Virtually all of Kuwait’s key macroeconomic indicators are pointing upwards. But political wranglings could rein in growth once again. READ MORE HERE

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

To grow, Islamic banks must compete with conventional lenders

Dedicated Islamic banks are generally national in nature and in certain markets have reached their ‘natural market share’ for Islamic banking, according to an A.T. Kearney study.

A recent report by the consulting firm A.T. Kearney, The Future of Islamic Banking, and a Reuters article, ‘No windfall from Qatar ban on Islamic windows’, have generated much productive chatter globally.
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By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Dear Dr. Ahmad Mohamed Ali, President, Islamic Development Bank (IDB) Group:

Asalaam Alaikum:

The Islamic finance world welcomes your comments on the ‘Mega’ Islamic Bank to effectively compete against well capitalized conventional financial institutions.

“…The ‘Mega Islamic Bank’ comes as an initiative of the Islamic Development Bank in its efforts to address the dearth of senior financiers, the absence of the Islamic tools of stock exchange and the absence of market liquidity between Islamic banks.”

However, $1 billion, with $500 million in paid capital by the three founders (IDB, Dallah Albaraka and Qatar Government), is smaller than three existing Islamic banks, which have never addressed themselves as ‘mega.’ The three include Saudi Arabia’s Al Rajhi, Qatar’s Mashraf Al Rayan and Kuwait’s Kuwait Finance House (KFH). Furthermore, it seems the ‘mega’ story may be incomplete without Malaysia’s participation.

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An OECD study shows countries with greater income from natural resources tend to be socially less developed. Which perhaps explains why Saudi, Qatari and Kuwaiti students fare far worse then Lebanese and Taiwanese students. READ MORE HERE

Barclays Capital expects GCC economies to rise 5.4% this year, but Citibank worries that a sudden drop in oil prices could leave the states with a dilemma: whether to curtail spending or keep pumping funds into the economy. READ MORE HERE

January 17, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

“The proper man understands equity, the small man profits.” Confucius.

The year 2011 was the year for [Malaysia] Shariah compliant index out-performance against all conventional developed and emerging market country indicies and almost all frontier countries.

The Islamic finance industry has not talked up the Islamic equity capital market story, as the Islamic debt capital market poster child, ‘Sukuk,’ has become the alter-ego of Islamic finance. But, does that amount to concentration brand and business risk for a $1 trillion, where Sukuk are, at best, 20% of Islamic finance?
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Kuwait-based KAMCO sheds light on the future economic outlook of the GCC based on 2011 and 2012 GDP growth expectations. In addition, the report incorporates growth analysis of consumer loans in Saudi Arabia, Qatar and Kuwait for 9M-11. GDP in Saudi Arabia, Qatar and Kuwait is expected to post growth rates for 2011 and 2012, by 29% and 7% in Saudi Arabia, 35% and 7% in Qatar, while Kuwait is expected post growth of 25% and 12%, respectively, supported by the growth in oil GDP.
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In the first part of the 2012 regional economic prospects, a look at oil-rich countries’ efforts to manage their citizens’ expectations, economic slowdown and regional and domestic political upheavals in the New Year.

The year 2011 was probably the most unexpected for the Middle East in decades with not just the magnitude of changes unravelling in the region, but also the sheer number of those cataclysmic changes. READ MORE HERE

Arab countries that have recently been liberated from the clutches of their dictators are searching for a path to prosperity. For many, the political and social and economic achievements of Turkey is worthy of emulation. Indeed, the Prime Minister Recep Tayyip Erdogan is somewhat seen as a rock star among the youth of the Arab world.

But a new study by Legatum Institute, focused on the prosperity of nations, wonders whether Arab countries could consider alternative growth models. READ MORE HERE

Kuwait’s Finance Minister warns that the state’s rising wages and subsidies bill could lead to the devaluation of the dinar and compel the state to sell off assets to meet the out-of-control expenses. READ MORE HERE