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Bahrain bank mulls $5bn equity deals

Manama, February 7, 2009

Newly-launched First Investment Bank is working on five private equity deals each worth $50 million to $1 billion, and expects Egypt to top the region for such deals, the Islamic lender's chief executive said.

The newcomer wants to capitalise on the tightening of the region's money markets faced by established banks.

'The thing that works for us is, we're fresh, we have our capital intact, we have no commitments, so we can really sit back and look at the market and choose the right opportunities', Jamal al-Hazeem told Reuters.

He said the Bahrain-based bank is looking at three deals in its main focus region of Middle East and North Africa, and two deals outside of that region. He said each of the deals ranged from $50 million to $1 billion, without elaborating.

Private equity firms in the Gulf Arab region are betting that company valuations will further suffer under the global financial turmoil, while regional investors still have reserves thanks to a years-long oil boom despite a recent slump in oil prices.

Dubai-based private equity firm Abraaj Capital said this week that 2009 looked promising as sellers were forced to adjust their expectations.

Hazeem said he expected Egypt to top the region's private equity market in the near future. 'Egypt does still provide a good market for small and medium-sized private equity deals,' he said.

Hazeem said the creation of Nilex, a stock exchange on which Egyptian small- and medium-sized companies can list, has increased the country's attractiveness for the industry.

'This is a very good mechanism for small companies exits. So Egypt, I think, will continue to lead private equity transactions in the region, for the buy side,' he said.

First Investment Bank was launched last week with paid-up capital of $120 million from eight Gulf financial institutions, including Kuwait's Gulf Investment House and Boubyan Bank, and Abu Dhabi investment firm Noor Capital.

Its second major business line is real estate, in which it has launched a $500 million land reclamation development on Bahrain's northern coast.

Islamic banks cater to investors who want to avoid earning or paying interest viewed as usury under Islamic law.-Reuters




Tags: First Investment Bank | Bahrain private equity deals |

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