1st Edition

The Financial Markets of the Arab Gulf
Power, Politics and Money





ISBN 9780367732738
Published December 18, 2020 by Routledge
230 Pages

USD $48.95

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Book Description

Financial markets across the Arabian Peninsula have gone from being small, quasi-medieval structures in the 1960s to large world-class groupings of financial institutions. This evolution has been fueled by vast increases in income from oil and natural gas. The Financial Markets of the Arab Gulf presents and analyzes the banks, stock markets, investment companies, money changers and sovereign wealth funds that have grown from this oil wealth and how this income has acted as a buffer between Gulf society at large and the newfound cash reserves of Gulf Cooperation Council states (Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain) over the last fifty years.



By assessing the development of institutions like the Abu Dhabi Investment Authority, the Saudi Arabian Monetary Authority, the Public Investment Fund and the National Bank of Kuwait, The Financial Markets of the Arab Gulf evaluates the growth of the markets and provides a detailed, critical, snapshot of the current form and function of the Gulf’s financial markets. It argues that the markets have been controlled by various state institutions for socio-political reasons. In particular, the Saudi state has used its sophisticated regulatory regime to push for industrialization and diversification, which culminated in the Vision 2030 plan. The UAE, Qatar, Kuwait, Bahrain and Oman have also been strongly involved in establishing modern markets for similar purposes but have done so through different means, with varying results, and each in line with what has been considered their respective comparative advantages.



Along with critically surveying these institutions and their role in global finance, the book also presents case studies depicting transactions typical to the region, including the highly profitable documentary credits of commercial banks, the financial scandal of certain financiers and their regulatory arbitrage between Bahrain and Saudi Arabia, a review of the Dubai’s trade miracle, and an assessment of the value and importance of the privatization of Saudi Aramco.

Table of Contents



  1. A Short History of the Financial Markets in the GCC States


  2. The Commercial Banks



    The Islamic Banks



    The Money Changers



    The Bahraini Offshore Market



    The Capital Markets



    Conclusion







  3. The Financial Markets of the United Arab Emirates




  4. Dubai versus Abu Dhabi



    The UAE’s Regulatory Environment



    Free Trade Zones



    The Banking Sector



    Sovereign Wealth Funds



    SWFs, Power Patronage and Asset Ownership



    Conclusion







  5. The Financial Markets of Saudi Arabia




  6. SAMA and the Regulatory Environment



    The Capital Markets



    The State Controlled Financing Companies



    The Money Changers



    The Commercial Banks



    Conclusion







  7. The Financial Markets of Bahrain, Qatar, Kuwait and Oman






  8. 4.1 The Financial Markets of Bahrain



    The Banking Sector



    The Capital Markets



    Islamic Financial Regulation: A New Niche?



    Bahrain’s Unique Natural Resource



    Conclusion





    4.2 The Financial Markets of Qatar



    Qatar’s Energy Markets



    Trade and the Embargo



    The Banking Sector



    The Capital Markets



    The Qatar Investment Authority



    Conclusion



    4.3 The Financial Markets of Kuwait



    The National Assembly



    The Capital Markets



    The Banking Sector



    Sovereign Wealth Funds



    SWFs in Crises: The KIO and the Gulf War



    Conclusion





    4.4 The Financial Markets of Oman



    Qaboos’s Elite Bargain



    A New Challenge



    Natural Resources and Diversification



    The Banking Sector



    The Capital Markets



    Conclusion







  9. The Gulf States in Global Financial Markets




  10. Phase 1: 1960-1985



    Phase 2 1985-Present



    2008: Shifting Tones



    Lasting Change



    Looking East: Energy Investments in Asia and Southeast Asia



    Conclusion







  11. Case Studies




  12. Introduction



    6.1 The Saudi Aramco Privatization



    Valuation



    Transparency through Privatization



    To IPO, But Where?



    Conclusion





    6.2 Name Lending and the TIBC Bankruptcy



    Background



    Regulatory, Personality or Practice: Who is At Fault?



    Conclusion



    Name Lending: A Primer





    6.3 Dubai as a Financial Safe Haven



    Indian Gold Smuggling



    Iranian Trade Links



    Conclusion





    6.4 Documentary Credits



    The Mechanics



    Profitability



    Conclusion







  13. Conclusion


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Author(s)

Biography

Dr. Jean-François Seznec is Senior Fellow, Center for Global Energy at the Atlantic Council, Adjunct Professor at Johns Hopkins School of Advanced International Studies and Managing Director at The Lafayette Group.





Samer Joseph Mosis is a Senior Analyst with S&P Global Platts focusing on commodity markets. He previously was a Consultant for The Lafayette Group and holds a Masters Degree in International Economics from Johns Hopkins School of Advanced International Studies