UAE

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.

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.

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.

#Sharjah hires #HSBC to set up US #dollar #sukuk #programme

Sources say, the emirate of Sharjah has hired HSBC to set up a US-dollar sukuk programme because its government is looking into borrowing to reduce its budget deficit. A first issuance under the newly set sukuk programme is expected in the 4th quarter 2017 according to sources. HSBC has not yet commented on this. The government of Sharjah did not respond either.
Sharjah debted capital market before, having issued a $750 million 10-year sukuk in 2014 and a $500 million 5-year sukuk in January 2016. Sharjah is rated BBB+ by Standard & Poor's. The agency affirmed its credit rating and outlook last month, citing Sharjah' social and political stability, and the emirate's low external risks derived from its membership in the United Arab Emirates. The rating however is constrained by the emirate's limited monetary flexibility, due to the fact that the UAE dirham is pegged to the US dollar, and the underdeveloped domestic bond market, S&P said.

#Dana #Gas takes offer to #creditors off the table in $700m #sukuk row

Dana Gas has withdrawn an offer to creditors to exchange its debt of $ 700 million Islamic bond for new notes. Thereby ending the chance of a consensual resolution to a case that could shape the future of the global Islamic finance industry. The gas company is refusing to repay holders of its Islamic bond which matures in October. It said last month it had received legal advice that the bond was no longer Sharia-compliant in the UAE because of changes in Islamic finance interpretations over the recent years, and was therefore not lawful. But creditors say Dana has to pay them back and argue if the sukuk was legal when the deal was struck, it holds, and if it was illegal then it would mean the company is in default.

DIEDC opens nominations for 5th Islamic Economy Award

The Dubai Islamic Economy Development Centre (DIEDC) announced the commencement of nominations for the fifth edition of the Islamic Economy Award (IEA). The award is a joint initiative of DIEDC and Dubai Chamber of Commerce and Industry under the directives of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. The eight key categories of the Islamic Economy Award 2017 are: Money and Finance, Food and Health, Media, Hospitality and Tourism, Waqf and Endowments, SME Development, Islamic Economy Knowledge Infrastructure and Islamic Arts. In addition to the eight main categories, the Lifetime Achievement Award recognizes a notable individual, whose work over several decades, has inspired others and had a major positive impact on the Islamic economy.

Dana #sukuk: why the market is overreacting

The sukuk issued by Sharjah-based Dana Gas and recently denounced as non-shariah compliant will not damage confidence in the Islamic debt markets, as some have claimed. The gas provider's announcement in June that $700 million worth of its bonds are not compliant with shariah law in the United Arab Emirates (UAE) perplexed the market. The firm’s chief investment officer, Mohieddine Kronfol, said that the impact of this restructuring will be insignificant to the wider industry in the long-term. He added that Dana Gas is owed around $1 billion from Iraq and Egypt, Dana Gas is only one issuer in a global sukuk market with over 90 issuers. In his opinion, the media and public attention spent on Dana Gas is out of proportion with what has transpired so far.

Dana Gas describes UK court decisions on #sukuk as favourable

Dana Gas described decisions by the High Court of Justice in London as favourable, as the company seeks to restructure $700 million of outstanding sukuk. On July 5 the High Court upheld an injunction blocking holders of the bonds from enforcing claims related to the securities against Dana. The court ordered Dana to cancel an injunction in a court in Sharjah and to seek a stay of proceedings there. The company remains keen to engage with sukuk holders and reach an agreement on a consensual basis, which is not prevented by the injunctions in place.

Collaboration Between DIFC And DIEDC Set To Launch Islamic #FinTech

Dubai International Financial Centre (DIFC) signed a Memorandum of Understanding (MoU) with Dubai Islamic Economy Development Centre (DIEDC). Earlier this year, DIFC launched FinTech Hive, a 12-week accelerator programme which allows tech start-ups to test and develop FinTech related business ideas. As part of the agreement, the programme will include institutions such as Emirates Islamic Bank, Dubai Islamic Bank, and Abu Dhabi Islamic Bank, to mentor participants in the field of Islamic finance technology. Arif Amiri, CEO of DIFC said this MoU was an important step for FinTech, for the Islamic economy and for FinTech Hive. For his part, Abdulla Mohammed Al Awar, CEO of DIEDC, said FinTech Hive at DIFC will go a long way towards developing segments like mobile banking and payment systems, as well as SME financing.

Dana gas saga far from over

Last month, Dana Gas tried to impose on investors a restructuring of the payment of its two outstanding sukuk tranches totalling US$700 million. The company got an injunction in the High Court in London restraining sukuk holders from taking any hostile action against Dana. The overriding concern is that if the High Court in London rules against Dana Gas, the matter goes to trial and Dana Gas wins, it would set an appalling precedent that can undermine the integrity of sukuk as a fundraising instrument. Syariah advisories agree that the only solution would be the introduction of a world sukuk standard supported by local laws, an Apex Sukuk Standard, which would give legal and syariah certainty. Any dispute could either be subject to arbitration or recourse to law. Dana Gas re-scheduled yet another conference call with sukuk holders to discuss the matter. The High Court in London scheduled a hearing for September. This saga is far from over.

UAE's Dana Gas aims to propose new #sukuk terms in coming weeks

According to Dana Gas CEO Patrick Allman-Ward, the company aims to communicate proposed terms of a restructured sukuk issue in coming weeks. He spoke to sukuk holders in a conference call, but there was no question and answer session and no immediate response from creditors. In mid-June, Dana stunned creditors by announcing it would halt payments on its four-year sukuk because they no longer complied with changing interpretations of the Sharia code. Dana said it would exchange the sukuk for new Islamic instruments with lower profit rates than the existing paper. Investors and bankers are concerned that other sukuk issuers could imitate Dana in refusing to redeem paper on the grounds that it has lost its sharia-compliance. CEO Allman-Ward insisted that Dana's arguments did not apply to other, lawful sukuk formats. Dana's existing paper features profit rates of 7 and 9%. The new sukuk would provide profit distributions at less than half the rates. Sukuk holders are contesting the plan in courts in London and the emirate of Sharjah.

Amid Dana debacle, Islamic finance seeks safeguards against illegality claims

The Islamic finance industry is seeking ways to safeguard deals against challenges to their religious permissibility. Sharjah-based Dana Gas declared it would not make payments on $700 million of sukuk because Islamic finance standards had changed since the instruments were issued. This raised concern across the Islamic finance industry that more companies could avoid redeeming sukuk by adopting the same argument as Dana. To try to avoid similar cases in future, investors may demand more detailed and restrictive language in sukuk documentation. Such language already exists for some sukuk, but it is not used consistently and is not standardised. Investors may also screen the groups of scholars who provide sharia endorsements for sukuk. The newly formed high sharia authority for Islamic banking and finance is expected to set rules and a general framework for Islamic finance governance in the United Arab Emirates.

London court to hear Dana Gas #sukuk case in September

London's High Court plans to hold a full hearing in September on efforts by Abu Dhabi-listed Dana Gas to restructure $700 million of its outstanding sukuk. Dana Gas declared the bonds invalid last month, saying they were no longer compliant with changing interpretations of the Sharia law. The judge upheld an interim High Court injunction blocking holders of the bonds from enforcing claims related to the securities against Dana Gas. However, he imposed restrictions on asset sales by Dana and its ability to raise more debt or pay dividends. The case has worried the Islamic finance industry as it has raised the prospect that other firms could justify not honouring obligations by claiming sharia-based financial standards had changed.

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