GCC

COVID-19’s direct and indirect impact on GCC banking sector

The Current economic crisis due to the COVID-19 pandemic is likely to impact many sectors, none more so than Banking. The Banking sector will be directly impacted by lower profitability, increased non-performing loans (NPLs), deterioration in capital adequacy, etc. and also indirectly impacted by the effect of the various lockdowns and restrictions on the other sectors to which GCC banks are exposed which would impact their operations and profitability in the long run. Direct Impact due to COVID-19 The operations...

GCC fiscal deficits and financing post COVID-19

The economic repercussions of the impact of novel Coronavirus and the subsequent breakdown of OPEC+ supply cut agreement is unprecedented for the gulf economies. The sudden freeze in economic activity due to various measures such as travel restrictions (curbs on flights, public transportations and taxis), closing of schools, universities, shopping malls, commercials establishments, and curfew imposition to prevent the spread of virus has created a demand shock. Transportation sector that accounts for approx. 50 percent of global oil demand by...

The importance of Circuit Breakers in curbing volatility

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...

Data Science and its Economic Potential for the GCC

Data is the new oil; emerging technological applications like data science, Artificial Intelligence and analytics have made data a more valuable commodity. Leveraging data science can aid in extracting valuable information from the raw data. Such insights will open up new avenues of growth in the present digital economy; Data science applications have already made some economic impact in key GCC sectors like oil and gas, finance and healthcare. The GCC governments also generates large amounts of data hence effective...

3 reasons why GCC automotive market is facing slump

Automobile is an essential part of the lifestyle of middle east citizens and hence forms an important component of GCC’s annual imports. The region enjoys higher ownership of automobiles primarily attributable to per capita income above the world average. Middle East imports, often fluctuates with oil prices and so is the case with automobile imports too. But what is noteworthy is the sharp decline in imports of automobiles by value and more particularly by number of vehicles during 2016 and...

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...

GCC Bond issuances witness an uptick in H1 2019

Bond markets in the GCC witnessed a pick-up in debt issuances during the first half of 2019 after a subdued close in the last two quarters of 2018. The rise in oil prices during the first nine months of 2018 boosted the oil revenues for GCC economies, reducing the need to tap the bond markets. Consequently, Sovereign issuances dried up in the second half of 2018. Since the start of 2015 (As of 23rd Sep 2019), the UAE and Saudi...

A dab of good food and a dollop of technology!

Customers are increasingly expecting certain advantages when they shop, travel and handle their finances such as digital access, personalization, loyalty tracking and no touch transactions. In a relatively new trend, customers have similar expectations when they dine as well. Restaurant tech is defined as set of innovative technologies that improve the restaurant business and the experience for customers. AI, blockchain, drone delivery, and robotics are expected to play a larger role in the food industry. With a 77% smart phone...

GCC Ridesharing and its long road!

Digital ride sharing platforms are placed within the wider framework of an emerging disruptive model that is referred to as the sharing economy. Sharing Economy refers to the business model that operates through an online platform that facilitates consumer to consumer transactions, panning across sectors including transport, warehousing, tourism and hospitality and finance among others. GCC has a thriving sharing economy primarily due to factors such as a consistent labor force, high levels of urbanization, high technology adoption rates, national...

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...