A broad presence, a selective player

24 December 1999
SPECIAL REPORT BANKING

The hallmarks of HSBC's retail banking operations in the Middle East - longevity of experience and comprehensive product ranges - also serve as the template for its investment banking activities. HSBC Financial Services (Middle East) has, in different guises, been a well established force throughout regional markets for more than 25 years, and offers fully integrated debt, equity and advisory services. 'We are distinguished from other players by our client base, which includes governments and top multinationals right down to the smallest local traders, and by our knowledge and understanding of the region built on experience,' says Mukhtar Hussain, chief executive officer of HSBC Financial Services (Middle East). 'We add to this commitment to the region the experience of the group acquired across global capital markets.'

The institution's coverage of the region's nascent equity markets is extensive, with dedicated units established in Cairo, Dubai and Riyadh. HSBC issues research covering equities in the Maghreb, Egypt, Oman, Jordan and Lebanon, and, through its affiliate SBB, the Saudi market. 'Our desire is to fully participate in the regional equities markets we are allowed to, and to bring the benefit of our global experience,' says Hussain. 'As the move towards transparency accelerates, we will deepen and diversify our research on the MENA [Middle East & North Africa] region.'

HSBC is an active, if not dominant, force in the region's debt markets, and is regularly involved at a senior level in high-profile project financing deals. This year it acted as global bookrunner and lead arranger on the $400 million facility for Qatar General Petroleum Corporation's NGL-4 project and the $750 million Qatar Chemical Company deal. 'We have a broad presence but will continue to be a selective player,' says Hussain. 'We are conservative when it comes to committing our balance sheet, unlike some other players who seem to be trying to buy their way into the market. We've been here a long time and don't need to do that.'

The advisory services of the investment bank bear testament to this approach, and it has been mandated to handle some of the major deals expected next year. In the increasingly active Egyptian market, HSBC is running the initial public offering for the Ghabbour vehicles group - which will come in the form of a global depository receipt - and the $420 million loan financing for Aswan Iron & Steel Company, which is developing a mining and industrial complex southeast of Aswan. 'Our aim is to find the optimum financing structure and the best routes to accessing international capital,' says Hussain. 'We are unique in our ability to cover a wide spectrum of debt and equity solutions.'

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