The Qatar exchange was the only bourse in the Middle East and north Africa region to record a positive price return in 2011 as the Arab Spring uprisings hit the country's financial markets. The exchange's CEO explains the factors behind its stability, and how its three-phase strategy will enhance its reputation.
Qatar's impressive economic growth over the past few years, driven by the energy sector, looks set to slow down in 2012. However, the country's central bank governor is unfazed by such forecasts, as he says the private sector will now come to the fore in areas such as infrastructure, education, services and healthcare.
An increasing number of financial institutions from international banks to local specialist players are developing sharia-compliant structured products, offering investors limited downside risk and high returns. But as the uptake for such products increases, so does the pressure of ensuring that they are 100% sharia-friendly.
Local banks in the Middle East have continued to perform strongly despite the global financial downturn. The strategies of three such institutions – state-owned National Bank of Abu Dhabi, local-owned Qatar National Bank and retail franchise Emirates NBD – help to explain such a strong performance.
The Lebanese banking sector witnessed slow growth in the first half of 2011, as political paralysis gripped the entire economy. The re-election of Riad Salameh as central bank governor helped boost activity in the latter half of the year, but with the country's political situation and the global economic climate still threatening to trouble Lebanese banks, how does he intend to stimulate growth throughout 2012?
Having endured an eventful recent past that includes a civil war, involvement in Middle East disputes and weathering the crisis in neighbouring Syria, Lebanon’s robust financial sector is growing at what the industry believes is a healthy pace. And with its banks highly liquid and well placed for the implementation of Basel III, good economic growth is forecast for 2012.
The Banker’s Deals of the Year for 2012 celebrate the most impressive transactions in FIG capital raising, M&A, corporate and SSA bonds, infrastructure and project finance, loans, structured finance, equities, restructuring, Islamic finance, and this year a newly added trade finance category. Many deals were undertaken in very difficult market conditions, while banks from emerging markets are noticeably playing a larger role in the top transactions in their countries.
Now Kuwait has joined many other Gulf states in pushing through private financing across a range of sectors and overhauling its infrastructure, it boasts one of the Middle East's largest and most diverse public-private partnership programmes. But as the country's government opts for PPPs, will the banks follow?
By identifying potential weaknesses and fixing them – diversifying a previously oil-reliant economy and encouraging growth in the private sector – Saudi Arabia has managed to sustain a growing economy, even through times of economic and political turmoil.
Home to an estimated 9% of the world’s total oil reserves, Kuwait posted its 12th consecutive budget surplus of $18.9bn in 2011. But while the country's coffers are flush with cash, continued political infighting has stymied development, leaving the economy overly reliant on the oil sector and the country's basic infrastructure in need of improvement.
Loans are up, deposits are growing and profits are healthy in Saudi Arabia's banks. But with growth opportunities in Islamic finance and a low proportion of home ownership in the country, there are still many more lucrative areas for these institutions to tap.
Kuwait's banks are struggling to recover from the significant losses made in 2008 and 2009, suffering with high levels of non-performing loans and a dearth of lending opportunities. The government's economic development plan was designed to both offer a lifeline to the banking sector and diversify the country's oil-reliant economy, but while banks are keen to get on board with the various projects, political indecision is slowing their progress.
In an attempt to tighten its regulatory framework and instil greater confidence in investors, Kuwait’s parliament has approved its first independent capital markets regulator for the Kuwait Stock Exchange. Only time will tell if the move can resuscitate the market.
The events triggered by the 2008 global financial crisis have ushered in a new wave of banking regulation in the United Arab Emirates and led to a greater focus on risk management. While UAE banks now boast some of the highest capitalisation levels in the world, the biggest challenge facing the sector as a whole is that of tightening liquidity.