UAE

#FinTech Hive programme now includes Islamic finance

FinTech Hive at DIFC has announced that its upcoming programme will expand its themes to include insurance, Islamic finance, and regulatory technology services. This year’s cycle will welcome First Abu Dhabi Bank, Arab Bank, and Noor Bank as new Financial Institution partners, along with returning partners such as Abu Dhabi Islamic Bank, Citigroup, Emirates Islamic, Emirates NBD, HSBC, Mashreq, Standard Chartered, UAE Exchange and Visa. The participating Financial Institutions will partner with startups in a wide-ranging 12-week mentorship and networking programme. FinTech Hive at DIFC will also feature the Dubai Islamic Economy Development Centre (DIEDC) as a strategic partner again this year. In addition, FinTech Hive at DIFC will collaborate with Accenture’s FinTech Innovation Labs to connect regional innovators to the international FinTech ecosystem.

Green developments in Islamic finance

Increasing environmental awareness worldwide has seen a marked rise in the appetite for green bonds. Malaysia has been the market leader in the issuance of Green Sukuk, with guidelines issued in 2014 for socially responsible investment (SRI). These set out that the proceeds can be used to preserve the environment and natural resources, conserve the use of energy, promote the use of renewable energy and reduce greenhouse gas emission. Malaysia launched the world’s first Green Sukuk on 27 June 2017. The UAE's Green Growth Strategy was launched in 2012 to become a global hub and a successful model for the low carbon green economy. There will most certainly be challenges, like drafting of documentation acceptable to governments, investors and Shari’ah scholars. There is increasing appetite for environmentally friendly products and considerable potential in the UAE.

One year on: Al Hilal Bank CEO Alex Coelho

In this interview, Al Hilal Bank CEO Alex Coelho gives his regional and global assessment of market threats and opportunities. Coelho still lectures at New York University and those theoretical discussions help feed into the practical decisions he makes in his day job. He’s bullish about recent stock market volatility and doesn’t seem overly concerned at the possibility of the US economy overheating. Now he is more concerned by geopolitical rather than economic upsets. Coelho refuses to predict the future price of oil and sees no correlation between oil prices and their activity as a bank. He says this is due to government focus on diversifying output. He thinks Dubai’s Expo 2020 will have a positive effect on the UAE economy, as such events have high impact in economies that are in growth mode, such as the UAE and GCC.

#UAE's Sharjah Islamic Bank gives initial price guidance for dollar #sukuk

Sharjah Islamic Bank has given initial price guidance in the 160 basis points over mid-swaps range for a planned five-year dollar sukuk issue that has been capped at $500 million. The bank is expected to price the Islamic bonds later on Wednesday. The bank has appointed HSBC and Standard Chartered Bank as global coordinators and Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Noor Bank, and Standard Chartered Bank as joint lead managers and bookrunners for the issue.

The Fourth Amongst DFM's Series Of Shari'a-Compliance #Standards: Dubai Financial Market Invites Experts To Advise On Its 'Standard On Investment Funds'

Dubai Financial Market (DFM) released the draft of its "Standard on Investment Funds", the first of its kind all-inclusive standard. The DFM invited Islamic finance professionals to provide counsel and feedback on the standard. The consultation period will be concluded on 11 May 2018. Dr. Hussein Hamed Hassan, Chairman of DFM’s Supervisory Board said the Standard complements the DFM Standard for Issuing, Acquiring and Trading Shares. It comprehensively explains the two ways of Shari’a-compliant fund management, Mudaraba or an investment agency contract (Wakala bil Istithmar) and the circumstances stipulating that fund management is responsible to pay Zakat. It also defines the key disclosures that should be included in the financial statements.

#UK injunction restricts Dana Gas dividends in $700 million #sukuk dispute

United Arab Emirates energy firm Dana Gas received a new injunction from the English High Court restricting its ability to pay dividends or increase its debt. Sukuk holders have been trying to force the company to redeem the sukuk since last year. Dana said in late March that it would seek shareholder approval on April 11 to pay a cash dividend for 2017. The dividend would be worth 5% of capital or about 349 million dirhams (67.4 million pounds). But the English High Court order blocked Dana from making dividend payments unless it also sets aside money to redeem the sukuk. It also prohibited Dana from increasing its debt by more than $25 million.

DFSA hosts accounting standard-setters for Islamic finance

The Dubai Financial Services Authority (DFSA) recently hosted the International Accounting Standards Board (IASB) as part of a consultancy meeting. The Authority's involvement reflects its commitment to developing an effective and supportive regulatory framework for Islamic finance. The DFSA is a member of the Islamic Finance Consultative Group (IFCG), which focuses on challenges that may arise in the application of International Financial Reporting Standards (IFRS). The meeting was attended by IFCG members from Bahrain, Indonesia, Malaysia, Pakistan, Saudi Arabia, the UAE and the United Kingdom.

Dubai’s Damac said to hire Barclays, HSBC for possible #sukuk

Damac Properties Dubai hired banks for a possible sale of U.S. dollar-denominated sukuk. Hired banks include Barclays and HSBC and more banks will follow to arrange the debt sale, which may happen as soon as this month. Damac is the latest company in the Middle East looking to tap the bond market amid a busy start to a year for debt sales. Besides sovereigns like Saudi Arabia and Qatar, Sharjah Islamic Bank, Oman Telecommunications and Noor Bank are among those waiting to access capital in the next few weeks. Issuance from the Gulf Cooperation Council climbed to $22.8 billion so far this year, the second-best first quarter in at least 12 years.

#UAE's Dana Gas plans cash dividend despite $700 mln #sukuk dispute

Dana Gas plans to pay a dividend for 2017 despite its legal dispute with investors demanding that the company settles $700 million of sukuk bonds. International funds and local investors want Dana to direct its resources towards repaying that debt. Dana last year halted payments on its sukuk, saying the bond had become unlawful in the United Arab Emirates because of changes in Islamic finance. Dana has been in talks for months with creditors to restructure its sukuk. One of the proposals envisaged Dana redeeming 10% with cash and rolling over 90% under new terms. However, creditors want the company to redeem a higher proportion of the sukuk.

Corrected: Arkan Bank could tap investors for $200mln through Nasdaq Dubai listing

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $200 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

Arkan Bank could tap investors for $100mln through Nasdaq listing

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $100 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

Dubai Investments to launch sharia-compliant Arkan Bank

Dubai Investments will lead a consortium of investors to launch Arkan Bank. Arkan Bank is now applying to the Dubai Financial Services Authority for approval for a licence to operate as an Islamic financial institution. It plans to offer sharia-compliant banking services and investment products to serve ultra-high-net-worth individuals, corporates, and institutional clients. The bank has an initial paid-up-capital of $100 million and will have an authorised share capital of $500 million. Arkan Bank chairman Khalid Bin Kalban said the bank would initially focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank. The bank plans to list its shares on NASDAQ Dubai within 12 months of its establishment.

DIEDC to collaborate with #Turkmenistan bank

The Dubai Islamic Economy Development Centre (DIEDC) signed a Memorandum of Understanding (MoU) with The State Bank for Foreign Economic Affairs of Turkmenistan (TFEB) to exchange knowledge, experience and best practices in Islamic economy. The MoU was signed by Sultan Bin Saeed Al Mansouri, UAE Minister of Economy and chairman of DIEDC, and Rahimberdy J. Jepbarov, chairman of TFEB. The centre aims to organise workshops and training courses and share professional research. In addition, the two parties have set up a joint committee to oversee the collaboration. Al Mansouri said this partnership between DIEDC and TFEB would strengthen synergies between the two countries. He further highlighted sukuk as an effective tool to finance projects in infrastructure, education and health care, as well as in other vital sectors of the economy.

Sharjah Govt issues $1b #sukuk

The Government of Sharjah has issued a $1 billion (Dh3.67 billion) dollar sukuk on a 10 year maturity. The lead arrangers for the issue were Sharjah Islamic Bank, Dubai Islamic Bank, HSBC and Standard Chartered. Walid Al Sayegh, Director-General of Sharjah Finance Department, pointed out that the timing behind the issuance makes this the first sovereign sukuk issued in 2018 in the region. It is also the largest sukuk issuance by the government of Sharjah, which previously carried out two issuances. Al Sayegh said that the revenue from these sukuk would be used for infrastructure projects, as well as urban and financial development of Sharjah.

Islamic #fintech adoption is set to increase

According to experts, the adoption of Islamic fintech will soon see a global increase as nations focus on financial inclusion across emerging economies. At the 11th edition of Innovation Arabia, Mohamed Roushdy, founder of Fintech Bazaar, revealed that traditional fintech has been existing for long as a service provider supporting financial services, but not customers. When it comes to fintech adoption today, adoption is highest in Asia in emerging economies. China leads the way with 69% adoption, followed by India at 52%. In terms of financial inclusion, Roushdy said the situation looks rather bleak across many Muslim nations. According to the Global Findex Database, 71% of Muslims have no bank account. Professor Nabil Baydoun, vice-chancellor at Mohammed Smart University (HBMSU), said the importance of the Islamic economy is seen as a vital resource and a contributing factor in the transition to the post-oil economy. The 11th edition of the event is being held under the patronage of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai.

Dubai launches #incubator to boost ethical Islamic start-up firms

Dubai Airport Freezone Authority (DAFZA) has announced the launch of Goodforce Labs, a startup incubator focused on supporting ethical startups in the fields of Islamic economy and Halal industries. Goodforce Labs will select a group of startups and small and medium enterprises and support them towards a $50 million in annual revenues and measurable social impact. Most Islamic economy startups face many problems and struggle to grow and survive. A number of startups have joined the incubator like Growmada, an e-platform for selling handicrafts from developing countries, Waqf 2.0, a cloud-based platform for managing Awqaf, Zileej, a company specializing in disciplined entertainment products and Rabia Z, which designs modest women’s clothing.

Emirates to meet investors ahead of possible #sukuk issuance

Emirates airline mandated local and international banks to arrange a global investor roadshow ahead of a possible sukuk issuance. The carrier mandated Citi and Standard Chartered Bank as global coordinators and joint lead managers, alongside BNP Paribas, HSBC, J.P. Morgan, Abu Dhabi Islamic Bank, Dubai Islamic Bank, First Abu Dhabi Bank, Emirates NBD Capital, and Noor Bank as joint lead managers. Proceeds from the issuance will be used for general corporate purposes. Emirates did not disclose the size of the possible sukuk, but said it will be of benchmark size. The company has tapped the debt capital markets with four issuances since 2011 raising over $3.65 billion, over 50% of which has been from sukuk. The most recent aircraft order was for 36 Airbus A380s worth $16 billion and was made in late January. Delivery of the aircraft will begin in 2020.

Emirates Islamic Bank supports Rental Disputes Center initiatives

The Rental Disputes Center (RDC) has received a generous donation of AED 500,000 from Emirates Islamic Bank to support insolvent tenants in rental claims disputes. The RDC has already set up the "Yad Al Khair Committee" to study the cases that require support from the donation. Awatif Al Harmoodi, General Manager of Operational Quality & Processes at Emirates Islamic Bank, said Emirates Islamic Bank is keen to expand its corporate social responsibility strategy to cover all segments of the UAE and will continue to cooperate with the RDC.

Al Hilal Global #Sukuk Fund delivers 3.93% dividend

Al Hilal Bank has announced the dividend payout of the Al Hilal Global Sukuk Fund. The Fund, which was launched in March 2012, distributed a 3.93% dividend to all registered unit holders. Al Hilal Bank CEO Alex Coelho said the Fund had registered excellent cumulative total returns since its inception in 2012. Al Hilal Bank currently offers 3 open-ended mutual funds inclusive of the Global Sukuk Fund. In 2017, Al Hilal Global Sukuk Fund was awarded the title "Best Fund over 3 years", while the GCC Equity Fund received the "Best Islamic Fund" award in 2013 and 2014. The bank plans to continue launching investment products as part of its ongoing efforts to create value and increase diversification for its clients.

New Islamic start-up #incubator launched in Dubai

Dubai Airport Freezone Authority (DAFZA) has partnered with Dubai Islamic Economy Development Centre and venture firm Technolera to launch a new start-up incubator. Goodforce Labs is launched to help Islamic small and medium enterprises to reach $50m in annual revenues and a measurable social impact. It will help start-ups to start, manage and develop their businesses while providing support in areas including design, marketing, operations management and technology. DAFZA said there are more than 2,500 companies in the ethical Islamic lifestyle market but many struggle to grow and survive. Start-ups that have signed up to the incubator so far include handicraft e-commerce platform Growmada, cloud-based charitable endowment manager Waqf 2.0, disciplined entertainment product specialist Zileej and modest women’s clothing firm Rabia Z. Financial literary firm iWealth and halal food e-learning platform Smart Halal are among the other entrants.

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