Interpreting Middle East Economic News and Analyzing Market Trends

Category: Kuwait

Ambitious Gulf investors to launch Islamic bank in Luxembourg with goal of serving wider European market

 

Islamic Bank in Lux

Gulf investors are again attempting to launch an Islamic bank in mainland Europe, this time in Luxembourg.  There have been previous attempts at launching Islamic banks in France and Germany, but they were never launched siting an unaccommodating banking regulator as the reason.  Other Islamic banks were launched in Switzerland over the years, but their objectives were very narrow in scope.  The UK, on the other hand, has been the most successful in this regard since it was the first Western country to adopt Islamic banking regulation.  Today, there are four Islamic banks operating in the UK, one retail and three investment banks.  Will an Islamic bank in Luxembourg be successful?

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Egypt’s sovereign credit rating upgraded (but still junk) with a stable outlook siting $12 billion in aid from GCC countries

Cairo Traffic

Photo source: Think Progress

Standard & Poor’s raised Egypt’s long and short-term credit rating from real junk to junk siting $12 billion in aid pledged by GCC countries as one of the main reasons for the improvement.  The firm also says it has a stable outlook on the country going forward.  What has changed since Morsi left and the outlook was negative?  The economy has not improved.  Some would even say it’s getting worse.  The $12 billion pledgde is still a pledge, not much has been delivered yet and there are no guarantees that Egypt will get this money… its merely a pledge and not a legal promise as Kuwait is finding out.

 

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Amnesty exposes Qatar’s slave labor practices, Qatar hires law firm to investigate itself, other GCC countries continue with similar practices

qatar-laborers

All of Qatar’s construction workers are from poor neighboring countries such as India and Bangladesh

 

Last week Amnesty International exposed Qatar’s inhumane labor practices some describe as modern-day slavery.  In its investigation, Amnesty interviewed laborers, companies and government officials.  This story made worldwide headlines as Qatar has taken center stage recently as it prepares for the 2022 FIFA World Cup.  Amnesty should have gone further and expand its investigation beyond Qatar.  These poor labor practices are not unique to Qatar, all neighboring GCC* countries are guilty of these same practices.

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Junk sukuk – the next trend in Islamic finance… and Kuwait looks to launch derivatives to pump up market

Sukuk Trading

What’s the best way to increase trading volume in stale markets?  Launch exotic new products to entice new investors.  The UAE is looking to launch high-yielding (a.k.a. junk) sukuk as it pushes to become the global hub for Islamic finance and Kuwait is eying the derivatives markets.

  

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Middle East high tech startups take off

Silicon-Valley-Middle-East-2013

Source:  Smithsonian.com

The Middle East has been a hotspot for tech start-ups lately.  This growing trend has been overshadowed by all the bad news coming out of the region since 2011.  Don’t expect any competition to Silicon Valley any time soon, but entrepreneurship is catching on in the Middle East in a big way.  Political troubles are only adding more fuel to the trend.

 

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