Note from the CEO
Operational resilience is defined as “the ability of an organization to continue to provide business services in the face of adverse operational events by, preventing, recovering from, and adapting to such events.”
While at this time last year no one could have anticipated that the entire world would be struggling to contain a pandemic, I think that SICO, like all businesses, has just been through a stress test like no other, and the result of that test speaks volumes about our resilience as an organization and our future viability as a regional provider of financial services.
Looking back at this unprecedented year, I am both pleased and grateful to report that we have proven our resilience and verified our ability to meet challenges head-on with creative solutions from an extremely talented and dedicated management team and pool of individuals who continue to create value for our clients. Although COVID-19 has reshaped the way we live, learn, conduct business and interact with one another both socially and professionally, our team has shown a remarkable ability to adapt, care for one another and get the job done with the same level of excellence that SICO is renowned for.
After an initial market shock in the first quarter of this year when our AUMs dipped sharply by 20%, our asset management and distribution efforts resulted in a swift recovery and will be closing out the year ahead of where we were at the end of 2019. Our trading business prospered during the year with all brokerage divisions reaching new highs including SICO Financial Brokerage, our UAE subsidiary, which will end the year profitable. Our investment banking team continues to be called upon to de-bottleneck complex transactions despite compromised deal flow during the pandemic. Our research team is providing valuable insights for our clients who are relying on us to be the beacon of hope and to make sense of the nonsensical.
Our support functions, namely IT, HR and Communications have also stepped up to ensure that we were all safe, that we had a seamless transition to Work from Home, that a secure system for virtual meetings and transactions was in place for each and every member of the organization, and that a steady stream of internal and client communication kept us all well-informed and connected when we are unable to travel or be in the same room with one another.
As an organization we did not put any of our plans on hold. In fact, we are in the final stages of a strategic acquisition in Saudi Arabia that will fast track our on the ground presence in the Kingdom with immediate access to asset management, brokerage and investment banking licenses through a capital market entity with a successful track record. Being able to offer a diverse bouquet of financial services from day one will be extremely important as we enter a new market because I believe that we essentially derive our resilience from the diversity of services that we offer to our clients.
While the headlines may be projecting doom and gloom, I am optimistic. We have proven that our survival instinct is intact and that we have a formula that works. We may have a rough couple of months ahead of us as we battle through the second and third waves of COVID, but I believe that there is light at the end of the tunnel with at least 3 promising vaccines on the verge of getting approvals for distribution by the end of the year or early next year. As vaccine rollout gets underway in 2021, we will begin to see pent up consumer demand for things like travel and entertainment that could present upside. The outlook for 2021 will be dependent on how fast the economy recovers from the COVID lockdowns, and what the impact will be on certain sectors of the economy like hospitality and airlines. Long-term investors should be looking at asset classes and sectors that are most likely to benefit during the recovery.
In the meantime, I invite you to take a look at some of the positive news highlights and wins that SICO managed to achieve during the year.
Once again, I would like to extend my thanks and gratitude to our talented team of professionals who helped us to not only remain afloat but to actually thrive on many different fronts and to our valued clients for sticking with us. We appreciate your loyalty and the trust that you have placed in us to manage your assets and conduct your transactions.