By Souhail Karam
UPDATE 1: France's BNP Paribas buys 25% stake in SAIB affiliate, SAIB Asset Management.
France's BNP Paribas has bought a 25 percent stake in the investment arm of Saudi Investment Bank, officials said on Monday, as interest in the booming Gulf Arab economies grows.
News of the stake comes less than a week after Saudi Arabia, the largest Gulf Arab state and the world's largest energy exporter, relaxed rules on foreigners buying Saudi stock, a move expected to attract foreign investors.
Bankers say the new rules and other reforms in Saudi Arabia, which boasts the largest equity market in the Arab world but one overwhelmingly dominated by local retail investors, will help fuel growth in the Gulf finance sector.
BNP Paribas will buy the stake in SAIB Asset Management Co, which will change its name to SAIB BNP Paribas for Asset Management, the Saudi Capital Market Authority (CMA) said in a statement posted on its website.
SAIB invests 35 percent of its assets in Saudi Arabia, 34 percent in the United Arab Emirates, 18 percent in Kuwait, eight percent in Qatar and four percent in Bahrain, Managing Director Saud Saleh Al-Saleh said in remarks published last month.
Swiss UBS AG said last month it would start an investment and corporate banking affiliate in Saudi Arabia after it teamed up with local Development and Management House for Investments Co.
After the transaction, Saudi Investment Bank will keep a 55 percent stake in SAIB BNP Paribas for Asset Management, the Saudi bank said in a separate statement.
SAIB Asset Management has obtained a CMA licence to operate in asset management and offer custody and advisory services. Details of the transaction were not disclosed.
BNP Paribas declined to comment and Saudi Investment Bank was not immediately available for comment. (Reuters)