GCC Investment

Impact of Covid-19 on GCC REITs

The GCC has seen a number of Real Estate Investment Trusts (REITs) listed in stock exchanges in the past few years. This accelerated after Saudi Arabia’s أسواق المال Authority (CMA) approved the listing of REITs in 2016 as a part of the National Transformation Program (NTP) and Saudi Vision 2030. Due to the economic crisis in the wake of the covid-19 pandemic, many of the listed REITs have seen a steep decline in their share prices and market capitalisations. Saudi...

How to improve the Secondary Market for Sukuk Bonds

This article was first published in Islamic Finance news Volume 17 Issue 22 dated the 3rd June 2020 Sukuk bonds have been gaining in popularity since their first issuance in 1990. According to the International Islamic Financial market (IIFM), Global Sukuk Issuances with maturity over 18 months totalled USD 42 billion in 2019, a growth of 6% over 2018 and nearly 40% over 2009. However, in-spite of the rise in issuances, the secondary market for Sukuk Bonds has remained illiquid...

أهمية الضوابط في كبح التقلبات

Stock markets around the world and the GCC have responded to the COVID-19 pandemic with massive volatility, as traders have been panic selling out of fear driving the indices down. The Boursa Kuwait All Share Index (BKAT) saw huge falls on March 8 and March 9 when the BKAT fell 9.1% and 9.4% respectively due to the oil price crash and coronavirus fears. Due to this, Boursa Kuwait has announced that from March 15, the security circuit breaker would be...

Islamic Liquidity Management – The Journey So Far

This article was first published in Islamic Finance news dated December 2019. Globally, the assets under Islamic finance industry have surpassed the USD 2.4tn mark. Digitalization which has emerged as a revolutionary trend in financial system is becoming popular in Islamic finance industry as well. Islamic banks account for over 70% of industry’s total assets, as of latest available. Islamic liquidity management instruments are still at their infancy, and there are very few instruments that meets the industry needs and...

Secondary Market of Sukuk: An Overview

This article was first published in Islamic Finance news Volume 17 Issue 1 dated the 8th January 2020 Sukuk are useful instruments, both for issuers as well as investors. They can be an alternative source of funds for governments and conventional institutions, a liquidity management tool for Islamic banks and institutions whose investments must be Shariah compliant and a source of portfolio diversification for conventional institutions. However, in order to benefit from the advantages of Sukuk, the primary and secondary...

GCC Companies: High Cash Holdings and Shareholder Returns

Investors look at various parameters to understand and evaluate a company’s attractiveness. One such item in the balance sheet is the level of cash that a company holds. If the cash balance has been consistently growing, it is generally considered to be a good indicator that the company is performing well and is therefore able to accumulate cash reserves on its balance sheet. However, it is essential to determine the cause behind growth in cash flow and reason for holding...

How does remittance cost in the GCC stack up?

Cost of remittance varies across GCC countries and is dependent both on the source and destination. Based on the average remittance cost across MTOs, it is observed that operators involved in transferring money from Qatar and Saudi Arabia have the highest remittance costs while that of Kuwait and the UAE have the lowest cost. For instance, the average cost of remittance of USD 200 from Qatar to India stands at 3.9% while that of Kuwait to India is 1.9%. Certain...

Securitization platform for Islamic liquidity management

This article was originally published in Islamic Finance News (IFN). Liquidity management has been one of the major hurdles faced by Islamic banks since inception, owing to the dearth of instruments that help maintain liquidity while complying with Shariah laws. Due to the unavailability of compliant instruments, Islamic banks typically hold a large amount of liquid assets in their balance sheets until maturity and are dependent on their balance sheet assets for liquidity management. The excess idle cash adds pressure...

Saudi Corporate Capital Spending – An Encouraging Boost to Non-Oil GDP

Capital Investment is a harbinger of future growth as the fruits from today’s investments will appear in the future. Saudi Corporate sector has invested large resources in capital expenditure in 2018 which is much higher than their total net income earned during the year. The Corporate sector as represented by 120 (non-financial) listed Companies included in Tadawul All Share Index (TASI) of Saudi Stock Market, was examined to measure change in Property, Plant & Equipment (PPE), gross of depreciation (Capex)...

GCC Stock Markets – Kuwait continues to be the best performer

According to recently published Monthly Market Review for the June, GCC markets recovered lost ground during the month, as the positive performance of Saudi equities lifted the broader index. Kuwait continued its positive run in 2019, registering gains for the sixth month in succession. Kuwait’s All Share index rose by 1.9% while its Premier market index rose by 2.3% in June. In the first half of 2019, Kuwait emerged as the best performing market with a gain of 19.1%. The...