Bank Asya closed 80 branches and cut its headcount by 1,708 people in a bid to boost profitability next year. Bank Asya has seen its profits and capital base collapse since it found itself at the centre of a power struggle between now President Tayyip Erdogan and his former ally-turned-foe Fethullah Gulen, the Islamic cleric whose sympathisers founded the bank. The bank made a 301 million lira ($133 million) net loss in the first nine months of this year after a 60 million lira profit a year earlier, while its balance sheet has shrunk.
After sales of Islamic bonds began the fourth quarter at the slowest pace in six years, sukuk from companies including FlyDubai and Bahrain Mumtalakat Holding Co are among deals announced or sold this week. They will increase the amount raised this quarter to at least $5bn. These deals have been in the pipeline and the market volatility in September and October delayed them, said Abdul Kadir Hussain, the chief executive officer of Mashreq Capital DIFC. However, the latest transactions won’t be enough to make for a record sukuk issuance year, he added. Global sukuk yields have retreated 17 basis points since reaching a five-month high in October to 2.8% on November 18.
A bond with an Issue Amount of $500 million priced on Wednesday. Borrower is Al Shindagha Sukuk Limited, Obligor Dubai Aviation Corporation. Its Maturity Date is 11/26/2019. Following are terms and conditions of the bond: Coupon 3.776 pct; Reoffer price Par; Spread 200 basis points; Underlying govt bond Over the midswaps, equivalent to 212.7 basis points over the 1.5 pct October 2019 UST; Payment Date November 26, 2014; Lead Manager(s) ENBD Capital , Credit Agricole & HSBC; Listing Nasdaq Dubai & Irish Stock Exchange.
CastleHill Capital, a fund with bases in the UK and Middle East, aims to launch its first shariah-compliant UK student accommodation fund in early 2015. The fund is part of the CastleHill Group, which runs student recruitment services in partnership agreements with over 50 universities. CastleHill Capital said it would leverage these strong relationships to offer high quality student accommodation in the UK. Clyde & Co, an international law firm, has been appointed on the role of advisory on the creation of the fund.
Indonesia's regulator has issued revised Islamic banking rules covering asset quality and capital adequacy to help clarify market practices, while industry growth has now dropped to single-digits. Indonesia's financial services authority, Otoritas Jasa Keuangan (OJK), announced the move on Wednesday as part of a package of 20 new rules, which range from corporate governance to microfinance. Authorities want Islamic banks to hold at least 15 percent of the market by 2023, but the sector's growth is stalling. As of September, there were 11 full-fledged Islamic banks and 23 Islamic business units in Indonesia with combined assets of 244 trillion rupiah ($20.1 billion), representing a 7.2 percent growth year-on-year.
The NBAD Islamic MENA Growth Fund has been named the Best Islamic Fund 2014 by Global Islamic Finance Awards. The Fund invests in a balanced portfolio of equities based on Islamic Shari’ah principles, with a view to achieve capital growth, primarily in the MENA. NBAD’s award-winning Asset Management Group, designed and manage NBAD Islamic MENA Growth Fund and various other products, which include conventional and Islamic offerings ranging from equity funds and fixed income funds to exchange-traded funds (ETF), structured products, and discretionary portfolios and advisory services. NBAD’s Asset Management Group manages assets in excess of AED 11.28 billion.
The Bahrain Businesswomen’s Society in collaboration with the UNIDO organized the “Women Entrepreneurship and Innovation” Conference which coincides with the Global Entrepreneurship Week in Muharraq. The forum aims to will inspire women entrepreneur’s participants to achieve their potential in business and train them to be innovative and take advantage of business networks and how to communicate with investors and sponsors, and how to discover new opportunities and possibilities. The Minister of Industry and Commerce Dr. Hassan Fakhro said that the number of individual institutions that belong to women in the Kingdom of Bahrain has increased by 10.3% in 2013 compared to 2012.
Five days long advanced training courses regarding Islamic insurance has started in the Russian Islamic Institute. Islamic Business and Finance Development Fund (IBFD Fund), Kazan (Privolzhsky) federal university, Russian Islamic University and LLC IC “Alliance Life” are organizers of the course. Important issues of nowadays are implementation of Islamic economic products at banking, insurance and other spheres, development of education in the scope of Islamic economy. Lecturers of the courses are worldwide recognized specialist at Islamic economy. Islamic insurance courses will continue up to November 21. Round-table of Islamic insurance implementation is going to be held on November 22.
EIIB-Rasmala, a Dubai-based investment bank and asset manager, is moving to buy the remaining 49 per cent of an associate company based in Egypt. The takeover of Rasmala Egypt Asset Management (Ream) follows new strategic initiatives for next year. EIIB-Rasmala is now opening discussions with potential joint venture partners to expand its investment activities in both Egypt and other parts of Africa, its chief executive Zak Hydari said. In November, EIIB-Rasmala announced it was finalising the launch of two leasing fund strategies and planning to expand its UAE property business. The Dubai investment bank also said it expected to raise about US$1 billion for its growing leasing and alternatives business and approximately $250m to invest in a broad mix of property transactions in the United Kingdom.
From 2008 to 2013, Bank Asya's assets and net revenue grew annually at 28 percent and 12 percent, respectively. Its reputation and business were soaring when, in December 2013 and without prior warning, President Erdo?an launched a powerful and concentrated attack on the bank, alleging that it was weak and insolvent. Despite losing almost half its market value during one excruciating week in September 2014 and reporting its first ever quarterly loss in 18 years of TL 301 million, Bank Asya has responded by highlighting its capital adequacy ratio of 18.3 percent. Ultimately, the solution to Bank Asya's current predicament ideally lies with President Erdo?an withdrawing his unfounded allegations.
Malaysia Building Society Berhad (MBSB) is planning a second issuance of its structured covered sukuk commodity murabaha programme. The proposed deal will come nearly a year after the government-owned company sold a debut RM495 million multi-tranche transaction via sole lead manager RHB Investment Bank. The second issue is targeted to raise up to RM700 million. MBSB is hoping to extend the tenors to 10 years in the new issue. The bonds are rated AA1, higher than the A2 corporate rating for MBSB. RHB will be leading the deal again, and may be joined by one or two other banks. The deal is expected to close by the end of the year.
The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will revise four of its standards in the first half of next year while expanding its guidance for Islamic bonds. AAOIFI's new secretary general, Hamed Hassan Merah, said the standard setting body is looking at the possiblity of developing clearer guidance on sukuk that will incorporate accounting, legal, technical and tax-related aspects. Besides, a revised investment accounts standard is to be released by the end of 2014. Consultations on takaful, ijara and murabaha will be conducted in the first half of 2015, AAOIFI said. On takaful, AAOIFI is considering how to extend its guidance to retakaful, and clarifying the definition of benevolent loans (qard hassan).
Kuwaiti firm Investment Dar is making a renewed legal push to secure ownership of a major asset at the centre of its long-running restructuring process. The case is a rare test of Kuwait's Financial Stability Law, introduced in 2009 to assist debt renegotiations. The firm has been embroiled in litigation over a stake in Kuwait's Boubyan Bank, which it sold to Commercial Bank of Kuwait (CBK) in 2008, with the right to buy it back. CBK currently holds a 19.9 percent stake in Boubyan. Investment Dar hopes to sell the stake to repay creditors. For its part, CBK said last week it cancelled a proposed 120 million dinar capital-boosting bond due to "legislative and technical issues".
Dubai Islamic Bank (DIB) and Air Arabia announced today the signing of an aircraft financing deal to facilitate the delivery of six new Airbus A320 aircrafts in 2015. The US$230 million Ijara facility will finance the delivery of a new aircraft every two months starting January 2015, the program culminating with the final unit being handed over by the end of the year. Air Arabia, recently named amongst the Global Growth Companies (GGC) by the World Economic Forum, has seen its route network expand rapidly in 2014 with the addition on new routes such as Cairo in Egypt, Antalya in Turkey, Tbilisi in Georgia, and Samara in Russia. The low-cost airline pioneer now serves 100 destinations from its four hubs in the UAE, Morocco and Egypt.
Bahrain-based Gulf Finance House has completed a capital reduction plan, a move that helps the Islamic investment firm to cut accumulated losses. It had received approval from the Bahraini authorities for the step, which reduces the nominal value of its shares by 13.8 per cent to $0.265 per share from $0.3075. As a result, paid-up capital had been reduced to $837.9 million from $972.3 million. Accumulated losses on GFH’s balance sheet had been reduced by $134.4 million under the measure. The reduction doesn’t involve any cash transfer and doesn’t impact on shareholder positions as the bank’s net equity remains unchanged.
The Thomson Reuters Global Sukuk Index is at 115.64836 points, up from 115.41158 at the end of last month and 109.78969 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 113.89345 points, against 113.67021 at end-October and 107.28036 at the end of 2013. The Indonesian government plans to issue global sukuk in the first quarter of next year, but no details have been provided on the deal. Besides, Pakistan plans to issue a U.S. dollar-denominated Islamic bond worth at least $500 million in November. Oman's government will make its first issue of rial-denominated sukuk for the domestic market as soon as in the first quarter of 2015; the issue may be worth the equivalent of around $300 million or $400 million, with maturities of five or seven years.
The GCC economies are dominated by Sovereign Wealth Funds that account for more than 30% of the global SWF assets, valued at $6tn, said Doha Bank Group CEO, Dr R Seetharaman. He was delivering the keynote address on “Uncertain times — can GCC banking take off?” at a conference hosted by the ICAI Abu Dhabi Chapter recently. Gulf SWFs have invested in a wide range of industries and high-risk assets with higher expected return. The assets under management growth in the GCC will be mainly driven by positive economic outlook, family businesses & entrepreneurship and the population demographics, Seetharaman said.
The Arabia CSR Network brings the GRI G4 training in the Arabic Language for the first time to the Arab world. The training will be held on the 17th -18th December in Dubai, United Arab Emirates. The move is a significant step for Sustainability reporting in the region and will support the regional and national strategies that call for organisations to report on their sustainability performance. The training course will be attended by multi-sectoral participants who will benefit from cross fertilization of ideas and experience. G4, GRI's latest sustainability reporting framework was released last year.
Saudi Arabia's Jadwa Investment says it is planning to invest in domestic real estate as it expands into new asset classes, hoping to cash in on booming demand for new homes. Tariq al-Sudairy, managing director and CEO of Jadwa, said the group will focus on the asset class and target major cities like Riyadh, Mecca, Madina. Jadwa would partner with real estate developers to select and execute projects on behalf of clients. Funds would be set up as projects were selected and the size of the investment would be determined on a case-by-case basis. Sudairy said private equity in the kingdom offered significant potential as well. Jadwa itself hopes to seal an unspecified deal as early as the first quarter of 2015.
This week, 40 young leaders from the World Economic Forum’s Global Shapers community will travel to the Vatican to hold a private audience with Pope Francis. They are there to respond to a question posed by the pontiff: how do we create a new global mindset that can overcome social and economic exclusion? The challenge of overcoming socio-economic exclusion is too large for governments, charities, non-profits and agencies to tackle alone. The private sector has played a crucial role in catalysing important advances in health, engineering, communications and technology.