IslamicFinance.de

A lack of legislation is seriously hampering domestic issues of Sukuk in Kuwait, forcing companies to go abroad, Abdulkader Thomas, president of consultancy Shape Financial Corp said to Ulf Laessing and Raissa Kasolowsky published on Reuters. A ministerial decree allowing sukuk issued in 2007 was not adequate for the market to flourish, Thomas said. Saudi Arabia would also have to overhaul its legislation for its sukuk market to function more effectively.

Fitch Ratings had affirmed Kuwait International Bank (KIB)'s Long-term Issuer Default Rating (IDR) at "A-", Short-term IDR at "F2", Individual Rating at "C/D", Support Rating at "1" and Support Rating Floor at "A-". It said the outlook on the Long-term IDR was stable, adding that the bank's IDRs and Support Rating "reflected the extremely high probability of support that could be expected from the Kuwaiti authorities in case of need, based on the state's history of support for local banks during past systemic crises." It also said that the successful conversion into an Islamic bank and the many structural improvements to its business since the July 2007 conversion.

Liquidity Management House, which is a wholly owned subsidiary of Kuwait Finance has succeeded in making a combined global 1-year Murabaha finance deal about USD 115 million for KFH-Turkey, after attracting 7 global and regional banks: Halk Bank-Turkey, Islamic Development Bank, Citibank, Garanti Bank International-Holland, Gatehouse Bank-UK, NBK International PLC, Standard Chartered Bank.

KFH-Turkey Chief Executive Officer is Ufuk Iwan.

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.

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 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.

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.

Kuwait News Agency citing that the Moroccan newspaper "Al-Jareeda Al-Oula" reported that three Gulf investment groups have revealed their intention to invest USD 250 mn this year in Morocco, including the Kuwait Fund for Arab Economic Development (KFAED and the Kuwait Finance House Group (KFH).
In the same context, the newspaper quoted an official from the "ENOCENOC" group of the United Arab Emirates as saying that the group decided to invest USD 150 million to set up an investment project in the northern city of Tangier.

The Executive Director of the ENOCENOC Group Saeed Khoury said the investment will be to build the first phase of the plant in Tangier which is scheduled to enter service in the first quarter of next year.

The Bank of Kuwait and Middle East (BKME) expects 2009 to be difficult due to a global crisis but has no exposure to troubled investment firms and will turn an Islamic bank in January 2010. BKME, owned by Bahrain's Ahli United Bank, saw Q4 net profit fall by 89.5 % to 965,000 dinars compared to KWD 9.23 mn in Q4 of 2007, according to Reuters calculations based on financial data.

Press Release

Various Kuwaiti Banks Placed On CreditWatch Negative On Large Exposure To Investment Companies

LONDON (Standard & Poor's) Feb. 16, 2009--Standard & Poor's Ratings Services said today that it placed its 'A-' long-term counterparty credit ratings on Kuwait Finance House and Commercial Bank of Kuwait on CreditWatch with negative implications. At the same time, the 'A-2' short-term counterparty credit ratings on these banks were affirmed. Furthermore, Standard & Poor's placed its 'BBB+/A-2' long- and short-term counterparty credit ratings on Al Ahli Bank of Kuwait and Burgan Bank on CreditWatch with negative implications. At the same time, Standard & Poor's commented on its CreditWatch placement of Kuwait-based Gulf Bank. The 'A-/A-2' long- and short-term counterparty credit ratings on Gulf Bank remain on CreditWatch with negative implications, where they had been placed on Oct. 27, 2008.

Bank of Kuwait and the Middle East (BKME) achieves KD 51.4 mn in profits in 2008 versus KD 48.2 mn in 2007 with a 6.6 % increase as compared to the last year.

The conversion of BKME into Islamic Sharia will be completed within the coming months as per the timeframe approved by Central Bank of Kuwait.

Hamad Abdulmohsin Al-Marzouq is the Chairman and Managing Director of BKME.

Rania El Gamal reported on 12 February on Arabianbusiness that the operations of Global Jordan unit were halted by court due to a dispute over a financing by Housing Bank by a Jordanian court. An agreement reached allowed the court to revert its ruling. Housing Bank was no longer willing to a accept a guarantee of Global Kuwait in favour of Global Jordan unit.

The size of Global's portfolio in Jordan in September was about USD 900 mn and included investments in real estate, financial services and industry. Global also opened a brokerage business for Amman's financial markets.

Kuwaiti banks or investment firms may have to merge if they want to obtain state help under a USD 5 bn (Dh18bn) rescue plan, a bill devised by the central bank said. Under the plan, the central bank will also decide which investment firms will qualify for aid depending on whether the firm is able to continue its business and has a "good" solvency.

Kuwait Finance House Malaysia said last Friday it has received a USD 300 mn capital injection from its parent, increasing the paid-up capital to USD 500 mn.

UAE Cabinet appoints Steering Committee to Review, Develop Strategies for Amlak, Tamweel. The high-level Committee, headed by H.E. Sultan bin Saeed Al Mansouri, UAE Minister of Economy, brings together experts from across ministries and regulatory bodies. The move highlights the federal government's support to the UAE economy and strengthening of its financial institutions. The Committee will draw up a comprehensive report of Amlak's and Tamweel's performances under the changed economic environment and present its recommendations on the way forward to the government by the end of February.

Global Investment House laid off around 40 employees, and reduced salaries by up to 20 %. Investment Dar has cut salaries by 5 to 20 % but said it had no plans to lay off staff.

Edward Russell reported on Financeasia on 2 February, that Kuwait Finance House’s (KFH) 2008 posts profit before charges but faces falling revenues. In Q4, KFH's revenue fell 16.3 % quarter-on-quarter to KD 185 mn. The revenue decline increased 3.7 % from the previous quarter when it fell 12.5 % quarter-on-quarter. Despite the decline in revenues in the second half of the year, the bank managed to report an overall increase in income of 6.5 % year-on-year.

The finance house's unaudited full-year net profit totalled KD 157 mn(USD 542 mn on revenues of KD 884.9 mn. Given the current economic environment, KFH announced to retain KD 211 mn as a "provision". After the KD 211 mn provision, KFH lost anywhere between KD4 8 mn and KD54 mn for the year. Full-year and fourth-quarter audited results have yet to be released.

ALAFCO Aviation Lease And Finance Company released their Financial Results as published on Zawya on 27 January. Ahmad A. Alzabin announced that the operating profit of the company during the 1st quarter of the current fiscal year that ended 31 December 2008 reached KD 3 million, and that ALAFCOearned a net profit of KD 1.45 mn. The company's assets reached KD 281.21 mn and shareholders equity reached KD 82.29 mn during the quarter.

Global-Saudi is an investment bank with a capital of 50 million Saudi riyals. It carries out conventional and Islamic financial services such as the establishment and management of investment funds, portfolio management, international brokerage, private and public placement, underwriting, advisory, dealings as a principal and as an agent as well as custody. Additionally, Global-Saudi obtained approval from the Authority to launch 3 Investment Funds, which are the Global GCC Market Fund, Global GCC Equity Fund and Global Saudi Equity Fund (Noor Fund).

Gulf Daily News reported on 9 January that Kuwait's Investment Dar, is considering selling a stake in real estate affiliate Oqyana. Daily As-Seyassah said Dar had received an offer from an unidentified Gulf investor to buy 50 % of its stake in Oqyana.