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July 8, 2021
Economic recovery post COVID-19: How they stack up for GCC economies?
GCC economies were hit hard by the pandemic last year with the cumulative GDP of the region falling by 5% in 2020 over that of 2019. However, the IMF estimates all the GCC economies to show positive growth in 2021 with Saudi Arabia expected to grow 2.9%, UAE by 3.1%, Qatar by 2.4%, Kuwait by 0.7%, Oman GDP Growth in % from 2020-2022 Source: IMF 2021 MECA Regional Outlook Macro indicators have improved in the GCC The improved projections are...
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July 7, 2021
Fresh listings could reinvigorate Islamic equity capital markets
This article was originally published in Islamic Finance news (IFN) GCC regional equity markets continue to scale new peaks buoyed by global rally and increasing oil prices. S&P GCC Composite Index, an index, has gained over 20% for the year. Liquidity glut sloshing around global markets has fuelled the rally. Following the COVID-19 pandemic, central banks worldwide eased money supply and increased the availability of credit at near zero interest rates to stem economic fallout. However, the capital has found...
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June 1, 2021
ETF’s in GCC: How far have they come?
Exchange Traded Funds (ETF) was first introduced in the year 1993 and since then, it has made a long journey and won the interest and participation of many retail and institutional investors. Currently, there are more than 7,000 ETFs traded globally. The global ETF assets were worth about USD 7 trillion as of august 2020 (https://etfgi.com/news/press-releases/2020/09/etfgi-reports-assets-invested-etfs-and-etps-listed-globally-broke). Today ETFs are available in many countries, based on pure equity or a mix of equity and debt or fixed income instruments or alternative...
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May 23, 2021
Oil Price Move yet to lift Saudi Aramco’s Share Price
Saudi Aramco the blue chip of Saudi Arabia and the world’s largest oil company took a drop in its stride last year post Covid-19 as oil demand slumped and OPEC+ which is led by Saudi Arabia agreed to sharp cut in oil exports by 9.7mmbpd effective May 2020 from an October 2018 baseline (with Saudi output cut from 12.3 mmbpd in March 2020 to 8.5 mmbpd) to shore up and stabilize the oil prices in the international market. In line...
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May 12, 2021
The Archegos Lesson: Bring Risk Management to where it belongs
The biggest lesson from Archegos fiasco is that risk management function should not be a side-kick and should be manned by independent, non-partisan executives who will not bend come what may. While this can slow down the growth, at least the institution will survive to analyze. If not, the board meetings will only happen in corporate cemeteries! While 99% of today’s news is centered around COVID-19 and its multiple waves across the world, on March 23, 2021 a hedge fund...
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April 28, 2021
GCC Asset Management and its challenges
Interview with Mr. M.R.Raghu, CEO, Marmore MENA Intelligence How big is GCC Asset Management industry and who are the major players? The GCC Asset Management Industry manages around USD 59 billion in assets, spread across 223 funds across the region. The Saudi asset management industry leads the region managing 87% of the assets and having 57% of the funds domiciled in the country. Kuwait comes in at a distant second, having 5% of the total AUM domiciled in the county....
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April 18, 2021
Indian startups Eye a new “SPAC” opportunity
When US stock market sneezes, Emerging markets including India catches cold! However, this time around there is positive news for Indian tech startups in the form of Special الغرض Acquisition Companies (SPAC’s). Though SPAC’s are not a new concept, suddenly they seem to be in a rage in US for a variety of reasons. Before that, let us briefly look at what this is. As the name implies, it is a special purpose vehicle formed and floated in the market...
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March 10, 2021
Deluge of bond issues by Gulf banks provides capital boost
GCC banks continue to tap the bond markets at a brisk pace in 2021 as they try to take advantage of low interest rates amid prospects of economic recovery. The impact of COVID-19 on earnings have spurred banks to raise capital through bonds to strengthen their balance sheets. Banks also needed to issue new bonds to pay off the ones maturing this year. UAE’s Emirates NBD bank had the first public debt issuance in GCC this year with a USD...
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March 9, 2021
Kuwaiti banks – Earnings report 2020
All major Kuwaiti banks reported their financial results for the fourth quarter of 2020 and that of the whole year. As expected, all the banks reported a reduction in net profits for 2020 compared to that of 2019 mainly due to the increase in provisions and impairment charges for bad loans caused by COVID-19’s disruption to the economy. Exhibit 1: Earnings scorecard - Kuwaiti banks Source: Boursa Kuwait, Refinitiv, Corporate Disclosures Kuwaiti Banks continue to clean up their balance sheets...
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February 18, 2021
Revenue squeeze could spur Gulf bond issuance to new highs in 2021
International debt sales by sovereigns and corporates in the Gulf region topped a record USD 100billion issuance in 2020 as governments raised capital to cover their widening deficits and corporates latched upon the opportunity to strengthen their balance sheets amid low interest rates. Central banks opened up the liquidity taps to support the economy and investor frenzy for positive yielding instruments drove international debt issuance from the gulf region to record highs. Exhibit: GCC borrowings topped USD 100billion in 2020...