The book aims to unravel the potentials of Middle East financial markets, which are spread over a large and wealthy part of the world. These markets are gradually being opened for international investors seeking diversification and rewarding risk adjusted returns.
However, opening up to international investors is a necessary but not a sufficient condition to attract institutional money needed to provide depth and professionalism to these markets. Without a cultural shift towards more transparency, better regulations and governance, and the availability of custody, clearance and equity research, up to international best practice, not much institutional money will be forthcoming to the region.
Funding sources in the Middle East and North Africa Region are still predominantly channeled through the banking system, with equity and fixed income markets playing a marginal role. While the worlds financial markets show on average a balanced structure of bank assets, stock market capitalization and debt securities, the capital mix in the region is heavily skewed towards bank assets with a share of 58.8%, equities around 34% and debt securities (bonds and Sukuk) 7.2%.
Stock markets of the UAE and Qatar have recently been upgraded to emerging market status, which together with Egypt are the only three Arab countries that have selected listed companies featuring in the Morgan Stanley Capital Index for Emerging Markets (MSCI EM). Saudi Arabia has opened its stock market to direct investment by foreign financial institutions in the second half of 2015. The opening of the Saudi stock market is a major positive development for the regions capital markets.
The path ahead for MENA finance has become now clearer. The relative weight of commercial banks in the financial system will diminish gradually, and a wider range of financial services will be provided by deeper and increasingly more sophisticated debt and equity capital markets, in line with worldwide trends. Sharia compliant products, such as Sukuk, are expected to continue to grow at double-digit rate to meet the strong demand generated regionally and internationally.
O autorze
Henry T. Azzam is Senior Lecturer and Coordinator of the Master of Finance Program at the Olayan School of Business (OSB), American University of Beirut. He joined the faculty of OSB in January 2014. Before that he was Chairman and CEO of the Social Security Investment Fund of Jordan and until July 31, 2012 he was Deutsche Bank’s Chairman for the Middle East & North Africa region (MENA).
From May 2007 till October, 2010, he was Deutsche Bank’s CEO for the MENA region (Dubai) and before that, he was the CEO of Amwal Invest, an investment bank he founded in Amman, Jordan in 2005 and has guided its first two years of operations. He also served as the Chairman of Dubai International Financial
Exchange (now Nasdaq Dubai), Chairman of the mobile telecom company, Mobile Com (now Orange), Amman, and Chairman of Rubicon, an IT company
based in Amman-Jordan.
Before establishing Amwal Invest, Henry T. Azzam was the CEO of Jordinvest, Amman (2001-2004), Managing Director of Middle East Capital Group, Beirut (1998-2001), AGM and Chief Economist of the Saudi National Commercial Bank, Jeddah, (1990-1998) and Vice President and Chief Economist of Gulf International Bank, Bahrain (1983-1990). Before that he worked with the Arab Fund in Kuwait and the International Labour Organization in Geneva. He has four books published, the last one “The Arab Economies Facing the Challenges of the New Millennium”. I.B. Tauris, 2002.
He is currently a board member of Byblos Bank (Beirut), Arab Jordan Investment Bank (Amman), and Rasmala Investment Bank (Dubai). Previously he served as a board member of Royal Jordanian Airlines (Amman), Nuqul Group (Amman), Aramex (Dubai), Majid Al Futtaim Trust (Dubai), Arabtec (Dubai), and was a member of the International Advisory Board of the Saudi Stock Exchange (Tadawul).
He holds a Ph.D. in Economics from University of Southern California, Los Angeles and BA and MA from the American University of Beirut.
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