By: Mahmoud Gamal

Abu Dhabi – Mubasher: The UAE-based banks have raised their investments in treasury bonds (T-bonds) by 6% or AED 11.8 billion in September.

National banks invested around AED 207.4 billion ($56.45 billion) in T-bonds at the end of September, versus AED 195.7 billion ($53.27 billion) in the same month last year, according to data released by the Central Bank of the UAE (CBUAE).

Month-on-month, banks’ investments in T-bonds increased by 3.8% or AED 7.7 billion, compared to AED 199.7 billion in August.

Basel III

The Emirati banks tend to boost their investments into debt instruments such as T-bonds as a result of introducing the standards of Basel III, which will protect the banking sector and reinforce its stability, capital market analyst Basel Abu Teima told Mubasher.

The UAE had started to apply the standards of Basel III, which will be officially introduced by the CBUAE in 2019.

Abu Teima stressed that the banks are seeking to diversify their investment portfolios from fixed income as the bonds’ interest they obtain to face the impacts of lower oil prices that some economic sectors are still suffering from despite the current direction to recovery.

Stocks

The UAE banks’ investments in stocks fell by 8.4% year-on-year to AED 10.9 billion in September, versus AED 11.9 billion, data showed.

Meanwhile, the banks’ investments in the held-to-maturity securities increased by 3.14% last month, reaching AED 78.7 billion from AED 76.3 billion in August 2017, the central bank added.

Translated by: Mai Ezz El-Din