-flow available in the region under one universal platform to see the value of this market. A US$26 billion funding gap can be a turning point for the regional economy to flourish and strengthen job creation. This can all be fueled by private investors and regional banks if they loosen up their mandates and start seeing the potential in leveraged buyouts, acquisition financing, growth capital injection, capitalization events for regional SMEs are lacking. The growth of these companies can lead to a more diverse capital market as potential for public listing on regional stock exchanges is not being harnessed to its full potential.

I invite all Bankers that care about the livelihood of the regional markets and that wish to work on high growth SMEs, to join me in serving business owners in the region to consolidate and syndicate to secure and fill the funding gap in the region.

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Advantages of Hiring “Real” Investment Consultants

advantages-of-hiring-investment-consultants

Advantages of Investment Consulting

Looking at the importance of Investment Consulting one must wonder exactly what advantages an investment consultant can provide him or her. Here is a breakdown of the advantages you should be on look out for when hiring an investment consultant.

Deep Financial Knowledge

First and the foremost advantage of investment consultant is the financial knowledge, not just understanding numbers but also understand how to structure, restructure, engineer and reengineer the mode of which the financial activities of any entity, whether company or personal are and will be conducted taking into consideration the past records to optimize returns in the present and the future.

Aside from this general knowledge these consultants spend a certain time period of their lifetime studying the financial industry. They are well researched fellows who are always in touch with the ups and downs of the financial industry.

A Clear Path

When laymen without any sound financial knowledge look to invest somewhere often times they choose a vague path. This comes from the lack of knowledge.

When someone doesn’t know about the rules of finance they are bound to get unorganized and mess things up. Investment consultants provide a clear path which tells the investors where their money is, and should be, going. An organized structure is built so that the operations of investing follow a smooth pattern.

Time is saved up

Investment Consultants save a great deal of time for their clients so that they can focus on their lives and their day to day business. Some investment consultants take the responsibility of managing the portfolio of their clients which takes off some more work off their plates.

An Investment in Itself

Hiring an investment consultant is an investment in itself. An early investment of the hard earned money is put into the bet of the knowledge and advice of an experienced individual. Simply put, one invests and pays money for the advice of an experienced professional.

 

Read more: 3 Major Questions you should ask yourself before hiring an investment consultant.

Types of Investment Consultants

Generally, investment consultants are broken down into 4 main categories which are as follows:

Financial Planner: This type of investment consultant manages the personal finances of their clients from retirement plans to college fees.

Registered Representatives: These are the commission based investment consultants. Their responsibilities include selling investment and insurance products. These guys usually work for financial organizations that make and sell financial products and instruments.

Money Managers: These are the guys who make the investments on the behalf of their clients. These people usually work for the hedge fund firms.

Financial Advisors: Financial advisors are the people who take some fees and provide general as well as personal advice.

How to Hire an Investment Consultant

This is the biggest concern to an investor. When you hire an investment consultant you actually put your money in their trust. This is the biggest decision of the investment journey for most and should be handled carefully. In the next post we will outline

 

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Arabian Gulf Investments

If you need investment consulting then it should come from a reputable company that can promise to make good use of it. Arabian Gulf Investments is one of the companies that passed the test of our surveying radar. This company is a group of serial entrepreneurs full of the current market trends.

The most important factor of any investment consulting company is the experience. Arabian Gulf Investments have compiled a team that has loads of experience combined with the current practice. The combination of contemporary trends and the past experience makes a company strongly credible. The company offers Buy-Side Consulting as well as Sell-Side Consulting so that the clients enjoy both sides of consulting at the same place.

Wealth takes hard work to accumulate and when it is done accumulating it should be treated like an infant. Retirement funds and life savings are hard earned money and should be invested in the right direction. An investment consultant is crucially important for any kind of investments done with such money.