-- - 2/7/2006
Kuwait's Investment Dar said yesterday it would set up a Saudi investment firm with Saudi investors, placing itself for future growth in the country’s real estate, insurance and investment market.
Investment Dar and its subsidiaries will have a stake of around 60 per cent in the firm, Vice CEO Youssef Malallah told reporters. Saudi firm Al Dammam Construction will hold a 10 to 15 per cent stake, and around 20 Saudi investors have been invited to put up the remaining capital.
“This company will be a gateway for different sectors like insurance, real estate development, investment and asset management,” Malallah said, adding the firm will be “innovative” in providing Islamic Shariah-based financing.
“Its a promising market and there is a lot of room for creativity,” he added. Saudi Arabia is trying to diversify and liberalise its oil-based economy and develop its equity-heavy financial markets.
The fledgling insurance industry is set for rapid growth after the introduction of laws regulating the $1-billion sector, which predicts annual growth of 30 percent until 2010.
Saudi Arabia's Capital Markets Authority (CMA) this month announced rules governing the creation of real estate funds, a move that analysts said would enhance transparency and encourage investment in the sector.
Investments in the Saudi real estate sector are estimated at 1.5 trillion riyals, or about half the total property investments in the Gulf Arab region, but only a fifth of the total investment is led by organised real estate firms, industry sources say.
The Combined Saudi Company, which will be based in Dammam on the Gulf coast, has received preliminary approval from the trade ministry, Malallah said.