Abdulaziz N. Almarzooq, CEO of KFH Capital – Winner of the best investment bank on the border markets and Kuwait – makes its prospects on the Arab border markets and the point of the world Sharia of KFH.
Global finance: What is the current geopolitical environment prefers border markets, especially in the Arab world?
Abdulaziz N. Almarzooq: The border markets of the Arab world should experience various economic prospects in 2025. Resource economies such as the United Arab Emirates and Saudi Arabia should develop considerably, with economic diversification and reduced dependence on engines oil. GDP growth rates are expected respectively at 5.1% and 3.8%.
Economic diversification is progressing in the wider Gulf region. Kuwait perfects budgetary reforms and investments in infrastructure, Qatar extends its liquefied natural gas sector alongside tourism, Bahrain draws financial services and Oman invests in logistics and tourism. A similar trend occurs in Morocco with investments in infrastructure and commercial partnerships, and Jordan with budgetary reforms to further stabilize the economy. Egypt and Tunisia, however, are struggling with high debt and inflationary pressures, the former relying on the International Monetary Fund for Support.
Notwithstanding, geopolitical instability and conflicts present risks to regional growth, exacerbating the economic disparity. Recent regional escalations, such as the Israeli-Palestinian conflict, led to a drop in many major Gulf stock markets. The uncertainty of investors and geopolitical factors worldwide, such as trade tensions and inflationary pressures, could also have an impact on growth.
GF: KFH Capital has become a powerful investment bank in the region. What is your formula?
Almarzooq: KFH Capital reached around $ 24 billion in transactions in 2024 by taking advantage of its competence in Sukuk emissions, customer -focused strategies and innovative financial products. Our leadership in the structuring of large -scale Sukuk accentuates our domination of the market.
In the future, KFH Capital aims to rely on its successes by enriching its offers of innovative investment solutions, risk management and diversification to extend its presence in the global landscape of banking services. Our commitment to the digital transformation and the diversification of the strategic portfolio, associated with an ever -increasing demand for Sukuk and compatible financial products Sharia products, suggests substantial growth opportunities.
GF: How vibrant is the Sukuk market?
Almarzooq: In 2023, the Islamic finance industry was estimated at 4.9 billions of dollars in assets; It should reach $ 7.5 billion by 2028. Sukuks contribute 17.5% of total assets; Sovereign offers lead in terms of emissions, their contribution from 60% of the total sukuk issued in 2022 to 64% in 2023. In particular, the Saudi government has undertaken a series of transactions to refinance $ 9.6 billion in its national sukuk which was due to maturity between 2024 and 2026. infrastructure.
GF: Does KFH capital develop innovative instruments to propel growth and deepen Islamic capital markets?
Almarzooq: KFH Capital was at the forefront of the progress of the extent of Islamic finances, the development of innovative instruments such as Ijarah funds, real estate investments and SUKUK cross-border structures. These products meet the various needs of investors, while joining the principles of Sharia law.
A key illustration is our arrangement of a sustainable sukuk program of $ 350 million for KFH-Turkey. The show was monumental, which led to the first level 2 sustainability sukuk in the world. The product is reserved to finance other green and social sustainable projects, reflecting the dedication of KFH Capital to align innovative financial solutions on sustainable development objectives.
A new structure developed by KFH in 2023 turns out to be a game changer and is widely used. This strategic innovation in Sukuk structures allows you to use shares as well as cover mechanisms to widen the asset base for Wakala Sukuk emissions [in which the investor appoints an agent to invest funds on their behalf].
GF: To what extent are sustainability and ESG policies essential in the structuring of emissions?Almarzooq: The region is gradually implementing sustainability and ESG policies, although there are issuers who do not yet have an in place. Several have created programs and KFH Capital worked with them. We have a strong commitment to these principles, which is illustrated by our leadership in the unification of sustainable practices and the innovative service for financial services.