Saudi Arabia

King Abdullah Financial District set for Phase I launch

The first phase of the King Abdullah Financial District project is due to be launched next year. The business hub in Riyadh has been under construction since 2006 and will soon get a fresh lease of life under the management of the kingdom’s sovereign wealth fund. The Saudi Public Investment Fund (PIF) will take over the management of the King Abdullah Financial District from the Public Pension Agency. As outlined in the Saudi Vision 2030 plan, the new hub is to be an economic free zone with visa exemptions and a direct connection to the airport. The government is now exploring new incentive options to attract financial institutions to occupy space in the district. The 73-building development has been restructured to reduce office space and increase the number of residential units.

#Saudi #fund ‘to take over Riyadh financial district’

Saudi Arabia's Public Investment Fund (PIF) has finalized a deal to take over the management of the King Abdullah Financial District from the Public Pension Agency. As outlined in the Saudi Vision 2030 economic reform plan, the financial district is to be an economic free zone with visa exemptions and a direct connection to the airport. The first phase of the project is due to launch next year with plans to host the G-20 meeting there in 2020. The government is now exploring new options to attract financial institutions to occupy space in the district. The 73-building site has been restructured to reduce office space and increase the number of residential units. PwC and local regulator Capital Market Authority are among the companies due to take space in the area.

#Saudi Co. Liable For $668M In Back Rent Tied To #Sukuk Bond

Financial services company Saad has been ordered to pay around $668 million to Citicorp Trustee Company and Golden Belt Sukuk Company. Saad's obligations are tied to sukuk bond and linked to the leasing of land in Saudi Arabia. The judgment was handed down Friday in London's High Court, where Judge Peter Macdonald Eggers ordered Saad to honour its obligations.

ICD, Mizuho Bank (M) Berhad seal $150m #Murabahah deal

The Islamic Corporation for the Development of the Private Sector (ICD) and Mizuho Bank have formalized the signing of a Murabahah deal. The financing is earmarked for the purpose of scaling up of ICD’s projects in its selected 55 member countries. The $150 million Murabahah agreement is the second bilateral Islamic facility that has been extended to ICD by Mizuho Bank. The agreement was signed by Khaled Al Aboodi, CEO of ICD and Shojiro Mizoguchi, CEO of Mizuho Bank. Al Aboodi expressed his strong support for the partnership. Shojiro Mizoguchi said he was very proud to continue to work with ICD and looking forward to leverage on each other’s expertise and experience.

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http://saudigazette.com.sa/article/521372/BUSINESS/ICD-Mizuho-Bank-(M)-Berhad-seal-$150m-Murabahah-deal

#Saudi corruption purge snares $33 billion of net worth

Some of Saudi Arabia's most powerful men were arrested in October as part of a fight against corruption. The government freezed the accounts of the more than three dozen men totalling $33 billion of net worth. The series of arrests has implicated the country's richest people, including Prince Alwaleed bin Talal, Bakr Binladin, Mohammed Al Amoudi, Saleh Kamel and Nasser Al Tayyar. Prince Alwaleed bin Talal is No. 50 on the Bloomberg Billionaires Index ranking of the world's 500 richest people, with $19 billion. Two of the four Saudis on the Bloomberg index haven't been detained, hotel magnate Mohamed bin Issa Al Jaber, who has an $8.3 billion fortune, and Prince Sultan Bin Mohammed Al Kabeer, the biggest individual shareholder in food processor Almarai Co., who has $4.7 billion.

Arrested #Saudi tycoon faces fraud claim in English courts

Saudi billionaire Maan Al-Sanea is accused in the English courts of a $650m (£495m) fraud that has triggered a battle between hedge funds and the French bank BNP Paribas. He was arrested by Saudi authorities in October on charges of evading justice and owing large sums of money to creditors. Maan’s Saad Group collapsed in 2009, triggering a long battle to recover billions he had shipped offshore to the Cayman Islands. The High Court trial concerns the arrangement of a $650m sukuk, which was paid to Mr Maan personally to lease land he owned. Judgment in a separate claim brought by the hedge funds against him is due on Thursday. Subsequent arrests of prominent Saudi businessmen sparked debate over whether the moves represent consolidation of power or a genuine crackdown on corruption.

Al Rajhi Bank unveils novel payment services hub

Working closely with Accenture, Al Rajhi Bank has successfully implemented a fully dedicated payment service hub solution. The new hub adds a new payment alternative for all of the bank's payment products and services. In addition to delivering a silo-breaker architecture, the Payment Services Hub (PSH) is designed to reduce time to market for new products, while simultaneously reducing risks. Al Rajhi Bank's CEO, Waleed Al Mogbel, said the new Hub would enable the bank to deliver a leading customer service and increase operational efficiencies. The PSH opens up opportunities for the bank to develop new revenues streams for corporate and retail banking, particular around open banking and real-time payments.

#Saudi's Jabal Omar picks two banks for #sukuk sale early next year -sources

Saudi Arabia’s Jabal Omar Development Company has hired two banks to manage a sukuk sale which could exceed 4 billion riyals ($1.07 billion). Bank Albilad and GIB Capital were hired to arrange the issuance, which is planned for the first quarter of 2018. The property developer's sukuk would be among just a few corporate debt sales expected over the next few months, as the Saudi market is still largely dominated by government bonds. The government has issued a total of 47 billion riyals through monthly sukuk sales since July, and is likely to continue. Jabal Omar’s flagship Mecca development project includes residential units, hotels and commercial malls. The company has raised a number of large bank loans over the past few years, and the sukuk proceeds would be used to refinance its existing bank debt.

Thomson Reuters Provides Shariah-Compliant Deal #Application to Alinma Bank

Thomson Reuters will provide Alinma Bank with a Shariah-compliant application. It will fully automate deal workflow for Shariah-compliant financial transactions. The application provides a real-time view of Shariah-compliant deals, through an automated online system that minimizes the process of tracking transactions. Alinma Head of Treasury, Abdullah Al Zahrani, said that he was pleased to be the first bank in Saudi Arabia to partner with Thomson Reuters to bring innovative solutions to the Shariah-compliant banking. Nadim Najjar, Managing Director for MENA at Thomson Reuters, said this innovative application would automate the validation process and offer a seamless digital solution for the industry.

#Saudi Regulator Urges Consolidation in Crowded #Insurance Sector

Saudi Arabia’s insurance industry needs more consolidation and foreign input to help create solid companies. According to Ahmed Alkholifey, governor of the Saudi Arabian Monetary Authority (SAMA), there are some small firms which are incapable of surviving in the market in their current condition. There are 33 insurance firms listed on the country’s stock exchange with a combined market value of $11.1 billion. The governor said two foreign firms would soon increase their stakes in Saudi insurance companies, but did not mention names. Banque Saudi Fransi sold an 18.5% stake in Allianz Saudi Fransi Cooperative Insurance to Allianz Europe BV. In June, Al-Ahlia Insurance started non-binding talks with Gulf Union on a proposed merger. An agreement is expected to be reached by the first half of 2018.

#Saudi Arabia considers issuing international #sukuk early next year- Maaal

Saudi Arabia plans to issue an international sukuk in the first quarter of 2018. Fahad Al-Saif, head of the debt management office, said the government would issue domestic sukuk in November and December. Saudi Arabia issued its debut international sukuk earlier this year, raising $9 billion.

#Saudi Arabia joins AAOIFI, bringing potential boost to finance sector

Saudi Arabia’s central bank has joined the Islamic financial regulator Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The move could increase cross-border financial deals in the region, as guidelines will apply to all financial institutions within Saudi Arabia. Both conventional and Islamic banks will now be subject to the same standards, potentially encouraging deals with other Muslim countries. AAOIFI Chairman Sheikh Ebrahim bin Khalifa Al Khalifa stated that the addition of the Saudi central bank would help foster closer collaboration with the kingdom. Saudi Arabia may now hold ambitions of becoming a global heavyweight in the Islamic finance sector. However, it will face intense competition from Malaysia, South Africa and the UK.

#Saudi Arabia's IDB Plans #Blockchain-Based Financial Inclusion Product

The Islamic Development Bank (IDB) plans to use blockchain technology to develop sharia-compliant products to support financial inclusion in its member countries. The bank's Islamic Research and Training Institute signed an agreement with local firm Ateon and Belgium-based SettleMint for the development of the project. Blockchain involves a shared electronic ledger that allows all parties to track information, removing the need for third-party verification. The IDB said such features would allow for instantaneous clearing and settlement of transactions and asset exchanges, while helping eliminate counterparty risk.

#Arab Petroleum Investments Corp hires banks for dollar #sukuk -lead

Arab Petroleum Investments Corporation (APICORP) has mandated banks to arrange a series of fixed income investor meetings ahead of a potential sukuk sale. The sale is that of a potential five-year benchmark US dollar-denominated sukuk. Meetings will start on October 19 in Riyadh and end on October 24 in London. Apicorp has hired Bank ABC, Crédit Agricole Corporate and Investment Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital and Standard Chartered Bank as joint lead managers and bookrunners for the planned deal.

Exclusive - #Saudi Arabia preparing tougher rules for insurers - sources

Saudi Arabia’s central bank is preparing tougher rules for insurance companies. A new supervisory framework will be introduced in the coming months that will force insurers to boost capital significantly and improve internal risk controls. The moves are aimed at triggering consolidation in the insurance industry and forcing weaker companies to merge with stronger ones. The proposed changes were discussed during a meeting between officials of the Saudi Arabia Monetary Authority (SAMA) and senior insurance executives. Saudi Arabia’s insurance market is fragmented, with only a few companies dominating the sector and an abundance of smaller firms unable to make inroads. The central bank does not want the smaller companies to fail, as more than half of the shares are owned by politically sensitive retail investors in a market unaccustomed to liquidations.

SEDCO Capital discusses #ethical #investment in forum

#Saudi asset manager SEDCO Capital participated in the Islamic Finance Forum in London as an associate sponsor. Several panels and workshops were held focusing on trends in Islamic Finance and European markets. Panel topics included the role of European Stock Exchanges in facilitating Islamic capital raising, Islamic corporate financing activity in Europe and the impact of Brexit. Kamran Butt, Managing Director at SEDCO Capital, participated in the panel discussion entitled "Responsible Investing: The Shift towards Green Finance, ESG & Ethical Funds". Butt said SEDCO's Prudent Ethical Investing (PEI) strategy created optimal risk adjusted returns by integrating Shariah-compliant investment approach with ethical investing. PEI stresses the importance of due diligence and transparency. PEI investment products are getting increasingly popular. International investors can choose from over 14 SEDCO Sharia-compliant investment strategies in Luxembourg with total AUMs of $1.8 billion.

#Saudi #insurers soar after decision to allow women to drive

Investors in Saudi Arabia are betting insurance stocks will be key beneficiaries from allowing women to drive. An index composed of 33 insurance stocks rose the most in three months. The Company for Cooperative Insurance, or Tawuniya, increased the most in seven months, other beneficiaries include Al Rajhi Takaful and Walla. The announcement to allow women to drive is one of the most dramatic moves in the government’s bid to open up society. Accroding to Jaap Meijer, head of research at Arqaam Capital, the number of cars in Saudi Arabia is likely to increase at least 20% in the next ten years as a result of the decision. He added that the increase is expected to be gradual. Net loss ratios on female drivers is likely to be lower than for men, as empirical evidence suggests that women are in fact safer drivers than men.

New round of GCC bank #mergers in the offing

GCC's banking sector is expected to see a new round of mergers and acquisitions (M&A) in the wake of the latest such move initiated by Kuwait Finance House and Ahli United Bank of Bahrain. According to U Capital, at least five M&A deals are in various stages of discussion. The new round of M&A follows the merger between National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE, resulting in creation of the regions second biggest bank. Combined assets of four top conventional banks in the region stand at $621 billion whereas the assets of entire Islamic banks in GCC stand at $563 billion as of second quarter 2017. According to banking sources, Masraf Al Rayan, International Bank of Qatar and Barwa Bank are in the due diligence phase. The three-way merger is expected to create the largest Islamic bank in Qatar. Saudi British Bank and Alawwal Bank are also said to be discussing a potential merger that would create the third-largest bank in Saudi Arabia.

#Saudi Domestic #Sukuk: Indication of Financial Solidity

The Saudi Finance Ministry announced that the third domestic sukuk issuance reached 350% in a record rate, while the first issuance was at 297% and the second at 300%. These figures indicate the solidity of the Saudi financial and banking sectors. The government received more than 24 billion riyals (USD6.4 billion) in bids for its third riyal-denominated sukuk. The latest issuance was divided into three tranches as follows: 2.4 billion riyals (USD640 million) from a five-year tranche, 3.9 billion riyals (USD1.04 billion) from seven-year notes and 700 million riyals (USD186.6 million) through a 10-year tranche. Thirteen licensed commercial banks qualified for the domestic sukuk program. Once the program was established, financial institutions competed two months ago to submit investment applications in the first issued domestic sukuk in the local market.

Fitch: Tougher operating environment challenges #Saudi Islamic banks

According to Fitch Ratings, a tougher operating environment is continuing to challenge Saudi Islamic banks. Sustained low oil prices have taken their toll on economic growth and government spending and this affects certain sectors. Asset-quality metrics are likely to deteriorate from their current strong position due to slower Islamic financing growth. Islamic banks accounted for about 43% of the sector at end-1H16, up from 36.6% in 1H15. There are 12 licensed commercial banks in Saudi Arabia. Four are fully sharia-compliant, with the rest providing a mix of sharia-compliant and conventional banking products. The performance and credit matrices of Islamic and conventional banks are similar in many ways due to the largely Islamic finance nature of the lending market in Saudi Arabia.

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