Markaz Research
Gulf Bank Successfully Completes Issuance of KD 50 Million Bonds
Published: 13 - Jun - 2021 Read More
Markaz Research
Invitation to Jazeera Shareholders to Participate in the Capital Increase
Published: 09 - Jun - 2021 Read More
Markaz Research
“Markaz” supports displaced families in collaboration with the United Nation High Commissioner for Refugees
Published: 09 - Jun - 2021 Read More
View All News


Rise of Markaz robo-advisor: a digital portfolio planner tool

Date : 27/08/2019
Author:  Hussein Zeineddine


Artificial intelligence (AI) is changing the world of retirement and future course of income planning, by using enhanced datasets and algorithms to efficiently deliver solutions tailored to Investor’s needs. AI can help them save, invest and retire better. One of the hottest trends to emerge in this area that use the data supplied by clients to create and automatically manage their investment portfolios.

Robo-advisors have achieved significant success in recent years. The robo-advisors managed $128 billion in assets as of November 2017, an increase of $88 billion from 2015. Organizations launched its robo-advisor solution in 2016 and has amassed $19 billion in assets during a one-year period, which shows that performance of robo-advisors is quite appreciating.

According to John Stein, CEO of robo advisor Firm that manages over $8 billion for 240,000 customers, stated that their growth path over the past few years has been faster than the growth of mutual funds and ETFs and the reason is the robo-advisors. Even when those products were new, in their early days. This idea of technology-driven, smarter investing is really transforming the way that people think about what they do with their money. It is taking off in a way that has never been seen before.

However, Are They The Most Effective Solution?
Based upon the above data and monitoring closely the recent trends that are taking place in financial industry, Markaz’s pioneering Management, Information Technology Services team and highly qualified analysts along with some of authentic service providers in market are working together in order to introduce a new Portfolio Planner tool that will change the future course of investments for its clients within the Zone. 

Rise of Robo-Advisor at Markaz
Markaz robo-advisor is an authentic online financial advisory platform that provides algorithm-based investment management services, including automated portfolio planning, automatic asset allocation, online risk assessments, account rebalancing and numerous other digital tools. Markaz is a customer driven organization where client’s needs are put first. High-end technology and qualified analysts at Markaz ensure client requirements are taken care of. When it comes to client‘s dynamic financial goals, Markaz leaves no stone unturned in order to ensure client assets are safe. 

Customers Need Human Interaction and Customization As Well
While robo-advisors are completely machine based tools, they appear particularly strong in the areas of account opening, enrollment and investment management, but they seem to lag behind in areas such as customer relationship management, wealth planning and client servicing. Nevertheless, Markaz’s newest tool will remove all these obstacles for our esteemed customers.  

Markaz robo-advisors will have a number of benefits, including an easier onboarding process, a suite of automated capabilities and minimal investment requirements compared to traditional alternatives. Markaz’s combination of human and robotic intelligence is going to bring revolution in the Kuwait financial industry. The algorithmic mathematical analysis by Markaz robo-advisor on client investments is combined with robust planning by highly qualified relationship officers (analysts). Robo-advisors also typically use their reduced fees to target millennials and low-income households. Markaz robo-advisor will offer its customers an automated solution to help them take their investment decisions. Our customers are our pride and keeping in consideration their dynamic financial goals, Markaz is bringing this brilliant tool to the market. 

Some Special Features of Markaz Robo-Advisor
•    Markaz robo-advisor will target minimum assets under management (AUMs) and simpler account types that only vary based on the risk level.

•    Robo-advisors available at market cannot have deeper conversations as financial advisors do to further understand client interests and build a more customized goal plan. However, robo-advisory service at Markaz will ensure additional support is provided at any point of time especially in terms of changing goals and plans also helping clients to reassess the risk profiling and online questionnaires

•    Current robo-advisors available around are lacking at adapting to changing circumstances and cannot provide life-stage management effectively. However, Markaz robo-advisory services would provide our clients a human touch services as well

•    Markaz robo-advisory is bought into functionality only after a detailed research and analyzing some of the current shortcoming of market Robo advisors.

Markaz robo-advisor uses the artificial intelligence technology. This will be interlinked with one of the Markaz’s sophisticated asset management system called Vestio, which will serve as a primary data source. It is accompanied with few of the markets data providers with whom Markaz is integrating in order to extract market data information. Once a client fills up the questionnaire regarding his personal information; investment goals and risk tolerance. Markaz robo-advisor compiles all this information and provides reliable results. Markaz robo-advisory services is going to be available online and through a mobile app. A client can access his details anywhere anytime. With this, Markaz is all about brining innovation to Client doorsteps.


Tags:  Advisors, App, Robo, technology

 Current rating: 0 (3 ratings)

What Is the Future of Ecommerce in the Arabian Gulf?

Date : 04/11/2018
Author:  Marmore MENA Intelligence


The Arabian Gulf or the GCC region’s retail sector has been going through sweeping changes that are not only disrupting the conventional retail but reshaping its future too. In recent times, the mode of retailing in the GCC has gone through substantial changes that was unimaginable a few years back. There are clear signs of transformation in the retail sector in the region. There is increasing scope for e-commerce in the Middle East, with Saudi Arabia and the United Arab Emirates establishing the template for sustainable business models that other countries can look to emulate ( Fitch Solutions-Middle East E-commerce 2018).

Over the last decade, e-commerce industry has grown 1500% in the region. In terms of average spending, an online user spent US$300 in the UAE compared to US$90 in Saudi Arabia, US$94 in France and US$1100 in Canada in 2017 (Albawaba-UAE the next E-commerce capital-2018).  However the size of e-commerce in the GCC region is relatively smaller. According to estimates, e-commerce just stood 2% of the total retail sales in the region in 2017 with the UAE taking the lead, followed by Saudi Arabia (The National and MR Raghu MD Marmore MENA Intelligence 2017).

GCC e-commerce market was estimated at US$3.4 Bn in 2015, US$4.8 Bn in 2016, US$6.7 Bn in 2017 (Arabian Gazette- E-commerce Market Value in MENA 2017). Marmore research predicts it to reach US$20 Bn by the end of the decade, i.e 2020. The table below summarizes various predicted values for expected size of the market by 2020/22.

Table 1: Various Estimates of E-commerce market size in GCC countries 2018
Source: Marmore and Secondary Research 2018

The ripple effects of digitized commerce will be wide and deep, directly impacting the conventional physical stores (retail industry), employment and the logistics sector. The growing youth population, higher mobile and internet penetration, high disposable income and booming FinTech industry, are expected to propel digital commerce. In the GCC, mobile penetration is recorded at 76% of the total population, and internet connectivity is reaching above 90% of the population in countries such as Bahrain, Qatar and the UAE (GSMA the Mobile Economy 2017).

In the GCC region, 73% of total mobile subscribers are having mobile internet, while smart phone adoption is 72% as on Q2 2017. Additionally, GCC regions top the other Arab countries and MENA in terms of technology adoptions and utilization (Ibid ). In terms of demographics, almost 50% of the population between 26-35 years prefer online transactions in UAE, Saudi Arabia and Kuwait. Younger population groups tend to have lower internet utilization. Similar is the case for higher and middle-aged population across 3 GCC countries, as shown in chart below.

Chart 1: Online Purchase Activity by Age Group 2017

Source: Service Plan Middle East 2018
E-Commerce Ecosystem
In 2017, when Amazon acquired Dubai-based online retailer,, it changed the rules of the online game forever in the Middle East. According to reports, Amazon paid US$850 Mn for Souq (Tech Crunch-Amazon Completes Acquisation-2017). The acquisition not only established Amazon’s footing in the region but also heated up the e-commerce competition and helped formalize the structure of the sector.

Table 2: Key E-commerce Market Players in the GCC

Source: Sayidaty Digital Group-Brining Commerce and Content together 2017

Surprisingly, while more than half of the population is under the age of 25 in the region, (Youth in the GCC-Booz & Co. 2017)  only 15% of businesses in the region have their online presence (Practical E-commerce 2017).  On the demand side, the key reasons for the rise in e-commerce are, namely, ease of shopping, new payments mechanisms, development of FinTech, multiple merchant points, rise of e-wallets and other alternative payment systems (ICT report-E-commerce in Saudi Arabia). Thus there is an increase in consumers’ willingness to use and accept such technology. On the supply side, the wide range of shopping brands to choose from is one of the prime factors driving the e-commerce market. Huge investments, innovation in consumer mobile devices and connectivity, entry of new players, competitive prices, expanding logistics services are the other key factors shaping the e-commerce market in the GCC region.

Table 3: E-Commerce Benchmarking

Source: Secondary and Marmore Research 2018. *approximately**Asia Pacific region 2017 of the total retail sales

Culturally, GCC countries are mainly cash-driven. Although mobile and internet penetration is high compared to global standards, the urge to touch and feel the physical product and, to some extent, a mild distrust in online payment mechanism have emerged as challenges before the region’s e-commerce market. In an environment of cultural conservativeness and technology evolution, Middle East is yet to embrace e-commerce on a full scale. The Table above provides the insights into online customers’ psychology.

Although the e-commerce growth in recent times has been phenomenal, complete trust and confidence in the system is yet to develop among the GCC population. In Bahrain, for instance, product search and data collection are among the top online activities, and online shopping is done by less than one-third of internet users. Also, in countries with higher online shopper penetration rates, such as the UAE and Saudi Arabia, the frequency of buying online remains subdued (PN News Wire- GCC B2C commerce market report 2018).
Overall, the key pressing issues before the e-commerce sector are summarised below:

  • Prevalence of cash-on-delivery over other payment methods and consumer wariness of safer online payment transactions.
  • Most of the countries lack a unified address system which, on the one hand, creates challenges for last-mile delivery.
  • Extensive use of mobile phone to trace customer location (PN News Wire 2018) makes delivery difficult.
  • Lack of a well-developed unified online payment system.
The online payment infrastructure is still in the evolutionary stage in the region and lacks deeper public trust. In Saudi Arabia, for example, about half of the population remains unbanked and card payment penetration is just over 40%. In terms of logistics, most of the online retailers don’t have well established warehouses and the distribution network is still weak (AT Kearney-Getting in on the GCC  E-Commerce Game 2017).

Strategies to drive e-commerce transactions in the GCC
Given this background, some of the strategies to improve the ecommerce transactions in the GCC are discussed below:

For consumers in the Middle East and Africa, price-points or promotions (34%) are the most likely factor driving purchasing decisions, followed by brand (24%) (KPMG). This makes personalised messages and product recommendations crucial. Promotions using data-driven marketing and deep learning (a subfield of AI) can be widely used to understand the individual’s shopping wallet. Entry of new players can increase competition and add better quality of customer service and better discounts.

As exhibited in Table 3, a majority of regional customers prefer to check products personally. In such a case retailers may use strategies like providing comprehensive information about the product ingredients, easy returns and satisfaction guarantees. Also, understanding the motivation of shoppers, their behaviour pattern (behavioural targeting) through browsing patterns can improve the services offered by online retailers and make people transact more online. 

In order to improve the payment method, online retailers and local banks can leverage new forms such as QR code payment method which would enhance customer convenience. Online retailers providing “bank transfer” option at checkout can offer a dynamic QR code via app that consumers can scan using their mobile banking app and confirm the payment. In China, the ICBC’s (Industrial and Commercial Bank of China) QR code payment is used for all small payment services, thus speeding up the e-commerce payment experience. Such payment methods can also be more secure as the payment information is not carried through the merchant's store network.

Thus the e-commerce platforms can increase the outreach of customers in the region by redesigning the digital solutions that can increase speed, convenience and visibility. In addition, regulatory drivers like cashless societies, financial inclusion, protecting customers and more open banking competition can increase e-commerce transactions in the region. Though the GCC region is a late adopter of e-commerce, regionally tailored solution and strategies like improving the customers’ trust, better logistics, reliable online payment system and increasing competition among the e-commerce players can offer great results.

This article is published in "Marmore Blog"

Tags:  Ecommerce, GCC, Technology

 Current rating: 0 (3 ratings)

What are we paying for? - Why investors are fond of the US tech stocks

Date : 01/08/2017
Author:  Marmore MENA Intelligence


‘FAANG’ stocks, as they are fondly referred, have been the epicentre of the US stock market in the recent past. Technology stocks account for 25.6% of S&P 500, making it the largest sector constituent. Tech stocks fuelled the rally in the US markets in 2017. Apple, Google, Netflix, Facebook and Microsoft with a weightage of 11.1% in S&P 500 index contributed a 34.5% share in the rally of the index in 2017 (YTD).


Trading at a premium would be an understatement to refer to FAANG stocks as they trade at stratospheric valuations (price to earnings ratio). Analysing all possibilities, we could for sure say one thing, what is driving the valuation is the frenzied investor behaviour of paying too much today for earnings that are likely to accrue in the distant future. So, what are we paying for? – Investor irrationality.

History tells us that investors have similar investment patterns in the past when it comes to US tech stocks. This kind of overexcited investing in tech stocks was the root cause of the catastrophic collapse of the stock markets after the dotcom bubble in 1999. Technology itself seemed to be an impressive business plan for the investors those days. Hence, these tech companies also spent more money on marketing their company to investors. However, markets turned to reality sooner, leading to the crash right at the start of the millennium. Poor financial management, lack of profit generating activities and no vision for the future business pushed investors to realize that tech companies can no longer be their exquisite investments. Many tech firms delisted, closed their offices and some even went bankrupt. In 1999, there were more than 200 companies that filed for an IPO in NASDAQ and vanished after the markets crashed in 2001.



Analysts who have either given a strong buy/buy recommendation for Amazon estimate that 92% of the price paid is for earnings that would be reaped after 2020(The Economist). In a decade, it is estimated that Amazon would trade at a PE of 10x. Amazon’s customer base is expected to reach 788 mn by 2025 generating a revenue of USD 3 trillion (almost the size of India’s GDP). Amazon’s valuations can be only justified by the exponential growth in its revenue, never with the earnings the company has made in the past nor with that anticipated for the future. Technology is an arena where ten years is too large a time horizon. 10 years before, products that were pioneers in use are no more existent today. With iPhone having being introduced, Apple was forced to kill its one master innovation, the iPod. Nobody thought of cloud hosting and the widespread use of internet two decades before. Technological breakthroughs generally disrupt the existing business models and can change the landscape of a sector/ companies that were till then operating quite successfully. This threatens the basis of estimating earnings for the future, especially in the longer term.


Net income has never moved in line with the revenues of the company, rather stayed divergent for almost 25 years. The chart above conveys the business model of Amazon, their focus has been to drive down prices and gain market share, which they have quite successfully done in the past three decades. Investors still believe that Amazon is in its nascent stages, and it could turn around to make profits and generate returns for the shareholders. This can happen only if the utopian dream of creating a monopolistic retail and web services market comes true. What would happen if Amazon increases the price of its services when it feels there are no more competitors? This strategy of cannibalising market share by reducing price has never worked out in the long term. The prospect of future earnings cannot happen just by holding market share. For now, Silicon Valley majors seem to have lost ground of their unique proposition – ‘Innovation’, which was at the heart of their organizations when they were incubated.

Similar stories seem to appear on many walls of Silicon Valley. Google and Facebook depend on their advertising revenue to a larger extent. When there is another technological innovation threatening their business, these tech giants have engaged in acquisitions at unimaginable valuations. The large tech companies are unable to innovate new income generating activities in-house, and with a huge cash reserve they have all decided to look for inorganic growth. The classic example would be the acquisition of Whatsapp by Facebook after facing tough competition from Google. The private messenger service ‘Whatsapp’ was valued at USD 19 Bn and acquired by Facebook in 2014. Apple has acquired more than 20 companies in the last two years. It is a qualm if these firms could run for years like these, without innovating in house and focus on profit making activities. Technology has too many competitors to acquire and to enter into price wars.

Snapchat’s IPO listing defeats it all, where the loss making company offered no voting rights to investors and the prospectus stated that it has no intention of paying cash dividends for the foreseeable future. The prospectus states that the company expects operating losses to continue in the future and may never achieve or maintain profitability in the coming years. The company is yet valued at $18.5bn. This displays the passivity of investors towards tech investing, owing which US tech companies afford to lack corporate governance, claim to make losses, deny rights to shareholders, and yet attract investments.

Majors in the Silicon Valley, Apple, Microsoft and Google have been more attractive in terms of their valuations compared to companies such as Amazon, Netflix and Facebook. Product and service line diversification of Microsoft and Apple have generated consistent profits for these companies, unlike in case of the others. Not all tech stocks run similar risks and are not equally overvalued. However, a majority of them, especially those struggling to generate profits are stocks that thrive on the promise of glorious tomorrow.

All said and done, Amazon is just a classic case of fundamentally weak but an overvalued stock. The situation may not be indicating another bubble in the stock markets as in 1999, though nothing much has changed about the way investors have picked companies. In the long run, disconnect between the revenues and the ability to generate profits is a risk that many tech companies have embedded in their business models. Investors have unfortunately failed to take notice of the same.

Bottom line for investors – ‘Look for bottom line numbers before investing’.

 This article is published in "Marmore Blog"

Tags:  Investors, Market, Stock, Technology, US

 Current rating: 0 (3 ratings)

Fintech in GCC

Date : 19/02/2017
Author:  Murtaza Pattherwala

Fintech in GCC - Blog

Fintech is yet to find its feet in the GCC, despite several digital transformation drives initiated by the regional governments. In the west, the governments play the role of a facilitator in terms of policy and regulation, and in providing the right environment for innovation to flourish, leaving it to the private sector to come up with modernized solutions. However, in the GCC, with the regulations lagging behind in most sectors and private sector wary of joining in, the governments play a more central role in fostering innovation.

Despite this, Fintech has permeated across the region, in peer-to-peer lending (Beehive), crowdfunding (Eureeca, Aflamnah, and Durise), payment solutions (CashU, Payfort, Telr, PayTabs), insurance
(compareit4me, Democrance) and online/mobile banking and online trading.

PayPal MENA is now spread across the Middle East, focusing on growing e-commerce markets, such as the UAE, Qatar, and Saudi Arabia. PayFort tailored its payment system to take into consideration the lack of credit card ownership in various markets, while Telr has modelled itself as a payment gateway that is not only multi-lingual, but also multi-currency, offering online payments solutions for merchants across social media channels and other websites. Funded by Saudi Aramco’s Wa’ed program, PayTabs has also entered the payment solution race in the region, and has an e-Commerce API plugin that can easily be integrated on any website.

Fintech could potentially increase the reach of Islamic financial services, and provide more choices that suit individual needs at competitive cost

GCC’s first crowdfunding platform, UAE-based Aflamnah, allows individuals from the Middle East region to raise funds for fresh ideas in films, games, television, art, music, etc. Another UAE platform, Eureeca calls itself a crowd-investing arena, as it allows interested investors to view profiles of available projects to invest. In return, the investors will gain shares in the businesses, in which they make their investments. launched an endto-end car insurance comparison platform that allows users to compare instant car insurance quote and buy online; a first in the MENA region. The new product has already generated more than 20,000 quotes, and sold more than 600 car insurance policies. Democrance plans to disrupt the insurance market by collaborating with insurance companies and mobile operators, to make insurance affordable and accessible to the people who need it the most. It distributes, administers and services insurance policies only through the mobile phone, which results in considerable cost savings. Finerd, an automated investment and wealth management company, is expected to unveil their much-awaited Sharia- compliant products sometime in 2016.

According to Marmore’s report on ‘Fintech in GCC’, one of the biggest potential impacts of Fintech will be on Islamic finance. Fintech could potentially increase the reach of Islamic financial services, and provide more choices that suit individual needs at competitive cost. SMEs that find it hard to obtain sharia-compliant bank funding from Islamic Financial Institutions (IFIs) could look to Fintech firms to fill that gap. Beehive is a Dubai-based sharia compliant P2P lender, and is the UAE’s first online marketplace for lenders and borrowers. It caters low cost finance to SMEs, while providing investors a direct access to alternative asset classes that can generate higher returns in an environment, where risks are shared.

The GCC has a large, youthful retail customer base that is receptive to new and disruptive financial technologies, as evidenced by the increasing penetration of e-commerce and online payment systems.
The region already has a strong foundation in the financial services sector, and a quicker adoption of Fintech would solidify its position as a financial hub.

This article is published in "Engage Q4, 2016" - click to view the publication


Tags:  FINTECH, GCC, technology

 Current rating: 5 (3 ratings)

From a slow start, innovative fintech could shake up finance in the GCC

Date : 23/05/2016
Author:  Marmore MENA

The article originally appeared in The National | Business.

While financial technology, aka fintech, is ascendant in most of the world, it is still finding its feet in the GCC despite several digital transformation drives initiated by regional governments.

In the West, governments play the role of facilitator in terms of policy and regulation, and in providing the right environment for innovation to flourish, leaving it to the private sector to come up with solutions. However, in the GCC, with regulations lagging in most sectors and the private sector wary of joining in, governments play a more central role in fostering innovation.

Still, fintech has begun to bubble up across the region, in payment systems (CashU), peer-to-peer lending (Beehive), crowdfunding (Eureeca, Aflamnah and Durise), online/mobile banking and online trading.

Even though cash is still king, the use of online banking, plastic cards and alternate payment systems, such as CashU, are slowly rising in popularity, mainly because of increasing e-commerce transactions. But mobile banking does not have many takers, mostly because of a lack of user-friendly interfaces, which should change over time.

Crowdfunding is one area where fintech has begun to show its potential in the region. Although it may not replace the traditional sources of funding, such as banks, private equity and venture capital, crowdfunding has provided another option for a region that is facing a severe liquidity crunch. In addition, crowdfunding, at times, focuses on motives beyond financial return, as in the case of Qatar’s Silatech, which has joined hands with Qatar Charity to launch a crowdfunding platform dedicated to funding young Arab entrepreneurs.

Fintech’s penetration into Islamic finance is still in its infancy with very few participants, such as Beehive, a Dubai-based Sharia-compliant P2P lender. However, the potential disruptions to traditional Islamic finance cannot be underestimated. From a consumer perspective, fintech provides more choices that suit individual needs at competitive cost and with easier access. SMEs that find it hard to obtain bank funding from Islamic financial institutions (IFIs) could look to fintechs to fill that gap, via Sharia-compliant P2P lending and crowdfunding platforms.

But the biggest potential impact of fintech would be the increase in reach of Islamic financial services, as an alternative to conventional finance, especially in markets where it is yet to enter. Fintech eating into IFI margins will force the latter to provide more services online and standardise offerings to customers.

Other areas where fintech is likely to have an impact, especially from a GCC standpoint, are remittances, insurance, investment advisory and online trading.

The arrival of online insurance marketplaces will lead to a homogenisation of risks and a complete overhaul of traditional channels of distribution. Technology companies could enter the insurance distribution space, leveraging on their extensive data collection and distribution capabilities, and charge insurers a fixed fee for every customer click.

According to the World Bank, the cost to a diaspora of sending money home averages 7.7 per cent globally. India, which receives the highest remittances from the Gulf region and worldwide, loses US$5 billion annually in bank transfer costs. Despite regulatory hassles in some places, fintech companies have entered the remittance space and are cutting out the middlemen.

So how close is the GCC to celebrating this fintech revolution? Currently, it is still at a nascent stage in most areas where fintech could have a potential impact. These technologies will most certainly affect the businesses of the banking, financial services and insurance industry, the biggest and most prominent sector in the region after oil and petrochemicals.

In terms of policy and regulation, the GCC still lags behind the rest of the world and change takes an inordinate amount of time to occur. However, demand from consumers is expected to give rise to faster adoption across the region. This is one revolution the GCC won’t be able to sidestep.

MR Raghu is the managing director of Marmore Mena Intelligence, a research house focused on conducting Mena-specific business, economic and capital market research.

Tags:  banking, financial, INNOVATION, payment, systems, technology

 Current rating: 5 (3 ratings)

Tag cloud

Capital Markets(13)
Stock Market(10)
GCC Markets(7)
Markaz Analysts Club(3)
Real Estate(3)
Company Analysis(2)
Monetary Policy(2)
Mutual Funds(1)
Reserve Bank Of India - RBI(1)
US economy(1)
US financial markets(1)
US government(1)
Stock Brokers(1)
Saudi Market(1)
Social Media(1)
Share performance(1)
Corporate governance(1)
Debt Issuances(1)
Capital Gain(1)
Climate Change(1)
Asset Management(1)
Fixed Income(1)
Indian Economy(1)
Indian Market(1)
Equity Markets(1)
Financial Analysis(1)