CAIRO: The Royal Bank of Scotland (RBS) has set up a full capability research team for the Middle East and North Africa region by teaming up with Rasmala Holdings, a regional investment firm.
Hans Zayed, who was selected only a few weeks ago to head Rasmala’s research unit, said that the joint venture is the first to be launched in the MENA region. It was first set up in February and the first research report was issued in May, which focused on the telecom sector, followed by the banking sector.
The joint venture between the two firms will be “complimentary,” Zayed said, as Rasmala will conduct research, which will be then shared with its clients, while benefiting from having access to RBS’s international profile and reach.
He attributed the decision to join forces between the two entities to having fluid “chemistry.”
Rasmala, which has $ 1.2 billion of assets under management and offices in Egypt, Oman, Saudi Arabia and the United Arab Emirates, will provide local knowledge to RBS through its research.
The firm brought Zayed on board as head of Rasmala’s MENA equity research and senior analyst for chemical and industrials; and Saud Masud has taken up the role of senior equity analyst for real estate and construction.
Zayed has over 15 years experience covering emerging and developed market equities across several sectors with Crédit Suisse First Boston, BNP Paribas and Société Générale in London, but began his interest in the MENA region under Merril Lynch back in 2006.
His colleague, Masud is a chartered financial analyst, who prior to this appointment worked with US technology companies and UBS in New York.
The Cairo-based research unit covers a total of 14 countries, with Egypt and the Gulf countries being the main foci, and 50 to 60 stocks as of April of this year.
Asked what RBS brings to the table, Zayed stated that it will ensure “quality control of Rasmala’s research and distribute it to its clients.”
Zayed also explained that RBS was one of the few international firms that had yet to establish a presence in the region, and thus, their strategy was to strengthen their focus on emerging markets, including MENA.
Given that they reached the market slightly later than other major international banking firms, entering the local market via a local firm has allowed it to set up shop quicker, rather than building from scratch, which would necessitate additional time.
He noted that if any firms have chosen not to cover the region through having an office on the ground in the MENA region, they have alternatively decided to remain based in London.
However, he added that in South Africa there are few similar joint ventures in operation.
Asked whether he thought other joint ventures would come onto the local scene, he said there is “always room for more,” but adding that a firm must have a rather robust competitive advantage, because in the current market environment, market volumes are too low to justify significant amounts of brokerages.
Zayed noted that Crédit Agricole had recently ceased their research operations based in Dubai, as well as ING, which closed down its activities last year. Unless a firm can bring something innovative to the table and is not “fully committed to the region,” it will unlikely be successful.
As for Rasmala, he stressed, the MENA region is its “bread and butter.”
