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- Equities offer unique long term opportunities in UAE and Saudi equities markets
- Eshara CEO eyes upcoming privatisation of Saudi Aramco and plans to boost non oil sector growth under Saudi Arabia Vision 2030 plan
Eshara Capital, the first investment fund managed out of Abu Dhabi Global Market (Abu Dhabi’s International Financial Centre), has launched its first strategy, providing its global investors unique access to the UAE and Saudi Arabia equity markets and upcoming IPOs.
Eshara’s GCC equities strategy provides exposure to US dollar pegged assets that have AA-rated sovereign backing whilst yielding 5% or higher.
The fund is launching at an opportune time to benefit from the continued correlation to the oil price recovery, as well various strategic transformation plans in the region that seek to diversify away from hydrocarbon reliance thus boosting the region’s non-oil private sector.
The oversubscription of Abu Dhabi Government’s bond issuance in April 2016 with pricing of c.100bps over gilts is testament to the interest in the region from international investors. Eshara strongly believes that continued capital inflows into the region during 2016 will further strengthen the equity markets, and that it is well positioned to benefit from these flows.
Central to Saudi Arabia’s transformation plan will be the privatization of Saudi Arabia’s national oil company, Saudi Aramco. This will be a significant global event, with up to $100bn of stock coming to market, increasing the depth and profile of the domestic market and making it home to the biggest company in the world.
Eshara Capital’s investment team is based on the ground in Abu Dhabi and has deep local networks and close links to sovereign wealth funds, large family offices and institutions in the region, and is partnered with global blue-chip investment partners (Bank of America Merrill Lynch, Julius Baer and Deloitte) to provide best in class investment practices and security for its clients.
Alex Guy, Eshara’s CEO and Founder, commented:
“The UAE has a robust and sophisticated equity market and wider financial services sector with highly capitalised banks, a large concentration of institutional and private wealth and several of the world’s largest sovereign funds.
“In Saudi Arabia, on top of the Saudi Aramco share sale, we are likely to see a doubling of the Tadawul market capitalisation as up to 20 new companies, state owned share sales and family businesses list on the stock exchange. Being on the ground as we are and having unparalleled access to and knowledge of these sectors will provide our international investors with unique access to these opportunities.”
He concluded on the launch of the fund by saying, “This is a huge milestone for us also because of Eshara’s heritage which dates back to 1962 when my grandfather set sail with the ‘British Signal’, a 35,000 ton BP oil tanker, carrying the first oil to be exported from the UAE, marking the start of Abu Dhabi’s rapid rise as a major player in the hydrocarbons industry and bringing us to where we stand today”.
Richard Teng, CEO, Financial Services Regulatory Authority from Abu Dhabi Global Market commented:
“ADGM has developed a comprehensive regulatory regime and vibrant ecosystem to support the global aspirations of fund managers and needs of investors. We are pleased that Eshara Capital has recognised these strengths and chosen ADGM as its international financial hub to execute its strategy and expand its operations. Eshara Capital has capitalised on its newly-awarded financial services permission to launch its first Collective Investment Fund and has other exciting initiatives in the pipeline. We welcome Eshara Capital to the ADGM family and will continue to support ADGM firms and other stakeholders in anchoring more financial activities in ADGM to support the growth of Abu Dhabi as an international financial centre.”
