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A pair of creditors of troubled Indianapolis developer HDG Mansur want a federal bankruptcy court to force the firm into liquidation, claiming it has no hope of reorganizing and is using Chapter 11 as a stall tactic to fend off a $5.8 million judgment. Two affiliates of HDG Mansur, HDG Mansur Investment Services Inc. and HDGM Advisory Services LLC, filed for Chapter 11 bankruptcy protection in May. The creditors, KFH Capital Investment Co. and Kuwait Finance House Real Estate Co., on Aug. 14 asked the bankruptcy court to convert the case from a Chapter 11 reorganization to a Chapter 7 liquidation. KFH's court filing requesting liquidation mentions a criminal probe launched by the U.S. Attorney’s office. A trial has been set for Oct. 6.
Since there are no banks in some parts of Somaliland, the money-transfer industry in the Horn of Africa is important due to its pragmatic versatility. Remittances to the Somali region alone are estimated at $1.3 billion each year. But these transfers now risk becoming impossible: Long-standing Western worries that remittance flows serve as a cover for money laundering and the funding of armed Islamist groups mean the taps could soon be turned off. Somaliland's uneasy transition from informal coping mechanisms to the formal systems of a conventional state remains deeply incomplete. This is one reason for the absence of an internationally recognized banking sector, which makes Somaliland particularly reliant on remittances.
Qatar is exploring investment opportunities in Ethiopia’s banking, insurance, real-estate development, and health and communication sectors. This was announced by a Qatari businessmen delegation, chaired by Sheikh Dr Khalid bin Thani bin Abdullah al-Thani, chairman of Ezdan Holding Group. Dr Mulatto Shuma, president of Ethiopia, highlighted government’s readiness to offer all possible support to encourage foreign investment in Ethiopia by offering facilities and incentives as well as adopting a policy that protects investments in the country. Other members of the delegation included Ali Abdulrahman al-Hashemi, delegated member of Mackeen Holding Company; Ali Ibrahim Abdulghani, CEO of Qatari Islamic Insurance Company; and Kyle White Hill, CEO of Vodafone Qatar.
Collaboration between Islamic finance market players must be strengthened further in the effort to ensure continuous growth of the industry, especially in the international arena, said Kamarul Ariffin Mohd Jamil, Chief Executive Officer of Affin Islamic Bank Bhd. He also highlighted the fact that interest to venture into the Islamic finance industry has been expressed by non-Muslim countries such as Germany, Luxembourg, France, Australia, South Korean and Japan. The establishment of market infrastructure and regulatory frameworks in these countries are currently at various stages of development, he added. Moreover, the industry needs more professionals who are conversant and well trained in Islamic banking and finance.
Capital Intelligence (CI), has raised Gulf Finance House's (GFH) Long-Term Rating to 'BB' from 'BB-' and affirmed the Short-Term Rating at 'B'. The Outlook for GFH's ratings reverts to 'Stable' from 'Positive' following the rating action. The ratings reflect the recent successful refinancing and resultant extended debt repayment period. Also supporting the ratings is the significant reduction in leverage in recent years and the moderately improved liquidity position. The factors constraining GFH's ratings are the forced debt restructuring a few years ago, an encumbered asset base, and the small balance sheet coupled with single name and sector concentrations. Also constraining the ratings is the still challenging investment environment.
Islamic Development Bank (IDB) has approved $987 million in funds for supporting economic and social development projects and programmes in its member countries, in addition to grants for Muslim communities in non-member countries. The funds approved by the IDB's Board of Executive Directors at a recent meeting include $176 million for Oman, $100 million for Uzbekistan, $179.3 million for Cameroon, $26.7 million for Lebanon, $20 million for Yemen and $10 million for Uganda. Egypt alone received $198 million for the development of develop Assiut Oil Refinery and $226,8 for the development of Sharm El Sheikh International Airport, from IDB's latest funds.
Bahrain's Gulf Finance House (GFH) said on Wednesday that it had signed to obtain a $105 million, five-year Islamic credit facility from Kuwait Finance House, which would help GFH redeem two syndicated debt facilities and allow the release of some major GFH assets. GFH, which suffered heavily in the wake of the global financial crisis and required multiple debt restructurings, said Kuwait Finance House would have an option to convert its outstanding debt into GFH shares. It did not elaborate on the terms of any equity conversion. The Bahraini firm noted that it had paid down some $30 million of current outstanding debt facilities to date in 2014, representing payment of more than 15 percent of its total liabilities.
Argentina's debt default imposed by US Judge Thomas Griesa and his earlier court rulings will have enormous ramifications for the global debt system. The ruling effectively declares that the rights of few wealthy investors supersede those of a sovereign nation to protect its citizens under international law. However there are two emerging avenues which may end this relationship of dependence and provide new-found economic sovereignty for such countries. The first involves significantly reducing reliance on western lenders by pursuing alternative and ostensibly less-harmful sources of finance. The second option is to press for the establishment of an International Debt Court under United Nations auspices, with a specific brief to regulate against harmful speculative practises.
CIMB Islamic, the shariah-compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to RM5 billion ($1.58 billion). The Basel III compliant sukuk programme, assigned a preliminary rating of AA+ by ratings agency MARC, will go towards replacing an existing RM2 billion Tier-2 sukuk and to fund working capital. The securities commission is still finalising approval and CIMB is not expected to issue sukuk from the programme any time soon. The company did not specify the range of maturities or sizes for sukuk under the programme. CIMB is currently in talks with two smaller banks to create a mega-Islamic bank.
Malaysian property developer Sunway will raise up to 2 billion ringgit ($633 million) by issuing sukuk mudharaba, it said in August; short-term commercial paper under the programme will have maturities of between a month and a year, while medium-term notes will have maturities of one to seven years. Sunway will make its first issuance within two years. Turkey's Treasury said it plans to issue lira-denominated sukuk worth 1.5 billion lira ($705 million) in October. Tunisia will sell its first sovereign Islamic bond in September after months of delays, raising $140 million. The Islamic Development Bank plans to issue a benchmark-sized sukuk around May next year, close in size to a $1.5 billion, five-year sukuk which it issued in February this year, among others.
The government of Bangladesh has signed a Tk 340 crore ($44 million) loan contract with Islamic Development Bank to install the second submarine cable for the country. The installation may complete by 2016, while Bangladesh entered a consortium in March this year. Monwar Hossain, managing director of Bangladesh Submarine Cable Company Ltd (BSCCL), said BSCCL has already paid $19.2 million to the consortium from its own fund. Bangladesh will have to spend a total of $72.5 million for the new cable. The IDB will provide $44 million, while BSCCL will spend $70 million from its own fund. The rate of interest for the loans will be LIBOR+1.35 percent and the loans will have to be repaid in 13 years.
Moody's lowered the long-term deposit rating of Bank Asya, which is known for its close ties to the controversial Gülen Movement, from "Ba2" to "B2". The financial strength rating of the Gülenist bank has been downgraded from "D-" to "E+". According to the rating agency's statement, the bank's standalone financial strength rating was lowered due to a fall back in negative asset-quality trends, funding volatility, and post-provision profitability. Moody's also stated that the bank has been placed on review due to uncertainty in deposit ratings and that the financial strength note is also under review in case of a possible reduction.
Bank Asya, which is known for its close ties with the Gülen Movement, is now in an even more critical condition after the Central Bank of the Republic of Turkey (CBRT) reportedly issued a "warning letter" to the Banking Regulation and Supervision Agency (BDDK). The "confidential" note delivered to the BDDK states that the bank might not be able to provide the required reserves for its deposits in the central bank. The bank faced a TL 6 billion deposit outflow and a TL 7.6 billion decrease in assets as well as an 81 percent drop in its profits in recent months. Furthermore, the default loan amount of the bank and the rate of loans being followed up have reached critical levels. The BDDK started to investigate transactions of Bank Asya in order to determine whether the bank will be able to fulfill its obligation.
The attempts to offer conventional financial products in Afghanistan are perceived as yet another foreign attempt to challenge basic tenets of the Afghan society. This perception - shared not only in the countryside but also by sectors of urban society - is fuelling resentment and distrust among people. As a consequence, the already meager financing in the rural areas, where 75% of the population lives, is drying up and almost non-existent. This is undermining any meaningful economic and social take-off. Within this landscape, Islamic finance and takaful represent a necessary tool to address the population's discomfort with the conventional approach, ease cultural tensions and creatively mend social relations.
AIA Public Takaful Bhd has declared a total surplus of RM8.5 million for the financial year ended Nov 30, 2013. In a statement, the insurance company said the surplus distribution will involve more than 36,000 certificates under AIA Public, marking the first surplus distribution since the company’s inception three years ago. The distribution will benefit eligible customers who had participated in Takaful products offered by AIA AFG Takaful Bhd and ING Public Takaful Ehsan Bhd, the two companies which had integrated their businesses in March 2014 to form AIA Public. AIA Public said the surplus will be distributed to those who are registered as a customer of AIA Public as at Nov 30, 2013, do not have any outstanding contribution payments and have not made any claims.
Currently, Pakistan ranks ninth globally terms of development of the Islamic financial services industry but some recent purposeful steps would prove to be a game changer, said Mian Shahid, Chairman United International Group (UIG). Now, the conventional insurance companies in Pakistan are set to make major inroads into the Islamic insurance business with the active support of regulators, he added. The potential of Takaful in the Muslim world is still largely unexploited, he said, adding that its premiums are expected to reach $20 billion by 2017. Saudi Arabia, UAE and Malaysia enjoy the lion’s share on account of their advanced Islamic finance sector while Pakistan would need more simplified regulatory frameworks to propel the industry’s expansion, the insurance veteran observed.
Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim today said there was nothing dubious about the out-of-court settlement with regard to the loan of more than RM60 million he took from Bank Islam. He said he had taken court action against the irresponsible people who had slandered him. Khalid made the statement when speaking at the monthly gathering of Selangor government departments. The Port Klang state representative reminded those who were not satisfied with him to lodge reports with Bank Negara for an audit to be carried out and not to act as they pleased. He said he had decided to remain silent as he had to protect the bank’s secrecy practice.
Abu Dhabi-listed Islamic insurer National Takaful Co (Watania) said on Tuesday that United Arab Emirates regulators had approved the sale of 60.53 percent of the firm to MB UAE Investments and an affiliate of MB. Watania said MB UAE Investments would acquire 51 percent and Al Madina Insurance Co would take 9.53 percent. The group would buy a total of 90.8 million shares. The deadline for the purchase is next Feb. 24, Watania said in the statement. It did not give details such as the purchase price or who would sell the shares. In a separate filing on the Oman bourse, however, Al Madina said it would buy 14.3 million Watania shares for 17.88 million dirhams ($4.87 million), implying it would pay 1.25 dirhams per share.
Dubai Islamic Bank (DIB) has officially submitted a request to Indonesia’s Financial Services Authority (OJK) to up its stake in Jakarta-listed Bank Panin Syariah (PNBS). It has expressed its intention to increase its ownership in Panin Syariah to 40 percent. DIB currently owns a 24.9 percent stake in Panin Syariah, a subsidiary of private lender Panin Bank (PNBN). The United Arab Emirates lender acquired Panin Syariah’s shares, reportedly worth Rp 251.79 billion (US$21.7 million), in two stages in May this year. The rest of Panin Syariah’s shares are controlled by Panin Bank with 52.5 percent, Hesti Femi Nugraheni with 5.4 percent and the public with 17.2 percent. The OJK expects to complete the talks and issue approval for DIB later this year.