UAE-based asset manager Janus Henderson is projecting significant expansion in the Shariah compliant investment space within the GCC region, as Meshal AlFaras – head of Middle East, Africa and Central Asia – shared this domestic segment has been underserved by international investors.
“With the opening of the Saudi and other GCC markets, I think the demand will be huge. I am 100% bullish on the region. Though there are many people who can be worried about tensions in the Middle East, I am from here, being a Kuwaiti, and I can see the growth.”
Meshal told IFN Investor his confidence is underpinned by the GCC passporting regime that is set to come into force in 2025, allowing the distribution and sale of funds throughout the region – as long as registration is done within any GCC jurisdiction.
“That is an area we want to focus on and expand our footprint, to be one of the first international firms to tap into the GCC market.” Read full report here.
While Janus Henderson will continue to use its existing channels of banks and sales intermediaries for direct interaction with investors, especially in the retail sector, Meshal said there is a potential to achieve far more if asset managers can band together to offer their funds on a common platform.
“Such an initiative will provide domestic investors ready access to keep the money invested within the GCC countries, rather than shipping it outside, creating further value.”
Meshal said efforts to contain the investment outflow is already being seen as local authorities are investing in their people and they are pushing for GCC nationals to take on leadership roles in so many economic areas.
“Look at Saudi Arabia, they just opened the Kingdom’s first ever metro in Riyadh. In the next few years, there are more mega projects including a US$250 billion GCC railway project that will start operating by 2030 and span a distance of 2,117km, connecting the entire GCC’s six nations, from Kuwait in the north to Muscat in the south.
“That will bring the region closer to each other and to ensure this infrastructure expansion, we have leadership stability.” All these factors, together with huge funding needs to be met, will create vast Shariah investment opportunities, noted Meshal.
Expecting the development boom to extend up to 2040 within the GCC region, before these economies transition into matured phases, Meshal said Janus Henderson will be exploring various ways to capitalize on these potentials.
“One may ask why should we invest in a rich region? Where we know that we can get the money back and get a higher yield as well? The US is continuing to launch new bonds and the entire world is launching bonds. So why should Saudi not do the same?
“In the GCC region now, I think that’s where we will see Shariah compliant investment growth, as more debt instruments are issued by the sovereigns and corporates.”
