Saudi Arabia

#Saudi refinance firm mulls #Sukuk issuance to fund mortgage drive

The Saudi Real Estate Refinance Company (SRC) plans to begin issuing sukuk in late September or early October 2018. SRC aims to refinance 20% of Saudi Arabia's primary home loans market, which authorities hope to expand to SAR 500 billion by 2020. Currently Saudi Arabia’s primary home loans stands at SAR 290 billion. Fabrice Susini, CEO of Saudi Real Estate Refinance Company, said that the company will now begin issuing Sukuk to raise money, first in Saudi riyals but eventually in foreign currencies. The company was founded in 2017 by the Public Investment Fund (PIF) and has so far operated with financing from the sovereign wealth fund and short-term deals with banks.

Saudi-based ITFC, Federated Investors to launch $300 mln trade finance #fund

The Saudi-based International Islamic Trade Finance Corp (ITFC) plans to launch a $300 million fund alongside U.S. fund manager Federated Investors. The sharia-compliant fund is expected to launch later this year and would invest in energy-related structured trade, supply chain financing and project finance assets of sovereign entities. The fund will be managed by ITFC with input from Federated Investors. The two firms have worked together on Islamic trade finance transactions since 2014.

#Saudi Arabia’s first #sukuk issuance through primary dealers positive for Islamic capital market development

Saudi Arabia announced the completion of its first sukuk issuance under the primary dealers program. The Saudi government has been a regular issuer of Islamic bonds since the Ministry of Finance established a Saudi riyal-denominated sukuk program last year. In the new primary-dealer system, the Saudi debt management office appointed five local banks to act as primary dealers for local government securities, namely National Commercial Bank, Samba Financial Group, Saudi British Bank, Bank Al-Jazira and Alinma Bank. The appointed primary dealers purchase sukuk sold at auction directly from the government and later place these securities in the secondary market for final investors, acting as market makers for government securities. The government expects that the primary-dealers scheme will develop the local government sukuk market and the debt capital markets in Saudi Arabia.

New Saudi bankruptcy law 'tries to find balance' between investor and creditor interest

Saudi Arabia’s new bankruptcy law will come into effect in late August and aims to attract foreign and domestic investment in private businesses. The new law is designed to outline bankruptcy proceedings and will offer protection to creditors and embattled companies seeking to conduct their affairs without fear of asset seizure. According to lawyer Dario Najm, an associate in Ahmad bin Hezeem & Associates, the new law allows indebted corporations to maintain their operations while gradually settling their debts. Creditors and debtors will enter into agreements on debt payment schedules. When implemented, the law will be the sole regulation covering bankruptcy, effectively replacing previous rules passed in 1996.

Blockchain platform-as-a-service for Islamic finance launched

Blockchain experts ArabianChain Technology and Curiositas will offer blockchain-based smart contracts and legal automation for Islamic finance products. The 'Wethaq' platform is targeting Islamic capital markets, acting as a platform-as-a-service for financial institutions, fundraisers and investors to use in the trading of sukuk products. Wethaq is expected to see issuance of its first Smart Ijara in the first half of 2019. The joint venture will combine Curiositas' legal automation and financial engineering expertise with ArabianChain's Distributed Ledger Technology (DLT) Protocol and smart contracts. According to Dimitrios Vourakis, Managing Director of Curiositas, Wethaq separates the essential structuring services provided by financial institutions from additional services such as custodianship and payments, and offers the latter on its automated platform.

#Saudi securities regulator awards first two #fintech licences

Saudi Arabia's securities regulator approved its first two financial technology licences on Tuesday. The Capital Market Authority (CMA) approved licences allowing Manafa Capital and Scopeer to offer crowdfunding investment services on a trial basis. Individual investors will use electronic platforms operated by the companies to fund small and medium-sized enterprises in exchange for shares in those enterprises. The CMA said it would receive applications for more fintech licences later this year. The Saudi central bank has also thrown its weight behind fintech, as it signed a deal with U.S.-based Ripple in February this year.

Franklin Templeton #funds awarded QFI status in Saudi Arabia

Franklin Templeton is evaluating opportunities to expand its Shariah business, which grew 32 percent in 2017. Franklin Templeton funds have become Qualified Foreign Investors (QFI) in Saudi Arabia, allowing the funds to invest directly in the kingdom’s stock market, it was announced on Monday. Sandeep Singh, Franklin Templeton’s regional head of Central and Eastern Europe, Middle East and Africa and head of Islamic Business said, that they operated in the Middle East and North Africa for almost 20 years and that they will remain dedicated to growing their business alongside the region’s growth.

#Saudi Arabia's #Sukuk selling crosses SAR 3.95 bn

Saudi Arabia's finance ministry sold 3.95 billion riyals (USD1.05 billion) of domestic Sukuk in its monthly sale by re-opening an issue originally made last month. It sold 3.35 billion riyals of five-year Sukuk, 350 million riyals of seven-year and 250 million riyals of 10-year. Last month, the ministry sold 5.0 billion riyals of domestic Sukuk.

Gulf Capital Acquires Strategic Stake in #Saudi Arabia #Fintech Geidea

Asset management firm Gulf Capital has acquired a strategic stake in Saudi Arabian fintech company, Geidea. According to Gulf Capital, this deal with Geidea is the largest acquisition in the Saudi Fintech sector. Geidea was founded in 2008 and is the official distributor of Verifone and a payment solution company. Gulf Capital also reported that this deal is its fifth investment in the technology sector and is part of its efforts to develop the payment and digital financial transaction sector in the GCC. Dr. Karim El Solh, CEO of Gulf Capital, stated that this partnership was paving the way to adopt Saudi Arabia’s Vision 2030 and move towards a cashless society.

SEDCO Holding Group Signs a Partnership Agreement with Saudi British Bank

SEDCO Holding Group signed a partnership agreement with the Saudi British Bank (SABB), for its Riyali Financial Literacy Program. The agreement was signed by Hasan Al Jabri, CEO of SEDCO Holding Group, and Naif Alabdulkareem, General Manager Retail Banking at SABB. The Riyali Financial Literacy Program attained the Ministry of Education’s endorsement to roll out the program in grade school as well as universities. The program aims to educate future generations on the importance and benefits of financial awareness. The program has already reached more than 400,000 beneficiaries and aims to reach 2 million beneficiaries by 2020.

Bidaya’s first #Sukuk issuance successful

Bidaya Home Finance has successfully closed its inaugural Sukuk issuance under the recently established SR500 Million Sukuk Issuance Programme. The total amount raised in relation to the Series 1 Sukuk was SR250 Million. Bidaya's CEO Mazin Al Ghunaim said this was a landmark transaction since Bidaya was the first housing finance company in Saudi Arabia to issue a Sukuk. Ashmore Investment Saudi Arabia acted as the Arranger with respect to the Sukuk Programme issuance, while Albilad Capital acted as the Dealer. Bidaya's Sukuk Programme is aimed at maximizing the utilization of capital markets, resulting in the diversification of the company's funding sources.

#Saudi issues new Islamic bond to finance budget

Saudi Arabia has completed the issuance of a new sukuk sale to help finance its budget deficit. The Kingdom raised $1.3 billion from the sale of sukuks in three tranches maturing in five, seven and 10 years. This was the second sukuk sale this year following a $4.8-billion issue it completed last month. The government debt level, both domestic and international, rose from 1.6% of gross domestic product in 2014 to 17.3 of GDP last year reaching $118 billion. During the same period, the government has drawn down some $245 billion from its fiscal reserves. Oil income made up more than 90% of public revenues before oil began to slide.

#Saudi- Finance Minister heads the Kingdom's delegation to the 43rd Islamic Development Bank board of governors Annual Meeting in Tunis

Saudi Finance Minister Mohammed Al-Jadaan will head the Kingdom's delegation to the 43rd Annual Meeting of the Board of Governors of the Islamic Development Bank between April 4-5 in Tunis. The Saudi delegation will include Dr. Ahmad Al-Khulaifi, Governor of the Saudi Arabian Monetary Agency (SAMA), Dr. Hamad Al-Bazie, Vice Minister of Finance, Eng. Yousef Al-Bassam, Vice President and Managing Director of the Saudi Fund for Development (SFD). The IDB annual meeting's agenda will comprise of discussion sessions about the 2017 IDB activities report, IDB's institutions annual report and the establishment of the Islamic Solidarity Fund for Development (ISFD). The ISFD aims to alleviate poverty, develop capacity, and eradicate illiteracy, diseases and epidemics in member countries via funding various productive, social and service projects and programs.

Newly empowered #Saudi women to help drive growth at Al Rajhi Bank

Saudi Arabia's Al Rajhi Bank has opened 133 female-only branches and a car showroom for women to help them access car loans. Women have been allowed to attend mixed sporting events and will be able to drive from June. Al Rajhi Bank is a major provider of vehicle loans and has operated car showrooms since 2008. They were only for men until the bank opened its first women-only one late last year. Al Rajhi CEO Steve Bertamini said families usually have a large automobile already, so the cars for women tend to be smaller vehicles for commuting. He added that the bank would provide extended hours for women within existing car showrooms and increase the number of female bank branches in 2018. Women's increased economic activity will help the bank's loan growth outperform the 4% expected for the sector in 2018.

#Saudi tycoon auctions off 900 vehicles to clear debt

Thousands of people attended the first day of an auction of vehicles owned by indebted Saudi Arabian tycoon Maan al-Sanea. Officials say the sale will go towards repaying about 18 billion riyals (US$4.8 billion) owed to creditors. The businessman was detained by authorities last year for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on payments. The first phase of the auction was launched this week, with around 900 vehicles including lorries, buses, diggers, forklift trucks and golf carts. Later stages of the process will include property, as well as machinery, ceramics and furniture. Prospective buyers were mainly businessmen from local construction companies and other contractors. Money raised from the first phase of the auction will go towards repaying creditors. Priority for the repayment will first go to repaying unpaid workers, vendors and other companies owed money will be given next priority, with banks at a later stage.

Bidaya Home Finance Issues Plans for Selling Islamic #Sukuk Bonds

Bidaya Home Finance revealed plans to sell Islamic sukuk bonds worth 500 million SAR. Bidaya Home Finance hired the services of Ashmore Investment Saudi Arabia to arrange the program.

Saudi Dar Al Arkan Real Estate hires banks ahead of 5-year dollar #sukuk deal

Dar Al Arkan Real Estate Development has mandated banks to arrange investor meetings ahead of a planned U.S. dollar five-year sukuk offering. If the deal goes ahead, Dar Al Arkan will be the first Saudi company to issue an international bond this year. The banks mandated are Alkhair Capital, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, Goldman Sachs International, Nomura, Noor Bank and Standard Chartered Bank, who will act as joint bookrunners of the deal.

#Saudi crown prince seeks solution to banks' $2.6 billion Islamic tax row: sources

Saudi Crown Prince Mohammed bin Salman has directed the government to resolve a dispute with banks facing higher Islamic tax liabilities. The General Authority of Zakat and Tax (GAZT) is demanding tax for years going back as far as 2002. Banks are contesting the extra payments, which are estimated at around 9.8 billion riyals ($2.6 billion) across 11 of the kingdom’s 12 listed banks. Although Saudi banks and other firms generally do not pay corporate tax, they are subject to zakat, a 2.5% levy on each bank’s net worth. Lenders and the authorities have been at loggerheads over the amount of zakat they pay for more than a decade. The dispute has captured more attention recently as the kingdom seeks to attract billions of dollars of foreign investment from global equity indexes. Bankers say the way the tax is calculated is opaque and the heavy financial demands on banks threaten the stability of the banking sector and capital markets.

#Saudi will issue #sukuk as soon as market conditions allow-DMO chief

Saudi Arabia is committed to the sukuk market and will issue Islamic bonds as soon as market conditions allow. Fahad al-Saif, president of Saudi Arabia’s debt management office (DMO) said Saudi Arabia had a ratio of 65% to 35% for local to international issuance, plus or minus 10%. He added that the DMO aimed to develop the local market but not to crowd out the banks. Saudi Arabia started issuing debt in the international markets in 2016 when it issued $39 billion in bonds, including a $9 billion sukuk. Domestically, the government has raised a total of over 70 billion riyals ($18.67 billion) through monthly local currency sukuk issues. The kingdom has recently agreed the refinancing, extension and upsizing of a $10 billion loan it had raised in 2016. The loan has now been increased to $16 billion. Furthermore, a new dollar bond sale is expected over the coming weeks.

#Saudi Arabia expands $10b loan #refinancing to $16b, adds Islamic tranche

Saudi Arabia is expanding the refinancing of a $10 billion international loan to raise $16 billion. The kingdom is introducing a significant Islamic tranche to the transaction, supporting Saudi Arabia’s goal of becoming the leading centre for Islamic finance. A $16 billion facility would be one of the largest syndicated loans ever extended in emerging markets. The kingdom raised the original $10 billion loan from 14 core banks in 2016, in what was its first jumbo transaction after a slump in international oil prices. A further dollar debt issuance is also planned, which could be marketed over the next few weeks.

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