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September 19, 2019
Liquidity in Islamic banking: Challenges and opportunities
This article was originally published in Islamic Finance News (IFN). Liquidity management has been a key element for banking, be it conventional or Islamic. However, the main difference between the two lies in the tools each of them can use to effectively manage liquidity. Conventional banks have access to instruments such as interbank deposits, repo operations, foreign exchange swaps, T-bills [treasury bills] and commercial papers that are inaccessible to Islamic banks due to their nature of charging interest, which is...
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September 10, 2019
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...
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August 13, 2019
Kuwait Retail Sector Positioned for Significant Growth
Kuwait’s retail sector is small in absolute terms when compared to regional peers like the UAE or Saudi Arabia. However, Kuwait has one of the highest concentrations of international retailers in the GCC, with the luxury segment proving to be a major draw. The value of Kuwait’s retail market was KD 3.5bn or 9.1% of non-oil GDP, as of February 2018 (Oxford Business Group). These figures are expected to grow even further as consumers have shown an increased preference for...
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May 20, 2019
Combining technology with Brick and Mortar stores in the GCC: 6 ideas
Euromonitor International projects that the retail sales across Kuwait, Oman, Saudi Arabia and UAE will increase by more than USD 24 billion over the next five years. The UAE retail industry currently (worth USD 55 billion) will lead the trend reaching to USD 63.8 billion by 2023, at an estimated growth rate of 16%. Non-store modes of retailing such as online shopping, direct selling, social media and home shopping is estimated to grow by 78 percent from 2018 to 2023....
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February 11, 2019
Novel liquidity instruments need of the hour for Islamic financial institutions
This article was originally published in Islamic Finance News. Islamic finance is still a relatively small part of the broader financial services industry. Compared to the conventional industry, Islamic finance lacks adequate liquidity instruments as Shariah restrictions limit the number of instruments that could be used for liquidity management. Islamic interbank and money markets also lack the volume and diversification of conventional markets leading to a sectoral disadvantage from the outset. Review of 2018 Since 2015, there has been a...
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September 9, 2018
Abraaj Episode & Implications for GCC Private Equity Industry
Globally, private-equity (PE) firms manage about USD 3 trillion of capital for various investors such as pension funds, sovereign wealth funds, endowments and High Net worth Individuals (HNWI). However, less than USD 18bn of that (approximately, 0.6%) is managed by PE firms based in the Middle East region. The minuscule proportion of the Assets under Management (AuM) of the regional PE industry sets clear perspective on the size of PE industry in the region compared with the global level. Recently,...
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May 13, 2018
Natural Gas over Oil: The Changing Narrative
For several decades, gas sector has been on the backseat largely overshadowed by oil, which commanded a larger market compared to the aggregate of all the other commodity markets. Natural gas, the least polluting fossil fuel compared to its peers such as coal and oil is set for a major transformation. The commodity's long-term demand is expected to soar in the coming years due to transition towards a low carbon future and growing usage of natural gas specifically in the...
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March 25, 2018
GCC SWFs Asset Allocation Strategies
The GCC SWFs are bestowed with the responsibility to preserve and grow the national wealth for the future generations and simultaneously, facilitate social development, economic diversification and enhancement of the domestic infrastructure. Based on these objectives the SWFs have been successful in devising and executing their investment strategy in the past. However, over the last few years, the regional SWFs have been operating under several challenges such as low interest rates, new normal oil prices, geopolitical shocks and beginning of...
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January 24, 2018
Waste to Energy in the GCC – Moving beyond the cost dynamics
Waste to Energy (WTE) provides an environmentally sustainable route for waste disposal while carrying the added benefit of producing clean energy. It is high time for the GCC countries to wake up and take note of their Solid Waste Management strategy as rapid urbanization has led to an increasing waste pile up year over year. Per capita waste generation in most GCC countries exceed the global average of 1.2 kg per day with Kuwait being the highest in the GCC...
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December 28, 2017
World’s Cheapest Power Project: A milestone shift to solar electricity generation?
Saudi Arabia recently registered the cheapest price bid to supply solar electricity ever recorded. Abu Dhabi’s Masdar and Electricite de France SA bid to supply power from a 300-megawatt photovoltaic (PV) plant for as cheap as 1.79 cents a kilowatt hour. If the project is successfully awarded by the Ministry of Renewable Energy Project Development, it would top the leader board beating the previous record for a solar project in Abu Dhabi for 2.42 cents a kilowatt-hour. It is a...