GCC

#Qatar witnessing robust momentum in #fintech, says Sheikh Abdulla

According to Qatar Central Bank (QCB) Governor Sheikh Abdulla bin Saoud al-Thani, Qatar is witnessing a robust momentum in fintech. The country is opening up increasing opportunities for digital payments, money management, lending, loyalty and rewards, remittances, investments and advisory services. Sheik Abdulla said the QCB’s recently launched new strategy would need to ensure that fintech firms are enhancing the financial system. Although there have been some success stories, he said banks and insurance companies in the region have been slow to embrace innovation. The fintech industry in Qatar remains very small, but it has seen a few startups such as Hasalty. As a mobile application, Hasalty improves financial literacy for children supported by the Qatar Business Incubation Centre.

The First Investor acquires another #German asset

The First Investor (TFI) Qatar, a subsidiary of Barwa Bank Group has acquired a new office building in Frankfurt. The asset is another unique blend to TFI Euro Income Fund, which was launched in 2017 with sharia compliant stature. Europe continues to provide excellent investment and business environments given low inflation and low interest rate regime. TFI is keen to pursue its investment strategy with the aim to help clients achieve their objectives in a very challenging business environment. By that, TFI will soon launch another UK Income Fund and a US Income Fund together with many investment opportunities during 2018.

#Qatar’s QR25bn worth #sukuk to mature soon

Almost half of Qatar’s outstanding sukuk, worth of over QR25bn, will mature in 2018. With the ongoing growth of Shariah-compliant institutions, new issuances are vital. If no sukuk are issued in the country to replace the maturing ones, Shariah-compliant investors might look to other sukuk investments outside Qatar. According to the joint research of Qatar Financial Centre (QFC), Thomson Reuters and Islamic Research and Training Institute (IRTI), retail sukuk remains an untapped segment in most of the countries in GCC. Qatar can capitalise on selling sukuk to the retail market to promote both the primary and secondary capital market. Financial institutions have been leading corporate issuance in the GCCIn Qatar, Ezdan Holding Group is the only corporation outside financial institutions to issue sukuk. Ijarah continues to be the most popular sukuk structure in Qatar. However, Qatari corporate sukuk have all been issued based on wakalah structure, which has been gaining popularity in the recent years.

Head of Islamic finance body AAOIFI resigns

The head of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has resigned. Hamed Hassan Merah presented his resignation after more than three years and the board of trustees accepted it. As a complex organisation with 200 institutional members from across 45 countries, the AAOIFI had been slow to respond to issues relating to conflicts of interest and product standardisation. Under Merah, the AAOIFI tackled such issues head on, launching a review of its accounting, auditing and sharia standards. In November, Merah said AAOIFI would now prioritize wider adoption of its standards by engaging national regulators in key markets, including Turkey and Malaysia. Saudi Arabia’s central bank joined AAOIFI as an institutional member in October 2017.

#Saudi bank #merger presses ahead after delays

The proposed merger of Saudi British Bank (SABB) and Alawwal Bank has been delayed but not derailed. The two banks announced in April that they had agreed to start talks, but progress has since faltered because of the complexity of the deal. Progress on the SABB-Alawwal merger has taken longer than expected because the regulatory environment for bank acquisitions in Saudi Arabia is relatively untested. Meanwhile, dozens of princes, high officials and senior businessmen were detained in November in a corruption crackdown. Among those was SABB vice chairman Khalid Bin Abdullah al-Mulhem. Almost all banks in Saudi Arabia were affected by the crackdown when authorities ordered the freezing of more than 2,000 accounts across the sector. A merged Alawwal and SABB would rank as the third-largest bank in Saudi Arabia with assets of $77.6bn, behind National Commercial Bank and Al Rajhi Bank.

Finance Minister: #Qatar's Islamic Banks is the third largest contributor to global growth in Islamic Banking

According to Qatar's Finance Minister Ali Shareef Al Emadi, Qatar's Islamic Banking sector is the third largest contributor to global growth in Islamic banking. At the 4th Doha Islamic Finance Conference, the Minister called for continued growth in the Islamic finance sector through concerted efforts to confront financial risks. The Minister noted that Islamic finance accounts for 50% of banking services in the GCC, where most GCC citizens prefer Sharia-compliant banking services. More and more international universities are adopting programs in Islamic finance, including the Master of Islamic Finance at Hamad bin Khalifa University in Qatar. The rapid growth of electronic financial transactions have brought new challenges requiring further cooperation, coordination and discussion. New products require the development of clear frameworks. Al Emadi added that increasing transparency in this field will help Shariah scholars to identify the correct structures and it will enable banks to make these products more attractive.

Sharjah Islamic Bank issues #Sukuk to raise $72.47m

Sharjah Islamic Bank (SIB) has successfully completed the issuance of Dh266.8 million worth of Sukuk convertible into equity of the bank to the Sharjah Social Security Fund (SSSF). SIB chairman Abdul Rahman Al Owais announced that income generated from the bank’s dividends will be used for uplifting social activities in the emirate. The Ruler of Sharjah nominated an entity engaged in endowment activities to subscribe to Sukuk equal to 10% of SIB’s capital and converting it into equity for the bank at a nominal value of Dh1 each. Al Owais expects that the capitalisation ratios will be strengthened by around 100 bps with the issuance of this capital. He added that by virtue of this exercise, SIB’s shared capital has increased from Dh2,668,050,000 to Dh2,934,855,000.

#Bahrain-headquartered investment firm buys controlling stake in Mentor-based MC Sign

Bahrains's Arcapita has acquired 75% interest in Mentor-based signage and lighting services firm MC Sign. The deal is worth more than $100 million. Atif A. Abdulmalik, Arcapita's CEO, said the company was well positioned to acquire market share in a highly fragmented industry that is dominated by locally-focused, sub-scale service providers. Arcapita's investment in MC Sign reflects the firm's global presence, with offices in Bahrain, Atlanta, London and Singapore. The investment firm has been active in the Middle East too. In October 2017, the firm partnered with Bahrain's sovereign wealth fund Mumtalakat to acquire 90% stake in Abu Dhabi's NAS United Healthcare Services. This was preceded by another deal through which Arcapita acquired logistics assets worth $150 million in Dubai.

Global #sukuk issuance jumps 45.3% to $98bn in ’17: S&P

According to Standard & Poor’s (S&P), global sukuk issuance increased 45.3% year-on-year to $97.9bn in 2017. This performance was primarily driven by good liquidity conditions in the Gulf Cooperation Council (GCC) countries. S&P head of Islamic Finance, Dr Mohamed Damak said the outlook for sukuk in 2018 looked uncertain. He added that tighter global liquidity conditions, mounting geopolitical risks and slow progress on the standardisation of Islamic finance products would continue to hold the market back. The US Federal Reserve is expected to increase rates by 75 basis points. Central banks in the GCC countries would probably mirror such an increase due to the peg of their currencies with the US dollar. Regarding retail sukuk, the agency believes that development of this part of the market necessitates a specific regulatory framework. Retail sukuk issuance has been successful in some countries where authorities provided a tax incentive to drain a portion of the savings toward this market.

#Qatar needs to develop regulatory framework to cement Islamic finance lead: QFC

According to a Qatar Financial Center (QFC) study, Qatar needs to reform interbank liquidity management to study leakages from Islamic banks through interbank finance. Moreover, there is also a need to develop a regulatory framework and promote green bonds and sukuk. So far Qatar has led the world in ensuring in the authenticity of Shariah-compliant bank assets with Qatar Central Bank and the QFC Regulatory Authority requirements separating Islamic and conventional banks. To ensure this segregation, there should be a review of interbank markets to limit flows from Islamic banks to conventional ones in their liquidity management operations using 'Murabaha'. The report also stressed the role of a centralised guidance on fit and proper criteria for Shariah scholars and promoting Fintech development.

MAG Lifestyle Development to accept Sharia-compliant OGC for #property

#UAE-based MAG Lifestyle Development has announced that it will accept OneGramCoin (OGC) as payment for real estate it sells. This move offers real estate investors an opportunity to utilize their digital assets while also welcoming OGC into the mainstream with a practical application in the property sphere. Bitcoin and other digital currencies are struggling to enter the mainstream in the Middle East, where the fundamentally speculative and high-risk character of cryptocurrencies does not go with the local investment culture. As the first Islamic Sharia-sanctioned digital currency, OGC is entering to fill this void. Each OGC is supported by a gram of gold, something that makes sure the cryptocurrency stays capitalized and stable. According to MAG, trade will go live in June 2018. Investors will buy OGC to the price of the property and get a 5% discount on the property cost consequently. OGC will then go to MAG based on the payment plan, which is 35% over six to nine months and 65% on completion at 2019’s end.

Islamic #FinTech in 2018

2018 may prove to be a pivotal year for Islamic finance stakeholders and their approach to developments in FinTech. Potential areas for FinTech are remittances, insurance, investment advisory services and online trading. In the coming years, demand from consumers is expected to give rise to the faster adoption of these technologies. Instead of mirroring conventional financial products, commentators see the opportunity to provide genuine Islamic-compliant alternatives to the traditional banking model. In December 2017, KFH Bahrain, Al Baraka Banking Group and Bahrain Development Bank announced the establishment of ALGO Bahrain. It will be dedicated to research and development in the Islamic-compliant FinTech sector. In addition, the largest FinTech hub in the Middle East and Africa will open in February 2018. The new hub named Bahrain FinTech Bay is operated by Singapore-based fintech incubator FinTech Consortium.

#Zakat Fund aid amounted to QR13.6m in December

Qatar's Ministry of Endowments and Islamic Affairs provided zakat to the needy families, the zakat totalled QR13,624,806 last December. The aid was distributed to the beneficiaries, including the permanent aid provided monthly and the irregular aid, which is related to specific needs and emergency conditions. The funds were distributed according to Shariah and after comprehensively researching each beneficiary case and undergoing a social and field research. The cases are then presented to specialised committees, who meet daily and assess the cases, guaranteeing the delivery of assistance to beneficiaries in need.

Emerging Markets: Middle East debt markets roll with the punches

The Middle East faces a very tricky 2018. War rages in Yemen. Qatar and its neighbours are at loggerheads, in an inter-Gulf feud without precedent. Saudi Arabia is purging its princes. But bond and loan markets are placid. Overall borrowing in the region in 2017 came in at a much higher level than before the oil price fell in 2014. The feeling across the capital markets is firmly that although the region poses risks, it is also rife with opportunities for 2018. One country where that optimism might not be so high is Qatar. The political turmoil in the region has reined in debt capital market bankers’ enthusiasm about Qatar, once the jewel of the Middle East capital markets. On June 5 last year, Saudi Arabia, the United Arab Emirates, Bahrain, Yemen, Egypt and Libya cut diplomatic ties with Qatar and installed sanctions over allegations of the emirate’s links to terrorist groups. In December 2017, Qatar National Bank and Commercial Bank of Qatar approached the international loan market. Now banks are brushing their concerns aside and bankers are more optimistic about Qatar’s funding capability.

A #bond dispute threatens the future of Islamic finance

Dana Gas stocks rose by 13.2% on Christmas Day 2017, to complete a buoyant six months for the stock. This may be due to the company's arbitration victory against the regional government of Iraqi Kurdistan, over $2bn it and its consortium partners are owed in overdue payments. It also hints at shareholders’ belief that Dana will not be forced soon to satisfy its own creditors. The firm refused to honour its $700m sukuk bond claiming that it no longer complied with sharia law, therefore was 'unlawful' in the United Arab Emirates (UAE). In November a British court ruled that the company had to pay. The judges said that, because the bond was issued under English law, it had to be viewed on its merits under that law alone. The risk of non-compliance in the UAE, they argued, must fall squarely on Dana. The Islamic-finance industry cheered this ruling. However, to get hold of Dana’s domestic assets, creditors need a new ruling from the UAE courts. The Dana saga is a reminder not just that Islamic finance still lacks shared standards, but also that court judgments help creditors only when they are enforceable.

Islamic #insurers to #refocus on profitable segments

Improving insurance profitability is expected to result in Islamic insurance players refocusing their sectors. According to Moody’s analyst Mohammad Ali Londe, the motor and medical insurance sector have benefited most from the recent premium rate increases in Saudi Arabia and UAE. Therefore, Moody's expects Takaful operators to refocus their underwriting and servicing operations on these lines. Previously, weak underwriting results in the core medical and motor lines forced Takaful insurers to widen their product offerings. GCC Takaful insurers’ results for the first nine months of 2017 reveal that underwriting profitability has improved in most countries. In UAE, motor premium rates rose in 2017 as a result of the country’s new unified motor policy which provides standardised coverages. The improvement in Takaful insurers’ underwriting profitability has started to reverse the previous deterioration in their capital adequacy.

QIIB high ratings by Moody’s, Fitch reflect #Qatar’s economic strength, says Al-Shaibei

QIIB announced that Moody’s and Fitch Ratings have affirmed its ratings at 'A2' and 'A' respectively. Moody’s said that its rating is based on several considerations, one of which is that the bank maintains high levels of liquidity and a strong capital base. Fitch explained that immediate risks from the diplomatic crisis to the bank’s overall standalone credit profile has reduced. The bank’s funding profile has generally stabilised from the back of outflows of nondomestic funding and the Qatari authorities have continued to provide funding support. QIIB's CEO Dr Abdulbasit Ahmad al-Shaibei said this strong rating was a confirmation of the strength of the Qatari economy and its ability to overcome various types of risks. He added that the ratings of Moody’s and Fitch proved that QIIB had a solid financial position, confirmed by its financial results, as in the third quarter of 2017, when the bank achieved a growth of 5.1%.

Ibdar Bank: Islamic #fintech will foster a culture of change

In this interview Ayman Sejiny, CEO of Ibdar Bank, speaks about the future of Islamic finance. Ayman Sejiny believes that fintech is going to be one of the biggest drivers of change in the new Islamic banking era. Fintech initiatives will not only improve existing customer’s banking experience, but also have the potential to bring the two billion financially-excluded individuals into the banking system. Malaysia, Indonesia, the UAE and Bahrain, driven by an influx of start-ups in the crowdfunding and payment space, have already positioned themselves to lead the field. They started to formally regulate crowdfunding and implement sandboxes or special fintech licencing schemes. These markets should therefore see huge growth in crowdfunding, P2P and payments platforms and even an increase in the use of AI in the form of robo-advisers. The UK and even the US will also see more investment in fintech startups to meet the demand for Shari’ah products in these markets. Ibdar Bank has set out a comprehensive plan for the engagement with fintech service providers.

#Qatar plans central Shariah committee for Islamic banks

Qatar is planning to set up a central Shariah committee for Islamic banks to create consistency in Islamic finance. According to Central Bank Governor HE Sheikh Abdulla bin Saoud al-Thani, this move ensures that the country’s financial regulations are benchmarked to international standards. A recent report by the World Bank and the Bahrain-based General Council for Islamic Banks and Financial Institutions suggested further action by regulators to strengthen the sector’s governance. One of the action points of the Qatar Central Bank (QCB) is assessing remuneration and commission framework of financial advisers and insurance intermediaries and implementing an appropriate conduct of business regime. In 2016, the QCB issued new regulations for insurers on licensing, controls, accounting, risk management and actuaries’ reports and also stipulated minimum capitalisation levels and limits on risky asset classes. QCB's new strategy is looking at supporting the growth of the asset management sector through aligning requirements across regulatory frameworks.

#ICD and #Afreximbank #sign $100m line of #financing #deal

The Islamic Corporation for the Development of the Private Sector the private sector arm of Islamic Development Bank Group and the African Export-Import Bank signed a line of financing agreement for a $100-million facility on December 24th in Jeddah.

The $100-million line of financing facility will be utilized by Afreximbank to provide Shariah-compliant financing to small and medium-sized enterprises in its member countries in Africa. Afreximbank has a solid pipeline of projects in the industrial, communication, technology, health care, construction and agricultural sectors that would be financed by the ICD line of financing.

Source: 

http://saudigazette.com.sa/article/524858/BUSINESS/ICD-and-Afreximbank-sign-$100m-line-of-financing-deal

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