Gulf Times

Sheikh Mohamed to lead Barwa Bank’s new board

Barwa Bank has elected its new nine-member board of directors (for 2013-2015) with Sheikh Mohamed bin Hamad bin Jassim al-Thani as chairman and managing director. The other members on the board are Abdulaziz Mohamed Hamad Almana (vice chairman); Mohamed Esmail Ali al-Emadi; Abdulla Abdulaziz Abdulla al-Subaie; Mohamed Ebrahim Mohammad al-Sulaiti; Aisha Mohamed al-Noaimi; Sultan Yousef al-Sulaiti; Jamal Abdul Rahman al-Musalmani and Nasser Hamad Ali al-Sulaiti (all board members). The board of directors also appointed Talal Ahmed Abdulla al-Khaja as a secretary to the board, which will meet at least six times a year and ad hoc as required.

QIB launches new Islamic product

Qatar Islamic Bank (QIB) has launched its new investment product called International Sukuk Portfolio. It will be invested predominantly in global sukuks issued by sovereign, quasi-sovereign and corporate issuers using well defined investment guidelines and is designed to keep risk exposure under control. The portfolio will be managed by QIB’s subsidiary in the United Kingdom QIB-UK, which has experience in asset management. Since International Sukuk Portfolio is priced and available for trading on a weekly basis, liquidity will be ensured. The portfolio will be diversified across sukuk issuers, a wide sector split and a broad geographic allocation. Part of the profits will be distributed to investors on a quarterly basis.

Barwa Bank eyes full-fledged sukuk platform by end-2013

Barwa Bank expects its sukuk trading platform to become full-fledged by the year-end. Moreover, it sees the market as very competitive and lucrative with a great potential, according to chief investment officer Bashar Jallad. He said Barwa Bank was active in both the primary and secondary sukuk markets and started to act as a custodian for some of the clients. Barwa Bank’s sukuk trading platform is already functional but has not reached the optimum level, Jallad added. A focus area for the bank is relationship management.

Mobius to manage Asia-focused Islamic fund

Mark Mobius will lead the Templeton Shariah Asian Growth Fund that is to be launched at the end of this month by investment house Franklin Templeton. The initial seed capital of the fund is $5mn. Mobius expects the sector to grow significantly in the coming years. Franklin Templeton is also launching a Global Sukuk Fund, with $20mn of seed money to invest in Islamic bonds, and a Shariah Global Equity Fund, with $5mn of initial capital.

Barwa Bank honours best performing staff for business excellence

Barwa Bank Group (BBG) recently held its “Business Excellence” awards ceremony to honour the group’s best performers. The awards have been established to recognise the effort and contribution of employees and to motivate and inspire the team. The initiative is part of a commitment to training and development by the bank management to empower staff and ensure that Barwa Bank Group continues to be a major contributor to the financial services sector in Qatar and the region.

Mena insurers exude confidence as premium seen overgrowing the region’s economy

Insurers in the Middle East and North Africa (Mena) exuded confidence as they expect that the premium growth will exceed that of the region’s gross domestic product. The region’s low insurance penetration, favourable demographics and relatively moderate natural catastrophe exposure are considered to contribute to the sector's growth. However, high levels of competition, regulatory deficiencies, market fragmentation and political risks are relevant perceived weaknesses of the Mena insurance marketplace. The majority of Islamic insurers say that the potential of Islamic insurance has been overestimated.

Banking on corporate governance

In recent years the GCC financial service regulators have given importance to corporate governance and have come up with rules and regulations to implement the same. Qatar Central Bank (QCB), Qatar Financial Centre ( QFC) and The Saudi Monetary Agency are among the institutions that provided principles of corporate governance. Regulation in the GCC region has been strengthened to promote risk governance and financial stability in the financial services sector. Corporate governance promotes financial stability and can attract foreign direct investment, support the development of the bond market and encourage the production of more high quality research.

Barwa Bank seeks big debt sale slice; eyes credit rating

Qatar-based Barwa Bank arranged $863mn of notes in 2012, and is therefore the eighth-biggest underwriter out of 25 for GCC sukuk. Barwa Bank chief executive officer Steve Troop said that there was a space for an institutional Islamic bank to focus on sukuk. Barwa Bank which started operations in the third quarter of 2009 will wait until releasing first-half results before pursuing a credit rating. Moreover, it is preparing to sell shares in an initial public offering and is being advised by QInvest.

ADIB launches $1bn sukuk

A few days ago, Abu Dhabi Islamic Bank launched a sharia-compliant hybrid Islamic bond worth $1bn, thus aiming to boost its core capital. The Tier 1 perpetual sukuk has no particular maturity date. It was launched at a profit rate of 6.375%. Even though the structure of the sukuk is rather rare and unusual for the Middle East, the demand is high. This means that that ADIB offered enough of an incentive to reel in investors. It can be expected that more bonds of a similar kind may follow this issue.

Bahrain sukuk jump to record on GCC backing

The jump of Bahrain's sukuk in October resulted in the yield reaching a record and standing out from the neighbour countries. In October, the sukuk fell 65 basis points, or 0.65 percentage point. This is the biggest drop since the start of the trade in March 2010. According to the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index, this drop got ahead of a 21 basis-point decline to 2.96% in the average yield on sukuk in the Gulf Cooperation Council.

IFSB releases draft standards on capital adequacy, takaful

A new draft of the guidelines on capital adequacy for Islamic banks and the risk management of takaful were released by the Islamic Financial Services Board (IFSB). The IFSB is responsible for global guidelines for Islamic finance, despite the fact that national financial regulators determine the way guidelines are implemented. The initial guidelines on capital adequacy were released in December 2005 and were based on Basel II standards. The new stricter Basel III made amendments to the guidelines necessary.

IFSB to revise capital adequacy terms for Islamic institutions

The plans of the Islamic Financial Services Board (IFSB) are directed towards revising its capital adequacy guidelines for Islamic financial institutions. The draft is expected to be issued in November in order to receive industry feedback. While the IFSB is responsible for the global guidelines for Islamic finance, national financial regulators determine how much capital banks must maintain and in what form. The original guidelines on capital adequacy were released by the IFSB in December 2005. At that time, they were based on Basel II standards. However, now stricter Basel III standards are used which require corresponding changes in the guidelines.

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QFIS explores finance possibilities

Recently, the Qatar Faculty of Islamic Studies (QFIS) took part in the Joint Qatar Foundation Annual Research Forum and Arab Expatriate Scientists Network Symposium which took place at the Qatar National Convention Centre. Papers on the Qatar National Research Strategy by four researchers were presented. The research papers mainly deal with the topics of Qatar’s national priorities and the renaissance and reform movement in Qatar. One of the presentations, prepared and performed by senior researcher Bahnaz al-Qura Daqi, was titled ‘Risk Management among Islamic and Conventional Banks - A comparative study of Qatari banks registered in Qatar Financial Market’.

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Qatar Islamic Bank nets QR1.13bn gain in 9 months to Sept

Qatar Islamic Bank (QIB) shows high performance with a net profit of QR1.13bn in the first nine months of 2012. This is an increase of 2% compared to the same period last year. In September this year, QIB's total assets were at QR66.8bn - an increase of 26.7% since last year. The reason for the continuous asset growth are the financing activities, which have risen 42% from QR11.3bn in the first nine months of 2011 to QR38.1bn this year.

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QIIB picks banks for dollar sukuk

As part of the preparation for issuance of a dollar-denominated sukuk, Qatar Internationa Islamic Bank (QIIB) has charged QNB Capital and two international banks to arrange investor meetings which will be held in the Middle East, Asia and Europe starting on October 10th. At the moment there are no informations about the size of the sukuk or other offer details.

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Barwa Bank launches its first equity fund

The First Investor GCC Equity Opportunities Fund is name of a new 100% Shariah compliant investment scheme, launched by the Barwa Bank. The bank's first Shariah compliant fund will be managed by the investment subsidiary of the bank. The fund's investment goal is to achieve long-term capital growth based on investments in a diversified portfolio of equities that are listed on exchanges of the Gulf Co-operation Council countries. According to the head of Asset Management it is possible to achieve more than 12% growth a year, as their selections have consistently outperformed the market.


Steve Troop

High-risk takaful strategies cause for concern, says S&P

Standard and Poor’s is concerned about profitability in long term of Gulf takaful providers because they consider the investment strategies highly risky. On the other hand, according to forecasts, takaful contributions in the GCC region will grow much larger than premiums in the local conventional insurance industry in the following 12-18 months. Still, Standard and Poor's claims that it is not known for sure how many of the companies involved will maintain their long-term profitability.

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Islamic assets seen jumping to $3tn on Asia, GCC

It is expected that by 2015 global Islamic financial assets will double their amount and reach the mark of $3tn. These expectations are based on the fact that demand for the securities in the Gulf Co-operation Council and Malaysia lures issuers to the market. A classic imbalance between demand and offer in the Islamic finance can be observed, which is driven by demand. Yields on sukuk and paying returns on assets have reached a record low in the current month.

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Sukuk yields at 7yr low on policy easing

This week, sukuk yields have reached a seven-year low, the declines are expected to continue. As the main reason the strong support of the sukuk demand by Asia and the Gulf is pointed out. The average yields approach the levels of January 2005.

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