Markaz Structured Finance Team speaks at Euromoney Conference


Markaz was invited to speak recently in a Euromoney Seminar titled “Derivatives in the Middle East”, held in Dubai. Due to Markaz’s experience in Derivatives in the Middle East, Euromoney invited Mr. Hussein Zeineddin Assistant Vice President of the Equity Derivatives and Structured Products Department in Markaz to present a case study of Markaz role in launching options in the Kuwait Stock Exchange in 2005, making it the first exchange to offer this tool in the Middle East. Commenting on upcoming derivatives products, Mr. Zeineddin said: “As part of Markaz responsibility to develop the options market, we are planning to introduce Put options (to become a valuable addition to the already offered Call options). Also, Markaz structured the “Arboun” Contract, the Shari'a compliant alternative to the conventional Call Option. Both products’ proposals are pending the KSE’s approval; we remain ready with the necessary infrastructure like trading and risk management systems. If approved, the KSE is poised to become the first exchange to offer traded Islamic derivative products.” Markaz is also calling for; a) allowing investors to write options and not just to buy them, b) having multiple market makers, c) trading options during official market trading hours. Finally, Mr. Zeineddin explained the implications of current financial crisis on derivatives growth in GCC. According to him,as structured derivative products are currently in spotlight for their role in elevating the credit crisis, regulators will be stricter for any such products at least in the near term. Due to the substantial re-assessment of risk across the markets, regulators will focus more on products with solid credit origination and valuation standards. In such scenarios, we think that Shari’ah compliant financial instruments and structured products will have a wider acceptance globally. Markaz believes that Options can create many positive developments in GCC equity markets such as addressing investors’ liquidity concerns and providing investors the ability to maneuver the markets in this highly volatile boom and bust market cycles. Forsa Fund, which acts as the sole options market maker in Kuwait is also the first options fund in the Middle East. Markaz is also a market maker for futures trading in the KSE. ### Photo caption: Mr. Hussein Zeineddin Assistant Vice President of the Equity Derivatives and Structured Products Department in Markaz About Kuwait Financial Centre "Markaz" Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over KD 1.4 (USD 5.32 billion) as of June 30, 2008, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and has been awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends-