GCC

#NCB Capital #launches Pan European #Real #Estate #Fund

NCB Capital, Saudi Arabia’s leading provider of wealth management and investment services, and the Kingdom’s largest asset manager, has announced the launch of its Pan European Real Estate Fund with more than $150 million raised through a private placement.
NCB Capital has partnered with Fidelity International, a leading global asset manager, to invest in commercial properties, including office, retail, logistics/industrial and mixed use, located in key European property markets including France, Germany, Benelux and the United Kingdom. Favorable currency conversion rates, robust legal and regulatory environments, coupled with consistent growth expectations of the core European economies make this an opportune time to invest in a solid real estate market.

#Fintech’s #power is in the unbanked and unbankable

Katharine Budd, the chief executive and co-founder of Now Money, a Dubai-based fintech start-up, explains how fintech works.
This is a new financial services phenomenon. While nowadays you might be able to operate your bank account from a website or mobile app, but the systems behind these online user interfaces have barely changed since they were implemented in the 1970s. The international payment transfer system Swift still runs on the telephone systems. This means that no matter how nice the front-end website your account is on, the transactions displayed are still run off legacy systems, which can lead to legacy issues such as delays in processing transactions and potentially losing the transaction in the system altogether.
New start-ups are innovating where banks are stagnating and are cooperating with regulators and cybersecurity experts and developing new technology. These organisations have become know as “fintechs” and their purpose can range from offering customers alternative ways to bank, usually through mobile, to using advanced analytics to provide investment recommendations.

#Aramco Plans to Raise #$3 #Billion in #Sukuk Sale

Saudi Aramco has plans that would raise 11.25 billion riyals (3 billion US-Dollar) from its debut Islamic bond. That would boost the size of the sale because of investor demand. King & Spalding Partner Rizwan Kanji weighs in on "Bloomberg Markets: Middle East."

#GCC sovereigns to lead emerging market #bond issues in #2017

GCC is expected to account for about 31% of sovereign bond issuances from emerging markets this year. The expected 2017 sovereign issues will be distributed among GCC, Eastern Europe Middle East Africa and Latin America, according to forecasts by Bank of America Merrill Lynch.
Issues from the GCC has been increasing rapidly mainly due to low oil prices, with some new issuers in 2016, and analysts expect the 2017 issuance to continue to be high. Among those, Kuwait inaugurated the external sovereign debt market with $8 billion (Dh29.3 billion) to finance a budget deficit resulting from low oil prices. Sovereign issuance for 2017 is forecast to be 6% higher compared to the previous year. In 2016, sovereigns issued $135 billion, mainly from Latin America, while corporates issued about $300 billion, mainly from Asia. Analysts expect gross sovereign external issuance to come in at $144bn in 2017.

#Merger of three #Qatari #banks to take six months

The merger of Qatari banks Masraf Al Rayan, Barwa Bank and International Bank of Qatar is said to take six months to complete, Masraf Al Rayan’s chairman Hussain Ali al-Abdulla said lately. In December Reuters had reported that merger talks had begun which, if successful, would create the Gulf state’s second-largest bank. The new bank would have assets worth more than 160 billion riyals ($44 billion).
KPMG and PricewaterhouseCoopers have been appointed as merger advisers, along with law firm Allen & Overy as legal adviser, and furthermore the Barwa Bank and International Bank of Qatar. Masraf Al Rayan’s shareholders approved the issuance of sukuk worth up to $2 billion to meet the bank’s liquidity needs. In January banks had been appointed to handle a debut sukuk issue of around $500 million, banking sources told Reuters that month, but Abdullah said on Sunday the timing of the issue had not been finalised. Asked whether the bank’s liquidity had been affected by low oil prices Abudullah said “liquidity now is better than in 2016” and that the U.S. Federal Reserve’s raising of interest rates last month would improve the profits of Qatari banks.

MIDEAST DEBT-#Saudi Aramco pays premium in debut #sukuk sale

Saudi Aramco is paying a significant premium to the government and to its previous borrowing in its first sukuk sale. Aramco is offering 7-year, riyal-denominated sukuk at 25 basis points (bps) over the six-month Saudi Arabian Interbank Offered Rate (SAIBOR). The private placement, part of a 37.5 billion riyal ($10 billion) Islamic bond programme, could be as large as about 6 billion. It is expected to take place early next week. Riyadh is restructuring the company and its regulatory environment to make Aramco attractive as an investment. But major decisions on the company's structure and its post-IPO dividend policy have not been announced. Alinma Investment, HSBC Saudi Arabia, NCB Capital and Riyad Capital are the joint lead coordinators. They are joined by GIB Capital, Samba Capital and Saudi Fransi Capital in dealer roles.

#Saudi Arabia considering changes to debut dollar #sukuk structure -sources

Saudi Arabia is considering whether to change the structure of its planned U.S. dollar sukuk issue, which would be the kingdom's first international sukuk issue. The structure would comprise a mudaraba agreement plus a murabaha facility. Potential changes to that structure are now under discussion to make the instrument more easily tradable and less complex to understand for international investors. So the structure may be changed to an ijara format, a lease-financing structure which is common among sovereign sukuk issuance around the world. The new issue would be Saudi Arabia's second international bond sale after a $17.5 billion debut conventional bond issue last October. Citi, HSBC and JP Morgan are global coordinators, BNP Paribas and Deutsche Bank are also involved with lead roles.

Dubai's Drake & Scull breaches covenants on #sukuk, other bank facilities

Dubai-based building company Drake & Scull said it breached financial covenants in relation to a sukuk syndicated facility and other bank facilities in 2016. The company incurred an annual loss 815.3 million dirhams ($222.01 million) last year as low oil prices and an economic slowdown hit the construction sector in the Gulf region. Drake & Scull was not able to comply with reporting requirements requested for a conditional waiver and therefore, breached financial covenants. These loans are now overdue on their principal and interest payments, and they are technically payable on demand.

Saudi Aramco to Price Islamic #Bond in $10 Billion Debt Push

Saudi Arabian Oil Co (Aramco) set final pricing for its debut Islamic bond as the company presses ahead with plans to raise $10 billion in debt. Aramco is selling debt with a seven year tenure in a private placement at 25 basis points over the country’s interbank offered rate. The oil giant is selling debt ahead of an initial public offering in 2018 as the country’s finance ministry plans to cut taxation on the company. The cut will boost Aramco’s net income by 300%, putting per-barrel income in a range similar to that of international oil companies. Aramco’s sukuk follows Saudi Arabia’s $17.5 billion bond issue in October, which was the state’s debut international debt sale. Saudi Arabia is also said to be planning a sale of riyal-denominated Islamic bonds to local institutions to help boost the country’s Islamic bond market.

#Bahrain’s sovereign wealth fund is back on track

Mahmood Hashim Al Kooheji, the head of Bahrain’s sovereign wealth fund, Mumtalakat, is intent on brokering safe, considered deals that yield long-term growth. The wealth fund is taking an increased interest in the comparatively stable sectors of healthcare, education and industry. As evidence of this strategy, Mumtalakat last year took an undisclosed equity stake in Italian healthcare firm KOS Group. In October 2015, Mumtalakat took a majority stake in UAE-based GEMS Education as part of an investment group that included US private equity firm Blackstone. Al Kooheji expects another deal to be reached next year to launch GEMS schools in Bahrain. He also points out that Mumtalakat announced six new deals in 2016, a significant number for a small fund. According to Al Kooheji, Mumtalakat is now truly diversifed in the GCC, US, UK and Europe and this will continue in the future.

#GCC #insurers’ gross premiums set to grow despite slowing economies

The insurance sector across the GCC is expected to report growth in gross premiums on continued growth in infrastructure investment and favourable regulatory changes. S&P Global Ratings analyst Emir Mujkic said gross premiums will increase in 2017 by around 30% in Kuwait, and by up to 10% in the other three markets. GDP growth will range between 1.5% for Kuwait and about 3.5% for Qatar. The Saudi Arabian Monetary Authority (SAMA) is expected to support the efforts of the traffic police to ensure drivers of illegally uninsured vehicles to buy motor coverage. There are currently 2.5 million Saudi nationals working in the private sector that are not covered by their employers’ group medical schemes.During 2017, the authorities will seek to prompt private employers to provide medical cover for all their staff.

QInvest’s income-generating #Ijara #fund oversubscribed

#Qatar’s QInvest has successfully launched its QInvest SQN Income Fund. It aims to pay out a net yield of 7% per annum on a monthly basis and has a targeted IRR of between 8-9%, with a tenure of 5 years. The Fund invests in the leasing and financing of business-essential, long-life, revenue producing equipment across developed markets. Industries include health care, manufacturing and agriculture. QInvest plans to launch another fund in the same series later this year. QInvest CEO Tamim Hamad Al Kawari said the new fund provides investors with concentrated portfolios with means of diversification and risk mitigation. It provides attractive returns and a regular income distribution, all within a relatively conservative investment profile.

GLOBAL #INVESTING: Why investors should look at Makkah hotels

Land prices in Makkah are higher than in downtown Tokyo or Paris, this ensures that five-star luxury hotel supply growth is the norm. Makkah is also at a macro inflection point since 25,000 three-/four-star rooms were demolished or reclassified by the Saudi authorities. The Saudi government intends to triple Umrah visas to 15 million by 2020 as per the kingdom's Vision 2030 policy. Makkah hotel investing is also attractive because the Makkah's religious tourism market is dominated by tour operators who pre-book rooms en masse and place a premium on new hotels. Makkah is unquestionably the world's most resilient, low-risk, price/demand inelastic, supply constrained, foreign capital inaccessible, secular growth hotel market.

DFM adds significant risks in Islamic finance on #hedging #standards

Dubai Financial Market (DFM) said it has officially published the final version of its Standard on Hedging against Investment and Finance Risks. This standard is the newest addition to DFM’s Sharia-compliant standards, which include Standard on Stocks and Standard on Sukuk issued in 2007 and 2014. The key amendments and add-ons to the draft of the standard are adding two types of risks, property risk and reputational risk. The amendment also emphasises the admissibility of the penalty clause only in Istisna, supply contracts and labour-lease contracts, excluding the contracts that result in a monetary debt owed by the debtor. It also emphasises the admissibility of the third-party guarantee in contracts of partnerships, Mudaraba and agency in investment, provided no link is made between this guarantee and the contract of partnership or Mudaraba.

BRIEF-Abu Dhabi Islamic Bank appoints Khamis Buharoun as acting CEO

On March 15 Abu Dhabi Islamic Bank appointed Khamis Buharoun as acting CEO. The appointment of acting CEO Khamis Buharoun is in context of CEO Tirad Marouf Al Mahmoud's medical leave.

Moody's: #GCC Islamic banks more profitable than conventional peers for second year running in 2017

According to Moody's Investors Service, the profitability of Islamic banks' in the Gulf cooperation Council (GCC) region will outpace that of their conventional peers for the second consecutive year in 2017. Islamic banks will maintain stronger margins in 2017, primarily as a result of their low funding costs, which reflect their reliance on stable current and savings account balances. Islamic banks also tend to have higher asset yields, given their focus on retail and the real estate related lending. Moody's expects that Islamic banks will retain a margin advantage of about 40 basis points over conventional banks in 2017. Moody's analyst Nitish Bhojnagarwala says conventional banks will continue to beat Islamic peers in terms of cost efficiency. Islamic banks are investing in branch network expansion, while conventional banks have already established their branch networks.

Arab Regulators #Conference: Regional firms slow to adopt global corporate government standards

The Arab Regulators Conference, hosted by the Arab Monetary Fund, took place on 8-9 March in Abu Dhabi. The two-day conference was an opportunity for regulators to engage in an open dialogue on how to strengthen the development of corporate governance across the region. The conference was attended by over 160 delegates from 17 different countries from both the regulatory and the private sectors. Abdullatif Al Othman, Chairman of Saudi Arabian Industrial Investments (SAIIC) highlighted the importance of corporate governance. He urged attendees to adopt the highest international standards of corporate governance, to help move the region from frontier markets to emerging markets to developed markets. This year, board diversity and women’s role on the board were also widely discussed as were governance trends and best practices.

#Bahrain's GFH banks says it may merge with Dubai's Shuaa Capital, others

Bahrain's GFH Financial Group may merge with Dubai-based Shuaa Capital, GFH said in a statement. A web of ties between GFH and Shuaa began forming last year. In May, Abu Dhabi Financial Group (ADFG) and GFH said they were jointly setting up an Islamic bank called ADCorp with initial capital of $100 million. In November, ADFG bought a 48.36% stake in Shuaa, which has a market capitalisation of about $535 million. In December, Shuaa bought 14% of Bahrain's Khaleeji Commercial Bank for $25 million. GFH owns 47% of Khaleeji. On Sunday, Shuaa said it would acquire Integrated Capital and Integrated Securities, both controlled by ADFG. Integrated Capital owns 11.74% of GFH. ADFG officials did not respond to requests for comment about the possible merger.

#Dubai: Low-income #housing policy to be introduced

A low-income housing policy will be introduced in Dubai, to provide housing units for individuals earning low income and renovate some old areas in the emirate. The Crown Prince of Dubai HH Sheikh Hamdan bin Mohammad bin Rashid Al Maktoum approved the policy. It will classify low-income people into Emiratis and non-Emiratis, including expats and workers, in strategic sectors in Dubai. The policy will also include families’ income levels, place of residence, and public benefits and will compare them with requirements and the extent of challenges families are facing. Sheikh Hamdan approved two main programmes. The first one aims to cooperate with real estate developers in order to provide housing units for low-income families while the second aims to refurbish some old areas in Dubai.

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