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Capital Markets The past 15 years have seen major advances in capital markets activity in Dubai. The financial sector free zone, the Dubai International Financial Centre (DIFC), has gone from idea to reality, and the emirate recently became the world’s largest market for sukuk (Islamic bonds). However, development has been uneven across types of capital markets offerings based on local demand patterns. New equity and bond offerings remain relatively underdeveloped, as most entrepreneurs in the emirate and the region are already well capitalised thanks to wealth accrued over years of oil exporting. Dubai aims to build on its growing reputation as a regional financial centre, and that has led to continued efforts by the government and major private sector leaders to encourage more breadth and depth in capital markets. This chapter contains an interview with Essa Kazim, Chairman, Dubai Financial Market (DFM).

The banking sector is a pillar of Dubai’s economy, having provided the basis for development over the past decade. The banks serve as conduits that link Dubai to regional and global economies, and their publicly traded shares are one of two main drivers of the local stock market, along with real estate stocks. For now, the banking sector in Dubai appears to be in the midst of transition, with lenders adjusting to changing demand patterns triggered by lower oil prices and continuing to evolve their offerings and operations. While it is expected that top-line growth will be muted in 2016, banks as a group appear ready to meet the challenge of staying profitable. The emirate’s lenders exist in the wider national system of the UAE, which means they are licensed at the federal level and authorised to operate anywhere within the seven emirates, regardless of where they are based. This chapter contains interviews with Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE; and Abdulla Qassem, Chairman, Network International.

Dubai’s economy is the result of a decades-long pursuit of diversification which has brought evolution into a variety of offerings – including services, finance and trade – that has made the emirate a cross-continental meeting point for commerce. Dubai has felt the impact of the fall in crude prices since mid-2014, but it now has sectors that can thrive regardless of oil market conditions. Since the global financial crisis the emirate’s economic narrative has been framed by its recovery efforts. Despite little direct exposure to the toxic assets that triggered the meltdown, Dubai experienced external shocks as the global economy suffered. However, it has successfully shifted the focus from concerns about the past towards plans for the future. As legacy debts are repaid or restructured new economic potential is emerging, helping to underpin fresh analyses and projections. Dubai will host World Expo 2020, for example, and preparation for this six-month-long series of events is a story analysts are now focused on. This chapter contains interviews with Obaid Humaid Al Tayer, Minister of State for Financial Affairs; Hamad Buamim, President and CEO, Dubai Chamber; Amina Al Rustamani, Group CEO, TECOM Group; and a viewpoint from Jim Yong Kim, President, World Bank Group.

Driven by rising demand for new sources of financing in the face of weak oil prices, Kuwait’s Islamic financial services (IFS) sector is increasingly considered to be a core component of the nation’s development. The industry’s steadily improving profile is largely a result of the government’s efforts to shore up the sector’s reputation over the past decade, most recently by rolling out new sukuk (Islamic bond) regulations in November 2015. As a consequence, local Islamic banks, investment companies and sharia-compliant insurers have gained market share at a rapid pace, in the process turning Kuwait into one of the world’s leading IFS markets. This chapter contains an interview with Mazin Al Nahedh, CEO, Kuwait Finance House

This chapter contains an outline of the legal framework in which local and foreign investors operate, including a look at the key changes made to bylaws governing capital markets and a rundown of the new regulations aimed at boosting investor confidence. This chapter contains a viewpoint from Alex Saleh, Partner, Al Tamimi & Co, on the new reforms to the capital markets law.