Islamic banks in the Arabian Gulf will see "mid-single-digit growth" this year and next due to government spending on strategic initiatives and healthy oil prices, S&P Global Ratings said.
Islamic banks in the Gulf lost ground in 2018 as compared to growth at conventional banks. However, the rating agency said sharia-compliant lenders have strong fundamentals with a stable market share of around 36 per cent of total bank assets in the GCC. They also enjoy stable profits, providing an average return on assets of 1.6 per cent.
“Overseas expansion is providing higher geographic diversification but it also comes with risks. High capital buffers will provide resilience to banks,” said Mohamed Damak, senior director and global head of Islamic Finance at S&P Global Ratings during a media roundtable in Dubai on Monday.
On the outlook for Islamic finance globally, he said the market would continue to grow slowly due to weaker economic performance in some core countries, including Turkey and Iran.
The sukuk market expanded strongly in the first eight months of 2019, however, with $113 billion (Dh415bn) issued globally, up 34 per cent on the same period last year, he added. In the UAE, sukuk issuance was Dh5.5bn, slightly higher than the Dh5.4bn issued in the first eight months of last year.
The total volume of sukuk issuance in Islamic countries is expected to be around $140bn to $150bn in 2019, up from $131 billion in 2018, according to the ratings agency. Indonesia and Turkey continued strong levels of issuance in the first eight months of 2019.
“Issuers continue to prefer the conventional route in the Gulf due to the lack of standardisation and the complexity attached to sukuk issuance versus conventional bonds,” Mr Damak said.
“Oil price volatility but a higher number (in oil prices) means lower financing needs and issuance for the GCC,” he added.
Green sukuk issuance is also likely to accelerate as efforts to combat climate change gain traction and countries in the region start renewable projects. Dubai is targeting a renewable mix of 75 per cent by 2050 while Saudi Arabia intends to build a $200bn solar project.
“A lot of these investments could be financed through green sukuk,” said Mr Damak.
Separately on Monday, Dubai Islamic Economy Development Centre (DIEDC) signed an agreement with the Dubai International Financial Centre, Dubai Financial Market and the Climate Bonds Initiative on Monday to collaborate on growing the green sukuk market and stepping up the exchange of knowledge and expertise in the field.
“The agreement aims to promote the issuance of green sukuk in the UAE and across the world, in addition to developing the standards of certification for green sukuk along the lines of the Climate Bonds Standard and Certification Scheme,” DIEDC said in a statement.
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
WHAT IS GRAPHENE?
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics.
UAE currency: the story behind the money in your pockets
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
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Brief scores:
Toss: Nepal, chose to field
UAE 153-6: Shaiman (59), Usman (30); Regmi 2-23
Nepal 132-7: Jora 53 not out; Zahoor 2-17
Result: UAE won by 21 runs
Series: UAE lead 1-0
Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
UAE currency: the story behind the money in your pockets
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
THE SPECS
Engine: Four-cylinder 2.5-litre
Transmission: Seven-speed auto
Power: 165hp
Torque: 241Nm
Price: Dh99,900 to Dh134,000
On sale: now
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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South Korea
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
MATCH INFO
Bayern Munich 2 Borussia Monchengladbach 1
Bayern: Zirkzee (26'), Goretzka (86')
Gladbach: Pavard (37' og)
Man of the Match: Breel Embolo (Borussia Monchengladbach)
Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
Brief scoreline:
Liverpool 2
Keita 5', Firmino 26'
Porto 0
Killing of Qassem Suleimani