The opening of Arqaam Capital branch in Johannesburg comes to reinforce the Africa Rising narrative and in that the place for South Africa as a financial gateway into the rest of the sub Saharan region.
Arqaam, the Dubai based emerging markets focused bank, announced yesterday that it has chosen South Africa as a base for its African investment and advisory business. The new Johannesburg office is pillared by a new a seat on the Johannesburg Stock Exchange (JSE).
Yesterday announcement said the the Dubai International Financial Centre (DIFC) based Arqaam facilitates investment, trade and finance between and into emerging and frontier markets and has successfully executed this strategy in the Middle East and North Africa (MENA). The South African business will drive their expansion into African markets with an initial focus on Ghana, Kenya and Nigeria.
Arqaam will offer local and international clients South African equity products backed by in-depth research reports of businesses across multiple markets. The bank’s local offer will expand into derivatives and bonds.
The banking licence issued by the JSE is the first to be issued in three years. JSE CEO Nicky Newton-King said “We are excited to welcome Arqaam Capital as the newest equity member of the exchange. Not only is Arqaam Capital well respected for its proven track record of success in emerging markets across North Africa and the Middle East, it is also the first brokerage to join the JSE from the Gulf region. We see their membership as another step in strengthening the JSE’s relationships with financial market players in other emerging markets”.
The statement said Arqaam’s business strategy combines international best practice with regional and local expertise in the markets in which it operates. Arqaam CEO, Riad Meliti said, “We are delighted to have joined the JSE and to enter the South African market. Our plan is to replicate the emerging markets model that has seen such success in our Dubai office. By drawing on South Africa’s world-class skills and investment infrastructure, Arqaam will expand to include multiple business practices and become a hub from which we can participate in the African Growth story.
“To our over 700 institutional investors, Arqaam South Africa offers exposure to African stocks, on-the ground intelligence and further deal-making capacity. By introducing African market opportunities to these clients, Arqaam will attract new investment into continental markets. To South African investors we offer exposure to frontier, emerging and MENA markets backed by multi-territory comparative research. This is a compelling offer and one of the reasons Arqaam is gaining, on average, 40 new institutional clients per quarter – many of whom are demanding access to fast growing African markets.”
Ross Abbott, head of the South African business said, “We have expanded into South Africa to meet overwhelming demand from our clients for investment opportunities in South Africa and Africa. Our office will be staffed predominantly by South Africans who are deeply familiar with this market.
Leanne Parsons, Director of Equity Markets says Arqaam Capital’s decision to join the JSE shows that investors in other emerging markets are also recognising the enormous potential the African continent has to offer. “We believe that the JSE can act as a bridge between Africa and investors from other regions. Arqaam Capital’s membership also will give companies listed on the JSE the opportunity to gain access to capital from a wider pool of international investors.”
The Arqaam development comes amid the continued debate about how real is the positioning of South Africa as a gateway into the rest of the African continent. Some will say this is more an aspirational thing. Rising on the back of the country’s advanced financial systems, there is collection of developments which points to the reality of this proposition. Most recently global commodities giant Glencore Xstrata listed on the JSE. The BRICS formation and the push by South Africa to host the the BRICS Development Bank, if and when it is launched, are further boosters.