DIFC chief economist urges Gulf gov'ts on sukuks

by Soren Billing

There has never been a better time for Gulf governments to start issuing Islamic bonds (sukuks), despite existing issues trading at “outlandish” prices, the chief economist of Dubai International Financial Centre (DIFC) has said.

“This is the time for governments to start introducing sukuks as part of public finance,” Dr Nasser Saidi told reporters at a press conference.

By using sukuks to finance major projects such as power plants, roads and ports, GCC governments would help the region consolidate its position as an international centre for Islamic .

“This is the time at which governments should be active with their central banks to create money markets in Shariah compliant instruments that the central banks can then use for assisting and providing liquidity to Shariah compliant institutions,” he said.

By simply running down the surpluses accumulated during the six year oil boom governments would risk losing investments that could continue to earn them an income, he noted.

Dr Saidi estimated the total size of that surplus to be around $950 billion.

"As governments develop the debt market, it will encourage the private sector to start issuing debt again," Dr Saidi said.

Asked about the low price of Gulf sukuks in the secondary market, he said prices are likely to return to more reasonable levels within the near future.

“I think this is a temporary phenomenon. I think the pricing is unrelated to the fundamentals,” he said.

“It doesn’t make a great deal of sense to me that you are pricing UAE debt as being more risky than Iceland…. This current pricing is outlandish.”

The amount raised globally from sukuk issuance decreased by 54.5 percent in 2008 from the year before to $15.1 billion, while the number of issues rose to 165 from 129, Global Investment House said in a research note on Thursday.

“The decline in sukuk issuance is due to the credit crunch that forced investors to step aside from the fixed income market, including the Islamic one,” the investment bank said.

“As evident of the credit crunch effect on sukuks, issuances in the fourth quarter of 2008 were weak when compared with other quarters in the same year.”

In the first three quarters of last year, the amount raised from sukuks averaged $4.8 billion per quarter, compared with only $0.8 billion in the fourth quarter.

GCC countries and Malaysia continued to be the largest markets, accounting for 55.5 percent and 36.3 percent respectively of the dollar amount issued.

Source : ArabianBusiness.com

President says no need for investors to worry about security

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono guaranteed security during the general elections this year, and assured investors not to worry about their security.

"Indonesia will be able to maintain security, so that it is not necessary for investors to be afraid of anything. No need for them to remain in a wait-and-see position or procrastinate their investment," the head of state said at the Jakarta Stock Exchange building here on Monday.

Yudhoyono made the remarks in a dialogue with market shareholders after officially opening the first trading session at the bourse in 2009.

According to the president, investors during a general elections normally maintained a wait-and-see stance before deciding on an investment.

"We had a direct election in 2004 and since then over 200 provincial and district leaders` election had been implemented. Meanwhile, we have also conducted direct democracy in many foreign countries," he said, adding that therefore, the government along with the general elections commission (KPU), the general election supervisory agency, the constitutional court, regional KPUs, and the police should carry out their tasks well.

In the current situation, the president believed that Indonesia would be able to manage and control the country`s politics and security during the general elections.

"There will be some clashes, friction and difficult campaigns. These incidents often happened in advanced countries and in the developing countries," he said.

The president said that general election should not be seen as a tense period or a burden to the community, but placed in an appropriate position.

On the occasion, the president also asked domestic investors to concentrate more on efforts to improve market capitalization in share trading at the Indonesian Stock Exchange (BEI), predicted to be able to support the BEI.

Arabian Businesswomen 2008 : Amna Bin Hendi

Amna BinHendi, Chief Executive Office of BinHendi Enterprises

Amna BinHendi currently sits as the Chief Executive Office of BinHendi Enterprises, a position she has held since September 2007. As the CEO, Amna has successfully stirred the organisation into becoming one of the fastest growing trading and distribution companies in the UAE that has its eyes sets on becoming power house in the industry across the region.

Prior to joining the family business, the young ambitious executive’s experience included a brief stint at the Dubai E-Government after which she joined Bin Hendi enterprises as Vice President for Human Resources in December 2002. With her strong business and leadership skills, she has been promoted to become one of the youngest top female executives in the corporate sector.
Born in 1980, Amna completed her Bachelor’s Degree in Information Systems and Business Administration from Zayed University.

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Almost three decades ago market research analysts at BinHendi Enterprises recognized a growing consumer interest in international products and fashion brands. In direct response, we established the United Arab Emirate's first exclusive fashion boutique, Pierre Cardin. Enthusiastic consumer response propelled the Company to fill another untapped niche in the Middle Eastern market with the introduction of Dubai's first car rental agency. Our unique approach, in hand with strong market growth, favorable government relations and an intimate knowledge of consumer preferences, encouraged BinHendi Enterprises to develop new sources to help meet the growing demand for high quality products and international services. BinHendi Enterprises currently operate twenty-nine highly successful fashion, Jewellery, accessory and food retail outlets, while our trading division reaches in excess of one thousand retailers, thus establishing the company as a leader in one of the world's most exciting and affluent markets.