8 April 2003
Warren Edwardes was interviewed by Shaheen Pasha, Dow Jones Newswires.
"I see anecdotal evidence of increasing political
and sentimental weighting influencing the direction of Islamic and Middle
Eastern investments. " said Warren Edwardes, ceo of London based financial
product development and risk consultancy, Delphi Risk Management. "There has
been an increased demand for euro denominated funds over the past year and a
trend away from US dollar assets as evidenced by the rise in the Euro towards
launch levels not justified on economic grounds. What is new is the drift in
sentiment away from Sterling, which seems increasingly unlikely to join the
Euro on political as well as economic grounds.
The reasons for the shift in sentiment away from the
US Dollar are many:
The need to diversify away from a heavy
concentration in a single market and currency;
Events in Iraq and a sceptical belief that the "road
map" for Palestine will amount if anything at all to a scattering of villages
resulting in a Middle Eastern Bophuthatswana;
Fear of seizure of Middle Eastern funds in the US
and the UK on terrorism grounds perhaps because of a similar sounding Arabic
name to suspicious funds. The Bush / Blair summit in Northern Ireland
furthermore has highlighted a feeling of inequity and a complaint that
terrorism in the UK to date has been substantially financed in New York, much
of it openly, and there has been no seizure of donor funds there or arrests of
The intention to genetically profile US residents of
Middle East origin and the perceived lack of welcome mitigates against
Finally, there are always followers of trends who if
they perceive a shift in sentiment for whatever reason will follow and
exaggerate the trend.
Real Estate investment seems to buck the
trend to bypass Sterling and a number of Islamic Real Estate funds have
recently been set up to invest in the UK.
It is always possible that there is more public
talk than private action on disinvestment from the US Dollar. Middle Eastern
investors are aware that their currencies are dollar linked and would be
taking a currency play.
Warren Edwardes is CEO of Delphi
Risk Management, the London-based financial product creativity,
communication and control consultancy.
Warren was previously on the board
of Charterhouse Bank and has worked in the treasury divisions
of Barclays Bank, British Gas and Midland Bank. He first researched
into what were later to be called "derivatives" in 1975
and was part of the team that executed one of the world's first
currency swaps in 1981. Since then he has devised and transacted
numerous structures that form part of the history of derivatives.
Warren can be contacted via
Warren Edwardes <note spelling of
edwardes> is author of best seller "Key
financial instruments: understanding and innovating in the world of
derivatives" which includes an appendix on Islamic Banking. see
are the Innovation, Communication & Risk Management arms of Delphi Risk
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