Note from the CEO
SICO’s core business has shown remarkable strength and resilience delivering sustainable growth and value for our stakeholders in the first half of this year. As we step into the second half of 2024, I remain confident that SICO will continue to successfully mitigate market challenges and carefully navigating ongoing uncertainties.
Despite a 2% decline in the GCC markets following last year’s rally, the first half of 2024 witnessed continued primary stock market activity with multiple listings, particularly in the UAE and KSA. We expect the trend to continue with more IPOs across GCC, including new listings in countries that have not seen IPO activity in the first half of the year. Nevertheless, global economic uncertainties persist, with concerns about a potential recession, heightened geopolitical risks, and the impact of Federal Reserve decisions on our region. There’s no doubt that equities and debt in the region will be impacted by these risks but we will be ready to not only mitigate the risks effectively but to also capitalize on opportunities as they come forth.
Our strategic focus on asset management, brokerage, real estate, investment banking, and securities services has driven impressive growth and expanded our presence in Bahrain, KSA, and UAE. This diversification has reinforced our position as a leading asset manager in the GCC and MENA regions.
A key highlight of the year has been the launch of Fractional Bond and Sukuk Trading for Accredited Investors. This innovative service lowers entry barriers and enhances portfolio diversification, allowing investments in denominations as low as USD 50,000. Additionally, the launch of the “Tanmia Liquidity Fund,” valued at USD 126 million in partnership with Oman National Investment Development Company, has significantly boosted market depth and liquidity on the Muscat Stock Exchange.
We also celebrated the 20th anniversary of the Khaleej Equity Fund (KEF), which continues to deliver exceptional returns, averaging 14.6% over two decades. This consistent outperformance makes KEF a top choice for investors seeking to capitalize on the dynamic GCC markets.
In a significant milestone for the investment landscape, our fixed-income assets under management soared to a new record of USD 2.8 billion in June 2024. This surge reflects a strategic move by investors who are keen on capitalizing on what many perceive as a final window of opportunity to secure the highest interest rates seen in decades. As the Federal Reserve signals a potential shift in its monetary policy, market participants are increasingly focused on locking in favorable rates before a series of anticipated rate cuts unfold. With a total of nine rate cuts already priced into the market for this cycle, investors are positioning themselves to navigate the evolving economic landscape by adding to their fixed income exposure.
Additionally, SICO has established a formidable reputation in the debt capital markets, exemplified by its recent role as joint lead manager in successfully raising USD 500 million for BBK’s Euro Medium-Term Note in June 2024.
Our strategic initiatives demonstrate a proactive approach to improving market access and liquidity. We focus on long-term value creation and prudent investment management to provide stability and growth for our clients in the face of uncertainties. Our commitment to transformation and innovation remains unwavering as we redefine success.
Our commitment to sustainability is equally important as evidenced in our third annual Greenhouse Gas (GHG) report, which highlights a 32% reduction in carbon emissions. This achievement not only underscores our dedication to environmental stewardship but also sets a new industry benchmark. We will continue to champion the push towards carbon neutrality and to lead by example as we forge new pathways towards a more sustainable future.