Arcapita has been picked to advise HSBC Saudi Arabia for an investment fund worth $150 million targeting Saudi Arabia and United Arab Emirate’s warehouse and logistics assets. The responsibility of Bahrain-based Arcapita will include identifying assets and assisting in the financing and disposal of assets. Arcapita will also offer asset administration and monitoring services to the investment fund of HSBC Saudi Arabia.
In emerging markets the logistics sectors of the United Arab Emirates and Saudi Arable are ranked the fifth and third most attractive per Agility Logistics Market Index. Vision 2030, the economic reform program of Saudi Arabia, is slated to raise government spending on sea and air port infrastructure as the kingdom introduces initiatives aimed at reducing its reliance on oil.
Thriving logistics markets
“As hubs facilitating trade between key international ports, and gateways to Africa’s $3 trillion economy, Saudi Arabia and the U.A.E. are thriving logistics markets with a solid long-term investment outlook,” the chief executive officer of Arcapita, Atif A. Abdulmalik, said in a statement.
This isn’t the first time that Arcapita is investing in the logistics sector. The investment firm which has offices in Singapore, London and Atlanta has inked deals in the sector worth over $5.3 billion in Asia, the United States and in Gulf Cooperation Council countries.
Earlier in the month Arcapita purchased a controlling stake in MC Sign Co, a lighting and signage services firm based in mentor. Though financial details were not revealed it is understood Arcapita’s stake in the signage and lighting firm is 75%. MC Sign was started more than six decades ago and has a workforce of 225 employees. In North America the firm has over 275 customers and on average processes over 40,000 orders per year.
Penalty for ‘spoofing’
The selection of Arcapita by HSBC Saudi Arabia comes in the wake of the British multinational bank being slapped with a $1.6 million penalty over charges of ‘spoofing’ in equities and metals futures. The charges were brought by the CFTC – Commodity Futures Trading Commission. Other lenders which were also charged alongside HSBC include Deutsche Bank and UBS.
Due to the significant assistance they provided the CFTC with, the three financial institutions received reduced penalties. UBS will pay $15 million to settle the ‘spoofing’ charges while Deutsche Bank will pay $30 million.
Under Dodd-Frank, a financial reform law enacted in 2010, spoofing constitutes a criminal offense. With spoofing traders create the illusion of demand by placing bids or asks with the goal of cancelling before they are cancelled.