Fortifying its money transfer network in the Middle East, MoneyGram International Inc. (MGI) inked a strategic alliance with the renowned Bank AlJazira (:BAJ) to support its own money transfer services.
BAJ offers personal, corporate, investment and private banking services. Per agreement, the bank will assist MoneyGram by lending out its branches for the latter to offer money transfer services via multiple bank and remittance centers across Saudi Arabia.
The alliance will enable MoneyGram to transfer money easily from Saudi Arabia to countries across the globe, and thus progressively cover more of the market share. The idea is to add value to business by giving MoneyGram customers access to convenient and varied money transfer options.
Growth prospects for MoneyGram are also validated by the World Bank, which estimated Saudi Arabia’s remittance market to be worth $27.6 billion annually. This makes Saudi Arabia the second largest nation in the list of worldwide countries that receive the largest amount of inbound transfers, after Mexico.
We believe that the rising number of immigrants in Saudi Arabia amplify money remittance provisions. This represents ample avenues of growth for MoneyGram in future as well.
Meanwhile, in Dec 2013, MoneyGram reached the milestone of operating through over 10,000 locations in the Philippines, and in over 200 countries and territories globally. The company also boosted its operations by adding more than 1,000 retail locations through its alliances with New Albertson's Inc. and Albertsons LLC in the U.S.
We expect such alliances to boost MoneyGram’s leading global market position, and also accelerate the company’s organic growth by boosting its money transfer business. Simultaneously, such efforts will also enhance demand for global remittances and boost its brand value.
MoneyGram currently carries a Zacks Rank #3 (Hold), indicating no clear directional pressure on the stock in the near term. Some better-ranked stocks in the financial sector include Moody’s Corp. (MCO), American Express Co. (AXP) and DFC Global Corp. (DLLR). All these stocks carry a Zacks Rank #2 (Buy).Read the Full Research Report on MGI
Read the Full Research Report on AXP
Read the Full Research Report on DLLR
Read the Full Research Report on MCO
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