United Arab Emirates and Economic Growth

Drake Scull International: At the same time sales of Islamic bonds, known as sukuk, dropped 41 per cent to $6.9 billion, according to Business Week. The increase in lending will be welcome for banks in the region, where oil more than 50 per cent decline in the past 12 months threatens to curtail government spending and clip economic growth. Loans that comply with Islam ban on interest in the GCC, which includes Saudi Arabia and the United Arab Emirates, have risen 22 per cent this year to $11.9 billion, the most since 2012, according to data compiled by Bloomberg. Investors are demanding higher yields amid market swings, prompting companies including Dubai-based construction contractor Drake & Scull International to delay sales. Given recent volatility, the bank loan market has provided a more stable and consistent source of funding for regional borrowers versus capital markets, where windows of issuance have been more fleeting, said Andy Cairns, the head of debt origination and distribution at National Bank of Abu Dhabi, the GCC biggest bond-arranger this year after HSBC. Top Arranger Dubai Islamic Bank, the UAE largest Shariah- compliant lender, is the biggest arranger of Islamic loans in the GCC this year. Volatility in US Treasury yields is averaging the highest since 2011 after Greece negotiated a debt bailout deal, China devalued its currency and the strengthening US economy boosted the prospects of the Federal Reserve first interest- rate increase in almost a decade. (news.financializer.com). As reported in the news.