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Alternative to GCC Currency Union?

Chris Cook opined in an Asia Times Online feature as guest writer that the Gulf takes the wrong currency path, commenting on the announced creation of a GCC currency union along the lines of the Euro. He sees the alternative to the central banking model as a peer-to-peer "Gulf Clearing Union" similar to the Swiss Wirtschaftsring-Genossenschaft. WIR members are obliged to give security over their property by way of collateral, it is a monetary system that is "property-backed". The key innovation that will enable a Gulf Clearing Union is the simple expedient of creating - within a suitable legal framework - a "petro" unit redeemable in a constant amount of energy value. Settlement of credit would take place in petros, in goods or services by reference to the petro, or in dollars or other currency acceptable to the seller.

Chris Cook is a former director of the International Petroleum Exchange and is now a strategic market consultant, entrepreneur and commentator.

Swiss WIR bank concept: http://www.wir.ch/

Islamic Commodity Investments

Devon Maylie reported on 5 January in Barron`s magazine, that commodity-focused companies and hedge funds are introducing special products that comply with Islamic law, either equity based or as direct exposure to commodities. Ian MacDonald, executive director for gold and precious metals at Dubai Multi Commodities Center is cited to claim that there are not enough effort spent on Sharia compliant commodity products so far. The DMCC is seed financing with USD 50 mn each a range of commodity oriented equity funds managed by BlackRock Capital Management, Tocqueville Asset Management, Zweig-DiMenna International Managers and Lucas Capital Management on its platform in partnership with US based Shariah Capital. London-based ETF Securities last year launched an exchange-traded fund for precious metals that is being marketed to Sharia investors. The World Gold Council is also partnering with DMCC to launch a similar product in March.

Rasmala MENA Private Equity Fund 2 announces first closing with USD 120 million

Arabianbusiness reported on 5 January the successful first closing of the Sharia compliant fund Rasmala MENA Private Equity Fund 2, with USD 120 million in commitments received. The fund is primarily focused on mid-cap opportunities in the GCC and Egypt that benefit from the region’s GDP growth.

Tamer Bazzari is Deputy CEO at Rasmala and member of the Fund’s investment committee.

Indonesia to issue global bonds in 2009

Reuters reported on 31 December that Indonesia plans to issue international bonds, and Sukuk. Timing is not scheduled yet. Treasury Director General Rahmat Waluyanto was quoted.

More background: http://in.reuters.com/article/asiaCompanyAndMarkets/idINJAK38567320081231

Nakheel Sukuk yields 32 %

Dubai`s corporate bonds pricing in further economic difficulties according to Nish Popa, ING Investment Management. The yield on the 3-year Sukuk issued by Nakheel Development, soared to 32% from 5% in January 2008.

Saudi Hollandi Bank SAR 775 mn Tier 2 Sukuk

Arab News reported on 31 December that Saudi Hollandi Bank closed its SAR 775 mn first tranche of a SAR 1.5 bn Tier-II Sukuk issuance approved by the bank`s shareholders. The 10-year floating rate note is 2 % above SIBOR (Saudi Interbank Offered Rate) and can be called at the end of 5 years. According to the Chairman Mubarak Al-Khafrah Saudi Hollandi is the first to support its capital in this way. Saudi Hollandi Capital acted as sole lead manager & book runner for this transaction.

Geoff Calvert is the managing director.

New Islamic Bank in Djibouti

AllAfrica reported on 27 December 2008 about the openining of Salam African Bank collaborated by Somali and Djibouti businessmen and openend by Djibouti president Ismail Omar Guelleh.

Mohamed Yusuf Ahmed Allore is said to be one of the managers.

Blue Orchard: Middle East next growth area for micro finance

Shveta Pathak reported in Business 24/7 on 30 December about the opportunity of micro finance in the Middle East interviewing Jack Lowe, President of BlueOrchard, USA, a Swiss micro finance company.

Jack Lowe, President of BlueOrchard, USA, sees the stable returns and low volatility offered by micro finance as key benefits making it a preferred asset class. The stable returns and low volatility are achieved because micro finance is closely linked to real economy, the society and has the advantage of managing the current situation better.

With the UAE Ministry of Economy having been assigned the task of launching a federal strategy to develop a programme to support and finance small start-ups in the UAE, micro finance institutions are hopeful of tapping the market Lowe told Emirates Business in an exclusive interview.

Excerpts from the interview: http://www.business24-7.ae/articles/2008/12/pages/12302008_f5a31399c6914...

GLOBAL CHALLENGE: Gulf investors are being sought to fund USD 100 mn contests

Richard Agnew wrote on Arabian Business on 29 December about the Global Challenge: Gulf investors are being sought to fund USD 100 mn contests to tackle world changing breakthroughs in fields such as space exploration and life sciences. Peter Diamandis is chairman of the US-based X-Prize Foundation, which manages on behalf of the investors the contest.

Launched in 1996, the X-Prize Foundation is credited with helping to kickstart the commercial space industry through the Ansari X-Prize — a USD 10 mn competition won by the Paul Allen-backed SpaceShipOne vehicle in 2004. Large prices should change the way people think, from questioning the feasibility to discussing the delivery. Future contest may focus on mapping the ocean floor, boosting food production, and for example a person who is severely handicapped from spinal cord injuries could be given the ability to regain their functionality.

http://www.xprize.org/

Sixth International Humanitarian Aid & Development Conference & Exhibition in Dubai

The UAE is hosting the sixth International Humanitarian Aid & Development Conference & Exhibition - DIHAD 2009 from 7th - 9th of April 2009 at the Dubai International Convention and Exhibition Centre under the patronage of H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President, Prime Minister of United Arab Emirates, Ruler of Dubai. It is organised by Index Holding with the offical support of the United Nations and the UAE Red Crescent Society. The theme of the event is "Empowering Communities: From Disaster to Development". Specialised sessions are offered:

- Building Community Resilience and Capacity for Disaster Preparedness and Response
- Climate Change and the Global Food Crisis: How can Communities prepare and respond.
- Case Studies of Mitigation, Preparedness and Response to Disasters and other emergencies at the Community Level Urban and Rural Environments.
- Technologies, partnerships and approaches to support communities to prepare and respond to Disasters and direct their development.
- Recovery from Disasters and Sustainable Development -Community Mobilization, and Community Empowerment and Development through Micro-Credit: Global Experience.

Reuters: Japan investors interested in Islamic products

Reuters reported on 30 December that Japanese investors have expressed interest in developing Islamic capital market products, according to a local newspaper quoting Aseambankers Chief Executive Officer Mohammed Rashdan Mohammed Yusof. No company names were disclosed in the interview, however Aseambankers, the investment bankers of Maybank Group plans to develop the Sukuk market in Japan.

Shariah compliant green fund launched

Hedge Fund Review reported on 22 December about the Falcon Fund launched by Da Vinci Invest of Zurich, aiming to invest in the carbon markets and forestry.

The fund will actively trade the carbon markets on a short-term basis and invest in forestry for the long term. Da Vinci Invest expects this strategy provide consistent value growth, diversification and an environmental benefit. Rainforest Invest, Forest Finance and Miller Forest will source opportunities in Panama, Costa Rica and Paraguay.

Only land formerly used for agricultural will be planted. No rainforest will be cut to farm the plantations. The Da Vinci Green Falcon Fund will charge a 2% management fee and a 20% incentive fee.

Da Vinci Invest, incorporated in 2004 as a UK company, is based in Zug.

Uganda: Global Trust Bank to introduce Sharia banking

UGPulse.com reported on 18 December that Global Trust Bank considers to introduce Sharia banking. Global Trust Bank was recently created and has its headquarters in Nigeria.

Richard Byarugaba is the Managing Director and told journalists that the bank is going to carry out a survey in the Ugandan market to see whether Ugandans need and are ready for such a product of sharia banking.

Japan moves carefully toward Islamic finance

Manabu Hara reported on 12 December in Asahi Newspaper that the Japanese Government has taking a step more to introduce Islamic finance. Earlier this month, the Financial Services Agency (FSA) amended financial regulations to let bank subsidiaries handle Islamic finance operations. But still Murabaha transactions are subject to tax issues.

Zurich launches takaful venture

Switzerland-based Zurich Financial Services Group has established a joint Islamic insurance venture with Abu Dhabi National Takaful Company (ADNTC). The joint venture, called Zurich Takaful Company Limited, will be based in Dubai at Dubai International Finance Centre (DIFC) and will deal with family takaful businesses across the Middle East. It is 51% owned by Zurich and 49% owned by ADNTC. Zurich’s initial focus will be establishing its DIFC office as a regional hub, which will then act as a springboard for future growth in the region.

Sukuk Trends

Mohammed Abbas and John Irish, reported on Gulf News (Reuters) on 9 March about the Sukuk market tendencies driven by sellers issuing in local currencies at low rates. The fallen LIBOR rates due to Federal Reserve policy are above off-setting for the increased margins asked for credit clients.

Local currencies are in favour as long as speculation is around about reevaluation of the dollar peg - this also limits the foreign demand for Sukuk and exposure to Gulf credit markets. Local currency Sukuk are relying on the GCC internal demand for such paper.

Source: http://archive.gulfnews.com/business/money/10212004.html

Polaris Investment Trust Plans to Issue Taiwan Islam ETF

Philip Liu CENS.com reported on 2 April that it plans to roll out Islam ETF in the second quarter this year.

The firm is also in talks with Morgan Stanley Capital International (MSCI) for licensing of its Taiwan Islam Index for use in issuing the Islam ETF in Abu Dhabi. The MSCI Taiwan Islam Index consists of 60 constituent stocks, selected from the over 120 constituent stocks of MSCI Taiwan Stock Index, whose operations conforms to the tenets of Islam.

Liu Tsung-sheng is president of Polaris Investment Trust.

Source: http://news.cens.com/cens/html/en/news/news_inner_22868.html

USD 158 mn AirAsia sukuk issue approved

Trade Arabia reported on 28 April that the RM 500 mn Sukuk issues is approved by the market regulator.

Bank Islam Malaysia and Kuwait Finance House (Malaysia) are the joint principal advisers, lead arrangers and lead managers for the issue.

Kuwait Finance House shall be the guarantor for the sukuk programme. Malaysian Rating Corp has assigned a long-term rating of AA+(bg) for the issue.

Source: http://www.tradearabia.com/news/newsdetails.asp?Sn=CM&artid=142568

SABIC new Sukuk issue received approval by regulator

Gulf Base cited Reuters that Saudi SABIC received regulatory clearance for its planned SAR 5 bn Sukuk sale. The approval was posted on the Saudi bourse website. SABIC is the worlds biggest chemicals firm by market value.

Source: http://www.gulfbase.com/site/interface/NewsArchiveDetails.aspx?n=61385

Dar eyes UK Islamic banking unit

Arabian Business reported on 28 April that Investment Dar its proposed British bank unit 'Dar Capital' might start with capital of up to GBP 100 mn. A project study should be finished by year-end.

Chairman of Investment Dar is Adnan Al-Musallam.

Source: http://www.arabianbusiness.com/517695-dar-eyes-uk-bank-with-up-to-100-ml...

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