Middle East Journal

Islamic Banking and Finance Trend Update

2010-07-23T23:23:55Z

Islamic financial institutions continue their strong run in international capital markets. The practice of Islamic banking has changed dramatically over the past few years. As a niche industry in many small countries, the industry has reached beyond respective domestic markets all over the world. Increasingly, these financial institutions are looking to non-Muslims as clients beyond the Middle East, Africa and Southeast Asia. Legal frameworks are adapting to a new era of Islamic finance, not only in Muslim nations but increasingly to other regions of the world.

Islamic banks are venturing into other areas of high finance, including corporate banking and more sophisticated types of investment banking. New divisions within these banks are offering specialized products to meet the needs for more sophisticated financial investments still compliant with Shari’ah law.

Several governments in the gulf are continuing efforts to become controlling shareholders in rising Islamic financial institutions. These controlling stakes have led to enhanced linkages across Asia and the Middle East.

Islamic banks are also looking outward and investing abroad. With more international foreign investments, Islamic banks will be less dependent on oil revenues and interlinked in international capital movements.

Has the Dubai Property Market Reached Bottom?

2009-03-15T00:31:41Z

The picture shown above is the Atlantis Dubai, a great example of Dubai's property bubble that has recently collapsed. But has the property collapse in Dubai ended?

World's Tallest Building tops out at 2648 feet

2009-03-15T00:18:38Z

The construction on the Burj Dubai --the world's largest tower has topped out at 2,648 feet (818 meters). Watch the video to see how tall this tower is.

No Signs of Recovery in the GCC

2009-03-09T23:07:49Z

No end appears in sight for a robust economic recovery in the GCC. This article illustrates how Dubai and Qatar are hard hit in the global economic recession. Oman was the only stock market to show positive gains. While the Middle East / GCC region is down, the outlook appears more vibrant than in Developed markets, with stock markets making gains in positive territory.

Dubai's Property Market Collapse

2009-02-13T17:51:35Z

This shows the degree of slowdown in Dubai's massive property market. It further shows how highly leveraged many consumers are in Dubai and high degree of speculation in Dubai's property market. In a blunt article by the New York Times, expatriates in Dubai are sharing ther fears about not only their property ownership (Freehold property), but also their futures in the city-state. Many are fleeing due to these fears. Other observations on the ground is that traffic is lower on key thoroughfares, a rare sight in Dubai.

Analysis of Carrefour's Dubai Market Entry

2009-02-02T09:58:00Z

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Carrefour's Market Entry Into Dubai in 1995

I. Executive Summary
In 1995, Carrefour expanded its European hypermarket concept that it had originally pioneered decades ago into Dubai, United Arab Emirates. Following a cautious country-by-country expansion strategy into Emerging Markets, Carrefour saw potential in the Dubai emirate. The emirate had a flourishing retail industry and exhibited strong fundamentals in its flourishing economy. Carrefour’s objective was to find a mode of entry that would allow it to reduce risk of failure and maintaining profitability, while offsetting its longstanding global rival Wal-Mart.

Dubai presented many advantages for companies considering market entry into Dubai in 1995. Despite a small population relative to other markets it served, Dubai offered an unusual composition of Expatriates and local residents in an economy with one of the highest standards of living and income in the world. The market was extremely business friendly with many advantages like zero corporate taxes in conjunction with very few barriers to trade. It had superior transportation networks, a well-defined legal system, positive retail conditions, strong economic growth, low political, and transfer risks. Carrefour reviewed the laws and determined that a joint venture would be best to minimize the risk of failure while having a qualified partner to aggressively seek growth and manage operations. It partnered in a joint venture with Majid Al Futtaim, a pan-regional conglomerate with retail experience in the Middle East. The joint venture adapted to the market by changing the place of its stores to the shopping mall, adapted its food to socio-cultural norms, promoted mostly non-food items because of higher profit margins, and was very careful in discounting amidst double-digit inflation.

Considering Research in the Middle East

2008-10-01T23:00:00Z

The Middle East market is experiencing lightening economic growth. From tourism to healthcare to real estate, opportunities abound in the GCC market region. So why are companies exploring the Middle East for their business expansions and market research endeavours?

Certainly many reasons emerge from executives. However, here are some of the reasons why some companies are considering expanding into the GCC region.

Strategic business advantages
- Achieve competitive edge
Location: Trading hub between Europe and Asia
Currently stable GCC market
Remarkable economic growth & investment opportunity
Large consumer market
Pro-investment environment
Fear of falling behind competitors
Many multinationals already have regional presence
Neglecting region can potentially impair longterm competitiveness for many companies

Luxury Movie Theaters

2008-09-04T23:39:00Z

Cinestar Cinemas unveiled its “Gold Class” refurbished cinemas to provide a business-class style movie theater. Located at the Cinestar Cinemas Marina Mall in Abu Dhabi, movie-goers can relax in spacious leather recliners while eating snacks off well-placed tables.

Carrefour's Emerging Markets Retail Battle

2008-09-01T23:47:00Z

Carrefour has announced a major investment plan in Krasnodar, Russia. The company expects to be functional in Southern Russia by the end of 2008. Furthermore, it plans to have 5 additional hypermarkets in 2009. The company realizes the importance of “growth markets” given that its international composition of sales grew 3% yoy to 28% of all sales.

Meanwhile, Wal-Mart is left in the dust in its emerging markets expansion plan. Media reports last year discussed Wal-Mart's search for a Russian partner, which likely included Lenta and X5. One potential cause for the delay in entry has been the process in dealing with government regulations which require partnerships. It may not help that diplomatic relations are strained following the conflict between Georgia and Russia, and the US' perceived role therein. While Wal-Mart's troubles in regards to its Russia market entry remain relatively unchanged from a year ago, Wal-Mart is being left behind.

MSU founds campus in Dubai

2008-09-01T23:37:00Z

Michigan State University (MSU) has founded a campus in Dubai's Knowledge Village. The program offers Bachelor's and Master's degree programs at the same level of rigor as MSU's flagship campus in East Lansing, Michigan.

Bachelor degree programs include Computer Engineering, Construction Management, Media Management, Early Childhood Education, and Child and Youth Development. Its Master's program offers degrees in Human Resources and Labor Relations, Retailing and Educational Technology

MSU is following a major trend of universities founding campuses throughout the world, particularly in the Middle East Gulf and in East Asia. The globalization of Western Universities allows professors and students to study abroad and enrich themselves, and at the same time provides students in those countries to gain a worldclass education without having to travel across the world.