GCC

Global sukuk sales to fall again in 2009

Experts are expecting further drop in Sukuk isssuance in 2009. Local currencies help to support the markets, K. Salman Younis, head of Kuwait Finance House's Asian operations was cited.

Unicorn Bank to make further investment of USD 12.9 mn in Dawood Islamic Bank

Dawood Islamic Bank Limited has received Rs. 1 billion (USD 12.9 mn) investment from Unicorn Investment Bank Limited, based in Bahrain , this was stated in a statement issued from Bank’s headoffice in Karachi. Dawood Islamic Bank launched in 2007 with an initial paid-up capital of Rs. 3 billion. The Dawood Islamic bank has a branch network of 21 branches spread over the major cities of Pakistan , including Karachi , Lahore , Islamabad , Faisalabad , Multan , Sialkot , Iqbalabad and Joharabad.

Unicorn already had a 22.2 % equity stake in Dawood Islamic Bank prior to the current investment. With the new investment the equity of Unicorn Investment Bank, in Dawood Islamic Bank has increased to 37% percent

Aamir Khan is Managing Director and Head Global Private Equity of Unicorn Investment Bank and a founder Director of Dawood Islamic Bank

Said Rafique Dawood is Chairman Dawood Islamic Bank.

Ratings On Dubai-Based Government-Related Entities Lowered On Deteriorating Economic

Press Release

Dial-in Details for 11AM GMT/3PM Dubai Teleconference To Discuss Rating Actions Below

DUBAI, March 17, 2009--Standard & Poor's Ratings Services today said it had lowered its ratings on six Dubai-based government-related entities (GREs) by one notch. The 'A+' ratings on DIFC Investments LLC, DP World Ltd., Jebel Ali Free Zone (FZE), and JAFZ Sukuk Ltd. were lowered to 'A', and the 'A-1' short-term ratings were affirmed. The 'A/A-1' ratings on Dubai Multi Commodities Centre Authority were lowered to 'A-/A-2', while the 'A+' long-term rating on Dubai Holding Commercial Operations Group LLC (DHCOG) was also lowered to 'A'. The outlook on all entities remains negative. (A separate research update for each of the entities will follow.)

Thee ratings on the GREs reflect both their individual stand-alone credit profiles and our expectation that the United Arab Emirates (UAE; unrated) federal government, backed by its largest constituent, the Emirate of Abu Dhabi (AA/Stable/A-1+), will continue to provide, as and when the need arises, financial support to the Dubai government, which owns the rated GREs.

Four Dubai-Based Banks Long-Term Ratings Placed On CreditWatch Negative On Deteriorating Operating Environment

PARIS (Standard & Poor's) March 17, 2009--Standard & Poor's Ratings Services said today that it has placed its long-term counterparty credit ratings on four Dubai-based banks, namely Emirates Bank International PJSC (EBI), National Bank of Dubai (NBD), Mashreqbank, and Dubai Islamic Bank (DIB) on CreditWatch with negative implications (see ratings list below). The 'A-1' short-term ratings on EBI, NBD, and Mashreqbank were also put on CreditWatch with negative implications, while the 'A-2' short-term rating on DIB was affirmed. This action reflects our growing concerns regarding the impact on the banking sector of the economic downturn in Dubai.

UNEP FI Insurance Working Group conducts first-of-a-kind global survey on ESG factors and insurance

The UNEP FI Insurance Working Group, supported by leading academic institutions from the United States and Europe, is conducting a landmark global survey on the understanding and integration of environmental, social and governance (ESG) factors in insurance underwriting and product development. The nature and scope of this survey makes it the first of its kind.

The core objectives are to:

- Assess the understanding and integration of ESG factors in insurance underwriting and product development globally
- Assess the financial materiality of ESG factors in insurance underwriting and product development
- Provide recommendations for sustainable insurance underwriting
- Provide research input for potential projects on other core insurance processes (e.g. investment, claims management, and sales & marketing)
- Establish a solid business case for the development of "Principles for Sustainable Insurance"

Visit http://www.unepfi.org/events/2009/survey to find out more and participate.

BBK looking for other acquisitions after merger with Shamil Bank was cancelled

Frederik Richter reported on 15 March based on Reuters that Bank of Bahrain and Kuwait (BBK) is looking for opportunities to acquire after the planned merger with rival Shamil Bank was put on hold.

BBK recently created its fully-owned Islamic investment bank Capinnova. BBK has a market capitalization of about $1.04 billion and a market share of 15-20 percent in the Bahraini retail market, according to its own estimates. (Reuters)

First Leasing Bank posts net profit of USD 3 mn

Bahrain-based First Leasing Bank (FLB) made a net profit of USD 3 mn in 2008 last year. The bank's income from financing activities grew to USD 8.4 mn from US 3.6 mn in 2007 and total portfolio grew to USD 142.5 mn from USD 54.5 mn at the end of 2007.

Khalid Kanoo is Chairman.
Greg Brinkerhoff is CEO.

More Sharia compliant Infrastructure Funds expected

Shashank Shekhar reported in Emirates Business 24/7 on 11 March that regional fund managers expect the emergence of several new Shariah-compliant funds focused on infrastructure projects, which offer returns in the range of 15 to 18 per cent. Infrastructure projects in sectors like health, agriculture and green energy are expected to attract the bulk of investments.

Futurebank sees 20.9 % increase in net profit in 2008

Futurebank sees 20.9% increase in net profit in 2008 and net profit rises to BD 10.7 mn.

Dr. Valiollah Seif is Chief Executive Officer and Managing Director.
Dr. Hamid Borhani is the Chairman of Futurebank.

International Investment Bank posts USD 13.5 mn net profit and announces 7 % cash dividend for the year 2008

International Investment Bank (IIB), Bahrain announces a Net Income of USD 13.5 mn and the approval of a cash dividend payment of 7% for the year ended 31 December 2008.

At USD 13.5 mn, the 2008 Net Income represents a 12.3% return on Paid up Capital (ROC). The Capital Adequacy ratio at 31 December 2008 of 86% is over 7 times of 12% required by the Central Bank of Bahrain.

Mr. Aabed Al Zeera is the Chief Executive Officer and Board member.

For full details on IIB’s financial results, please see the ‘Financial Section’ on IIB’s website at source.

Takaful Re Ltd. Ratings Unaffected By Arab Insurance Group Ratings Withdrawal

Press Release

LONDON (Standard & Poor's) March 11, 2009--Standard & Poor's Ratings Services said today that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54% holding, and is also the major service provider.

Dubai Islamic Bank sets aside cash amid fraud probe

Adam Schreck wrote on 10 March on Associated Press that Dubai Islamic Bank sets aside cash amid fraud probe and that it has foreclosed on a real estate project after court papers indicated the bank was the victim of a half-billion dollar fraud. In a statement, Dubai Islamic Bank said it had exposure of about USD 330 mn to a company named CCH linked to some of the suspects in the court papers.

Islamic Wealth Management benefits from Crisis

James Rutter wrote on 9 March in Wealth Bulletin that the crisis creates opportunity for Islamic wealth management as conventional wealth management and its brands looking less attractive. Current market conditions favour more simple products. Ironically, the trend in Islamic finance in recent years has been towards trying to mimic complex and risky western financial products.

By giving money to a counterparty which separately invests in underlying hedge funds or derivatives, an Islamic investor is able to receive a payout that tracks the performance of assets to which he would not otherwise be able to gain exposure. Islamic investors who bought such products have seen hefty losses, prompting a backlash against financial institutions adopting more flexible interpretations of sharia law.

Humayon Dar, CEO BMB Islamic sees ongoing demand for such products in a so-called Sharia wrapper, because of the limited choice of Islamic products.

Vatican related newspaper: Islamic finance suggests ideas for Western financial crisis

Loretta Napoleoni and Claudia Segre suggesting in the Vatican related L'Osservatore Romano, that Islamic finance offers ideas for the Western financial crisis. Citing the main concepts of Islamic finance and emphasizing specifically Sukuk.

The original article is in Italian linked via Source.

Dubai Islamic Insurance & Reinsurance Co. (Aman) Outlook Revised To Negative; 'BBB' Ratings Affirmed

Press Release

PARIS (Standard & Poor's) March 9, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Dubai-based insurer Dubai Islamic Insurance & Reinsurance Co. (Aman) to negative from stable. At the same time, we affirmed the 'BBB' long-term counterparty credit and insurer financial strength ratings on Aman.

"The outlook revision reflects the increasing pressure on Aman's risk-adjusted capital adequacy, arising mainly from the continuing decline in investment markets in the Gulf region," said Standard & Poor's credit analyst Lotfi Elbarhdadi.

President of IDB addresses the 5th World Islamic Economic Forum

Press Release

Jakarta, 3rd March, 2009

The Islamic Development Bank Group (IDB Group) provided “Gold Sponsorship” to the 5th World Islamic Forum WIEF being held in Jakarta, Republic of Indonesia. In his speech in the Leadership Panel on “Innovative Solutions to Global Challenges”, HE Dr. Ahmad Mohamed Ali, President of the IDB Group praised WIEF for addressing these critical topics, and emphasized three avenues to new innovative solutions to meet global challenges, namely, ethics-based rather than rule-based financial governance structure, investment partnership with the poor and the vulnerable, and unleashing the God-given potential and innate strength of the full human resources. In his speech, he briefed the participants on IDB Group activities in meeting global challenges.

The first day of the Forum included two panel sessions titled “Leadership Panel” and “Global CEO Panel” followed by four plenary sessions namely; Beyond Scarcity: Overcoming the Global Food Crisis, Paving Greener World: Creating a Future for Alternative Energy, Stemming the Tide of the Global Financial Crisis, and Global SMEs: Business Beyond Boundaries.

BMB Group wins mandate to manage Global Zakat and Charity Fund for OIC

The International Zakat Organisation ('IZO'), an important new charitable body of the Organisation of The Islamic Conference ('OIC'), announced its selection of The BMB Group to lead a new global charitable initiative which promises to be the largest in the Islamic world.

The proposed Global Zakat & Charity Fund would be over USD 3 bn in size and will manage charitable funds to address needy causes in the world.

The Fund will invest in community development projects with an emphasis on sustainability. The four major areas to be targeted are: (1) income generation through the provision of private equity investments to small and medium enterprises, (2) development of social enterprise through the establishment of hospitals, educational institutions and housing developments (3) development of agricultural and other vital infrastructure and (4) the provision of relief and emergency funding.

Mat Hassan Esa is the CEO of International Zakat Organisation.
Dr Humayon Dar is the CEO of BMB Islamic.
BMB appoints David Gibson-Moore as Managing Partner.

New governor of Saudi Arabian Monetary Agency may promote Islamic finance further

The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA). Foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.

Al Rajhi ahead of major international banks in market value

According to a survey published originally by the newspaper Al Qabas it results that Al Rajhi Bank with its market value of USD 22.4 bn was ahead of leading global banks, including: Morgan Stanley with USD 20.88 bn, Deutsche Bank with USD 13.83 bn, Barclays with USD 11.58 bn, Royal Bank of Scotland (RBS) with USD 10.93 bn and Citibank with USD 10.63 bn.

Moody's: Islamic Banks Not Unduly Challenged by Oil Price Drop and Crisis

According to Moody' s worldwide fall in oil prices and the global economic crisis has affected the Islamic finance industry, but the institutions' accumulated liquidity and capital will help them withstand these pressures.

According to Moody's, the drop in oil prices poses two key challenges for the Islamic finance industry. "Firstly, there is still a vital link between oil prices and Islamic banks as most of the latter operate in hydrocarbon-exporting economies. As they face increasingly limited funding sources, Islamic banks will find it more difficult to grow going forward. Secondly, oil liquidity has been a major driver of the disintermediation process in the Islamic finance industry. With reduced oil liquidity, not only have sukuk issuances been slowing sharply, thereby depriving Islamic banks of much-needed long-term funding, but pricing on such instruments has been distorted," says Anouar Hassoune, a Moody's Vice-President/Senior Credit Officer and co-author of the report.

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