Abu Dhabi-based Oman & Emirates Investment Holding Company (OEIHC), a joint venture between the governments and nationals of Oman and the UAE, is to set up a joint venture financial services company. It is understood that the new firm will take over OEIHC's existing financial services business and focus on investment and merchant banking. It will have an initial paid-in capital of AED 50 million ($13.6 million) and authorised capital of between AED 75 million and AED 100 million ($20.4 million and$27.2 million).

OEIHC is awaiting approval from the Central Bank of the UAE to incorporate the company by the end of the first quarter of 2000. The venture will have one international or regional bank as a strategic partner, and three- four local and regional banks as anchor investors. OEIHC will own between 40-51 per cent of the company while the remainder will be owned by the strategic partner and the anchor investors.

The venture will also be responsible for launching OEIHC's planned Al- Jazeera Fund in the UAE, which has already been approved by the central bank. The closed-end fund will be worth between AED 100 million andAED 200 million ($27.2 million and $54.5 million), of which between 40- 50 per cent will be underwritten by OEIHC and regional banks. The remainder will be offered to the public. The fund will focus on private equity investments in the GCC and will be listed on the UAE stock market.

OEIHC was set up in 1993 as a joint stock company. It is owned 30 per cent each by the governments of Oman and the UAE and 20 per cent each by nationals in both countries.

Sources say that the company plans to raise its paid-up capital to AED 500 million ($136.2 million) from AED 300 million($81.7 million) at present.