Financier who espouse Saudi listed companies – Swedish newspaper Svenska Dagbladet

East Capital launched in December last year, a new fund with a focus on so-called frontier markets. Frontier’s stock markets that are too immature to be called emerging and there are countries like Argentina, the new Asian Tigers Pakistan, Vietnam, Bangladesh and Sri Lanka, and some countries in Eastern Europe, Middle East and Africa

The fact that they is undeveloped, the risk in these markets is higher than the classic emerging markets. That they are undeveloped can be either the national economy works much, or how the stock market works, or both.

Saudi Arabia has yet not managed to enter the Frontier Club (defined of which countries are included in the MSCI Frontier Markets Index) which is due to the stock exchange are not available for direct investment by foreign investors.

But you can as foreign investors to trade through a kind of depository receipts and it is in this way that East Capital Frontier fund invests in Saudi Arabian companies.

– There are many interesting Saudi Arabian companies. They we’re looking at is often entrepreneurial and have exposure to the emerging Saudi middle class, says Peter Elam Håkansson.

The trend with a growing middle class is familiar from elsewhere, says Elam Håkansson and mentions Asia, Eastern Europe and Latin America.

– There is a global phenomenon and now we see the same tendency in parts of Africa and the Middle East.

Some of the Saudi Arabian company East Capital invested in the training company Al Khaleej Training and Education, the fast food chain Herfy Food Services and Jarir, which is a Saudi variant of French Fnac.

– These companies are well positioned to move towards a young and growing middle class.

The Saudi Arabian stock exchange has a market capitalization of over 500 billion dollars (4400 billion) and revenue of between around 2 billion dollars a day. Tasi index (Tadawul All Share Index) has risen by 20 percent from a low in December 2014, the last year shows a decline of just over 2 percent.

The stock market is, according to Elam Håkansson, more developed in Saudi Arabia than in many other Frontier countries and there are proposals to open Marketplace for direct ownership by foreign investors.

An important question is whether the country’s repressive stance on certain issues can affect Western investors’ interest in the Saudi stock market. East Capital’s own policy says they do not invest in companies involved in weapons manufacturing, pornography and tobacco.

How do you deal with the Saudi society’s attitude to professional employment for women and the effect it has on the Saudi companies ?

– We are in dialogue with the companies we have invested in how they work with the recruitment of women and it is an important issue for them. Unfortunately, women constitute still a small part of the working Saudi labor force as a whole, but it increases slightly, says Peter Elam Håkansson.

He mentions training company Al Khaleej, where women make up about 40 percent of the 4500 employees.

– Major investments have been made, and in education and Saudi women constitute more than half of the students in universities. A large percentage of those studying to become engineers. It also grows up special industrial zones that simplifies female entrepreneurship and there are several sectors where men and women can work together, such as in healthcare and IT, says Elam Håkansson.