• July 9, 2020

    COVID-19 may force GCC companies to cut dividend payout

    Dividend payments have been an important tool to get investors to buy shares of companies as dividends provide a return on investment even during periods when the markets are down. GCC Companies listed on stock exchanges have provided consistent dividends in recent years. Due to Covid-19, many GCC Companies may be forced to cut dividend payouts due to fall in earnings and need to preserve cash. We examine the impact on dividends due to the pandemic and its ramifications for...

  • June 8, 2020

    Implications of COVID-19 on GCC Asset Classes

    COVID-19 has rendered economic outlook and companies’ performance projections for 2020 meaningless in a single stroke. Heightened uncertainty has become an everyday reality in the current times. As the coronavirus scare continues, the world is faced with multidimensional issues and tough questions, be it finding an effective treatment for the virus, zeroing in on an optimal quantum of stimulus or deciding the right time to lift lockdowns. With measures like social distancing and lockdowns affecting day-to-day lives of people, asset...

  • June 7, 2020

    How to improve the Secondary Market for Sukuk Bonds

    This article was first published in Islamic Finance news Volume 17 Issue 22 dated the 3rd June 2020 Sukuk bonds have been gaining in popularity since their first issuance in 1990. According to the International Islamic Financial market (IIFM), Global Sukuk Issuances with maturity over 18 months totalled USD 42 billion in 2019, a growth of 6% over 2018 and nearly 40% over 2009. However, in-spite of the rise in issuances, the secondary market for Sukuk Bonds has remained illiquid...

  • May 11, 2020

    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...

  • December 16, 2019

    Regulations governing liquidity risk in Islamic Banking

    This article was first published in Islamic Finance news Volume 16 Issue 48 dated the 4th December 2019 Given the systemic importance and the pivotal role played by banks in a country’s economy, banking regulations are of paramount importance for all stakeholders. Guidelines and regulations enable all banks to maintain stability and monitor their risk. In the context of Islamic Banking, liquidity risk is challenging because of limited availability of Shariah compliant short term liquidity instruments and a shallow markets...

  • November 21, 2019

    What affects the liquidity position of Islamic banks?

    This article was originally published in Islamic Finance News (IFN). Maturity transformation is the primary business of banks and which by definition is the conversion of a bank’s short-term liabilities into longer-term investments through loans and advances. The very nature of a bank’s business model requires them to hold a mix of liquid liabilities with illiquid assets. While the primary target of banks is to strive for profitability by optimal utilization of available funds, they also have to maintain an...

  • September 19, 2019

    Liquidity in Islamic banking: Challenges and opportunities

    This article was orginally 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...

  • September 15, 2019

    Do GCC Banks have adequate capital buffers?

    The term liquidity is defined as the banks’ ability to fund rising assets and to meet its obligations on time. Therefore, when banks are unable to perform the primary tasks of funding assets and paying its obligations, it faces liquidity risk. Effective liquidity management is important to promote macro-financial stability. In the GCC countries, fixed exchange rate regimes provide reliable nominal anchors, but when combined with open capital accounts, they result in limited independence of monetary policy. At the same...

  • August 6, 2018

    Banking stocks propel the GCC markets

    According to our recently released Monthly Market Review for the month of July, the second half of the year started on a good note for the stock markets of Kuwait and its regional peers, as they continue to yield positive results. Kuwait markets registered a positive performance for the month of July, as its All Share index gained 5.7%, propelling its YTD gains to 9.6%. Among Kuwait’s blue chip companies, Zain, Kuwait Financial House (KFH) and National Bank of Kuwait...

  • January 29, 2017

    Mobile payments are a great business opportunity for GCC banks

    The article originally appeared in The National | Business. Cash is still king in the GCC. But that is soon to change. The beauty of disruptive technology is it disrupts, no matter what. Either companies adapt quickly, or get swamped under. Consider the case of mobile payments. Sweden opened its first unmanned convenience store in March last year. Amazon is testing a grocery store in Seattle with no checkout lines. Customers check-in at the entrance of the store with a...