This week we had the opportunity to speak with Mohsin Khan, Senior Fellow at the Peterson Institute for International Economics and the former head of the Middle East department at the International Monetary Fund, ahead of the 2009 Reuters Islamic Banking and Finance Summit. I asked him why he thought that the once red-hot market for Islamic bonds had slowed to a trickle. Khan says some of the largest issuers of Islamic bonds, or sukuk, were real estate developers and the reason corporations are reluctant to buy or issue sukuk these days is due in large part to the continuing decline in the value of real estate in Dubai. Click below to listen:
Kahn on sukuk issues from Reuters TV on Vimeo.
Mohsin Khan, former head of the Middle East department at the International Monetary Fund, says the Islamic banking industry could benefit from consolidation by reducing the number of sharia boards, or groups of Islamic scholars, that each bank employs in the Middle East to decide whether or not investments comply with Islamic law. I spoke with Khan earlier this week ahead of the 2009 Reuters Islamic Banking and Finance Summit that kicks-off on April 13th in Dubai, Bahrain, Kuala Lumpur and London. Click here to listen:
Kahn on consolidation from Reuters TV on Vimeo.
Pakistan’s foreign reserves are dwindling fast and many worry about the country descending into chaos.
But Naser Al-Marri, managing director of Noor Financial Investment Co. is taking a longer view of the country.
“I love Pakistan,” he told a Reuters summit. “For me Pakistan is a mini-China.”
The country’s potential lies in its agricultural resources and its potential as a bridge for ferrying energy into fast-growing China.
Marri’s Noor, a major shareholder in Karachi Electric Supply Company, urged Gulf Arab desert countries to invest more in growing crops in Pakistan. Gas could also flow from the Gulf to China through Pakistan, he said.
As Pakistani president Asif Zardari visits Saudi Arabia seeking aid, he would be heartened by some long-term optimism.
“Many people don’t like Pakistan, but I am sure in five years, Pakistan will be the place to be,” Marri said.
A Barack Obama victory in the U.S. presidential election on Tuesday could bring much-needed good news to the Gulf Arab region, the chairman of Kuwait’s banking association told a Reuters summit.
Gulf Arab stock exchanges have tumbled this year and its economies are forecast to slow as the price of oil, its main export, drops.
The prospect of conflict involving nearby Iran is often cited as a risk factor for investing in the oil-exporting region.
“Maybe the pressure that is on this region in terms of U.S.-Iran tension might ease up,” said Abdulmajeed al-Shatti, who is also chairman of Commercial Bank of Kuwait, the chairman country’s third-largest lender. “Obama has indicated he would engage Iran and if the U.S. wants to change Iran, it has to engage.”
The Reuters Middle East Investment Summit in Dubai was hit by the whirlwind visit of British Prime Minister Gordon Brown across the Gulf as he looked to drum up support for ailing British firms and convince Gulf investors the IMF’s bailout fund was a safe place to put their cash. After courting Saudi Arabia and Abu Dhabi, it was a fleeting visit to the region’s commercial hub Dubai. As his motorcade flew passed the world’s tallest tower But hark…we have seen this before. President George Bush headed to the United Arab Emirates more than a year ago. But that’s where the similarities stop. For Mr Bush, Dubai ground to a halt. Chaos ensued. Streets were closed. Workers sent home. The President was in town, so that was that. Fast forward November 4, 2008. Mr Brown is here. Dubai is business as usual, although The Prime Minister’s motorcade did delay a speaker for the Reuters summit. Perhaps the credit crunch has meant random days off are no longer on the Dubai agenda……. unless you’re the President of course.
An eight-week strike by machinist workers at commercial aircraft maker Boeing delayed production and may cut profit by hundreds of millions of dollars.
But a major aircraft leasing company in the Gulf Arab state of Kuwait – and a Boeing client – sees one possible benefit to the company.
A global industry downturn is forcing manufacturers to slow down growth plans and control capacity, Ahmad A. Alzabin, chairman of Kuwait-based Alafco Aviation Lease and Finance Co. told a Reuters summit.
“Probably with Boeing they’ve been somehow more fortunate with the strike that was going on for two months. This absorbed some of the excess capacity that had happened.”
Healthcare and education offer a new frontier for Middle
East private equity firms as they take advantage of dramatic
demographic changes in the region.