Exclusive outtakes from industry leaders
Yes, the market for IPOs is opening up, investors are regaining confidence and the worst seems to be over, but challenges are still looming and there’s a dire need for a change in regulation. Or so suggested Shuaa Capitals’ chief Sameer al-Ansari.
“With the balance sheet of banks, whatever is keeping them constipated, we need to give them something to start. Banks have to be more comfortable and confident that there are no more shocks on the horizon,” said Ansari at the Reuters Middle East Investment Summit in Dubai on Tuesday.
The right provisions need to be made — and that means more acknowledgment of non-performing loans — in turn bringing adequacy ratios down, so that banks get a boost and start
lending again, Ansari noted.
“We need to open the tap a bit, even if its a drip,” the banking exec said, using hand gestures to illustrate his point. “We can’t have growth in the economy if its negative.”
Just to be clear, Arabtec is not considering a convertible bond issue.
The builder has no need for funds and has adequate access to capital if needed. But nonetheless its chief financial officer Ziad Makhzoumi is watching the region’s increasing capital raising activities with interest.
“I don’t think we need any funding whatsoever… As a CFO I have to look at all the options all the time,” he told the Reuters Middle East Investment Summit in Dubai on Monday.
A recovery in the Middle East and the prospects for investment are on the agenda at the Reuters Middle East and Investment Summit, taking place in Dubai, Riyadh, Cairo, Kuwait, Beirut, Bagdad, Abu Dhabi and London.
In the wake of Dubai’s debt crisis, which rocked financial markets globally and dented confidence in the region, top executives and officials will discuss whether the investment climate in the region is improving and confidence returning. 2011 will be a year of more restructurings, but the region’s capital needs will lead to a surge in debt issues and even a possible revival of the IPO market.
MANAMA, Feb 18 (Reuters) – Dubai’s debt fiasco and real estate bubble bust pushes investors to look out for alternative assets underlying Islamic finance products – could renewable energy provide a way-out?
Predominantly, Islamic finance and investment products have been backed by infrastructure or commodities assets. But executives at the 2010 Reuters Islamic Banking and Finance Summit said product diversification was needed to cut the over-reliance on real estate in the Gulf.
Manama, Bahrain Feb. 16 - The Islamic finance industry has a problem. Its main selling point is that it is sharia-compliant, meaning it adheres to Islam’s prohibition of interest and avoids dealing with forbidden sectors such as alcohol and gambling.
But in the eyes of many, much of the industry is actually not sharia-compliant at all.
Islamic banking is one of the world’s fastest growing financial sectors, according to industry estimates. It has attracted more attention in the aftermath of the global financial crisis as investors are increasingly looking for alternative, ethical ways of investing. This has also intensified a debate within the industry on whether it should move further away from conventional banking, designing products based more directly on Islamic principles.
Global issuance of Islamic bonds, or sukuk, is expected to fall this year from 2009 levels, a recent Reuters poll showed, as the Dubai debt crisis and an expected rise in borrowing costs weigh on market sentiment. In the Gulf Arab region, a funding crunch at Bahrain-based Islamic investment house Gulf Finance House shows that the financial crisis is far from over in the region and that the industry urgently needs to develop new products and business lines to generate revenues.
Dubai returns to the fixed-income sphere for the first time in more than a year after raising about $2 billion from dirham and dollar-denominated Islamic bonds.
Confidence in the emirate had run aground earlier this year as investors bet on Dubai’s state-linked entities not being able refinance debt. So far, this year it has met all its obligations and with the fresh issue booking about $6.5 billion from regional and international investors, Dubai’s doomsday scenario appears to be vanishing.
Coming out of one of the darkest recessions, have we learned the lesson at all? Or are we going to repeat the mistakes of the past again?
Khuram Maqsood, managing director of boutique corporate financing advisory firm Emirates Capital, thinks we may well repeat them.
Socially responsible investing, which takes into account social, environmental and governance risks, is arguably still in its infancy in the Gulf, where the enormous wealth created by hydrocarbons sometimes flows into extravagant projects like an indoor ski resort.
But Mustafa Abdel-Wadood, managing director of Abraaj Capital – the Middle East’s biggest private equity firm — sees SRI as enlightened self interest and the firm puts its own money where its mouth is.
Gulf Arab states have awed the West with six years of breakneck growth fueled by record oil prices and a real estate boom.
But what does the future hold? Will it be just a mirage of prosperity in the desert? Or, will the region, rich in oil, adapt to the future? Speaker: Timothy Fox Chief Economist, Emirates NBD Presenter: Martina Fuchs Dubai.