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OUTLOOK 2012 - Previews and Reviews - MOST SIGNIFICANT TRENDS And CHARTS OF 2011
From burgeon
to wither - the four stages of global
trade
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INVESTIGATING PROFITABILITY OF GCC BANKS
GCC banks under our coverage performed well during 3Q11 with profits rising by 17%YoY; over QoQ however, bottom line shrank by 5%. Kuwait was the only country that witnessed a decline in profits (down 2%YoY), UAE felt the lowest growth amongst peers, just 8%YoY while KSA, Qatar and Oman saw growth in the vicinity of 25%YoY.
Top-line performance of GCC banks improves, that of UAE and Qatar stars
GCC banks under our coverage witnessed a healthy operating performance with net interest income rising by 8%YoY and non-interest income jumping by 11%YoY. Banking sectors of UAE and Qatar saw the strongest improvement in the top-line on account of improvement in spreads for the former and robust volumes for the latter; resultantly growing by 19%YoY and 16%YoY respectively. Kuwait and KSA underwent a shrinkage in the top-line as spreads weakened and volumes were unimpressive; NII for these countries eroded by 6%YoY and 2%YoY respectively.
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Goldman's sukuk induces ownership and liquidity risks
The Shariah risk is not so much in the initial structure but in what it can potentially become, writes consultant Badri Ahmed.
Obviously,Goldman Sachs did not choose the most consensual structure. In the meantime, alively debate has been sparked especially concerning the possible risks of non-Shari'a compliance. These risks are not induced by the initial structure as it has been confirmed by Shari'a Scholars,but by what this structure can potentially become.
This is a summary analysis to highlight three key concepts of the structure of Goldman Sachs's Sukuk, namely:
Ø The type of structure, the liquidity, and the ownership of the Sukuk holders. This synthesis follows other articles(1) on the same subject and, it is not intended to be a definitive analysis, it could be supplemented by other experts or researchers in this field.
It is important, first, to specify the entities involved in the Sukuk structure, namely:
- Goldman Sachs Group, Inc. (GSGI): Parent guarantor
- Global Sukuk Company Limited (GSCL): Incorporated in the Cayman Islands."Seller" in the Master Murabaha Agreement,Issuer of Murabaha trust certificates(Sukuk), and trustee.
- Goldman Sachs International (GSI): "Buyer" in the Master Murabaha Agreement.
