Portfolio Diversification with Sukuks

Bond

Summary:

Growth in issuance across geographies and sectors.

Sukuks, often referred to as Islamic bonds, are financial instruments that comply with Islamic law also known as Shariah. Unlike conventional bonds, which involve interest payments on a loan, Sukuks represent ownership in tangible assets, services, or an investment in a particular project or business venture. Shariah prohibits interest, excessive uncertainty and speculation and disallows investments in industries such as alcohol, pork production and gambling.

As of Q1-2024, the global Sukuk market is around USD 867 billion in size with almost three-quarters of outstanding instruments denominated in local currencies and the rest in US dollars. Dollar-denominated sukuks are typically structured as trust certificates under English law. The hard-currency international sukuk market is the real attraction and driver of the increased interest in the asset class from an asset allocation perspective.

Asset class with secular growth

The first Sukuk transactions date back to the 7th century AD in Damascus, Syria. More recently, in early 2000, the Malaysian government issued the first modern Sukuk bond marking the start of what would become a rapidly expanding market. Sukuk issuance has since gained global traction, with notable issuances from the United Arab Emirates, Saudi Arabia, and even non-Muslim majority countries like the United Kingdom and Luxembourg. This global expansion reflects the growing acceptance and integration of Sukuks into the international financial system.

Over the past decade, the Sukuk bond market has thus metamorphosed from a niche market into a more mainstream asset class, as shown in Figure 1. This growth has been characterized by increasing diversification in terms of geographical issuance and industry sectors. The investment universe now includes sovereign, quasi-sovereign, and corporate issuers, with a notable increase in participation from non-Muslim majority countries. This expansion has been driven by a growing demand for Sharia-compliant investment products and the increasing attractiveness of Sukuks as stable and ethical investment options.

As indicated below in Figure 2, Malaysia remains the largest Sukuk market globally, with around 60% of its local currency debt market in Sukuk, while Gulf Cooperation Council (GCC) countries account for 35% of global outstanding Sukuk. The GCC is an expanding issuer region due to the vast number of infrastructure projects.

Sukuk issuance especially for sovereigns are often heavily oversubscribed. Egypt’s debut USD 1.5 billion Sukuk attracted bids of more than USD 6 billion in 2023. Pakistan’s 2022 Sukuk was oversubscribed by more than two times.

Sukuks and conventional bonds

When comparing Sukuk bonds to conventional bonds, several distinctions emerge. Sukuks attract a diverse range of investors, including both conventional and Islamic investors. They appeal particularly to those looking for ethical investment options and those adhering to Islamic principles.In terms of pricing new issues, Sukuk bonds are influenced by similar factors as conventional bonds, such as credit risk, duration, country of risk and prevailing market conditions. However, some Sukuk bonds have historically traded at a premium due to their Sharia-compliant nature and the limited supply relative to demand. Many Sukuk issuers have cross default provisions with their other debt obligations which ensures that Sukuks are ranked pari-passu with conventional bonds.

Liquidity is another area where Sukuk bonds have traditionally differed from conventional bonds. Historically, Sukuk bonds have been less liquid in the secondary trading market due to a higher proportion of bonds being held by buy-and-hold style investors. However, this landscape is changing with increasing issuance and growing familiarity among investors, which is gradually enhancing their liquidity profile.

Recent developments

In recent years, sustainable and green Sukuk issuances have grown substantially, aligning with global trends towards sustainable investing.

These instruments are designed to fund projects with environmental or social benefits, such as renewable energy or social infrastructure projects. The first green Sukuk was issued by Malaysia in 2017 and, since then, green Sukuks have gained popularity, with several countries and corporations following suit. Not only do they comply with Islamic Law, but they also meet international standards for green finance, thereby attracting a new and broader range of investor class interested in sustainable and ethical investment options.

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) recently completed market consultation on its proposed AAOIFI Sharia Standard 62. The proposed standard in its current form implies a shift from an asset-based sukuk structure, which is equivalent to senior unsecured conventional bonds, to an asset-backed sukuk structure, which is similar to a securitization. Market implications will largely depend on what form the finalized standard will take, which Islamic finance countries will adopt it, and how they will implement it.

Looking ahead, the future of the Sukuk bond market looks appealing. Continued growth in market size is expected and forecasted to cross USD 1 trillion in the medium term. Such growth will likely be driven by the increasing demand for Sharia-compliant products and broader global acceptance.

As the market matures and more participants enter the secondary market, liquidity is also expected to increase. The ongoing development of sustainable and green Sukuk bonds is expected to further enhance the depth and breadth of the market, contributing to its evolution as a significant asset class.

Myriad of benefits

From an investment perspective, allocating to Sukuk bonds offers several compelling benefits. Firstly, Sukuk bonds have historically provided stable returns with low volatility thereby making them appealing on a risk-reward basis. Secondly, they offer risk mitigation benefits, as Sukuk bonds often exhibit low correlation with conventional bonds, thereby enhancing portfolio diversification. Lastly, they provide an avenue for ethical investing, aligning with the principles of ethical and socially responsible investing.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Warren Takunda

Economic

Business activity in the U.S. services sector accelerated in September for a third consecutive month of expansion thanks to stronger production and new orders while employment slowed but remained stable and inflationary pressures moderated, according to the latest survey by the Institute for Supply Management released Thursday.

The ISM index, which shows the directional change of economic activity, rose 3.4 percentage points to 54.9 in September, reaching the highest since 55.0 in February 2023 and coming in stronger than the consensus call of no change at 51.5. It followed a slight 0.1-point rise to 51.5 in August, a 5.1-point rebound to 52.4 in July from a 6.8-point dip to 47.3 in June, which was the lowest level since 45.4 in May 2020.

“The stronger growth indicated by the index data was generally supported by panelists’ comments; however, concerns over political uncertainty are more prevalent than last month,” Steve Miller, chair of the ISM Services Business Survey Committee, said in a statement. “Pricing of supplies remains an issue with supply chains continuing to stabilize; one respondent voiced concern over potential port labor issues. The interest-rate cut was welcomed; however, labor costs and availability continue to be a concern across most industries.”

The services sector continues to outperform manufacturing industries, which in Tuesday’s report showed contraction for the sixth straight month in September on continued sluggish demand as firms remain reluctant to invest in capacity amid uncertainty over the pace of the Federal Reserve’s unwinding of its tight monetary policy and the outcome of the presidential election next month.

Looking ahead, Miller said, interest rates on auto loans and mortgage rates have already come down ahead of the Federal Reserve’s rate cut in September and more rate reductions projected by Fed policymakers should support the sector toward yearend after an historically weak third quarter.

“The wild card right now is how long the port strikes last,” Miller said. “Inventories are up, which is a good thing … and trucking companies are already positioning capacity out of the west coast.”

Sector inventories are likely to be depleted in two weeks if the dock workers continue to walk off the job, Miller estimates. East and Gulf coast cargo-handlers launched their first large-scale strike in nearly 50 years this week, demanding higher wages and job security against automation.

“What I’ve been hearing (is that) a week-long strike is going to have a month impact in terms of recovery,” Miller said, adding that there are already shortages of electrical components for transformers which could hurt the construction industry. On the bright side, he said, “Christmas time retail products are already here.”

Miller noted that imports were up in September and there were more comments by ISM member firms discussing labor actions, indicating services providers were trying to cope with more strike-prone unions in the U.S. and Canada.

Timothy Fiore, the ISM manufacturing chief, told reporters Tuesday that the main gateway for the transpacific shipping ferrying goods from Asia – the world’s production hub – is on the West coast, downplaying the overall impact of the East coast industrial action on U.S. imports.

“Amid robust consumer spending, the large services sector continues to add backbone to the expansion, likely weighing toward a smaller quarter-point rate cut from the Fed in November,” Sal Guatieri, senior economist at BMO Economics predicted in a report. “But there are still a lot of data to come and the dockworkers’ strike is a wildcard.”

Of the four sub-indexes that directly factor into the services PMI, the business activity/production index rose 6.6 points to 59.9 after falling 1.0 point to 53.3 in August. The new orders index also gained a solid 6.4 points to 59.4.

The employment index fell 2.1 points to 48.1 in September after slipping 0.9 point to 50.2 in August. It reflects a decrease in the number of firms hiring more after some of them had already expanded payrolls in July and August and thus saw balanced employment levels in September, Miller told reporters. It does not show a contracting trend, he said.

The supplier deliveries index – the only ISM index that is inversed – stood at 52.1, up 2.5 points from 49.6 in August, indicating slower deliveries after supply chains had recovered from the long lead times during the pandemic.

Miller said inflationary pressures have been easing, noting that a 2.1-point uptick to 59.4 in the prices paid index in September is not concerning given that the 12-month moving average is at 58.0, lower than 62.2 seen a year earlier and 79.8 two years ago.

Source: MaceNews

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Alex

Economic

Cardano’s Voltaire-era governance overhaul prevents it from becoming a “dictatorship” like Ethereum and sidesteps the “anarchy” of Bitcoin, its founder Charles Hoskinson said.

Speaking to Cointelegraph at Token2049 in Singapore, Hoskinson attacked Ethereum’s governance model, claiming it relies too heavily on its co-founder Vitalik Buterin for direction.

Hoskinson said that blockchains can elect to keep the protocol forever simple, like Bitcoin, or “pick a king” to run things. However, Cardano’s new governance model solves the “governance trilemma” of “efficiency, effectiveness and integrity” by using delegated representatives and a members-based organization called Intersect to distill complex governance topics down for a vote.

“If you have those three things, then you have a fair shot of avoiding the anarchy of Bitcoin or the dictatorship of Ethereum, and you actually have something that can move forward with one voice, but it’s still decentralized at the end of the day because it represents everybody.”

Pressed to explain his controversial remark comparing Ethereum to a dictatorship, Hoskinson stated that Ethereum’s “entire vision” starts and ends with the 30-year-old Buterin.

“Everybody looks to him for the roadmap. Everybody looks to him for inspiration, and he’s also the only person who has enough power to rally people,” he said. “If you were to remove him from the equation right now, what’s the next hard fork going to look like, and how quickly can they actually get there?” he asked.

Hoskinson said Buterin was primarily responsible for altering the Ethereum roadmap away from sharding-based optimization of the base chain and toward rollups and layer-2 networks for scalability.

In recent months, the Ethereum roadmap has been heavily criticized for empowering “extractive L2s” as fee revenue and activity on the L1 dropped.

“Where does this idea of embracing layer 2s or rollups come from? Was it some random Ethereum engineer — or was it Vitalik Buterin writing a blog post about it, talking about it, and advocating for it?”

Although Hoskinson believes Ethereum is heavily influenced by Buterin’s vision, Buterin does not wield unilateral power in the decentralized network.

The blockchain uses a mix of offchain and onchain governance, including the Ethereum Foundation and community and stakeholder input into Ethereum Improvement Protocols, with critical decisions taken at core developer meetings. Contentious decisions can result in a hard fork, as happened with The DAO hack rollback that resulted in Ethereum Classic.

Hoskinson was one of eight original co-founders of Ethereum and CEO of the Ethereum Foundation, but his for-profit vision for the protocol clashed with Buterin’s and the young creator fired him from the project at a meeting in Switzerland in 2014.

While Hoskinson conceded that he had played a broadly similar role in shaping Cardano since 201, he said the network’s new governance model is designed to ensure that “Charles, alive or dead, doesn’t matter. There’s still going to be innovation on a daily basis.”

Cardano’s Chang hard fork in early September turned its Cardano (ADA) asset into a governance token, enabling holders to elect representatives and vote on development proposals and on funding for community projects. The founding entities that have guided the project so far — the Cardano Foundation, Input Output Global and Emurgo — can no longer trigger forks and upgrades.

Hoskinson said the interplay between the members-based organization of researchers and engineers — dubbed Intersect — and the delegate representatives is a much more “collaborative model” that functions with or without an active founder.

“They can talk to each other, vote, and come up with and use a blockchain-based government to ratify a roadmap on a regular basis,” said Hoskinson.

Cardano is still working on finalizing a constitution that will likely set hard limits on some core issues, such as supply and how governance works.

Source: COINTELEGRAPH

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

It's a big week ahead for the Kiwi as the Reserve Bank of New Zealand (RBNZ) looks set to cut by 50 basis points, representing a step-up in the urgency to address a stagnant economy.

Typically, such an acceleration in the rate cutting cycle would weigh on a currency, as it diminishes the attractiveness of New Zealand's assets to foreign investors that are on the hunt for higher returns.

"We think the disinflationary information that we have received will dominate and that this will, ultimately, encourage the RBNZ to accelerate the easing process," says Stephen Toplis, Head of Research at BNZ.

Although the NZD can initially come under some pressure, Jane Foley, Senior FX Strategist at Rabobank, thinks the currency can ultimately withstand the move.

"While an announcement of a 50-bps rate cut next week would likely still push the NZD lower, we would expect buyers to emerge on dips below the NZD/USD0.62 level," she says.

"In view of expectations that further rate cuts are on the cards from the Fed, the ECB and various other G10 central banks during Q4, the impact of RBNZ policy easing on the NZD crosses will likely be offset," she adds.

A 50bp rate cut from the RBNZ would come in the context of a similar-sized cut at the Federal Reserve in September.

The European Central Bank has meanwhile indicated it could step up the pace it cuts rates, while the Bank of England's Governor hinted Thursday that his central bank could follow suit.

Investment bank GBP/NZD consensus forecasts: The end-2024 and 2025 guide from Corpay has been released. Featuring the median, mean, high and low points forecasted by over 30 investment banks. Please request a copy here.

The context for NZD is therefore important: if others are stepping up the pace, the 50bp move at the RBNZ starts to look unremarkable.

This could leave NZD free to react to a prospective fiscal stimulus announcement from China, which could ultimately be the story of the week for markets.

"Chinese stimulus will boost regional demand for New Zealand exports," says Foley.

If anything, it would be global risks that can put the NZ Dollar under meaningful pressure in the near-term.

"A clear caveat to the recent better tone in both the AUD and the NZD is the outlook for the broader tone of risk appetite. Further escalation in Middle Eastern tensions would support the USD and undermine the AUD and NZD," says Foley.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Brookings Institution

Economic

Artificial intelligence (AI) raises an acute set of challenges with respect to export control. On the one hand, AI opens the door to potentially transformative military technologies. The United States has a strong interest in ensuring that U.S.-developed AI technology is not used by geopolitical rivals in ways that threaten national security. A key framework to further that interest is the Export Control Reform Act of 2018 (ECRA). The ECRA gives the Department of Commerce the authority to promulgate new export control rules regarding AI technologies.

On the other hand, the more expansive a system of export control restrictions on AI becomes, the more cumbersome and impractical it is to enforce. In addition, adopting overly broad new export control restrictions aimed at blocking cloud-based access to AI computation by geopolitical rivals also risks impairing AI research at U.S. universities. The result would be a less robust and innovative U.S. AI ecosystem.

Leakiness of current rules

In October 2022, October 2023, and April 2024, the Bureau of Industry and Security (BIS) of the Department of Commerce released a series of export control rules aimed at limiting access by China to the most advanced chips used for AI computations. Unsurprisingly, this has spurred a thriving black market in smuggled chips.

But smuggling isn’t the only way for entities in export-restricted jurisdictions to access the computing power of the most advanced AI chips. A June article in Computerworld stated that “the existing rules omit the provision of chips-as-a-service, or cloud computing, creating a potential loophole for Chinese companies to benefit from the chips as long as they remain on US soil.” And an August 2024 Wall Street Journal article titled “China’s AI Engineers Are Secretly Accessing Banned Nvidia Chips” explained that “brokers are making overseas computing power available and offering a high degree of anonymity.”

These loopholes underscore that obtaining the benefits of AI computing does not require physical possession of the chips performing the computations. Cloud computing abstracts away the location of computing hardware. Just as a person can benefit from the convenience of performing a Google search without knowing the location of the servers doing the work of generating the search results, a company can train an AI model using cloud-based servers. Rules aimed at preventing a company—or a country—from physically obtaining the actual computing chips used to train AI models have limited effectiveness when those chips can be used from afar.

More restrictions on access to AI?

One possible response is to give the U.S. Department of Commerce the authority to broaden export control rules to restrict access to cloud-based AI computing. This was the goal of H.R. 4683, a bill introduced with bipartisan sponsorship in the House of Representatives in 2023 titled “Closing Loopholes for the Overseas Use and Development of Artificial Intelligence Act.” The bill, which has not made it out of the Committee on Foreign Affairs, would require the Department of Commerce to “prohibit United States persons and United States subsidiaries from providing support for the remote use or cloud use of any integrated circuit listed under Export Control Classification Number 3A090 and 4A090 of the Export Administration Regulations by an entity located in the People’s Republic of China or Macau.”

In May 2024, a bipartisan group of legislators introduced H.R. 8315, titled the “Enhancing National Frameworks for Overseas Restriction of Critical Exports Act” or “ENFORCE Act.” This bill, which received a 43-3 vote in the Committee on Foreign Affairs in late May, would allow the government to require that U.S. persons obtain a license for the “the export, reexport, or in-country transfer” of “covered artificial intelligence systems.”

H.R. 8315 provides an interim definition of “covered artificial intelligence system” that includes “an artificial intelligence system that… exhibits, or could foreseeably be modified to exhibit, capabilities in the form of high levels of performance at tasks that pose a serious risk to the national security and foreign policy of the United States or any combination of those matters, even if it is provided to end users with technical safeguards that attempt to prevent users from taking advantage of the relevant capabilities.” Depending on how it is interpreted, this definition could arguably be read to cover the majority of contemporary advanced AI technologies.

The challenge of defining boundaries on restricted AI

If language like this is included in a bill that is passed by Congress and signed into law, BIS wouldn’t necessarily adopt the broadest possible scope of coverage. There is every reason to believe that BIS would proceed with full awareness of the tradeoffs involved. But it is nonetheless important to consider the potential consequences of broad interpretations of controlled AI technology, which would risk sweeping in a host of technologies that have many applications unrelated to national security.

A good example is AI-based image recognition. Image recognition has a long list of civilian applications. It is used to enable AI systems to describe paintings to sight-impaired persons and to recognize faces for identity authentication. It is also used to help analyze medical images and to enable driverless vehicles to perceive their environment and navigate accordingly.

Image recognition has national security-relevant applications as well. For instance, it can be used in a military context for identifying targets. Image recognition is thus a classic example of dual use technology—that is, one with both civilian and military applications. Many—and perhaps most—categories of advanced AI technologies will fall into this dual-use category.

AI, “deemed exports,” and U.S. universities

An additional important policy consideration is that export control rules cover more than the physical transfer of restricted items to entities in targeted countries. As BIS explains, “[t]he obligation to obtain an export license from BIS before ‘releasing’ controlled technology to a foreign person is informally referred to as a deemed export. Releases of controlled technology to foreign persons in the U.S. are ‘deemed’ to be an export to the person’s country or countries of nationality.” In other words, provision of an export-controlled technology to a foreign national in the United States is also an “export.”

If a wide swath of leading-edge AI technology is designated as “controlled,” American universities will no longer be able to effectively perform AI research. According to a 2021 report from the National Foundation for American Policy, 74% of full time electrical engineering graduate students and 72% of those in computer and information sciences are foreign nationals. There are many graduate students in these disciplines who are working on AI. University research, including research by foreign graduate students at U.S. universities, is a key source of AI innovation.

Today, U.S. universities routinely provide their graduate student AI researchers with access to advanced, often cloud-based, AI-computing technologies. But if permitting graduate students to work at the frontiers of AI risks exposing universities to export control violations, universities will be forced to dramatically scale back their AI research.

The alternative—setting up partitioned university research spaces and projects accessible only to graduate students with the proper citizenship—is impractical for the majority of universities. And even if it were practical, it would be bad policy. American universities have a long history of welcoming foreign engineering graduate students who go on to have highly successful decades-long careers in the U.S. Many of them create U.S.-based startups that grow to employ hundreds or thousands of engineers. Choking off that pipeline is a surefire way to impede future American-led AI advances.

Ensuring continued U.S. AI innovation

Unintended consequences are always a concern with technology regulation, and particularly so when it comes to AI export control. Expanding AI export control rules to target cloud-based access to advanced AI computing risks having limited effectiveness against targeted entities, because those entities would still try to access AI cloud computing services through a series of hard-to-disentangle intermediaries.

It also risks undermining AI research at U.S. universities, thereby further accelerating a trend towards increasing industry dominance of American AI research. While industry AI research is extremely important, it should complement, not replace, university research. After all, not only does university AI research generate fundamental advances in knowledge, but it also helps make the U.S. a destination of choice for top foreign talent and provides vital early-career training for future AI professionals.

For the U.S. AI ecosystem to continue to thrive, U.S. universities need to be able to continue attracting the most talented AI researchers from around the world. AI export control rules should be crafted to avoid creating collateral damage to this fundamentally important aspect of the U.S. AI innovation ecosystem.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Stocks

London stocks were flat in early trade on Friday as Israel’s strikes against Lebanon intensified and as investors eyed the latest US non-farm payrolls report.

At 0900 BST, the FTSE 100 was unchanged at 8,286.14.

Patrick Munnelly at Tickmill Group said: "Escalating tensions in the Middle East have cast a shadow over global markets ahead of the weekend, and oil prices are on the brink of their largest weekly gain in over a year on Friday. Despite the fact that the majority of equity indexes and stock futures are in positive territory, investors are speculating about the possibility of imminent retaliatory strikes by Israel against Iran, which is limiting their gains.

"Brent crude futures are anticipated to experience a weekly increase of approximately 8%, which would be the most significant since February 2023. Conversely, US crude futures are expected to experience a weekly increase of 8.2%, which would be the largest since March of last year. Despite the fact that US President Joe Biden has stated that he does not anticipate a ‘all-out war’ in the Middle East, he has previously suggested that the US was considering strikes on Iran's oil facilities as a response to Tehran's missile attack on Israel.

"In spite of the fact that oil prices have returned to the levels they were at just one month ago and oil has recovered from a low base, the pressure on world stocks and investors' risk appetite is beginning to mount. Should oil prices continue to increase and geopolitical tensions persist, investors may need to reevaluate their inflation forecasts."

Looking ahead to the rest of the day, attention will turn to the US non-farm payrolls report for September, which is due at 1330 BST, along with the unemployment rate and average earnings.

The market is expecting payrolls to grow by 146,000 for September, up a touch from the 140,000 jump seen in August. The unemployment rate is expected to be steady at 4.2% and average hourly earnings are also expected to be steady, at 3.8% year-on-year.

On the UK macro front, the S&P Global/CIPS construction PMI for September is scheduled for release at 0930 BST.

In equity markets, JD Wetherspoon edged higher as it posted a 33% drop in full-year pre-tax profit after separately disclosed items, but a 73.5% increase in pre-tax profit before separately disclosed items to £73.9m. The pub chain also said that full-year revenue rose 5.7% to £2.04bn as like-for-like sales grew 7.6%.

Watches of Switzerland gained after saying it had bought Hodinkee, a specialist website for luxury watch enthusiasts, for an undisclosed sum.

SSE was in the red as it emerged that completion of its Dogger Bank A offshore wind project has been pushed back to the second half of 2025.

Source: Sharecast

Risk Warnings and Disclaimers

Add to Favorites

NIESR

Economic

Summary & aims

This project aims to look at the policy recommendations outlined in the April 2023 Government White Paper, “High Stakes: Gambling Reform for the Digital Age”, that reduce or limit the consumers’ ability to spend money on gambling products. The White Paper estimates that the overall impact of it’s recommendations would lead to a reduction in the Gross Gambling Yield (GGY) of between 3-8 per cent per year (DCMS,2023). This amounts to around £329-£812 million retained by customers instead of being spent on gambling.

In 2022, the Office for Budget Responsibility (OBR), stated that they expected the fiscal revenue from betting and gaming duties would reach £3.3 billion per year in 2022-23 (OBR,2022). This highlights how important it is to understand the impact of introducing policies/regulations that reduce gambling consumption and therefore reduce the the tax revenue gained by the British economy as well as other economic indicators such as employment.

Our work alongside the University of Glasgow will look at the what happens to the money that is no longer spent on gambling by consumers and whether this money is spent on other goods/services which have greater economic multipliers than that of the gambling industry. If this is the case, the net economic impact may be positive. For example, the Social Market Foundation found that the multiplier effect from economic sectors such as retail were much greater than the gambling industry (SMF, 2021).

Methodology

There are three stages to this project. In the first stage, a new survey of regular gamblers will be carried out in Great Britain (excluding Northern Ireland) to get an idea about their gambling behaviour.

This will inform the second part of the project, where we will undertake a discrete choice experiment where regular gamblers will be surveyed to collect data on how their personal expenditure could change under new gambling legislation where the amount they gamble will be limited/reduced. Choice modelling will be used to analyse the decisions and estimate the value that respondents place on the different categories of personal expenditure including other goods and services, savings and debt-reduction.

The results from the discrete choice experiment will allow us to derive elasticities between these different aspects of consumer expenditures to inform the third part of the project where we look at the macroeconomic effects of any changes in consumption by scaling these effects into a model of the UK economy.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Daily News

Remarks of Officials

Central Bank

Forex

FastBull Events

FastBull Featured

Devin

Mohammad Omar

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data

Portfolio Diversification with Sukuks

Asset class with secular growth

Sukuks and conventional bonds

Recent developments

Myriad of benefits

ISM: US Services Sector Expands for 3rd Straight Month in September on Solid Output, New Orders

Source: MaceNews

Ethereum is a 'dictatorship,' Claims Cardano Founder Charles Hoskinson

Source: COINTELEGRAPH

New Zealand Dollar Tipped to Brush Off 50bp Rate Cut, says Analyst

Source: Poundsterlinglive

The Tension Between AI Export Control and U.S. AI Innovation

Leakiness of current rules

More restrictions on access to AI?

The challenge of defining boundaries on restricted AI

AI, “deemed exports,” and U.S. universities

Ensuring continued U.S. AI innovation

London Open: FTSE Flat Amid Middle East Woes, Ahead of Payrolls

Source: Sharecast

Gambling Economic Modelling Project

Summary & aims

Methodology

Risk Disclosure