The prospect of Nakheel repaying its US$1.7 billion (Dh6.2bn) Islamic bonds on time may not be enough to revive the global sukuk market this year, IMF economists warn.
Uncertainty over the level of protection for investors if the Dubai property unit had defaulted on its debt has shaken confidence in Islamic finance. Nakheel's payments are due this month and this year.
The concern stems from the lack of an effective regulatory framework for dealing with such scenarios, the IMF economists said.
"Investor sentiment for sukuk issuances has been severely damaged from the Nakheel initial debt standstill and might halt the strong rebound of the sukuk market this year in the wake of continued uncertainty about investor protection," said the economists Heiko Hesse and Andreas Jobst, in an article for US financial analysis company Roubini Global Economics.
Lingering concern about Nakheel's sukuk repayment combined with debt defaults by two GCC companies has dampened investor enthusiasm for new Islamic bond issues in the region this year.
Nakheel's parent company, the Dubai Government-controlled Dubai World, had asked in November for a six-month holiday on its debts, then put at $26bn. Dubai World's debt has since been revised to $24.8bn.
In March, proposals were announced to repay fully and punctually investors in two sukuk issued by Nakheel, ruling out a possible default. The greater cost of insuring sovereign and quasi-sovereign debt has meant new sukuk issues in the region have almost dried up.
In contrast, total global sukuk issuance rose 114 per cent in the first quarter compared with the first three months of last year to reach $4.7bn, primarily driven by robust growth in Malaysia and Indonesia, according to data by NCB Capital.
But many scholars and practitioners question whether the recent upswing in sukuk issuance is sustainable. Munawar Iqbal, an economics professor at Pakistan's International Islamic University, said the sukuk market would remain subdued until effective changes took place.
"The recent short-term recovery is only due to an excess in liquidity. I believe that the sector will remain under a dark cloud for some time unless real Sharia-compliant products are devised," Mr Iqbal said at a sukuk seminar in Dubai yesterday.
He said confidence in the sector had remained shaken since the Islamic scholar Mohammad Taqi Usmani in 2008 said most sukuk were not Sharia-compliant. Such scepticism has been further aggravated by the recent sukuk defaults.
But while it still lacks standardisation, the industry most urgently needs financial experts who can combine knowledge of conventional finance and economics with Sharia expertise," Mr Iqbal said.
"One of the greatest problems is the availability of financial engineers who know both," he said.
Companies that have defaulted on sukuk payments since the global financial crisis include the Kuwaiti company The Investment Dar, which owns half of the luxury car maker Aston Martin; a subsidiary of Saudi Arabian conglomerate Saad Group; and the US oil and gas producer East Cameron Partners.
"The current controversy will raise expectations of enhanced transparency of sukuk structures as recent defaults have served as a poignant reminder of many risks that investors had not priced in before," said Mr Hesse and Mr Jobst.
In future, potential creditors were likely to require more explicit guarantees from issuers of quasi-sovereign debt to encourage them to invest, they said.
Nakheel's sukuk was explicitly guaranteed by Dubai World but not by the Dubai Government. But many investors believed the sukuk had the implicit backing of the Government.
The credit crisis disrupting Greece and the poor outlook for other heavily indebted European nations such as Portugal, Ireland, Italy and Spain was also weighing on the GCC sovereign sukuk market, said a report by NCB Capital, the largest investment bank in Saudi Arabia.
"Uncertainty is likely to persist in the GCC debt capital markets for the time being as Dubai World seeks creditor approval for its debt restructuring proposals," Jarmo Kotilaine, the chief economist of NCB Capital, said in the report released last week.
In the medium term, the bank remained optimistic the GCC bond markets were on the road to recovery, Mr Kotilaine said. The lowering of spreads on domestic currency-denominated bonds would lead to better pricing, encouraging potential issuers to tap into the market.
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uharnischfeger@thenational.ae
Super Rugby play-offs
Quarter-finals
- Hurricanes 35, ACT 16
- Crusaders 17, Highlanders 0
- Lions 23, Sharks 21
- Chiefs 17, Stormers 11
Semi-finals
Saturday, July 29
- Crusaders v Chiefs, 12.35pm (UAE)
- Lions v Hurricanes, 4.30pm
World ranking (at month’s end)
Jan - 257
Feb - 198
Mar - 159
Apr - 161
May - 159
Jun – 162
Currently: 88
Year-end rank since turning pro
2016 - 279
2015 - 185
2014 - 143
2013 - 63
2012 - 384
2011 - 883
AGL AWARDS
Golden Ball - best Emirati player: Khalfan Mubarak (Al Jazira)
Golden Ball - best foreign player: Igor Coronado (Sharjah)
Golden Glove - best goalkeeper: Adel Al Hosani (Sharjah)
Best Coach - the leader: Abdulaziz Al Anbari (Sharjah)
Fans' Player of the Year: Driss Fetouhi (Dibba)
Golden Boy - best young player: Ali Saleh (Al Wasl)
Best Fans of the Year: Sharjah
Goal of the Year: Michael Ortega (Baniyas)
Profile of MoneyFellows
Founder: Ahmed Wadi
Launched: 2016
Employees: 76
Financing stage: Series A ($4 million)
Investors: Partech, Sawari Ventures, 500 Startups, Dubai Angel Investors, Phoenician Fund
Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club
- 1st ODI, Wednesday, April 10
- 2nd ODI, Friday, April 12
- 3rd ODI, Sunday, April 14
- 4th ODI, Sunday, April 16
Squads:
- UAE: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
- Zimbabwe: Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
More from our Neighbourhood series:
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Challenge Cup result:
1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
ENGLAND SQUAD
Joe Root (captain), Dom Sibley, Rory Burns, Dan Lawrence, Ben Stokes, Ollie Pope, Ben Foakes (wicketkeeper), Moeen Ali, Olly Stone, Chris Woakes, Jack Leach, Stuart Broad
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
Ad Astra
Director: James Gray
Stars: Brad Pitt, Tommy Lee Jones
Five out of five stars
ORDER OF PLAY ON SHOW COURTS
Centre Court - 4pm (UAE)
Gael Monfils (15) v Kyle Edmund
Karolina Pliskova (3) v Magdalena Rybarikova
Dusan Lajovic v Roger Federer (3)
Court 1 - 4pm
Adam Pavlasek v Novak Djokovic (2)
Dominic Thiem (8) v Gilles Simon
Angelique Kerber (1) v Kirsten Flipkens
Court 2 - 2.30pm
Grigor Dimitrov (13) v Marcos Baghdatis
Agnieszka Radwanska (9) v Christina McHale
Milos Raonic (6) v Mikhail Youzhny
Tsvetana Pironkova v Caroline Wozniacki (5)
Drivers’ championship standings after Singapore:
1. Lewis Hamilton, Mercedes - 263
2. Sebastian Vettel, Ferrari - 235
3. Valtteri Bottas, Mercedes - 212
4. Daniel Ricciardo, Red Bull - 162
5. Kimi Raikkonen, Ferrari - 138
6. Sergio Perez, Force India - 68
Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
World Sevens Series standing after Dubai
1. South Africa
2. New Zealand
3. England
4. Fiji
5. Australia
6. Samoa
7. Kenya
8. Scotland
9. France
10. Spain
11. Argentina
12. Canada
13. Wales
14. Uganda
15. United States
16. Russia