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Saudi's home finance firm in final stages: sponsor

Saudi Arabia's national home finance company, Bidaya, may open its doors by the end of this year. In development since 2010, the company is a venture between the finance ministry's Public Investment Fund and the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD). Bidaya is in its last phase of development prior to launch and will submit an application for a licence as soon as regulations under the kingdom's mortgage laws are finalised. The "target size" of its paid-up capital will reportedly be 900 million riyals ($240 million). Bidaya will increase access to finance for middle-income home buyers across the Kingdom and thus, raise low levels of home ownership in the country.

Arab banks see Middle East opportunities as some global banks scale back

Big Arab banks with money to spend are expanding across the Middle East in markets such as Egypt and Iraq, as they take advantage of a retreat from some areas by major international rivals. Since 2011, some global banks have downsized some of their businesses in the region to cut costs, help shore up capital and focus on their core markets, while competition from local banks has intensified. Meanwhile, UAE and Qatari banks have led the way in making some sizeable acquisitions and increasing their stakes in other lenders. In Egypt for example, Gulf banks are eyeing acquisitions because there is a lot of potential.

OIC seeks support for Islamic Solidarity Fund

A meeting of the 58th session of the Permanent Council of the Islamic Solidarity Fund of the Organization of Islamic Cooperation reviewed the current financial situation of the Fund and the projects it is executing for member states and Muslim communities in non-OIC member states. OIC Secretary General Iyad Ameen Madani called for the mobilization of support for the ISF to overcome the limitation of resources in the face of growing needs, adding that many humanitarian issues were awaiting the attention of the Fund. He called for the establishment of a work group to identify projects for the ISF and unify efforts. The ISF has so far built 2,418 projects at a cost of $207 million in 130 countries throughout the world.

Dubai Sells First Bonds in 15 Months With $750 Million Sukuk (3)

Dubai tapped capital markets for the first time in more than a year with the sale of $750 million of 15-year Islamic bonds as the emirate seeks to pay debt and finance its budget amid a property-market recovery. The Dubai government’s securities will reportedly price to yield 5 percent. The price Dubai paid for the sukuk indicates a significant improvement in the credit quality. The sale comes after Abu Dhabi agreed last month to roll over $20 billion of debt for five years, helping push Dubai’s credit risk to 165 basis points on April 4. Dubai Islamic Bank PJSC (DIB), Emirates NBD Capital Ltd., HSBC Holdings Plc (HSBA), National Bank of Abu Dhabi PJSC and Standard Chartered Plc managed the sale.

Pakistan's MCB drops plans to buy Islamic bank, to set up own unit

Pakistan's MCB Bank Ltd will set up a wholly owned Islamic banking subsidiary while dropping plans to take a stake in Islamic lender Burj Bank. Last month, MCB started due diligence on taking a 55 percent stake in unlisted Burj, which held assets worth 53.3 billion rupees ($547 million) as of December, but it said it would not proceed for commercial reasons. The move comes amid increased activity in Pakistan's Islamic banking sector, with regulators stepping up development efforts and lenders expanding operations. MCB currently operates the country's sixth-largest Islamic window with 28 branches. It will reportedly spin off its Islamic window into a separate subsidiary with 10 billion rupees in paid-up capital, using its existing Islamic banking branches to form the new entity.

Deloitte and IRTI workshop: Restructuring Sukuk the Islamic way

The Deloitte Islamic Finance Knowledge Center (IFKC) in the Middle East and the Islamic Research & Training Institute (IRTI) held on March 27, 2014 the "Restructuring Sukuk- the Islamic Way" workshop in Dubai, the first of a series of executive workshops targeting industry practitioners, investors and issuers. The event tackled the Sukuk market trends and the key Sharia' and regulatory considerations for restructuring activities. The participants discussed actual restructuring case studies with analysis of risks associated with transactions and lessons learned. The event also provided practitioners the opportunity to hear different perspectives in discussions facilitated by leaders from Deloitte, DFSA , IDB Group , Islamic International Rating Agency, FWU Global Takaful, and Clifford Chance .

Islamic finance body IIFM eyes first sukuk standard

The Bahrain-based International Islamic Financial Market (IIFM) will develop its first standard contract template for sukuk, and aims to double the number of its standards as early as next year. A standard for leasing-based sukuk will be developed first by the IIFM to help harmonise industry practices, said chief executive Ijlal Ahmad Alvi. The move comes after a consultation meeting in Dubai this week which identified a need for guidelines covering the ijara sukuk structure as a priority. A work group will also study other common sukuk structures such as mudaraba, wakala and musharaka, as well as convertible and exchangeable sukuk. The ijara sukuk standard could be ready by the end of this year at the earliest.

Turkiye Finans USD500m 5.375% Apr 19

Turkiye Finans has completed a $500m bond issue. The issue is rated -/-/BBB and its maturity is April 24, 2019. The issue/fixed reoffer price is 100 with a profit rate of 5.375%. The spread at reoffer was 363.4bp over mid-swaps. The bonds were launched on Tuesday April 15, payment date is April 24. Joint bookrunners are Citi, Emirates NBD, HSBC, QInvest.

ICD boosting activity in Africa to widen Islamic finance appeal

The Islamic Corporation for the Development of the Private Sector (ICD) plans to increase its activities in Africa, part of plans to widen the appeal of Islamic finance across the region. Under a new strategy, the ICD is helping develop what it terms "Islamic finance channels" to spread sharia-compliant financial products more widely, ICD chief executive Khaled Al-Aboodi said. Such channels include Islamic banks, investment and ijara companies, and takaful and retakaful firms. Some of the projects will be led by Senegal-based Tamweel Africa Holding which will establish an Islamic bank in Benin and is finalizing a feasibility study for one in Mali. In Chad, the ICD is supporting the establishment of an Islamic bank and a leasing company, depending on the approval from local authorities.

Kuwait Finance House Q1 Profit Rises But Misses Estimates

Kuwait Finance House (KFH) reported a 13 per cent rise in first quarter net profit which rose to 26.06 million dinars ($92.54 million) from 23.0 million dinars in the same period a year ago. Revenues were 1 per cent higher at 224.4 million dinars. Five analysts in a Reuters poll had estimated an average net profit of 32.76 million dinars for the quarter. KFH’s total assets were 17.3 billion dinars at the end of the first quarter, an increase of 16 percent compared to the same time last year while deposits rose 7 per cent to 636 million dinars. Shares in the company closed at 0.85 dinars on Thursday on the Kuwaiti stock market, which reopens on Sunday. Chairman Hamad al-Marzouq said KFH wanted to expand in Turkey and adjacent countries’ markets, without giving details.

KFH research limited: Sovereign and Quasi-Sovereign issuers drive global primary sukuk market in 1Q-2014

According to the newly released report “Global Sukuk Report 1Q2014” by Kuwait Finance House Research Limited (KFHR), the global sukuk market saw a modest volume of USD31.14bln in new sukuk issuances in 1Q2014, a drop of 15.2% as compared to 4Q13. The drop in issuance volume stems from a noteworthy slowdown in the GCC sukuk issuances in 1Q14. Consistent with the trend over past several quarters, the primary sukuk market was led by sovereign and quasi-sovereign issuers who collectively accounted for 81% of the global primary sukuk market issuances in 1Q14. As an outlook for 2014, the sovereign sukuk sector is of much stakeholder interest this year. As a result, despite the modest primary market momentum in 1Q14, the global primary sukuk market is expected to once again surpass the USD100bln mark in new sukuk issuances this year.

Iranian official confirms execution for bank fraud to proceed

Iran's Chief Auditor Nasser Seraj announced that there is no truth to rumours that a death sentence issued in the so-called $3-billion fraud case will be withdrawn. Seraj indicated that the authorities are continuing to trace the assets of Amir Khosravi, adding that the investigation is proceeding well. The case came to light in 2011, and 39 defendants were accused of using forced documents to obtain credit from banks to buy state-owned companies. Four people were sentenced to death for the charge of "corruption on earth" including Amir Khosravi, and others were sentenced to prison terms of up to 25 years. Mohammad Reza Khavari was the CEO of the country's largest bank, Melli Bank, and he remains a major suspect in this case, having fled to Canada as soon as the investigation became public.

Saudi Arabia-based Weqaya Takaful outlook revised to negative by S&P

Standard & Poor's Ratings Services has affirmed at 'BBB' its insurer financial strength and counterparty credit ratings on Saudi Arabia-based Weqaya Takaful Insurance and Reinsurance Co. (Weqaya) but the outlook is negative. The affirmation reflects S&P’s view that despite a comprehensive net loss of Saudi Arabian riyal (SAR) 90.7 million ($24.2 million) for 2013 Weqaya's new senior management is taking appropriate remedial action. Consequently, policyholder confidence will be maintained and Weqaya will continue to enjoy both a satisfactory business risk profile, and at least a lower adequate financial risk profile. The negative outlook reflects S&P's belief that senior management at Weqaya must continue to work quickly and effectively to reinforce capital and earnings.

Investigating Islamic Finance In Nigeria

In Nigeria, the practice of Islamic finance was introduced in 1992 by the former Habib Bank (Bank PHB, and now Keystone Bank). The profile of this type of banking was again raised between 2008 and 2009 when Nigeria joined the Islamic Financial Services Board (IFSB). Later, the CBN issued framework dated January 13, 2011 to regulate Islamic finance in Nigeria. In July, 2011 the CBN granted licence to Stanbic IBTC Bank to operate an Islamic banking window and subsequently to Sterling Bank in 2013; the CBN had earlier granted approval for the establishment of Jaiz Bank to operate as the first full-fledged Islamic bank in Nigeria. In sum, for Nigeria to benefit from Islamic finance, the governing laws and regulations must be written and subject to interpretation and analysis.

Saudi Islamic bank giant losing ground as its profit slides

Al Rajhi Bankk is losing ground to peers in Saudi Arabia, its home market, as slowing credit growth and intensifying competition for retail customers weigh on earnings. The world’s biggest Islamic bank said this week that first-quarter profit fell 17% from a year earlier, its third quarter of declining earnings. Lending growth in the three months slowed to 7% from 19% in the same period of 2013. That compares with 30% for Bank Albilad and 11% for Samba Financial Group. Profit at the Riyadh-based bank is slowing even as the Saudi economy is poised to grow 4.2% this year, because rival banks are increasingly turning their attention to retail customers as new labour laws stifle construction projects. Construction lending accounted for 7.7% of total bank loans in 2013.

The IFSB announces the speakers for its 11th Annual Global Summit

The 11th IFSB Annual Global Summit, themed "New Markets and Frontiers for Islamic Finance: Innovation and the Regulatory Perimeter", will be held in Mauritius. The session topics which reflect the importance of the Summit theme include: Global Overview of the Islamic Financial Services Industry (IFSI): Outlook and Policy Developments; Legal and Regulatory Environment of Islamic Finance; Sukuk, Market Development and Regulation, The Role of Islamic Finance in Economic Development: Promoting Financial Inclusion, Sustaining Innovation, Expanding the Regulatory Perimeter - Striking a Balance; Panel Discussion on "New and Emerging Islamic Finance Jurisdictions: Opportunities and Challenges Ahead. Global players and thought leaders from among the regulators and market players of the Islamic financial services industry have confirmed their participation.

Withdrawal: Islamic insurers agree to out-of-court settlement

After waging a legal battle with the regulator as well as conventional insurers for almost two years, Islamic insurance companies have finally agreed to an out-of-court settlement of the longstanding dispute over controversial Takaful Rules 2012. General and family Takaful companies will withdraw their constitutional petition against the SECP, 23 insurance companies and the federation of Pakistan within this week, thus allowing conventional insurers to run Shariah-compliant insurance business through parallel window operations. The SECP is said to have agreed to the Takaful players’ suggestion that conventional insurance companies should be required to maintain separate capital accounts for the two lines of business.

Pakistan mulls $5.6b sukuk sales this year

Pakistan looks set to end a year-long drought in sovereign sukuk issuance to support its goal of doubling Sharia-compliant banks' market share by 2020. The government may offer as much as Rs542 billion ($5.6 billion) of local-currency sukuk in 2014, including notes backed by a highway and an airport. That compares to one sale of Rs43 billion in 2013. Lenders including MCB Bank and National Bank of Pakistan, are converting branches to respond to rising demand for banking that complies with the religion's ban on interest, which now has a market share of 10 per cent. The Rs323 billion of sovereign sukuk outstanding is less than a third of the amount of Sharia-compliant bank assets.

Source: 

http://www.timesofoman.com/News/32476/Article-Pakistan-mulls-$5%206b-sukuk-sales-this-year

Limitless said to seek delay on installment of US$1.2 billion debt

Limitless LLC, the Dubai-based developer, has reportedly asked creditors to defer the first installment on its $1.2 billion restructured debt until the end of 2015. The company has offered banks 200 million dirhams ($54 million) toward the $400 million amortization due in December. Limitless, which was put under the management of state-controlled developer Nakheel PJSC in 2010, has requested postponement of payment for a year. The company is revising business plans and will approach lenders about the debt maturing in 2014, its chairman Ali Rashid Lootah said. Options include sale of land in Jebel Ali, he added. Seemingly, the company reached an arrangement that would give lenders a profit rate equivalent to interest of 175 basis points over the London interbank offered rate and may extend payment by five years.

Turkiye Finans rallies on break after beating guidance

Turkiye Finans navigated challenging markets on Tuesday to price its $500m five year sukuk inside guidance at 5.375%. After what one investor termed a “sluggish” start, the deal achieved a $1.4bn order book and rallied from par on the break to 100.125/100.375. Turkiye launched as tensions mounted again between Russia and Ukraine. The Russia 4.875% ’23 bond has fallen three points since the start of the week and equity markets are down. Despite this, the Turkish participation bank tightened its guidance from 5.5% and almost doubled its book.

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