Arab News

ADIB becomes first bank to join UAEIIC

Abu Dhabi Islamic Bank (ADIB) has joined the UAE International Investors Council (UAEIIC), making it the first bank in the UAE to become a member in the council. ADIB's acting CEO Khamis Buharoon said his bank was committed to the development of Emirati investments, which are critical to economic diversification and the UAE’s global economic competitiveness. The council provides a link between investors, governmental and semi-governmental entities to streamline the investment process. It also serves as a pillar for ensuring the protection of UAE capital abroad through advice, guidance, and logistic support.

First Islamic trade finance #workshop in #Uzbekistan

The International Islamic Trade Finance Corporation (ITFC), the Ministry for Foreign Trade of Uzbekistan and the United Nations Development Program (UNDP) have come together for the first trade finance workshop titled "Trade Finance as a Key Factor in Trade Promotion". ITFC's chief operating officer Nazeem Noordali said that ITFC and the government of Uzbekistan signed a $100 million framework agreement to finance pre-export and import activities in the country. He added that ITFC was working closely with its partners to promote Islamic trade finance among the Uzbek banks and non-banking financial institutions.

#Saudi issues new Islamic bond to finance budget

Saudi Arabia has completed the issuance of a new sukuk sale to help finance its budget deficit. The Kingdom raised $1.3 billion from the sale of sukuks in three tranches maturing in five, seven and 10 years. This was the second sukuk sale this year following a $4.8-billion issue it completed last month. The government debt level, both domestic and international, rose from 1.6% of gross domestic product in 2014 to 17.3 of GDP last year reaching $118 billion. During the same period, the government has drawn down some $245 billion from its fiscal reserves. Oil income made up more than 90% of public revenues before oil began to slide.

Islamic Development Bank grants $63.3 million to #Sudan

The Islamic Development Bank (IDB) signed a grant agreement worth $63.3 million for the establishment of facilities and services in South Darfur, Sudan. Earlier this month, the IDB agreed to lend Tunisia $185 million to finance developments including an electricity project. The bank agreed to finance an electricity link worth $150, as well as the construction of hospitals in Kasserine and Kef worth $34 million. The IDB is a Jeddah-based multilateral development financing institution. It began its activities in 1975. The present membership of the bank consists of 57 countries.

IDB, WB eye $1.9 trillion Islamic finance market

The Islamic Development Bank (IDB) and the World Bank are to use the Islamic finance market for infrastructure development projects through public-private partnerships (PPP). The IDB recently organized a forum in Washington in partnership with the World Bank on this subject. The World Bank suggested that the Islamic financial market has reached $1.9 trillion over the past six decades. IDB spokesperson Dr. Abdul-Hakim Elwaer said the aim of the forum was to create awareness about the potential for infrastructure development through PPP. This falls in line with the new development orientations of IDB member countries. For example, Saudi Arabia is targeting to increase the private sector’s contribution to the GDP from 40 to 65%. The Kingdom aims to achieve this through increasing the use of PPPs and through the privatization of government entities.

Islamic #insurance #merger creates #UAE giant

Takaful Emarat has agreed to acquire Al Hilal Takaful from Al Hilal Bank. The all-cash transaction will create the largest Islamic insurer in the UAE. The move is viewed as part of a consolidation drive in the Gulf’s takaful sector to offset weak profitability. Mohammad Al-Hawari, managing director of Takaful Emarat, said the deal would drive growth through a wider range of takaful services and a larger customer base. The merger is subject to full regulatory approvals and is scheduled to be completed in the first quarter of 2018. The transfer of Al Hilal Takaful’s ownership to Takaful Emarat will have no impact on current takaful policies, contracts, claims settlements or the writing of new insurance business.

GFH in $150m deal to sell assets to global private schools operator

Gulf Finance House (GFH) has struck a $150 million deal to sell part of its educational assets to a global private schools operator called Inspired. Inspired runs private schools in Europe, Africa, Latin America and Australia. Hisham Al-Rayes, CEO of GFH, said Inspired’s network and experience would add significant value to the schools. This way, both students and teachers will take part in exchange programs and benefit from the latest programs to enhance the level of education. Inspired has schools in Italy, the UK, Switzerland, Belgium, South Africa, Kenya, Australia, Colombia and Peru. GFH’s businesses include asset management, wealth management, commercial banking and real estate development.

ADGM and KPMG launch #FinTech Abu Dhabi Innovation Challenge

Abu Dhabi Global Market (ADGM) and KPMG have come together to launch the first FinTech Abu Dhabi Innovation Challenge on Oct. 22. The Innovation Challenge includes an intensive five-week program for innovative and mature start-ups to conceptualize and present market-ready solutions that address real business challenges in the Middle East, Africa and South Asia (MEASA) region. During the program, 10 finalist teams will work divided into six focus areas: Financial and Investment Management, Financial Inclusion, RegTech, Trade Finance, InsurTech and Private Capital Markets.The finalists will showcase their solutions at the FinTech Demo Day in Abu Dhabi to a panel of industry experts. Each finalist will benefit from mentoring sessions and fast-tracked consideration for admission to ADGM’s Regulatory Laboratory (RegLab) program. They will also win a $15,000 cash stipend to cover any costs associated with travel matters and accommodation.

#Dana #Gas takes offer to #creditors off the table in $700m #sukuk row

Dana Gas has withdrawn an offer to creditors to exchange its debt of $ 700 million Islamic bond for new notes. Thereby ending the chance of a consensual resolution to a case that could shape the future of the global Islamic finance industry. The gas company is refusing to repay holders of its Islamic bond which matures in October. It said last month it had received legal advice that the bond was no longer Sharia-compliant in the UAE because of changes in Islamic finance interpretations over the recent years, and was therefore not lawful. But creditors say Dana has to pay them back and argue if the sukuk was legal when the deal was struck, it holds, and if it was illegal then it would mean the company is in default.

Dana debacle highlights need for unified Islamic finance regulator

A recent report from Standard & Poor’s said that Islamic financial assets had accelerated toward the end of 2016, but that such progress was unsustainable in the long term. The agency pointed out too that a lack of standardization was a barrier to creating a truly global industry based in the Middle East. The Islamic economy would continue to grow but at much lower rates than in the boom years from 2007 onward. It is against this background that recent events at Dana Gas should be seen. In 2013, the company issued sukuk totaling $700 million. Dana, which does a lot of its business in Egypt and Iraq, had problems getting paid in those countries. Earlier this month, Dana said it had received new legal advice which meant its sukuk were no longer to be considered Shariah-compliant. The Dana debacle confirms the belief that what is really needed is a much more standardized regulatory approach in the Islamic finance market.

Workshop on #Sukuk Model Law project held

The Islamic Research and Training Institute (IRTI) and the Islamic Development Bank (IDB) organized a regional consultation workshop on Sukuk Model Law project. The workshop was organized in partnership with the Monetary Authority of Brunei Darussalam and was held in Brunei capital. Participants included senior officials of financial authorities from the IDB member countries in the ASEAN region, namely Brunei, Indonesia, Malaysia, Bangladesh and Maldives, as well as from Hong Kong, South Korea, Singapore, Philippines, Sri Lanka and Cambodia. The project aims to create a model Sukuk law and guidelines that allow IDB member countries and other jurisdictions a basis for a legal framework for Sukuk issuance and regulation. This was the second of four regional consultations on the Sukuk law. The first consultation was held in Senegal, Africa, and other two are planned for Europe/Central Asia and the MENA regions.

Jadwa Investment launches Jadwa #REIT Al-Haramain Fund

#Saudi Jadwa Investment announced the conclusion of the public offering of its first Shariah-compliant Real Estate Investment Traded Fund, Jadwa REIT Al-Haramain Fund. The new fund will invest in real estate properties in Makkah and Madinah. The REIT, which has an initial size of SR660 million ($176 million), offered SR360 million worth of units to the general public. Over 5,800 individual and intuitional investors subscribed for SR4.53 billion during the offer period, resulting in a 1.257% coverage of the offered units. Haitham Al-Ghannam, head of alternative investments at Jadwa, said the initial portfolio of the REIT would comprise of two hospitality assets, a four-star hotel and a pilgrim accommodation. Both properties are located in Makkah with a combined capacity of 984 hotel rooms. At its initial offer price of SR10 per unit, the REIT offers net initial yield of 5.2%.

ICD and TUV SUD to develop private sector in Central Asia

The Islamic Corporation for the Development of the Private Sector (ICD) and TUV SUD signed a memorandum of understanding (MoU) to foster their joint operations in the countries of Central Asia. ICD's CEO Khaled Al-Aboodi and the managing director of TUV SUD Central Asia, Anar Ahmadov, signed the MoU on behalf of the two corporations in Astana, Kazakhstan. The aim of the MoU is to facilitate cooperation in promoting private sector participation and inform about business opportunities in countries of Central Asia. This partnership will enable the two institutions to work closely on market studies related to the transit and logistic sector in the common member countries.

1st regional #consultation on #Sukuk Model Law held

The first workshop on the Sukuk Model Law was held in Dakar, Senegal. The event was organzied by the Islamic Development Bank (IDB) and the Islamic Research and Training Institute (IRTI), in partnership with the Central Bank of West African States (BCEAO). A number of experts and finance officials from the eight BCEAO member countries participated in the event. The project aimed to create a model Sukuk law and guidelines that leverage global best practices. Subsequent regional consultations are planned for South East Asia, Central Asia and the MENA regions. Speaking on the occasion, IRTI Director Mohamed Azmi Omar said the workshop reaffirmed the importance of Sukuk as an increasingly significant instrument of resource mobilization.

#Conference on challenges in #sukuk markets

The Sukuk Conference organized by the Saudi Capital Market Authority (CMA) in collaboration with the World Bank will be held on Dec. 6, 2016. Government officials and representatives from the World Bank and the private sector will participate in the conference. The conference sessions will include topics such as: elements of sukuk markets, dynamics of sukuk markets, establishment of an effective environment for sukuk market, regulatory issues in the sukuk market and the role of debt markets in economic growth. The CMA aims to encourage the issuance of debt instruments and also to promote the economic development of the Kingdom within the 2030 Vision.

Bank AlJazira expands #remittance business amid downturn reports

Bank AlJazira (BAJ) has announced an ambitious expansion plan. BAJ currently operates 40 Fawri remittance centers and plans to open several new branches across the Kingdom of Saudi Arabia. The Bank's Senior Vice President Sami Hamad Al-Rajhi said Fawri has a vast overseas network of payout locations in more than 200 countries and will continue to expand. He pointed out that money can be sent through Fawri to all major countries like India, Philippines and Pakistan, which are the three top remittance recipient countries, and Bangladesh, Egypt, Sri Lanka, Indonesia, Yemen, Turkey, Jordan, Morocco and many more countries around the globe. In addition, Fawri offers buying and selling of bank notes, namely for dollar and euro currencies. Fawri will be able to deal in all major currencies in the near future.

SEDCO Capital’s second real estate income fund acquires new properties

SEDCO Capital announced the acquisition of seven real estate assets over the past 19 months, bolstering the firm’s realty portfolio in Saudi Arabia. The purchased assets include the Hyper Panda retail in Dammam, Olya School in Riyadh, Dar Al Baraa School in Riyadh, an Extra Store in Dammam, Alhamra Plaza retail strip outlet in Riyadh and Irgah Plaza retail strip outlet in Riyadh. The acquisitions collectively total SR473 million in purchase price for approximately 88,000 sqm of built up area. According to Hasan Al-Jabri, CEO of SEDCO Capital, the total assets under management reach the $5.2 billion mark and clearly show clients' confidence in SEDCO.

Middle East's AuM declines in 2015, says BCG study

According to the annual benchmark report of the Boston Consulting Group (BCG), the global growth of asset management stalled in 2015 as the industry recorded its worst year since the 2008 financial crisis. Growth in assets under management (AuM) stalled — or in the case of the Middle East declined 10%. Flows of assets, revenue growth and revenue margins all dipped lower in 2015. AuM decreased in North America and the Middle East but rose elsewhere. Growth was modest in Europe and strong in Latin America and Asia, excluding Japan and Australia. The 10% growth of AuM in Asia, excluding Japan and Australia, was relatively robust. BCG reports that the global value of AuM rose just 1% in 2015, to $71.4 trillion from $70.5 trillion in 2014, after growing 8% that year. Asset managers will have to shift from outdated product strategies and develop disruptive investment capabilities.

International Islamic Trade Finance Corporation names CEO

The International Islamic Trade Finance Corporation (ITFC) has appointed Hani Salem Sonbol as its CEO. As ITFC is an autonomous member of the Islamic Development Bank (IDB) the announcement was made at the 41st annual meeting of the IDB in Jakarta. Sonbol expressed his thanks to Ahmad Mohamed Ali, president of IDB’s board of directors. He held several leading positions, including deputy CEO of ITFC, director of the IDB Group Regional Office in Rabat, and director of trade finance and development department at IDB.

IDB signs SR200m rural health plan for India

The Jeddah-based Islamic Development Bank (IDB) has signed a SR200 million agreement with an Indian non-governmental organization (NGO) to provide medical care for poor rural people. The money is part of a SR1 billion donation which was given by a Saudi benefactor to be utilized for the benefit of poor people across the globe. The benefactor earmarked SR200 million for India, thereby funding 15 mobile health clinics, which the IDB will maintain for the first five years. The rest of the money is reserved for the deployment of 60 mobile clinics in Pakistan, Bangladesh, Afghanistan, Yemen, Kyrgyzstan and Uzbekistan.

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