5 March 2015

Leaders Middle East: Al-Ghunaim’s views on remaining competitive

By Leila Sistani, Editor in Chief


Maha Al-Ghunaim has built an admirable reputation for herself, one that extends beyond the Arab business community. It all came about several years ago when she chose to start her own corporation. After working for 20 years in large financial institutions in Kuwait, Maha decided to establish an investment company that reflected her personality.


After graduating from San Francisco State University in 1982, Maha joined the Kuwait Foreign Trading Contracting and Investment Company (KFTCIC), the largest Kuwaiti investment banks with 80 per cent government owned. She began as a dealer in Marketable Securities, executing transactions, and then became a portfolio manager. In 1988 she became Vice-President for Portfolio Management, a member of the asset allocation committee and a member of Al-Kharejeyah Umbrella Fund. In 1995 the Kuwait Investment Authority combined KFTCIC with Kuwait Investment Company (KIC) under the KIC name. Maha was appointed Assistant General Manager of asset management at KIC and was responsible for the local and international markets.


By 1998 Maha had arrived at the point where the next logical step was to found her own investment bank. She had had a model career in which had worked her way up through the major areas of investment banking and so had a good understanding of what was involved. She brought in four people as co-founders to establish Global Investment House with a capital of USD50mn which became one of the largest Investment Banks in the Middle East & North Africa with market cap exceeding USD5bn and the largest network of offices in the region in ten years.


In 2008, Global, like many other financial institutions, was affected by the international financial crisis and mainly its prop book investments. The company had to go into a complete restructuring exercise and is today a debt free company, well capitalized for growth focusing on its fee based core business; asset management, investment banking and brokerage.


Maha’s success had drawn media attention to herself. She won a number of accolades including the "Banker Middle East Industry Award 2008 (BME) for her outstanding contribution to the financial industry." In September 2008, the Wall Street Journal had named her number 43 on its list of 50 “Women to Watch”. Forbes (US) ranked her for three consecutive years as one of the World's 100 most influential women, and Forbes (Arabic edition) ranked her second in its list of the Arab world's 50 best businesswomen. Though she had not sought the honors, the press is proclaiming her a role model for Arab women and women in the Islamic world.


Global Investment House is a Kuwaiti investment company licensed by the Central Bank of Kuwait. Since its inception in 1998, Global has presented various investment solutions to its wide client base and has played a major role in developing the regional capital markets.


Global plays an important role in promoting investment opportunities in the MENA region to investors through expert financial engineering. It provides investors with a diverse scope of national and international investment opportunities and facilitates those investments by providing clients with services that target their individual needs and exceed their expectations.


Mrs. Al Ghunaim, how would you describe the current economic and business landscape in the Gulf?

GCC economies are oil based and therefore intractably linked with the rise and fall in oil prices. Oil prices, which are currently the lowest in over 5 years, will lead to lower nominal GDPs and if production levels are cut, then to much lower real GDPs as well. Moreover, lower revenues will lead to comparatively constrained budgets in the sense of lower surpluses or even budget deficits if historical level of expenditure is maintained. We understand that most GCC countries have enough accumulated surpluses in their coffers to weather budget deficits for a number of years though smaller members like Bahrain and Oman will be more affected than the remaining.


On a positive note, this will be the right trigger to make the GCC governments realize the importance of diversifying away from oil and realize the significance of curtailing their non-productive/current expenditures. And if they have already realized this, then to expedite on the measures they have chosen to adopt to reach these goals. We believe that the GCC will come out stronger from the current economic pressure, by seriously addressing the structural weaknesses it suffers from currently.


How well have the Financial Markets recovered after the financial crises witnessed in 2008?

Setting aside the recent fall in markets starting November 2014, some of the regional markets had recovered significantly from the financial crisis in 2008. As per data collected from Bloomberg, Qatar not only recovered but exceeded the highest point it reached just before the crisis in 2008. By mid-September 2014, Qatar was 14% higher than the highest point of 2008. Similar the Abu Dhabi market also recovered and reached its highest point in end-May 2014; 2% higher than the highest point in 2008.


The largest market in the region, that is, Saudi Arabia almost recovered as well however it was still marginally lower by 5% than its peak in 2008. This was in September 2014. Dubai and Kuwait however remained comparative laggards, the former’s high point still short by 15% from its 2008 peak and the latter still lower by a significant 45%.


How strong is Global Investment House at this moment in terms of your portfolio and clients?

Today Global is well capitalized focusing on its core businesses; asset management, investment banking and brokerage with regional presence and a strong and diversified client base. Our portfolio includes only subsidiaries that form an integral part of our core business, which is in line with the company’s business model.


Global manages today USD 4.1 billion on behalf of its clients through an array of investment funds and discretionary portfolios covering different asset classes, strategies, markets and industries.


What are the necessary reforms and initiatives needed to keep the GCC as an attractive destination for Foreign Investors?

GCC countries need to diversify their economies away from oil and gas and invest heavily in power, water, health, education, petrochemicals and other productive sectors. Structural weaknesses need to be addressed to send the right signals across and to sway investor sentiment in its favor. The legal and regulatory framework within the GCC pertaining to capital markets needs to be improved upon giving investors the required level of comfort to invest. Greater emphasis can be laid on transparency and corporate governance, as well. The lack of skilled human resources is another challenge facing the establishment of a robust capital market in the GCC. The role of regulators needs to be enhanced in terms of vigilance and prosecution but barriers to entry arising from exceptionally high fees and incessant red-tape need to be removed.


Mrs. Al Ghunaim, you are regarded as one of the most respected women in business in this region. What is the role that women are playing in business and politics in the Gulf? What initiatives are needed to empower more women into high business and political positions?

Despite the increase witnessed during the past decade of women entering the business and political fields in this region, their role is still below expectations. We need to see more active women in these fields which could only be achieved by enhancing their education level and creating a culture that is performance and achievements driven regardless of gender; the right person in the right place.


For the purpose of our publication, LEADERS Middle East. What is the role that LEADERSHIP plays in all spheres of society, and how serious is Kuwait in developing young global leaders?

Leadership is a process that involves different stakeholders to create a vision and lead them towards efficient execution. In addition to the role of empowering, inspiring and decision making, it is of utmost importance that leaders lead by example to create confidence and gain respect and trust.


Leaders become role models and accordingly their characteristics will be reflected on those who follow them through their actions. I’m a believer that in order for leaders to have positive impact in the society, they should follow the highest standards of ethics, values and integrity.


In Kuwait, our culture encourages leadership starting from home and the way children are raised. In addition, there are a lot of scattered initiatives launched by the private sector to develop leadership skills focusing mainly on the educational aspect.


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