GCC

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

#Al-Rajhi #REIT #shares to go on #sale next week

Al-Rajhi Capital said, the initial public offering period of Al-Rajhi REIT Fund will run from Jan. 1 to Jan. 14. The fund will have a size of $ 282 million, according to the fund manager. Some 42.67 million units will be offered to investors at SR 10 each.
“The Sharia-compliant fund aims to acquire or invest in income-generating commercial, office, and educational assets, as well as warehouses, which are mainly located in the Kingdom, except for Makkah and Madinah,” was said in a statement.
The preliminary portfolio comprises 13 assets that generate income at the end of January and July of every year.
The fund’s assets are spread across various sectors in the Kingdom: Retail 54 %, warehouses 12 %, offices 26 % and education 8 %. Eligible investors are Saudis, GCC nationals, foreigners residing in the Kingdom, institutions, companies, and investment funds operating in the Kingdom, along with other Qualified Foreign Investors.

#Gulf #Islamic #Investments acquires two logistics facilities

The Gulf Islamic Investments, a Islamic financial services company based in the UAE, has revealed the acquisition of nearly one million square feet of logistics facilities on behalf of its investors, at the price of 144 million US-Dollar. The two state of the art logistics centres, are located in Dortmund Germany, and serves as key logistics centre of Amazon supplying goods to 29 other facilities. These newly built facilities are leased out to Amazon on a long-term lease that cannot be cancelled with regular rental uplifts linked to Germany CPI.

Islamic #insurance #merger creates #UAE giant

Takaful Emarat has agreed to acquire Al Hilal Takaful from Al Hilal Bank. The all-cash transaction will create the largest Islamic insurer in the UAE. The move is viewed as part of a consolidation drive in the Gulf’s takaful sector to offset weak profitability. Mohammad Al-Hawari, managing director of Takaful Emarat, said the deal would drive growth through a wider range of takaful services and a larger customer base. The merger is subject to full regulatory approvals and is scheduled to be completed in the first quarter of 2018. The transfer of Al Hilal Takaful’s ownership to Takaful Emarat will have no impact on current takaful policies, contracts, claims settlements or the writing of new insurance business.

Dubai: MAG to sell #property via Sharia-compliant OneGram

Dubai's MAG Lifestyle Development will offer customers the opportunity to purchase properties using OneGram, the first Sharia-compliant crypto-currency. Talal Moafaq Al Gaddah, CEO of MAG Lifestyle Development stated that customers will benefit from the growing potential of crypto-currencies with OneGram. Each OneGram Coin (OGC) is backed by a gram of gold, which ensures that it remains a fully capitalised and stable digital currency. In compliance with Islamic Sharia law, it is also zero interest, profit-loss sharing, and non-speculative as it is pegged to gold. OneGram is also simple to buy and trade and will go live in June 2018. Mohammed Ibraheem Khan, co-founder of OneGram said this was the first real-world application for OneGram and the company was proud to be taking this step with MAG Lifestyle Development.

#Iranian Private Banks Secure #Qatar Foothold

Several major Iranian private lenders have recently established correspondent relations with Qatar National Bank (QNB). Kourosh Parvizian, CEO of Parsian Bank, said these banks opened accounts with QNB and are prepared to offer financial services to Iranian and Qatari businesses. QNB governor Sheikh Abdullah Saoud Al-Thani said Qatari lenders will make efforts to remove trade obstacles quickly. The Iranian delegation in Doha held a meeting with officials from QNB, Al Rayan Bank and Al Khaliji Bank. They discussed using local currencies in bilateral trade and taking speedy measures to ease trade between the two countries. Bank Melli Iran is also holding talks with one of the largest banks in Qatar for establishing correspondent ties.

Dana Gas says appeal against BlackRock joining #sukuk trial rejected

The English Court of Appeal has refused Dana Gas' appeal against fund manager BlackRock to participate in English court proceedings. Dana is refusing to redeem its $700 million outstanding sukuk on the grounds that they are no longer sharia-compliant and therefore unlawful in the United Arab Emirates. Courts in both Britain and the UAE are hearing the case. On November 17 the English High Court ruled in favour of the sukuk holders. Dana plans to set aside this judgement on the grounds that the company was not permitted to represent itself in court. Regardless of the result of that application, additional legal proceedings in England are expected.

Ratings scheme planned for #Islamic #endowments

Islamic institutions in Bahrain and Malaysia are developing a ratings scheme for Islamic endowments, or awqaf. The Bahrain-based Islamic International Rating Agency and the Malaysia-based International Institute of Islamic Waqf (IIIW) hope that greater accountability in the management of awqaf can help integrate them into Islamic financial markets. This could mobilize idle assets which are estimated to be valued between $100 billion and $1 trillion across the globe. Awqaf operate social projects such as hospitals, mosques and schools with donations received from Muslims. Most Awqaf do not disclose financial figures, but their underperformance is believed to be considerable since they have traditionally been run by administrators rather than investment managers.

#Bahrain to launch compulsory risk regime for Islamic banks

The Central Bank of Bahrain (CBB) will publish a consultation on a proposed risk assessment framework for Islamic banks in the first quarter of 2018. Khalid Hamad Abdul-Rahman Hamad, director of banking supervision at CBB, said the bank was planning to issue a very detailed risk management toolkit to improve risk management practices taken by Islamic banks. Under the proposed new rules, banks are required to have proper reserves, be it profit equalisation reserves or investment risk reserves. Whenever banks are investing, they must have a pre-plan regarding how much of bank assets will be funded by unrestricted investment accounts and how much will be invested from funds.

GFH in $150m deal to sell assets to global private schools operator

Gulf Finance House (GFH) has struck a $150 million deal to sell part of its educational assets to a global private schools operator called Inspired. Inspired runs private schools in Europe, Africa, Latin America and Australia. Hisham Al-Rayes, CEO of GFH, said Inspired’s network and experience would add significant value to the schools. This way, both students and teachers will take part in exchange programs and benefit from the latest programs to enhance the level of education. Inspired has schools in Italy, the UK, Switzerland, Belgium, South Africa, Kenya, Australia, Colombia and Peru. GFH’s businesses include asset management, wealth management, commercial banking and real estate development.

MIDEAST DEBT - #Sukuk documents seek to reassure investors after Dana Gas scare

Sukuk issuers are changing the language in documentation for new issues to reassure investors after Dana Gas refused to redeem $700 million of maturing sukuk. Dana Gas said it would not repay sukuk maturing in October because changes in the interpretation of Islamic finance had made the bonds unlawful in the UAE. Issuers are now amending their documentation to preclude the use of this argument. According to Mohamed Damak, global head of Islamic finance at Standard & Poor's, clauses seeking to reduce sharia compliance risk have become normal in the global industry, but the complexity of sukuk makes it difficult to remove the risk entirely. According to Mohammed Khnifer, senior associate at the Islamic Development Bank, sukuk holders and issuers will now rely more on English law and avoid local laws with dollar-denominated issuance.

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