UAE

Dana Gas profit boosted by financial settlement with Kurdistan Regional Government

Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion payment as part of a settlement agreement with the Kurdistan Regional Government (KRG). The agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier. The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs. The company is at the centre of a legal dispute after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant. It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. Dana claimed being confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

British judge to issue ruling on $700 million Dana Gas #sukuk case soon

British High Court judge George Leggatt said that he would not further adjourn a trial in the Dana Gas case and would issue a judgement soon. Dana is claiming it does not need to redeem its $700 million sukuk, which matured at the end of last month, because the instruments became invalid under UAE law. Dana had asked for further postponement of the trial pending developments in a UAE court, where motions in the case have also been filed.

#UAE's Dana Gas profit boosted by financial settlement with KRG

Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion payment as part of a settlement agreement with the Kurdistan Regional Government (KRG). The agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier. The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs. The company is at the centre of a legal dispute after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant. It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. Dana claimed being confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

ADIB hosts regulatory compliance #forums for banks from #Sudan and #Iraq

Abu Dhabi Islamic Bank (ADIB) held forums on the international regulatory environment for banks from Sudan and Iraq to support their increasing integration into the global economy. The forums followed the lifting of the United States' longstanding sanctions against the government of Sudan on 12 October 2017. Andreas Meletiou, ADIB’s Head of Global Financial Institutions, said the seminars were equally important for transfer of knowledge and experiences, as well as for deepening networks. The two separate forums gathered around 50 bankers from each country to discuss the evolving international regulatory environment for financial institutions. They addressed issues such as Basel III and IFRS 9 requirements as well as anti-money laundering measures. ADIB, which has a large retail and corporate banking operation in its home market of the United Arab Emirates, also operates a wide international network, including Egypt, Iraq, Sudan and the United Kingdom.

#Innovation in Islamic finance is better cultivated from the roots than the branches

Although Islamic banking and Sukuk comprise the lion’s share of Islamic finance assets, there are significant untapped opportunities in the securities, equity markets, investment funds, insurance and microfinance markets. For Islamic finance to flourish, time would be more valuably spent creating new financial products that are Shari'ah-based rather than adapting existing conventional products to become Shari'ah-compliant. The innovative magic is in the roots, not the branches. On 14 November 2017, the Dubai International Financial Centre (DIFC) will host the Global Financial Forum (GFF). The invited industry experts are set to provide valuable insights on the progression of the sector and innovation in Islamic finance.

APICORP lists $500 million #Sukuk on Nasdaq Dubai

Nasdaq Dubai has welcomed the listing of a $500 million Sukuk by APICORP, the development bank of the Arab world’s oil and gas industries. The transaction is APICORP’s second Sukuk listing on Nasdaq Dubai, as the first was in January 2016. The Sukuk was issued under a $3 billion Sukuk programme and is aimed at diversifying its funding sources. APICORP’s activities include equity investment, debt financing, financial advisory and energy research services. Sukuk listings in the Emirate currently totals at $52.97 billion. 11 Sukuk listings have taken place so far in 2017 on Nasdaq Dubai with a total value of $10.25 billion.

Dana Gas Is Said to Miss Payment on $700 Million #Sukuk Today

Dana Gas has no plans to repay the two mudaraba sukuk of $350 million in size each due Oct. 31. The company shocked the Islamic finance industry when it said it no longer considered its sukuk Shariah-compliant. The missed payment will be the second time in five years the company fails to settle bonds at maturity. In June Dana Gas offered to replace the existing sukuk with four-year bonds that pay less than half the current rate. It retracted that offer in July, adding that it will seek a court-driven solution. A UAE injunction has barred Dana Gas from taking part in the trial in London, but British judge George Leggatt will hand down a ruling on the 13th of November.

Exclusive: First Islamic #robo-adviser to launch in Mena

The first Sharia-compliant robo advisers plans to start operations in the UAE soon, as it looks to a US$2 million funding boost this week from the Dubai venture capital firm Beco Capital. The digitally automated investment adviser Wahed Invest launched in the USA five months ago. CEO Junaid Wahedna said the company was in the process of moving to a new office in Dubai which will become the company’s new global headquarters. Wahed Invest expects to start regional operations by mid-Nov­ember, focusing initially on the UAE. According to Wahedna, the target for ethical, Sharia robo-advisory is the younger demographic, 25-35 years old, digitally savvy and educated millennials. The minimum investment of $100 enables it to tap into a broader customer base.

Dubai's Emirates Reit plans debut #sukuk of at least US$300m this year: source

Dubai-based Emirates REIT plans to issue a debut Islamic bond of at least US$300 million by the end of this year. The Syariah-compliant real estate investment trust (REIT) has called a shareholder meeting on Nov 23 to discuss the planned sukuk, which could be issued shortly after that date. The company's total debt as at June 30 was about US$300 million. The loan-to-value (LTV) ratio of the REIT stood at 36.8%, which means there is room for issuance larger than US$300 million, the source added. The company had a portfolio of US$772 million at the end of June. Its portfolio includes mixed-use properties, office buildings and schools in Dubai.

#UAE’s Dana Gas leaves maturing #sukuk unpaid but no default declared

Dana Gas will not redeem $700 million (Dh2.57 billion) of its sukuk, as the dispute on the validity of the sukuk drags on in British and UAE courts. Dana claims changes in the interpretation of Islamic finance over recent years means the securities are no longer Sharia-compliant and have become unlawful in the UAE. The case is closely watched by the global Islamic finance industry because some investors think it could set a precedent for other sukuk issuers. Dana asked the Sharjah court for an early hearing date for an appeal which would allow it to participate in the London court case. Proceedings in London are expected to resume by Nov. 13, a ruling on the case could be issued on that date or shortly afterwards.

ADIB launches second Advanced & Autonomous Car #Equities basket note following high demand

Abu Dhabi Islamic Bank (ADIB) launched a second 'Advanced & Autonomous Car' Equities Basket Note, following high investor demand for the first tranche. The Shariah-compliant note matures in one year and provides 100% capital protection. The product provides investors with exposure to a basket of five leading car manufacturers, including Daimler, SAP, Volkswagen, BMW and Tesla. The minimum investment for the note is US$30,000, with an option for early redemption after three months. In September 2017, the bank launched a similar equity basket note, which provided investors with exposure to a basket of nine companies operating across the car industry. On September 7, 2017, an ADIB Shariah-compliant diversified equity basket note capturing the performance of undervalued blue-chip yielded 5.45% upon its maturity.

DMCC and Dubai SME to develop Shariah compliant #trade finance #platform for SMEs

DMCC has signed a Memorandum of Understanding (MoU) with Dubai SME to create a web-based trade finance platform for SMEs. The platform will be Sharia-compliant and operate under the DMCC Authority regulatory framework. Present at the signing ceremony was Gautam Sashittal, CEO of DMCC and Abdul Baset Al Janahi, CEO of Dubai SME. Gautam Sashittal said this cooperation between DMCC and Dubai SME opens a new avenue for funding and financing SMEs. Al Janahi said the SME sector in the UAE has evolved remarkably during the past decade chiefly due to support from the government. He added that this MoU was among a series of partnerships created after identifying the gap that existed in the SME landscape in terms of mobilising resources. DMCC is using Alternative International Management Services (AIMS) to make the platform Sharia-compliant.

#UAE Central Bank warns against #Bitcoin

The UAE Central Bank has warned against Bitcoin, terming it as unofficial and lacking sufficient supervision. According to Governor Mubarak Rashed Al Mansouri, it can be easily used in money laundering and in funding terror activities. Al Mansouri also said the central bank has completed the formation of a committee for developing Islamic Sharia-compliant products in order to support the Islamic finance sector. On the level of the UAE financial exposure to global capital markets, the governor said local markets have a slight exposure as the existing liquid assets now account for 17% of the banking sector's total assets. He added that UAE banks are robust enough to deal with risks as they have sufficient capital on account of the rising level of individual deposits.

Islamic Development Bank (IDB) celebrates listing $1.25 billion #Sukuk on Nasdaq Dubai

Dr. Zamir Iqbal, Chief Financial Officer of the Islamic Development Bank (IDB), rang the market-opening bell to mark the listing of a $1.25 billion Sukuk on Nasdaq Dubai. 53% of the five-year Sukuk issuance was acquired by investors in the EMEA region, while 47% went to investors based in Asia, with an annual return of 2.261%. The IDB is one of the largest Sukuk issuers on Nasdaq Dubai, with a current total of eight listings valued at $10.25 billion. The bell-ringing ceremony was attended by Hamed Ali, CEO of Nasdaq, as well as Azahari Bin Abd Kudus, Capital Markets Manager of the IDB. Dubai is a leading international centre for Sukuk activity, with Sukuk listings in the Emirate currently totalling $52.47 billion.

Dubai Economy launches Sharia-compliant #smart #programme

Dubai Economy in partnership with Dar Al Tawreeq has launched a Sharia-compliant smart programme to offer receivables finance to suppliers dealing with government entities in Dubai. Dubai Economy is the first government entity to offer such a financing option to suppliers. Faster payment will support businesses in growing sustainably and maintaining cash flows. Businesses working with government entities can use the smart software developed by Dar Al Tawreeq to ensure liquidity by obtaining financing on their invoices. The programme also provides easy access to on-demand working capital for businesses at no additional cost. The programme was launched by Khalid Al Kassim, Assistant Director General in Dubai Economy and Haitham Al Refaie, CEO of Tawreeq Holdings. The programme emphasises the principle of public-private partnership adopted by Dubai in its evolution into an Islamic Economy Capital.

Dubai Entrepreneur Launches Shariah-Compliant #Cryptocurrency Token

Dubai-based entrepreneur Com Mirz is set to launch a new Shariah-compliant cryptocurrency called Habibi Coin. The startup has already seen a staggering 750-member syndicate that is willing to invest in Habibi Coins with a $100-million initial coin offering (ICO). That is in addition to $3 million dollars raised by Mirza. In the same way that Bitcoin works as a decentralized payment system of digital currency with peer-to-peer transactions, Habibi Coin is essentially the bitcoin of the Middle East as it involves no intermediary. There is a significant rise in technology and digital currency that is paving the way forward in the Middle East. The Middle East is set to undertake one of the largest Shariah-compliant tokens, the Habibi Coin.

Dubai Aerospace plans #sukuk issue by mid-2018

Dubai Aerospace Enterprise (DAE) intends to tap the Islamic bond market within the next nine months to diversify the company's funding. DAE Chief Executive Firoz Tarapore confirmed that the company intended to issue a sukuk very soon, but did not specify how much the company could raise. According to Tarapore, DAE wants to change its capital structure to include a higher percentage of unsecured debt. The company intends to be a benchmark issuer in the U.S. debt market. DAE has already raised $2.3 billion in the United States through a senior bond issue this year to finance its acquisition of AWAS.

What the West doesn’t understand about #UAE foreign #aid

In 2013, 2014, and 2016, the UAE was the world’s biggest international donor, disbursing billions of dollars each year. In 2015, it had the fourth highest aid per capita in the world. Most westerners have no idea that the UAE is so active in foreign aid. Around 90% of its foreign aid is developmental with the rest going on humanitarian and religious/cultural assistance. The recipients are primarily developing Arab and Islamic countries, including Egypt, Yemen, and Jordan. A key factor is a difference in Islamic and secular westerner attitudes to charity. When Islamic banks in the Gulf region are solicited for funds to support civil society projects, they often donate only on the condition that their donation be anonymous. Going forward, transparency efforts must continue. However, the UAE must also work hard to protect the dignity of its aid recipients via appropriate levels of discreetness.

#United Arab Emirates: The Securities And Commodities Authority (SCA) Launched A Strategy For Islamic Capital Market Development

The Securities and Commodities Authority (SCA) launched a strategy for Islamic capital market development. The strategy includes the supervisory role played by SCA, the role played by self-regulatory organizations (SROs) and the challenges encountered. SCA's role is to issue legislative regulations for the Islamic capital market, updates on sukuk and capital adequacy regulations, the introduction of shari'ah board governance system and the organization of training programs. Markets' role is to issue provisions regulating trading securities, update existing regulations and develop investment indicators for Islamic securities. There are numerous challenges facing the Islamic finance market. They include the high costs of Islamic contracts, the increased complexity of Islamic products, the difference in perspectives of Islamic law and the availability of trained and qualified human resources.

#Mergers among smaller Islamic banking industry likely in GCC

There are several rumors about possible mergers of the smaller Islamic banks in the GCC region. According to UCapital, the relatively small size of Islamic banks is one of the compelling reasons for them to consider consolidation. However there is no compelling reason for a big number of regional banks to rush into merger deals. Banks across the region are facing pressure on profitability and tighter liquidity. The UAE, Bahrain and Oman would benefit from consolidation as many banks in these countries lack sufficient scale. A proposed merger of Kuwait Finance House and Ahli United Bank is expected to result in second biggest Islamic Bank in the GCC. Merger of Qatari banks Masraf Al Rayan, Barwa Bank and International Bank of Qatar which was announced last year is progressing and is expected to complete by end of the year.

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