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by Joanne Bladd
Any pretence that the middle east is immune to the world's credit crisis evaporated last week following Saudi Arabia's announcement that it expects to post a budget deficit of $17.3bn in 2009 - its first in more than five years.
Word from the Kingdom's ministry of finance that government expenditures were budgeted at $126.6bn for fiscal year 2009, while total revenues sit at $109.31bn, is hard proof - were it needed - the world's largest oil baron is feeling the chill of falling barrel prices.
For critics of the Kingdom's mega-projects, the news adds fuel to speculation that the liquidity freeze could restrict Saudi's sprawling growth plans.
Flush with oil revenue in recent years, the Kingdom has diligently smoothed the path for foreign investment through widespread expansion in infrastructure.
As with Dubai, the scale of the plans, anchored in the promise of foreign finance, were met with questions over their long-term viability. And to a degree, it seems the detractors were right.
With foreign investors now a rare breed, a string of Saudi's infrastructure plans have been left wide open to the slowdown. Adding salt to the wound are falling oil prices and a shift to a more conservative attitude among Saudi businesses, the impact of which is starting to show.
Progress on King Abdullah Economic City, the $27bn jewel in the crown of Saudi's 10x10 plan, has already fallen behind schedule while its developer, Emaar, searches for financing.
That the project, a key component in Saudi's bid for a diversified economy, is struggling to attract private investment, is a sign to many that Saudi's star is on the wane, and must raise serious questions over the viability of the remaining five economic cities.
But rumours of Saudi Arabia's slowdown are premature. Simply, its projects are too big for the government to allow them to fail. In contrast to the debt-to-asset ratio crippling certain Western governments, Saudi holds an estimated $433bn in net foreign assets, and a $157bn budget surplus - a late "liquidity gift" from the days of $147 a barrel prices.
It's hardly overleveraged. And the ministry of finance has been quick to state that large-scale projects "that ensure sustainable development... [and] more employment opportunities" will be first in the queue for supplementary funding.
The fast-tracking on Riyadh's King Abdullah Financial District and the announcement by Modon, the government's industrial development arm, of the launch of a further four industrial cities is evidence of this. Rather than fiddling while Rome burns, Riyadh has sent a clear message it has no qualms about dipping into its reserves to cushion the immature private sector, now the credit crunch has come calling.
Appropriately for the holiday season, Saudi's government is learning that charity begins at home. Whatever the cost, the domestic wheels will keep turning because Saudi Arabia has its eyes on a bigger prize - economic diversity.
Source : ArabianBusiness.com
Showing posts with label asset. Show all posts
Showing posts with label asset. Show all posts
Tuesday, December 30, 2008
Saturday, December 6, 2008
Islamic Finance A Viable Alternative To Conventional Finance
KUALA LUMPUR, Nov 17 (Bernama) -- The current financial turmoil has provided an opportunity for Islamic finance to position itself as a viable alternative to conventional finance by providing investors with other asset classes and markets that provide stability, the Raja Muda of Perak Raja Nazrin Shah said.
He said there was much talk these days about the creation of a new international economic order.
"Some world leaders have called for a Bretton Woods II. There is growing consensus that the unregulated capitalism that has led us to this crisis needs to be reconfigured to provide greater resilience and stability to the financial system.
"The strengths of Islamic finance are derived from syariah principles, which also happen to be sound business principles.
"The syariah injunctions require that financial transactions be accompanied by an underlying productive activity thus giving ride to a close link between financial and productive flows," he said in his address at the launch of "The Malaysian Sukuk Market Handbook -- Your Guide to the Malaysian Islamic Capital Market," here, Monday.
Raja Nazrin said syariah principles prohibited excessive leverage and speculative financial activities thereby insulating the parties involved from too much risk exposure.
"It is worth speculating to what extent the world financial crisis could have been averted, or at least its impact considerably reduced, if the principles of Islamic finance had been more widely practised," he said.
He said there was now a greater awareness and interest among the world financial community of the merits of Islamic finance.
The Perak Regent said there was already a growing demand for Islamic financial products in the global market, far exceeding their supply.
Raja Nazrin said in recent years, "We have witnessed a rapid expansion of the Islamic financial services industry."
"Today, Islamic finance is fast becoming an accepted component of the global financial system.
"Malaysia's direct involvement in the development of Islamic finance has significantly transformed the financial landscape at both the national and international levels, making the country a leader in the international race to become a major Islamic financial centrem" he said.
He said the vibrancy and dynamism of Malaysia's Islamic financial system today was reflected in its continuous product innovation, diversity of Islamic financial institutions, comprehensive regulatory and legal infrastructure, as well as the availability of Islamic finance talent and expertise.
Raja Nazrin said the Islamic capital market in Malaysia today offered a wide range of retail and wholesale products such as syariah-compliant stocks, Islamic unit trust funds, Islamic exchange-traded funds, syariah-compliant real estate investment trusts, structured products and derivatives.
"These world-class financial products are available in both ringgit and non-ringgit currencies," he said.
On sukuk, he said, the country has not only achieved several industry "firsts", but has also successfully developed a deep and liquid market.
"We can lay claim to being the worlds largest and most innovative sukuk market.
"At end-2007, total sukuk originating from Malaysia amounted to RM213 billion (US$62 billion), constituting 68.9 per cent of the global sukuk outstanding," he said.
In the same year, the regent said, the worlds largest sukuk, amounting to RM15 billion (US$5 billion) was raised in the Malaysian sukuk market.
"Following the liberalisation of our foreign exchange administration rules, several foreign development banks, quasi-sovereign agencies and multinational corporations have joined our local corporations in tapping the local sukuk market for funds," he said.
He said the rapid growth of the sukuk market has been nothing short of remarkable.
"As a pioneer, Malaysia has set standards and provided leadership by example on many fronts," he said.
Raja Nazrin said the handbook by RAM Ratings would serve as a guide to institutions and professionals, particularly those from the international community who were keen to make the most of the Malaysian capital market for creating and transacting in sukuk. Learn more Islamic Bonds: Your Guide to Structuring, Issuing and Investing in Sukuk
Source : BERNAMA
He said there was much talk these days about the creation of a new international economic order.
"Some world leaders have called for a Bretton Woods II. There is growing consensus that the unregulated capitalism that has led us to this crisis needs to be reconfigured to provide greater resilience and stability to the financial system.
"The strengths of Islamic finance are derived from syariah principles, which also happen to be sound business principles.
"The syariah injunctions require that financial transactions be accompanied by an underlying productive activity thus giving ride to a close link between financial and productive flows," he said in his address at the launch of "The Malaysian Sukuk Market Handbook -- Your Guide to the Malaysian Islamic Capital Market," here, Monday.
Raja Nazrin said syariah principles prohibited excessive leverage and speculative financial activities thereby insulating the parties involved from too much risk exposure.
"It is worth speculating to what extent the world financial crisis could have been averted, or at least its impact considerably reduced, if the principles of Islamic finance had been more widely practised," he said.
He said there was now a greater awareness and interest among the world financial community of the merits of Islamic finance.
The Perak Regent said there was already a growing demand for Islamic financial products in the global market, far exceeding their supply.
Raja Nazrin said in recent years, "We have witnessed a rapid expansion of the Islamic financial services industry."
"Today, Islamic finance is fast becoming an accepted component of the global financial system.
"Malaysia's direct involvement in the development of Islamic finance has significantly transformed the financial landscape at both the national and international levels, making the country a leader in the international race to become a major Islamic financial centrem" he said.
He said the vibrancy and dynamism of Malaysia's Islamic financial system today was reflected in its continuous product innovation, diversity of Islamic financial institutions, comprehensive regulatory and legal infrastructure, as well as the availability of Islamic finance talent and expertise.
Raja Nazrin said the Islamic capital market in Malaysia today offered a wide range of retail and wholesale products such as syariah-compliant stocks, Islamic unit trust funds, Islamic exchange-traded funds, syariah-compliant real estate investment trusts, structured products and derivatives.
"These world-class financial products are available in both ringgit and non-ringgit currencies," he said.
On sukuk, he said, the country has not only achieved several industry "firsts", but has also successfully developed a deep and liquid market.
"We can lay claim to being the worlds largest and most innovative sukuk market.
"At end-2007, total sukuk originating from Malaysia amounted to RM213 billion (US$62 billion), constituting 68.9 per cent of the global sukuk outstanding," he said.
In the same year, the regent said, the worlds largest sukuk, amounting to RM15 billion (US$5 billion) was raised in the Malaysian sukuk market.
"Following the liberalisation of our foreign exchange administration rules, several foreign development banks, quasi-sovereign agencies and multinational corporations have joined our local corporations in tapping the local sukuk market for funds," he said.
He said the rapid growth of the sukuk market has been nothing short of remarkable.
"As a pioneer, Malaysia has set standards and provided leadership by example on many fronts," he said.
Raja Nazrin said the handbook by RAM Ratings would serve as a guide to institutions and professionals, particularly those from the international community who were keen to make the most of the Malaysian capital market for creating and transacting in sukuk. Learn more Islamic Bonds: Your Guide to Structuring, Issuing and Investing in Sukuk
Source : BERNAMA
Saturday, November 8, 2008
Best Asset Management Company (Global Finance) : Saudi Joint Stock Company
SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches back almost 30 years.
Established on 12 Safar 1398(H) (21 January 1978), SABB formally commenced activities on 26 Rajab 1398(H) (01 July 1978) when it took over the operations of The British Bank of the Middle East in the Kingdom of Saudi Arabia.
SABB is an Associated Company of the HSBC Group, one of the world’s largest banking and financial services organisations with over 10,000 offices in 83 countries and territories across Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. This association means that SABB customers not only have access to our own market-leading services and customer care, but can also tap into the HSBC Group’s global network, resources, skills, specialist knowledge and expertise
Assets
SAR 98.2 billion (US$26.2 billion) at 31 December 2007.
SAR 77.2 billion (US$20.6 billion) at 31 December 2006.
Profit
SAR 2,607 million (US$695 million) at 31 December 2007.
SAR 3,040 million (US$811 million) at 31 December 2006.
Capital Strength:
SABB paid up capital is SAR 6,000 million with share capital ownership split as follows:60% Saudi Nationals and 40% HSBC Holdings BV (a wholly owned subsidiary of HSBC Holdings plc)
Network
SABB operates through a network of 75 branches, including 12 exclusive Ladies’ branches, with a team of 2865 employees of whom 85.5% are Saudi nationals as at 30 September 2007.
Products and Services
Enhanced levels of service for all our customers – that’s what we at SABB consistently strive for. Our range of banking services includes Personal, Commercial, Corporate, Private and Islamic Banking; Investment, Treasury and Trade Services, and Credit and ATM Cards that are welcomed in more than 18 million commercial outlets within the Kingdom and around the world. In addition SABB ATM and credit cards can access more than 350,000 ATMs in the Kingdom and around the world. Our Electronic, Internet and Telephone Banking facilities allow customers to conduct banking business from the comfort of their own homes or offices and our information delivery channels now include mobile telephone technology and Short Message Services (SMS).
Saturday, October 25, 2008
Interview : Imam Feisal Abdul Rauf (2)
If the message is the same, then how come the people don't agree with each other?
Well, God's perennial lament -- not only in the Quran, but in other scriptures as well -- is that people generally do not follow God's dictates and the guidance and the mandate that God has offered to humanity to follow. We tend to be recalcitrant. We tend to be disobedient to divine guidance. And if you look at human conflict, it has even existed within people of the same religious tradition. I don't need to remind you that even among those who call themselves Muslims there has been a lot of bloodshed.
We're finding that it's very hard to define who Muslims are. Every time we figure, oh, that's what it is, or that's who they are, there's an exception to the rule. There's a very traditional housewife-looking lady in Malaysia who's also an OB/Gyn who ministers to unwed mothers. We have girls in Turkey who are saying, "Look, we want to express ourselves as Muslims. We want to cover our hair." And we have a secular government that's discriminating against them -- women who want to cover, women who don't. Men who want to keep women in the house; men who agree that women have absolute opportunity to do what they need to do in society. How does this all fit?
The definition of the faith of Islam that I gave you before is the Quranic universal definition of the human being vis-a-vis the creator. There is a narrower definition of Islam which is used, which is those who follow the teachings of the prophet Muhammad. Now, according to that definition, their Islam is defined by what was commonly called the five pillars of faith. This is what theologians call the orthopraxy, or the orthopraxis. It means the practices which define you as a Muslim.
There are also five articles of creed, of belief, which theologians call the orthodoxy. That which defines you as a Muslim, if you adhere to these beliefs, [parallels] to, say, [Christianity] and Judaism, that in the Jewish faith, there is an orthopraxy, not much of an orthodoxy. As long as you abide by the rituals, the dietary laws, male circumcision, et cetera, et cetera, there is flexibility within the Jewish tradition on what you might choose to believe in to be considered as a member of the Jewish faith community. So there is flexibility in whether [you] believe in an afterlife, heaven and hell and so forth.
In the Christian faith, you have the opposite situation. You have a fundamental orthodoxy, which is, you have to believe that Jesus Christ is savior. If you believe wholeheartedly that Jesus Christ is savior, you are saved; you receive salvation. And there's a great flexibility on the ritual end. What you do in terms of prayers or dietary laws, circumcision, et cetera, there's flexibility on that.
In Islam, we have both an orthodoxy and an orthopraxy. The orthodoxy of the Islamic faith is defined as a belief in the oneness of God and the right attitude, the right understandings of God, as I mentioned earlier. A belief in the angels, beings created of light, who convey the divine commandments. The belief that God communicated to humanity via scriptures. And these scriptures are considered to be both oral and written form. ... And the belief that God also communicated his guidance and messages and teachings to humanity via human intermediaries, human messengers, we call them. prophets, or messengers.
And the last item of the Islamic orthodoxy is the belief in the last day. The last is a compound concept which means that this creation will, in fact, come to an end. So those of us who believe in the big bang theory, there will be a big implosion, in other words, at the end of time, so to speak, followed by a day of resurrection, where all the souls shall be resurrected; followed by a day of judgment, where all souls will be judged; followed by the obtaining of divine approval or divine disapproval. A pass grade or a failing grade. Those who get a passing grade will be in paradise. Those who get a failing grade will be in what we call hell. And the underlying theme of the last day is that we are all accountable for our ethical actions. ... That's the orthodoxy.
The orthopraxy of Islam is a declaration of faith: the statement that there is no God but God; that Muhammad is the messenger of God; the five-time daily prayer; the giving of alms, typically 2.5 percent of one's income or assets; the fasting of the month of Ramadan; and the going to pilgrimage, or hajj, once in one's lifetime, if one can afford it, financially and physically. Anybody who does these things is within the box of Islam.
There are other things, secondary things. Rules of dress and rules of behavior and rules of what may be considered right or wrong. And these come from cultural norms and from secondary sources of jurisprudence. But anybody who believes in these things and practices these things is a Muslim. ...
Source : Frontline : Muslims
Well, God's perennial lament -- not only in the Quran, but in other scriptures as well -- is that people generally do not follow God's dictates and the guidance and the mandate that God has offered to humanity to follow. We tend to be recalcitrant. We tend to be disobedient to divine guidance. And if you look at human conflict, it has even existed within people of the same religious tradition. I don't need to remind you that even among those who call themselves Muslims there has been a lot of bloodshed.
We're finding that it's very hard to define who Muslims are. Every time we figure, oh, that's what it is, or that's who they are, there's an exception to the rule. There's a very traditional housewife-looking lady in Malaysia who's also an OB/Gyn who ministers to unwed mothers. We have girls in Turkey who are saying, "Look, we want to express ourselves as Muslims. We want to cover our hair." And we have a secular government that's discriminating against them -- women who want to cover, women who don't. Men who want to keep women in the house; men who agree that women have absolute opportunity to do what they need to do in society. How does this all fit?
The definition of the faith of Islam that I gave you before is the Quranic universal definition of the human being vis-a-vis the creator. There is a narrower definition of Islam which is used, which is those who follow the teachings of the prophet Muhammad. Now, according to that definition, their Islam is defined by what was commonly called the five pillars of faith. This is what theologians call the orthopraxy, or the orthopraxis. It means the practices which define you as a Muslim.
There are also five articles of creed, of belief, which theologians call the orthodoxy. That which defines you as a Muslim, if you adhere to these beliefs, [parallels] to, say, [Christianity] and Judaism, that in the Jewish faith, there is an orthopraxy, not much of an orthodoxy. As long as you abide by the rituals, the dietary laws, male circumcision, et cetera, et cetera, there is flexibility within the Jewish tradition on what you might choose to believe in to be considered as a member of the Jewish faith community. So there is flexibility in whether [you] believe in an afterlife, heaven and hell and so forth.
In the Christian faith, you have the opposite situation. You have a fundamental orthodoxy, which is, you have to believe that Jesus Christ is savior. If you believe wholeheartedly that Jesus Christ is savior, you are saved; you receive salvation. And there's a great flexibility on the ritual end. What you do in terms of prayers or dietary laws, circumcision, et cetera, there's flexibility on that.
In Islam, we have both an orthodoxy and an orthopraxy. The orthodoxy of the Islamic faith is defined as a belief in the oneness of God and the right attitude, the right understandings of God, as I mentioned earlier. A belief in the angels, beings created of light, who convey the divine commandments. The belief that God communicated to humanity via scriptures. And these scriptures are considered to be both oral and written form. ... And the belief that God also communicated his guidance and messages and teachings to humanity via human intermediaries, human messengers, we call them. prophets, or messengers.
And the last item of the Islamic orthodoxy is the belief in the last day. The last is a compound concept which means that this creation will, in fact, come to an end. So those of us who believe in the big bang theory, there will be a big implosion, in other words, at the end of time, so to speak, followed by a day of resurrection, where all the souls shall be resurrected; followed by a day of judgment, where all souls will be judged; followed by the obtaining of divine approval or divine disapproval. A pass grade or a failing grade. Those who get a passing grade will be in paradise. Those who get a failing grade will be in what we call hell. And the underlying theme of the last day is that we are all accountable for our ethical actions. ... That's the orthodoxy.
The orthopraxy of Islam is a declaration of faith: the statement that there is no God but God; that Muhammad is the messenger of God; the five-time daily prayer; the giving of alms, typically 2.5 percent of one's income or assets; the fasting of the month of Ramadan; and the going to pilgrimage, or hajj, once in one's lifetime, if one can afford it, financially and physically. Anybody who does these things is within the box of Islam.
There are other things, secondary things. Rules of dress and rules of behavior and rules of what may be considered right or wrong. And these come from cultural norms and from secondary sources of jurisprudence. But anybody who believes in these things and practices these things is a Muslim. ...
Source : Frontline : Muslims
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