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Dubai raises USD 635 mn to refinance debt - Chinese and local banks involved

Simeon Kerr reported in The Financial times on 5 April that the Dubai government raised a
USD 635 mn Islamic finance to help retire a USD 1 bn in civil aviation authority debt maturing later this month.

The lease-based Islamic facilty syndication, led by Dubai Islamic Bank, mainly depends on local banks, but Industrial & Commercial Bank of China and WestLB also participated in the syndication, which was priced at 3 % points above US, UAE and euro benchmark rates. It is due to be repaid in three equal semi-annual instalments from April 2010.

It was the first Islamic transaction for the Industrial & Commercial Bank of China with a branch in the DIFC.

Dubai is preparing to seek a sovereign rating in the second half of this year.

Delay of annual reports - The Investment Dar

The Investment Dar announces that the release of its financial results for the year ended 31 December 2008 has been delayed as a result of additional reporting requirements from the Company's subsidiaries and associates. The Company has been in dialogue with the Kuwaiti regulatory authorities regarding this issue.

As of 1 April 2009, the Kuwait Stock Exchange suspended trading in the companie's shares until further notice as a result of the postponement of the release of its full year financial results for the year ended 31 December 2008. The same action was taken for a number of other Kuwait Stock Exchange listed companies.

European Finance House USD 200 mn Sukuk fund

Esteban Duarte and Neil Unmack reported on Bloomberg on 30 March that European Finance House Ltd. in London, a subsidiary of Qatar Islamic Bank seeks is planning the EFH Global Sukuk Plus Fund, managed by Aleksandar Devic, a former Lehman Brothers credi analyst. The Fund targets USD 200 mn.

EFH’s Luxembourg-based fund is targeting this year a yield of 6 % points more than the 3-m USD LIBOR. The fund will buy sukuk with an average credit rating of A, the sixth-highest investment grade ranking in Standard & Poor’s scale.

Mark Watts is head of asset management at European Finance House an he expects a strong rising Sukuk issuance once capital markets are free again.

Global finance structures must be revamped, says UN expert panel

International finance structures must be drastically overhauled in the face of the current global economic crisis, a panel of experts convened by the United Nations General Assembly chaired by Joseph Stiglitz, winner of the 2001 Nobel Prize for Economics said.

The expert panel made a number of suggestions to support developing nations and creating an international infrastruture for the global markets led by the United Nations.

The panel included Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia.

KFH plans USD 133.3 mn Saudi investment branch

The Kuwait Finance House (KFH) is set to open an investment bank in Saudi Arabia with a capital of SAR 500 mn (USD 133.3 mn). KFH is further looking into investment opportunities in the UAE, Oman and Qatar.

Fitch partially downgrades Kuwait Finance House

Fitch Ratings affirmed Kuwait Finance House's (KFH) Long-term Issuer Default Rating (IDR) at 'A+' and Short-term IDR at 'F1'. KFH’s Individual Rating was downgraded to 'C/D' from 'C' and placed on Rating Watch Negative (RWN). KFH's Support '1' and Support Rating Floor 'A+' were affirmed. The Outlook for the Long-term IDR is Stable.

Abu Dhabi's Hilal Bank sets up Kazakh unit

Stanley Carvalho reported on 31 March on Reuters that Abu Dhabi's government-owned Al Hilal Bank will set up an Islamic bank in Kazakhstan. Al Hilal will headquarter the new bank in the central Asian state's capital Almaty, opening in the second half of 2009 with an initial capital of AED 100 mn(USD 27 mn).

Chairman of Hilal Bank is Ahmed Ateeq al-Mazrouei.

HSBC Gets Approval For Selling Sukuk In Hong Kong

HSBC has received approval from the Hong Kong Monetary Authority to sell Sukuk (Islamic Bonds) in Hong Kong, the first local bank in the territory to do so.

Bruno Lee is head of liabilities business and wealth management.

French management school offers Islamic finance course

Grande Ecole Sup de Co Reims (Groupe Reims Management School) suggests a new course specialising on Islamic finance, which is coordinated by Ghassen Bouslama and offered in English.

Bahrain's Albaraka sees '09 profit growth at 7 %

The chairman of Bahrain-based Islamic lender Al Baraka Banking Group BARKA.BH expects a 7 % rise in profit this year.

Waad is legally binding for compensation, says scholar

Shariah scholar Abdulazeem Abozaid is cited in the Qatari newspaper The Peninsula to say that promises are binding in Islamic finance structuring to the degree of compensation for loss but not for entering into the contract.

Real Estate firms - good and bad news

Emaar Economic City in Riyadh, as subsidiary of Emaar Properties Dubai, announced that it has so far earned SAR 2 bn from the sale of the first phase of residential units.

http://archive.gulfnews.com/business/Real_Estate_Property/10300746.html

Nakheel has joined Thailand's Amburaya Hotels & Resorts to transform Thailand's idyllic Koh Samui Island with the launch of a stunning integrated resort development comprising 17 luxurious private residences and a 75-key all-villa hotel.

http://archive.gulfnews.com/business/Real_Estate_Property/10300825.html

Dubai-based developer Limitless said Thursday it is reviewing a $12 billion (Dh44.04 billion) residential and commercial project in India because authorities there have not yet bought the required land. Its announcement came a day after the developer cut 7 per cent of its workforce and delayed a key contract on its $61 billion Arabian Canal project due to the global economic downturn.

http://archive.gulfnews.com/business/Real_Estate_Property/10300811.html

Egon Zehnder executive search assigned to find new EON Bank head

Yap Leng Kuen reported in the The Star that the International search firm Egon Zehnder International has been appointed to find a replacement for former EON Bank CEO Albert Lau Yiong.

Islamic Bank of Britain launches mortgage product in Scotland

Jane Bradley reported in the Scotsman on 3 April that Islamic Bank of Britain is introducting its mortgage product to Scotland. It is understood the launch is just the beginning of a wider push into Scotland – which is likely to include the opening of a physical branch and back office operations as well as the introduction of online retail banking for Scottish customers.

Brunei short term Sukuk

The Ministry of Finance, Brunei Darussalam announced the successful pricing of its 24th, 25th, 26th and 27th issuance of short-term Sukuk Al-Ijarah securities. The accumulated total of these four Sukuk issuance was B$ 165 million; B$ 31 million for Series 24, B$ 60 million for Series 25, B$ 11 million for Series 26 and B$ 63 million for Series 27.

Ghurair in AED 1.27 bn Islamic facility

The well-diversified Al Ghurair Group has signed a USD 347.2 mn (AED 1.275 bn) Islamic facility with a group of financial institutions including Mashreq. The facility has been structured in Ijara and Musharaka that require a sale and lease-back of the asset owned by the client.

Standard Chartered and Mashreq, which is majority owned by the Al Ghurair Group, were the lead book-runners and participating banks include First Gulf Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Arab African Bank and Ajman Bank.

Gassner's picture

Sustainability, Islamic Finance and Managing Risk While Seizing Opportunities

I just published an article with the Dow Jones Islamic Market Indexes Newsletter, giving an overview about the lines of arguments regarding performance and ethical screens, be it Islamic or Sustainability and what empiricial findings have been published.

It is claimed by critics that the reduction of the universe through ethical screens shall reduce the performance, likewise corporate social responsiblity comes against a cost. Similar counterarguments have been raised regarding Islamic screening criteria.

Bank Sarasin published a study doing own research with partners and reviewing published empirical analyses in the literature. It shows that there is no negative impact on performance. My review of empirical analyses in regard to Islamic finance concluded the same and all publications let conclude that ethical screens add value by way of risk management. An example is the debt limitation of the Sharia tolerance criteria.

Ethical screens may therefore improve the investment decision process and more research shall determine, which factors add value to the portfolio and therefore form part of a professional process.

Projections for Takaful - Views of Best RE CEO

Nopporn Wong-Anan wrote in Arabianbusiness on 30 March that Saleh Malaikah, chairman of Islamic reinsurance operator BEST Re sees the takaful business growing by 17 % over the next 3 years. The growth prospects lying in the fact that insurance coverage is not widely used in the Middle East and shows therefore potential; Saudi Arabia has a market share of 20 % in takaful from the overall insurance market, and promises the highest growth rate. In Malaysia the takaful market share has reached 30 %.

Allianz has seen robust performance in Muslim markets

Allianz Indonesia grew by 8.5 % and is the fourth biggest life insurer in the country. In 2008 the MENA region has proven to be one of Allianz's growth powerhouses. Revenues from the region grew to 2.4 billion euros, an increase of 40 percent from last year. In Asia Pacific Property and casualty business (P&C) remains growth driver, unique opportunities to strengthen distribution.

Allianz offers conventional and Islamic coverage.

Inovest offers water technology investment

Inovest (previously Al Khaleej Development Company – Tameer), a Bahrain-based shariah compliant investment company, has launched a new water technology venture in partnership with a US company.

The project size is USD 32 mn, from which USD 24 mn will be the net equity, and USD 7.2 mn is being subscribed by Inovest and its technology partner.

The product launch is subject to approval from Central Bank of Bahrain and other statutory approvals, the company added

Inovest CEO is Dr. Khalid Abdulla.

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