By CEO Middle East
CEO Middle East meets Adeeb Al-Sowailim, CEO of Saudi-based FALCOM Financial Services.
Investment bank FALCOM has led the way with innovation, top tier performance and strategic diversification. As Saudi Arabia emerges with confidence as a player in the global investment arena, the region has seen a growing band of young and bright emerging market business leaders promoting leadership and a fresh point of view on how to manage the future. CEO Middle East meets Adeeb Al-Sowailim, CEO of FALCOM Financial Services, the company that has made its mark on the local financial landscape with ideas that delivered value.
As the new decade begins, we talk to the man who steered his ship though rough financial weather and a very choppy investment sea with determination, focus and a team of dedicated sailors. He is our star for the new decade.
The CEO of Saudi-based Sharia-compliant investment bank FALCOM has seen impressive growth in the past year, and the future is looking even brighter. Despite several challenges, Islamic finance and investment has emerged as a secure alternative to conventional banks and FALCOM is a ready to take the next decade head on.
"I am looking at the next wave," says Al-Sowailim. "The crisis has prompted many of the conventional players to re-think their game plans and market approach. The Kingdom of Saudi Arabia proved to be more resistant than others as it is built on the solid foundation of oil and it is using its financial robustness to develop infrastructure and manufacturing bases," he adds.
"The next decade will bring amazing opportunities, here in the local market, we are excited and ready. Investors will be looking for ideas to regain their ground; companies will beeline for IPOs to fund their growth and FALCOM has the expertise," says the energetic CEO.
Few people would argue with that. We asked around and discovered that the bank had won eight international awards for its performance a recognition few in the region can match.
FALCOM is a Sharia-compliant investment bank that promises intelligent investment ideas. The bank is designed to deliver upscale investment banking and wealth management solutions and today has an enviable client list. FALCOM is a leader in investor empowerment in terms of knowledge, products and services. "We have also witnessed the growing demand for Sharia-compliant products and services within the Kingdom's investing population," he says.
FALCOM is one of the investment banks in Saudi Arabia to have developed a Sharia index licensed by the stock market regulator - Tadawul.
Al-Sowailim explains that The FALCOM Sharia Index is the first index of its kind representing 112 companies (nearly 78 percent of the TASI index) carefully handpicked by the Sharia Department and are approved by the Sharia scholars. The index is also the largest licensed index in the GCC region. FALCOM's core philosophy of investor empowerment led to the development of the Sharia Index.
He says that investors can now access real-time index constituent data from FALCOM Sharia Index' comprehensive range of real-time indices via their Tadawuly. The real-time constituent data will help investors to see changes to index constituents as they occur throughout the trading day.
FALCOM Sharia Index carries out an independent screening of each current and prospective company within the index to ensure Sharia compliance, in accordance with an eminent body of Islamic Sharia scholars comprising the Islamic board. FALCOM also has a committee to ensure that the index accurately reflect the market and remain objective at all times.
On his expansion plans Al-Sowailim says that the bank has its corporate office based in Riyadh and has eight investment centres in the Kingdom. The bank has its first international office in Oman.
FALCOM's regional footprint will be completed in the immediate future to take advantage of the common currency emerging capital markets and cross border deal flows. As a pure play investment bank the business lines are corporate finance, brokerage and asset management. The local brokerage business commands over 45 percent of the new player's market share.
FALCOM's local equity fund is one of the best performing funds since its inception. The bank is equipped with a full-fledged Treasury, it also has one of the biggest buy and sell side research in the Kingdom.
Technology played a crucial role in building the brand's touch point experience. FALCOM's premises are all designed to seamlessly deliver bespoke service to top tier clients.
FALCOM's eight international awards came during a course of two years. Global Finance magazine named FALCOM the best new investment bank globally for 2008 and the best Islamic investment bank for 2009.
Investing in the region's biggest economy
FALCOM continues its innovation and its pioneering spirit with its online trading platform that provides automatic and integrated information on investor's portfolio. FALCOM clients have real-time awareness with speed, reliability and accuracy of their market positions to support real-time decisions. Today the new version can be used for trading in Abu Dhabi and Dubai markets giving investors reach and investment opportunities.
"We now have a sizeable share of the online brokerage market amongst our peers. We have diversified our private equity portfolio with acquisitions and investments in greenfield business areas like insurance and real estate and consumer finance. For us it was not about managing crisis or recovery, we were focused on our clients. We remained clear that we had to innovate and at the same time stay true our core of providing clients with a host of secure investment strategies," Al-Sowailim says, adding: "Some time ago, we collectively decided not to get carried away by the events around us, and look for opportunities as they come dressed in challenges."
Reading Al-Sowailim's mind is no easy task. However, we sense that the bank is diversifying and moving towards becoming an integrated financial services organisation. Is this the way forward in the next decade for FALCOM? We probed the CEO for an answer.
There are clearly many challenges ahead and Al-Sowailim appears more than ready to face them.
"At home we are experiencing an evolution with positive moves by the capital market authorities in spearheading the liberalisation process. The CMA has done a wonderful job. We have also seeing stricter controls and implementation of listing regulations. Better transparency in disclosure of information to investors is being enforced."
He adds: "With such a sizeable domestic market, a visionary budget, and a vibrant young population we are confident that our country can easily support the corporate growth that it has embarked upon. Saudi companies also enjoy a competitive advantage of subsidised power, comparatively lower inflation and better infrastructure.
"Based on the strong economic fundamentals, sound government policies and macroeconomic factors we are confident that we are well positioned for the opportunities."
So what does the future hold?
The CEO is confident that it is a brighter future in a better world. "The investor will be empowered with more choices, better transparency, improved corporate governance, detailed disclosures and quality analysis that would create a level playing field for market participants on one hand and on the other, businesses of all shapes and sizes will thrive and benefit from an evolving capital market regime.
"The capital market would then truly drive the economic engine bringing in more private sector play in the country's development. A new of world opportunities will emerge for all of us. Consolidation and mergers and acquisitions cannot be ruled out. Not just in industrial environment but with the financial institutions as well, I see new players coming in and a new era of competition is about to begin," he explains.
With so much success already, the key is in keeping its strong position, Again, Al-Sowailim has clear plans to ensure that his market leadership is strengthened. He explains: "Innovation will be the key. We laid the foundations and the financial capability that provide our clients with the very best here in the local market and now we are ready to export the same expertise to the region. We also innovated with our services by providing our clients with six delivery channels to trade. We focused on performance in our asset management business and this is reflected in our local equity fund.
"Our private equity deals will bear fruit for our investors in the near future. On the investor empowerment front, our information portal
went through a comprehensive upgrade and this enhanced the site traffic. We are in the forefront of index development, with first licensed index by the Saudi stock market and there is more to come."
He adds: "Today, we are fully equipped to meet the growing needs of our clients both locally and internationally. Our GCC footprint is expanding with an office in Oman. In order to be ready for the emerging opportunities, it is important for us to stay ahead of the race, with ideas that perform and a brand that is respected by our clients. We must respond to the changing times with innovation and look for ideas that deliver value."