Economic Roundup: GCC Islamic funds growing and new jobs for Saudis

By Ribal Dayikh in Dubai
For Al-Shorfa.com
2010-03-22

[KHALED DESOUKI/AFP/Getty Images] Shuaa capital will build a hotel in al-Tawhid square in Jeddah

As many as 680 Islamic funds, 45% of which are concentrated in the Gulf Cooperation Council (GCC) member states have assets estimated at $70 billion, according to the monthly economic report released by Kuwait-based Sabaek Company on Sunday (March 14th).

Islamic funds in the GCC ‎witnessed accelerated growth as a result of increasing ‎wealth in the region, thanks to rising oil ‎prices, according to the report.

According to Ernst and Young, the amount of GCC Islamic fund assets increased from ‎‎$267 billion in 2007 to $736 billion in 2008.

These funds emerged in the field of wealth management ‎to answer the needs of investors who are willing to join ‎capital markets consistent with sharia law. The number of Islamic funds is likely to increase to 700 ‎in 2010.

The report added that the Saudi Arabian share amounts to 147 funds, accounting for 20% and valued at $18 billion. There are 55 funds running $5.5 billion in assets in the ‎United Arab Emirates (UAE), followed by Kuwait, which is ‎home to 36 funds managing $3 billion, and Bahrain ‎with 20 funds investing less, nearly $1 billion.‎

Saudi Market Closes Strong

Samba Financial Group leads gainers on March 16th as Saudi Arabia's index hit a new 17-month high. Likewise, Dubai and Qatar indices hit new levels, while the majority of the Mideast stock markets witnessed an upward trend.

TASI closed up by 0.5% and Qatar’s index hit a 12-week high. The indices of Abu Dhabi and Kuwait slumped to a closing low.

New Hotels Offer Jobs for Saudis

Omar Al-Jaroudi, CEO of Shuaa Capital in Saudi Arabia, said that the company would provide 2,500 job opportunities for Saudi nationals by 2014, by building eight hotels around the Kingdom. The company does not intend to offer shares for subscription before 2014.

Shuaa acquired a plot near Jeddah Corniche with the aim of building a five-star 500 million ryial hotel, which will have 250 rooms and 150 service apartments. The 140-meter-high tower will be managed by the UAE's Rotana Hotel Management Corporation.

UAE Investor Plans Syrian Development

Majid Al Futtaim Properties Company, which is owned by UAE investor Majid Al Futtaim, announced its intention to launch an $817 million commercial and administrative project in Syria, as part of its strategy to invest in new MENA markets.

Peter Walichnowski, CEO of Majid Al Futtaim Properties, said that the company would finance the project on its own along with loans offered by Syrian banks.

Walichnowski’s statements were made during the opening of Dubai-based Mirdif City Center, which features 430 stores. He also stated that the project would cost a total of $816.8 million, and would occupy one million square meters, featuring a shopping center, hotels and administrative buildings.

Majid Al Futtaim Properties has 10 shopping centers in the region, and it is planning 14 new projects in the UAE, Oman, Egypt, Lebanon, Syria, Qatar, the KSA, and Yemen by 2015.

Oman Currency Remains Tied to Dollar

Hamood Sangour Al Zadjali, Executive President of the CBO, announced during the "Oman Global Investment Forum," which started on March 16, that Oman has no plans to drop its currency value to the dollar. He expects economic growth to increase to about 6 percent this year.

He also expected inflation rates to rise marginally, but not enough to cause serious problems, estimating that they will range between 4% and 5%. Oman withdrew from the Gulf Monetary Union in 2006 followed by UAE in 2009.

Kuwait bankruptcy case delayed

On March 18th, three local banks requested the court to adjourn Boubyan Bank’s bankruptcy case against the Al Abraj Holding Company.

The Full Jurisdiction Court in the commercial bureau accepted the appeal and adjourned consideration of the case until April 20th. The court said that Boubyan’s attorney had asked to levy a distress upon Abraj’s accounts with the other banks, in addition to declaring its bankruptcy.

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