IslamicFinance.de

Dubai-based Noor Bank will consider a possible initial public offering of its shares in the medium term, although there is no current need for new capital at the bank. Besides, the bank has announced it was dropping the word “Islamic” from its title after a two-year study of its brand status and positioning. The new name is a major strategic move aimed at underlining its local and international growth ambitions, according to Hussain Al Qemzi, the bank’s chief executive. This rebranding is expected to help the IPO. The rebranding will not affect Noor’s status as a Sharia-compliant financial institution. Mr Al Qemzi said that the bank would continue to look at its traditional areas for expansion: Turkey, the GCC region, and South East Asia.

Under an interim deal between world powers and Iran last month, the Islamic republic agreed to freeze part of its nuclear programme in return for modest relief from sanctions. The unwinding of sanctions in the Iranian context will prove quite challenging and difficult in part because as the sanctions have grown over time, they’ve been layered with elements of sanctions building on themselves. The issue of sanctions with Iran have not just been about nuclear issues but also about human rights, support to president Bashar Al Assad in Syria, support to Hizbollah, support to Iraqi militias. Under the interim sanctions deal, the Obama administration has estimated that the sanctions relief will be worth US$6 billion to $7bn. Banking and oil sanctions will remain in place while negotiators attempt to reach a permanent deal over the next six months.

The 55-year-old American economist Nouriel Roubini is considered one of the leading economic thinkers of his generation. For 2014, the good news according to him is that there is an uneven but meaningful recovery under way pretty much everywhere. The bad news is that asset inflation and “frothiness” could create the conditions for another bust. Quantitative easing leads to a risk of financial instability, and greed in financial markets can still cause bubbles and crashes, he warned. But when he turns to the Middle East economies, and to the growing sector of Islamic finance, his tone brightens noticeably. The Islamic system is less volatile and potentially more stable than conventional financial systems. The advanced economies can learn from the Islamic system in this respect, he said.

Dubai has embarked on a three-year strategy to place itself firmly at the centre of the Islamic economy. The first steps in the seven-pillar plan, which includes 46 initiatives to be implemented within a three-year window – reduced from five – will be taken next year. The seven separate strategic directions are: finance; the halal food industry; family friendly tourism; the digital economy; fashion, arts and design; economic education; and standards and certification. Dubai has already launched plans to be a global centre for the issuance of sukuk to challenge the supremacy of sukuk centres such as London and Kuala Lumpur. Next month the emirate will host the first Global Islamic Economy Summit, organised by Dubai Chamber of Commerce and the international news and information group Thomson Reuters.

Dubai’s Islamic bonds are the world’s best-performing sovereign dollar sukuk this quarter as the economy of the Arabian Gulf business hub gathers steam, with bank profits, tourist numbers and property prices rising. Dubai’s US$650 million of notes due May 2022 returned 5.3 per cent, the most among 33 Sharia-compliant sovereign bonds tracked by Bloomberg. The average return was 1.3 per cent. Dubai’s CDS, contracts insuring the emirate’s debt against default for five years, fell 86 basis points in the past 12 months to 199. They reached a five-year low of 187 on May 7. Dubai’s economy is set to expand 4.6 per cent, on average, between 2012 and 2015.

Saudi Arabian food company Almarai plans to sell perpetual Islamic bonds, the first from an issuer in the kingdom. Almarai will meet domestic investors in the next two weeks to privately place of 1.7 billion Saudi riyals of senior sukuk that do not mature. BNP Paribas, HSBC Saudi Arabia, Saudi Fransi Capital and Standard Chartered have been mandated as joint lead managers for the perpetual offering. Almarai, which sold 1.3bn riyals of five- and seven- year sukuk in March, is raising funds for a 15.7bn-riyal four-year investment program. The ability to raise cash without disturbing a company's share structure is a key benefit, therefore this might be especially interesting for the region's family-owned businesses.

In May, John Kerry, the US secretary of state, announced a US$4 billion plan to kick-start Israel-Palestinian Territories peace talks. Sir Ronald Cohen has been arguing exactly that since 2003. He has direct experience of the suffering and dislocation conflict can cause in the Middle East because he and his family became penniless refugees from their home in Cairo after the Suez conflict. In Jordan, apart from Mr Kerry's initiative, there was another example of a strategy towards peace in a business framework with the "breaking the impasse" plan, aimed at getting Israeli and Arab business leaders in the region working together. Sir Ronald was involved in that from its inception. His plans have had significant beneficial outcomes in local projects to reduce prisoner recidivism, tackle homelessness and illiteracy. Most recently he was the chairman of Big Society Capital, the United Kingdom's first social investment bank.

Abu Dhabi University, the Zakat Fund and Abu Dhabi Islamic Bank have launched a Dh15 million Ramadan fund-raising campaign to support 300 needy students. Dr Nabil Ibrahim, Chancellor of Abu Dhabi University said that generosity is a life lesson that teaches the community that today's contributions impact tomorrow's innovators. Moreover, the Ramadan campaign gives donors the chance to 'shape the future', he added.

Nakheel's sukuk yields spiked yesterday, as the developer discusses its options on how to refinance its upcoming debt repayments. Yields for the developer on its Islamic bonds maturing in 2016 hit their highest level since November last year. Analysts said investors were responding to a lack of information over progress with the company's refinancing discussions with lenders. The recent sell-off may have hurt bond investors, but borrowing costs have returned to about the same levels as recently as nine months ago, meaning most issuers would have few difficulties selling new debt if they needed. Funds tracking the HSBC/Nasdaq Dubai UAE US dollar sukuk index have lost money this year, with total returns down 2.7 per cent year to date.

HSBC reported profits before tax of US$8.4 billion for its global business during the first quarter, a 95 per cent increase on the amount generated during the corresponding period a year earlier. HSBC Middle East, the bank's regional arm, reported profits before tax of $524 million for the first quarter, a 57.8 per cent increase compared with a year earlier, as it released provisions earlier made for bad debts. Meanwhile, Abu Dhabi Islamic Bank reported net profit at group level of Dh340.1m for the first quarter, an increase of 10.6 per cent compared with a year earlier. ADIB reported 5.4 per cent growth in net customer financing assets during the quarter to Dh54bn. At the same time, the bank's provisions and charges for bad debts were flat compared with a year ago at Dh185.5m.

Leonardo Peklar, the new chief executive of Hawkamah Institute for Corporate Governance, is planning an initiative to encourage regional companies to appoint more women to their boards. He hopes to invite female board members from global multinationals to the GCC region to extol the virtues of women business leaders. Currently, only 1.5 per cent of board seats in the GCC are held by women, according to Hawkamah statistics. Another priority for Mr Peklar is the issue of reforming the way the region's mainly family-owned businesses are run. Banks and Islamic finance and private equity were other sectors he planned to focus on improving corporate governance.

The main suspect wanted in connection with a brazen daylight robbery of more than US$10 million (Dh36.7m) from Syrian International Bank for Trade and Finance (IBTF) has been held for questioning in Egypt. In January, $3.4m in cash, €4.75m (Dh22.8m) and 33m Syrian pounds (Dh1.7m) was allegedly stolen from the vault of the IBTF in Damascus. The bank learnt that the suspect fled Damascus to Egypt immediately after allegedly committing the crime. The suspect was arrested last month, upon the discovery by Cairo authorities that his passport was fraudulent. The bank has hired a lawyer to expedite the extradition of the suspect from Egypt.

Iraqi Islamic Bank for Investment and Development has teamed up with a Bahrain-based Baraka Islamic Bank to develop an investment vehicle that will target Iraq's lucrative and promising food sector. The fund has already acquired interest from Arabian Gulf and European investors, prompting the Iraqi lender to increase the size of the vehicle from US$50 million (Dh183.6m) to $75m. It will provide financial support to an affiliate company of Iraqi Islamic Bank that has a three-year track record of delivering contracts on sugar stockpile to Iraq's ministry of trade.

An unknown investor has bought almost 4 per cent of Ajman Bank. Shares were up as much as 2.6 per cent to Dh1.58 each, after a block of 38.8 million shares were traded yesterday morning. The bank did not comment on the share movement, which represents 3.8 per cent of Ajman Bank's share capital. Ajman Bank which is 25 per cent owned by the emirate's government, has frequently been at the centre of rumours that it was the takeover target of an unnamed institutional investor,

Some analysts see the ambition of overtaking London as the world capital of the sukuk business, as a challenge for Dubai's initiative to become the capital of the global Islamic economy. Mohieddine Kronfol, the chief investment officer for global sukuk and fixed income business for Franklin Templeton, thinks Dubai can establish itself in a leadership position in the long-term. Kronfol believes Dubai and the region need to be more mature in their overall approach to finance if they are to lead the Islamic economy. He cites the lack of a pension fund industry, the relative immaturity of the insurance and asset management businesses as examples of lack of financial depth.

A new index will track the number of women on the boards of publicly listed companies across the region. The Arabian Gulf chapter of Women Corporate Directors will partner with the Dubai-based Hawkamah Institute for Corporate Governance to produce the measure. The index will help to identify organisations committed to promoting women to top executive and boardroom positions as well as gaps in corporate representation. Currently, only 1.5 per cent of board seats in the GCC are held by women. In December, Sheikh Mohammed bin Rashid, had announced that it would become compulsory for every government company in the UAE to have a female board member.

Recep Tayyip Erdogan, the prime minister of Turkey, reinforced his credentials as a political leader of the Muslim world at the Sharjah Government Communication Forum this week. Besides championing of political causes in the region, he used the forum for the enhancement of his country's economic and trade relations with GCC states. A memorandum of understanding signed by investment officials from Turkey and Sharjah aims to extend further the business relationship between Turkey and a UAE emirate. Mr Erdogan certainly seems to have pulled back from full-blown commitment to a Europe-orientated strategy. In contrast, trade and economic relations to the south-east are blossoming.

Alderman Roger Gifford, the Lord Mayor of The City Of London, said that London is becoming increasingly important in the Islamic finance world. A lot of infrastructure exists to service Islamic finance, however it is nothing more than a niche product in London which represents less than 1 per cent of the entire market. Gifford is therefore promoting further cooperation between Dubai and the wider UAE market with London. This can help Dubai to become a global capital of the Islamic economy, according to the Lord Mayor.

Syrian banks prepare for worst-case scenarios after profits tumbled by between 40 and 90 per cent last year as the civil war further weakens the financial sector. Banking transactions such as trade finance or corporate lending have taken a big hit, while basic banking services continue despite the challenging environment. Therefore, several banks, including Byblos Bank Syria, have developed emergency plans to preserve business continuity. However, Syria's private lenders, an important part of president Bashar Al Assad's economic modernisation plan, are struggling with a mismatch of assets and liabilities.

Qatar-based Barwa Bank has become one of the top 10 underwriters of Arabian Gulf Islamic bonds within three years of opening and plans to seek a credit rating in the second half before a possible sukuk sale. The bank arranged US$863 million of notes in 2012, and is considering its own issuance of sukuk. In addition to sovereign clients, Barwa helped Dubai-based Emaar Properties and Abu Dhabi Islamic Bank sell Islamic notes in 2012. The lender had assets of 21.5bn Qatari riyals at the end of June.