SHARIAH COMPLIANT ASSETS HIT $267BN: A new report by Ernst & Young has found that Shariah compliant assets in the GCC and Far East have reached $267bn due to strong economic expansion, increased government expenditure and high levels of liquidity. The figure translates into a potential annual revenue pool of $1.34bn for the Islamic asset management industry, according to the report, which focuses on markets in the GCC, Malaysia and Indonesia. At the end of March 2008, there were over 500 Shariah compliant funds in the world, 153 of which were established in 2007 alone. The total could hit 1,000 by 2010, the report said.
US GIVES GCC ‘GREEN LIGHT’ TO DROP DOLLAR PEGS: US investment bank Merrill Lynch believes the US treasury’s positive forecast for the dollar and recognition of the inflation problem in the GCC has effectively given Gulf nations approval to drop the dollar peg and track a basket of currencies, reported our sister company Meed. In its new report the bank suggests that the UAE and Qatar will move to a currency basket in the next few months, which would coincide with the dirham and riyal appreciating by 5 percent by the end of 2008. It also expects Saudi Arabia to change its peg to the dollar in 2009.
MUBADALA TO INVEST IN UAE FINANCIAL SECTOR: Mubadala Development Company, an investment arm for the Abu Dhabi government, is looking to invest in the UAE’s financial services sector, a company official told Gulf News. Greg Fewer, Mubadala’s project and corporate finance adviser, said the company plans to tap the financial services sector through partnerships with international companies. Mubadala is not looking to acquire existing financial institutions, nor will it seek to establish new ones, but rather develop the business itself, he added.
ITHMAR PLANS NEW FUND: Dubai-based Ithmar Capital plans to raise $1bn by launching its third close-ended private equity fund during the second half of this year, Faisal Bin Juma Belhoul, Ithmar’s founder and managing partner, told Gulf News. The company currently has $500m worth of assets under management through its two funds. Ithmar raised $250m of committed capital through its second fund in 2006, Belhoul said.
DFM DOWN, ADX SLIGHT UP: The Dubai Financial Market ended the day down slightly by 1.17 percent or 66.96 pips. Dubai Insurance once again showed the biggest growth, rising 5 percent to 27.25dhs a share. The Abu Dhabi Securities Exchange rose slightly by 0.22 percent or 10.87 points. Abu Dhabi National Takaful showed the biggest increase, going up 9.99 percent.
US ‘SUPPORTS’ CURRENCY REFORMS: Analysts have said that the latest International Economic and Exchange Rate Policies report by the US Treasury, also known as the FX Manipulation report, signals approval for GCC currency reforms. The report recognises the inflationary pressures being felt by Gulf countries through the dollar peg, which analysts say may show political support for revaluation.
DFM, ADX RISE SLIGHTLY: The Dubai Financial Market finished slightly up by 0.12 percent, ending the day 6.96 pips higher. Of the 25 companies traded, 14 saw an increase, with Dubai Insurance once again recording the biggest growth. The Abu Dhabi Securities Exchange saw a 44.15 point, or 0.89 percent increase on Sunday. The Ras Al Khaimah Cement Company shot up 9.96 percent to 2.65dhs.
INFLATION THREATENS MONETARY UNION: A report by credit company Fitch Ratings has found that widely varying inflation rates could threaten a 2010 GCC single currency. The variances could hamper decisions such as settling on an international exchange rate. Recent figures place the UAE inflation rate at close to 11 percent, on a par with Saudi Arabia, while Bahrain’s inflation figures stand at $5.2 percent.
EGYPT REPORTS PAYMENT SURPLUS: The Egyptian central bank has announced a balance of payment surplus of over $4.9bn in the first nine months of its fiscal year. The figure has been fuelled by strong Foreign Direct Investment, which rose $2.3bn from the same period last year to $11.3bn.
IRAQ AUDIT SLAMS CONTRACTORS: An audit by the US Department of Defence on spending by army contractors in Iraq has found that none of the $8.2bn has been properly accounted for. A New York Times report also claims that $1.8bn in confiscated assets was handed out in ‘bundles of cash’ during the early part of the war.
SAUDI TO LAUNCH NEW LABOUR CONTRACT: From 1 June Saudi Arabia will begin implementing a mandatory new unified labour contract aimed at curtailing the role of agents in the hiring of foreign workers. The new contracts stipulate employee rights such as offered salary and leave allowance.