The Hindu Business Line : Geojit forays into Saudi market through joint venture

Aloula Geojit Brokerage Company, a joint venture of Geojit Financial Services, is targeting 10 per cent of the trading volumes of Saudi Arabia's capital markets. Billed at a trading volume of $10 billion per day, Saudi capital markets are the third largest in the world.

The joint venture has obtained licence from Capital Market Authority (CMA), the licensing authority for broking operations in Saudi Arabia.

Geojit will be holding 30 per cent equity in the joint venture with an investment of Rs 36 crore, and the remaining by partners from Saudi Arabia, Oman and the UAE.

"With the continuing oil boom, there is tremendous amount of capital seeking constructive avenues of investment from Saudi Arabia. With just about a dozen stock broking companies operating out of Saudi soil there are vast opportunities waiting to be tapped," Mr C.J. George, Managing Director of Geojit Financial Services Ltd, said.

However, the Saudi investor has been looking to diversify his investment portfolio into international markets, even as the country's stock markets have taken a major hit, with the trading volumes falling by over 65 per cent to $2 - $3 billion per day recently. The entry is deemed most timely since this could open up fresh avenues of investment for a huge amount of capital from Saudi investors to the Indian markets, Mr George said.

According to Mr Khalid Al Johar of the Al Johar group, one of the joint venture partners: "The cooperation of leading Saudi, Omani, Emirates and Indian business houses will lead to the establishment of a major regional financial power house. Along with the normal broking services the company will also offer Internet trading and custody services."

The operation and partnership contract signed for the Saudi Rial 100 million project, was between Geojit Financial Services Ltd, Jamal and Khalid Al Johar Development Co., from Saudi Arabia, National Securities Company from Oman, Rasmalah Investment Co from UAE and eight other Saudi investors.

Geojit will be responsible for the management of the company and local partners will provide the required support. Geojit's proven management and technical expertise is expected to be a major advantage for the company to establish its credentials in the region. With a network of 360 offices, three lakh clients and established Internet trading facility, Geojit is expected to provide cutting edge technology, manpower and management support to the project. "Geojit's internal information technology capabilities and experience of two decades will be used to set up a model brokerage company in Saudi Arabia," Mr George said.

Saudi Arabia has a population of 2.7 crore with a per capita income of $12,900 and 60 per cent of the population invests in the financial sector. The country also has an expatriate population of 15 lakh, who are now allowed to invest in the Saudi stock market. This will be the first time that an Indian stock broking company is doing business for the local population in a foreign country. The company would also be the first non-banking company to do stock broking operations in Saudi, ever since the Saudi government liberalised the sector recently.

More Stories on : Overseas Investments | Alliances & Joint Ventures

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
HSBC MF lines up new global offering

`Banks' deposit mop-up unlikely to affect MFs'

Distributors woo investors with signing up facilities

Bull domination

Sensex gains 236 points; volumes remain low

NCL Ind to issue pref shares to First Carlyle

Geojit forays into Saudi market through joint venture

Ministry seeks nod for coal cos to list debt instruments

Infotech, bank stocks push up benchmarks