tag:blogger.com,1999:blog-5124857623766724513.post6146912688280294201..comments2024-01-13T08:27:40.266+00:00Comments on Suq Al Mal: Shuaa Capital Turns the Corner or Does It?Abu 'Arqalahttp://www.blogger.com/profile/01296250358695456059noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5124857623766724513.post-36851747747161784322010-08-16T14:12:56.771+01:002010-08-16T14:12:56.771+01:00Laocowboy2
Thanks.
I think the research expendit...Laocowboy2<br /><br />Thanks.<br /><br />I think the research expenditures are <br />(a) an attempt to keep their names in front of the market - to have some positive market presence<br />(b) to bolster their AM and Brokerage business - by portraying themselves as experts in valuing securities and spotting market trends.Abu 'Arqalahttps://www.blogger.com/profile/01296250358695456059noreply@blogger.comtag:blogger.com,1999:blog-5124857623766724513.post-82216996554823425362010-08-16T05:51:53.325+01:002010-08-16T05:51:53.325+01:00I believe the "vehicle finance" business...I believe the "vehicle finance" business is essentially the GIC business. This (or did - info a little old) financed largely cars for car rental companies and light commercial vehicles for other SMEs (think delivery vans). Pre-crisi it was a steady if not spectacular earner. Post-crisis? No idea. If they are/were into construction equipment, this would have been a late development. Incidentally, GIC had separate (secured) funding arrangements and was not reliant of money from Shuaa.<br /><br />Remaining comments are not Shuaa-specific but more on sector as a whole.<br /><br />1. There are a lot of distressed brokerage companies out there. Red ink will continue until capacity meets demand - probably more due to the former reducing rather than the latter growing unfortunately - at least in the short term.<br /><br />2. Asset management ditto. Fees are based on (a) volume of AUM and (b) success incentives. The former have shrunk while the latter are gone, at least for now. As with the brokerage business, too many people fighting over a shrinking pie.<br /><br />3. There will be a business left in these sectors - the question is one of who will inherit. The best hope for Shuaa and others is to be "the last man standing". This however assumes that new entrants with deep pockets do not arrive. By this I mean the commercial banks. Despite a pretty woeful record in "investment banking", they have the muscle to make a difference if regulators allow.<br /><br />4. In the meantime, survival will have a lot to do with getting costs down as fast as possible. I am surprised that the Shuaa's and Globals are still putting so many resources into publishing research papers in the current market.Laocowboy2noreply@blogger.com