Three international institutions are working on preliminary studies to set up a ratings agency for Arab companies, to help them tap the local capital markets. An appraisal report could be completed and presented to the relevant boards for formal approval by the summer (MEED 13:1:95).

The project is being supported by the Abu Dhabi-based Arab Monetary Fund, the International Finance Corporation and the London-based ratings agency IBCA. All the participants would provide capital towards the project, with the technical expertise being supplied by IBCA.

Several countries have expressed a strong interest in the project. The strongest supporters are Jordan, Egypt and Tunisia. ‘The main issue is whether a market is ready or not, whether it is at a stage where local rating is required,’ says Robin Monro-Davis, managing director of IBCA.

The structure of the agency has yet to be finalised, but it could take the form of a holding company with subsidiary offices based in each of the Arab countries interested in the plans, Monro-Davis says. Initially, the offices would work independently to suit each market, he adds.