GCC

#Saudi Arabia's Largest Bank Said to Hire #Investment Banking Head

Sameer Nawaz has been appointed head of investment banking at Saudi Arabia’s Al Rajhi Capital. Nawaz will be responsible for building an investment banking team at the securities division of Al Rajhi Bank. Previously, he was co-head of investment banking at Saudi Fransi Capital. Usman Sikander, who was co-head of investment banking at Saudi Fransi Capital with Nawaz, will become head of investment banking. Banks are hiring in Riyadh in anticipation of a boom in fees as the government ramps up efforts to wean the economy off oil. Elyas Algaseer, Mitsubishi UFJ Financial Group's co-head said that the bank was looking to hire in Saudi Arabia in expectation that privatizations in the country could exceed $350 billion in about five years.

DFSA launches #crowdfunding framework

The Dubai Financial Services Authority (DFSA) launched its regulatory framework for loan and investment-based crowdfunding platforms. The DFSA crowdfunding regulations have the ability to catalyse growth in the FinTech industry by targeting the specific requirements of crowdfunding platforms. The regulations ensure clear governance for FinTech businesses and provide appropriate protection for their customers. They also formalise the DFSA’s approach to regulating crowdfunding platforms which had operated since 2016. Data provided by the Khalifa Fund shows that approximately 50-70% of SMEs have had their applications for funding from conventional banks rejected. Crowdfunding is expected to grow further in importance in the UAE as entrepreneurs seek alternative sources of funding.

DGCX to launch region’s first Sharia compliant Spot #Gold contract

The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group have agreed to develop and launch the Middle East’s first Sharia compliant Spot Gold contract to be traded on an international exchange. This development is reflective of the growing potential of the Saudi Arabian and wider GCC regions Sharia compliant gold markets. Ayedh Bin Dejem, Chairman for the Group, said this cross-border collaboration offered access to the regional gold and commodities market. It provides customers with improved hedging and investment solutions in compliance with Sharia law. DGCX Chief Executive Gaurang Desai added that Amanie Advisors LLC, the leading global Islamic Finance advisory firm, have been selected to advise on the initiative. The launch of this product appealing to a wider range of investors in the region is an ideal way for the Exchange to extend its reach.

Abu Dhabi Global Market launches first #foundations regime in the #UAE

Abu Dhabi Global Market (ADGM) has launched a Foundations regime in support of more effective structures for wealth preservation and wealth management. The new ADGM Foundations regime provides a strategic platform for financial planning and structuring, serving as an alternative to trusts and corporate vehicles. The platform offers a variety of services, including family succession planning, tax planning, asset protection, wealth management and corporate structuring, without relying on foreign regimes and practises. Both local and foreign entities will benefit from the ease-of-doing-business environment. The ADGM Foundations Regime creates a new type of legal structure with its own distinct attributes. It combines compliance regime with a high degree of operational autonomy to the founder and offers access to the double tax treaty network of the United Arab Emirates.

#Merger set to create largest #takaful firm

The entire business of Solidarity General Takaful (SGT) is proposed to be transferred to Al Ahlia Insurance Company. The Central Bank of Bahrain (CBB) received separate applications from SGT and Al Ahlia. SGT has applied to transfer its business to Al Ahlia and be dissolved under article 66 of CBB Law. SGT, a subsidiary of Solidarity Group Holding, is aiming to consolidate its position through the merger. The combined entity, which would be named Solidarity Bahrain, will have a paid-up capital of BD11.2 million and an estimated 15% market share with 10 branches, making it the largest takaful company in the country. In order to facilitate the merger, Al Ahlia shareholders approved the conversion of the insurance licence from conventional to takaful. Last year, Solidarity acquired a majority stake in Bahrain Bourse (BHB)-listed Al Ahlia Insurance Company via an open offer in a deal worth BD10.7m. Officials had said then that Al Ahlia would continue to be listed on BHB.

Dana Gas bondholders could be liable for ‘unlawful’ #Sukuk

Holders of Dana Gas’s sukuk could be liable to repay the company excess on account profit payments. The company said it had sought legal advice on the matter. Advisers said that the terms of the Sukuk are not compliant with Shari’a principles and are unlawful under the laws of the United Arab Emirates (UAE). The company is now pursuing the litigation route to resolve the matter and is confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

Al Hilal Bank launches #child #safety campaign by distributing car seats to new families

Al Hilal Bank has distributed car seats for newborns at Danat Al Emarat Hospital for Women & Children in Abu Dhabi, as part of its new initiative for promoting child safety in the UAE. The Car Seat initiative forms part of the bank’s long-term Corporate Social Responsibility (CSR) programme. Alex Coelho, the CEO of Al Hilal Bank, said the Bank takes CSR very seriously and is proud to play a role in providing support to local families. Mohammed Ali Al Shorafa Al Hammadi, CEO & MD of United Eastern Medical Services (UEMedical) stressed on the importance of such campaigns in the UAE. Government led research found that the majority of parents still do not believe in the importance of car seats. An astonishing 34% saw no necessity to buy them, 28% do not know which seat to buy, while 15% believe that passengers holding children is safe enough. The new programme will be complemented by an extensive car seat awareness campaign on social media and across Al Hilal Bank branches, with the objective of reinforcing the importance of car safety for children.

#Saudi developer Jabal Omar to raise 4b riyals via #sukuk

Saudi Arabia’s Jabal Omar Development plans to raise 4 billion riyals (Dh3.91 billion or $1.06 billion) with local currency sukuk issues. Bank Al Bilad has been hired to arrange the fund-raising, but other banks are likely to have leading roles too. The developer’s flagship project, Jabal Omar, is within walking distance of the Holy Mosque in Makkah. It includes commercial malls, residential units and hotels over an area of 230,000 square metres. Saudi Arabia’s real estate sector was hit hard last year, with prices declining 8.7%, as a result of the government’s austerity measures after a slump in international oil prices. Jabal Omar missed in January last year the first repayment, worth 650 million riyals. It amended the terms of the loan in February 2016 to postpone the date, the first payment on the facility is now due in 2019 and the loan will mature in 2024. Jabal Omar has also borrowed 4 billion riyals in February 2015, then 8 billion riyals in September 2015. It is not clear whether the planned sukuk would be used as new funding or to refinance some of the company’s existing debt.

Tadhamon International Islamic Bank ratings affirmed

Capital Intelligence Ratings has affirmed the credit ratings of Tadhamon International Islamic Bank (TIIB), based in Sana'a, Yemen. The Bank’s Long- and Short-Term Foreign Currency Ratings (FCRs) are both maintained at 'C', reflecting the volatile operating environment and devastated economy. TIIB has confirmed to CI Ratings that it is not currently in default of any obligations. All ratings remain on a 'Negative' Outlook. The rating is supported by adequate liquidity. Real estate and other investments outside of Yemen represent around 40% of the balance sheet. The Support Rating is adjusted to '5' from '4' based on the low likelihood of support from shareholders and the authorities, and their ability to provide timely assistance.

Abu Dhabi Islamic Bank invests heavily in digital services

Abu Dhabi Islamic Bank (ADIB) plans to continue its current strategy based on prudence in risk management, coupled with innovation in customer experience and products. This approach is working: over the past two years, ADIB has attracted more than 100,000 new retail customers, taking its total to more than 950,000. In the first half of 2017, net profits rose more than 14.1% year-on-year to $307m. Total revenues reached $757m, up 4.1%. CEO Khamis Buharoon says the bank has now a balanced customer base, across Abu Dhabi, Dubai and the northern emirates, comprising UAE nationals, as well as Arab, Asian and Western expatriates. A number of new additions to ADIB’s range of retail and wholesale banking services are planned. According to Buharoon, ADIB's individual and corporate customer base will continue to grow and key factors remain digitisation and automation in branches.

Islamic finance and SRI share a lot of common ground

Socially responsible investment (SRI) and Islamic finance share significant common ground. Both spheres of investment demand the businesses chosen for investment are socially useful, not detrimental to humanity, and compliant with humanitarian ethics. SEDCO Capital has incorporated the Sharia-compliant investment approach with its responsible investment strategy and created the concept of prudent ethical investing (PEI). At the heart of PEI lie the environmental, social and governance criteria (ESG) that are integrated into financial analyses. SEDCO Capital is not only Sharia-compliant but also evaluates ESG aspects as part of its investment process. PEI is merging these two forces to embrace a more sustainable economic development model that is expected to attract non-Muslim SRI investors into the Islamic finance market.

ADGM and KPMG launch #FinTech Abu Dhabi Innovation Challenge

Abu Dhabi Global Market (ADGM) and KPMG have come together to launch the first FinTech Abu Dhabi Innovation Challenge on Oct. 22. The Innovation Challenge includes an intensive five-week program for innovative and mature start-ups to conceptualize and present market-ready solutions that address real business challenges in the Middle East, Africa and South Asia (MEASA) region. During the program, 10 finalist teams will work divided into six focus areas: Financial and Investment Management, Financial Inclusion, RegTech, Trade Finance, InsurTech and Private Capital Markets.The finalists will showcase their solutions at the FinTech Demo Day in Abu Dhabi to a panel of industry experts. Each finalist will benefit from mentoring sessions and fast-tracked consideration for admission to ADGM’s Regulatory Laboratory (RegLab) program. They will also win a $15,000 cash stipend to cover any costs associated with travel matters and accommodation.

ADIB recognised for CSR initiatives from UN Global Compact subsidiary

Abu Dhabi Islamic Bank (ADIB) has been awarded for its commitment to corporate social responsibility (CSR) from the regional CSR Network Consultancy, a member of the United Nations Global Compact initiative. The award was presented to Mohammed Al Fahim, Regional Head of Corporate Banking at ADIB. ADIB has a proven track record of CSR initiatives, including launching blood donation campaigns, sponsoring mass weddings and organising a range of activities during Ramadan. The bank adopted design principles aimed at minimising both energy and water inputs and waste outputs. In addition, ADIB Future’s Champions League was a recipient of the Gold Prize for the Best Sports CSR Initiative, and Bronze winner in the Youth Development Project of the Year at the 2017 Sports Industry Awards. ADIB also maintained its commitment to recruit, develop and promote local talent through its youth development programme.

Dana Gas #Sukuk: A red herring or cause for concern?

The recent move by Dana Gas to declare its approximately US$700 million of outstanding trust certificates unlawful has been a troubling development for the Islamic finance industry. Dana Gas has initiated proceedings in the UAE to declare the sukuk illegal and has secured a series of injunctions preventing enforcement by creditors, but the key question remains unanswered. That is whether non-compliance with Shari'a principles would have any bearing on the legal enforceability of these instruments. Any judgment in favour of Dana Gas could have wide ranging implications on the sukuk market. White & Case LLP argue that the concept of Shari'a-compliance should be treated as distinct from legal enforceability. Dar Al Sharia Legal & Financial Consultancy issued a pronouncement on the Shari'a-compliance of Dana Gas' sukuk at the time the sukuk were issued. Pronouncements of such nature are generally not open to retroactive invalidation as is being sought by Dana Gas.

#UAE Authorities Plan SMB #Crowdfunding Framework

United Arab Emirates (UAE) regulators are setting out to establish a framework to guide the small business (SMB) crowdfunding market. Reports noted that regulators are aiming to promote innovation and a broadening of small business activity. Equity crowdfunding is expected to provide $93 billion to small- and medium-sized enterprises by 2020, reports added. In the UAE, SMBs stand to gain significantly from that trend, as these businesses make up an estimated 85% of all UAE companies. In Dubai, that number is even higher, at nearly 95% of all businesses. Meanwhile, research from the Khalifa Fund for Enterprise Development found that as many as 70% of small business loan applications in the UAE are rejected by traditional banks. Ian Johnston, Chief Executive of the Dubai International Financial Services Authority (DFSA), said the DFSA was the first in the GCC region to formalize a tailored regime for loan and investment crowdfunding platforms, which represent an important source of financing for the SME sector.

Abu Dhabi's Al Hilal Bank issues $100million private #sukuk- sources

Abu Dhabi government-owned Al Hilal Bank has raised $100 million through a private placement of sukuk. The issue, led by First Abu Dhabi Bank, has a two-year maturity and offers 90 basis points over three-month London Interbank Offered Rate. The bank issued a privately placed $225 million sukuk in June last year, describing the deal as the first private placement of sukuk by a United Arab Emirates financial institution. That sukuk matures in January 2019, while the new $100 million issue is due on Aug. 14 of the same year. Al Hilal Bank is rated A1 by Moody's and A+ by Fitch Ratings.

New #cryptocurrency launches in Dubai, backed by real economic activity

The Malaysian company Farad launched its Farad cryptoken at the Dubai International Financial Centre (DIFC) on Monday. The CEO of Farad, Wan Hasni, said this was the first cryptocurrency backed by real-economy activity. The Farad cryptoken (FRD) is a digital currency, with each token representing the rights to the forward purchase contract of 80,000,000 ultra-capacitor cells produced by a Chinese company over a period of 36 months. According to company documents, at the time of initial coin offering (ICO), 1 FRD will be equivalent to $12.50. The pre-sale ICO will happen on August 25, and then on September 15 the full sale will begin. Around 1.2 billion FRD will be issued in the ICO, half during the pre-sale and half at the full sale, for a 10% premium. The ICO will be followed by roadshows in Asia and Europe to promote the business.

Islamic #FinTech Strengthens Ties with European Partners

Abu Dhabi Global Market (ADGM) has announced two new partnerships with non-profit organizations from London and Zurich. The first alliance is with the Swiss Finance and Technology Association (SFTA). The second one is the British think tank Responsible Finance and Investment Foundation (RFI). The Swiss partnership will strengthen the collaboration between local FinTech businesses and will provide new opportunities for knowledge transfer. ADGM also signed an agreement with the London-based RFI. Both parties will work together to assist young FinTech entrepreneurs in testing and introducing innovative products under the ADGM Reglab program. In addition to that, RFI and ADGM will also set up an open platform to share knowledge and expertise. According to Blake Goud, the CEO of RFI, FinTech can have a leading role in transforming the way Islamic institutions connect with their clients. In his view, this partnership can encourage and support emerging FinTech companies to adopt ethical, responsible and Islamic approaches.

Moody's granted licence to conduct credit #rating activities in the Kingdom of #Saudi Arabia

The Capital Market Authority (CMA) authorised Moody's Investors Service to conduct credit rating activities in the Kingdom of Saudi Arabia. Managing Director Monica Merli welcomed the announcement, emphasizing the Kingdom's increasing prominence in the debt capital markets. Saudi Arabia is a key market for Islamic finance, an area in which Moody's is recognised as a global thought leader through ratings, research and speaking engagements at leading conferences. The Kingdom completed the world's largest ever inaugural Sukuk issuance at $9 billion in April 2017, a transaction rated A1 by Moody's. Moody's currently rates 140 issuers and 92 debt programmes across the Middle East, including leading coverage in rating Islamic financial institutions and Sukuk.

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