Saudi Arabia

#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.

#Master in Islamic Finance

The Islamic Corporation for the Development of the Private Sector (ICD) in collaboration with IE Business School offers a training program for the development of executives across the Islamic finance industry. The Master in Islamic Finance program has a blended format, combining on-site periods in Spain and Saudi Arabia with dynamic, interactive online modules to minimize the time away from work. The length of the training is 13 months and intake starts in October 2017. Throughout the program, participants will obtain practical knowledge of high-level financial tools, develop practical Islamic Finance technical skills and acquire leadership skills. Upon program completion participants receive a University Private Degree from IE Business School and IE Universidad. IE Business School is a school within IE Universidad, which is a University officially accredited by the Spanish education authorities.

#Saudi Arabia nudges yields down in 13b riyal #sukuk sale

Saudi Arabia auctioned 13 billion riyals ($3.5 billion) of local currency sukuk, with the offer 295% subscribed. It sold 2.1 billion riyals of five-year, 7.7 billion riyals of seven-year and 3.2 billion riyals of 10-year sukuk. The size of the issue was down slightly from the government’s offer in July, when it sold 17 billion riyals and attracted 51 billion of bids. The ministry qualified 13 Saudi banks to buy its sukuk issues in the primary market but hopes other institutional investors will eventually buy in the secondary market. Also, yields on Riyadh’s internationally issued US dollar sukuk have come down by about 12 to 15 basis points since the last domestic sale. Investment expert Mohieddine Kronfol said the way in which domestic and international Saudi yields were linked was a positive sign for Riyadh’s effort to develop a healthy debt market.

#Saudi Arabia's Largest Bank Said to Hire #Investment Banking Head

Sameer Nawaz has been appointed head of investment banking at Saudi Arabia’s Al Rajhi Capital. Nawaz will be responsible for building an investment banking team at the securities division of Al Rajhi Bank. Previously, he was co-head of investment banking at Saudi Fransi Capital. Usman Sikander, who was co-head of investment banking at Saudi Fransi Capital with Nawaz, will become head of investment banking. Banks are hiring in Riyadh in anticipation of a boom in fees as the government ramps up efforts to wean the economy off oil. Elyas Algaseer, Mitsubishi UFJ Financial Group's co-head said that the bank was looking to hire in Saudi Arabia in expectation that privatizations in the country could exceed $350 billion in about five years.

DGCX to launch region’s first Sharia compliant Spot #Gold contract

The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group have agreed to develop and launch the Middle East’s first Sharia compliant Spot Gold contract to be traded on an international exchange. This development is reflective of the growing potential of the Saudi Arabian and wider GCC regions Sharia compliant gold markets. Ayedh Bin Dejem, Chairman for the Group, said this cross-border collaboration offered access to the regional gold and commodities market. It provides customers with improved hedging and investment solutions in compliance with Sharia law. DGCX Chief Executive Gaurang Desai added that Amanie Advisors LLC, the leading global Islamic Finance advisory firm, have been selected to advise on the initiative. The launch of this product appealing to a wider range of investors in the region is an ideal way for the Exchange to extend its reach.

#Saudi developer Jabal Omar to raise 4b riyals via #sukuk

Saudi Arabia’s Jabal Omar Development plans to raise 4 billion riyals (Dh3.91 billion or $1.06 billion) with local currency sukuk issues. Bank Al Bilad has been hired to arrange the fund-raising, but other banks are likely to have leading roles too. The developer’s flagship project, Jabal Omar, is within walking distance of the Holy Mosque in Makkah. It includes commercial malls, residential units and hotels over an area of 230,000 square metres. Saudi Arabia’s real estate sector was hit hard last year, with prices declining 8.7%, as a result of the government’s austerity measures after a slump in international oil prices. Jabal Omar missed in January last year the first repayment, worth 650 million riyals. It amended the terms of the loan in February 2016 to postpone the date, the first payment on the facility is now due in 2019 and the loan will mature in 2024. Jabal Omar has also borrowed 4 billion riyals in February 2015, then 8 billion riyals in September 2015. It is not clear whether the planned sukuk would be used as new funding or to refinance some of the company’s existing debt.

Moody's granted licence to conduct credit #rating activities in the Kingdom of #Saudi Arabia

The Capital Market Authority (CMA) authorised Moody's Investors Service to conduct credit rating activities in the Kingdom of Saudi Arabia. Managing Director Monica Merli welcomed the announcement, emphasizing the Kingdom's increasing prominence in the debt capital markets. Saudi Arabia is a key market for Islamic finance, an area in which Moody's is recognised as a global thought leader through ratings, research and speaking engagements at leading conferences. The Kingdom completed the world's largest ever inaugural Sukuk issuance at $9 billion in April 2017, a transaction rated A1 by Moody's. Moody's currently rates 140 issuers and 92 debt programmes across the Middle East, including leading coverage in rating Islamic financial institutions and Sukuk.

#Qatar# Islamic #Bank #offers #certificates of deposit after Q2 outflow – Nasdaq

The Qatar Islamic Bank aims to boost its deposit base by offering certificates of deposit in Qatari riyals and US$, after it was hit by an outflow of money due to sanctions against Qatar by its neighbouring Gulf countries. The bank said this weekend, that it was offering 1 and 2 year CDs in its 2nd series of such papers. Its first series was launched End of 2015. Saudi Arabia, the United Arab Emirates and Bahrain cut diplomatic and transport ties with Qatar beginning of June this year, accusing the country of supporting terrorism. This prompted some firms and individuals from those states to pull money out of the Qatari banks. As a result, deposits in the Qatari banks shrank 1.8 % from the previous month in June. Qatar Islamic Bank was particularly hard hit, with its customer deposits falling to US$26.6 billion at end of June, according to its financial statements.

#Sharjah says no immediate plan to issue #sukuk

According to officials, Sharjah does‘nt have immediate plans for a sukuk, contrary to previous media reports. These had suggested that Sharjah had hired HSBC for a US dollar sukuk programme which could happen in the 4th quarter of 2017.
But, Tom Koczwara, Director, Debt Management Office, Finance Department at Government of Sharjah reiterated that the situation is still the same as in early May. “There is currently no immediate plan for a further sukuk issuance,” Koczwara said in an email. “The Debt Management Office reviews all financing options on an ongoing basis, assessing market conditions and the government’s financing requirements, and we will make appropriate recommendations on the different options to the relevant government authorities.“
S&P expects the Emirate’s fiscal deficit to narrow to 1.9 % of GDP in 2017 compared to closer to 3 % of GDP in 2016.

GCC #Islamic #insurance companies to #face #headwinds: S&P Global

Islamic insurers in the GCC will probably continue to face headwinds, despite a better overall. The forcasted slowdown follows years of annual growth in gross premiums of up to 20 %, which was mainly driven by the introduction of new mandatory covers, as well as strong increases in premium rates in Saudi Arabia, as new covers and actuarial pricing guidelines were adopted, S&P Global Ratings noted yesterday.
“Now that more policies are adequately priced, overall premium growth has slowed,” said S&P Global Ratings’ credit analyst Emir Mujkic. “The slowdown in premium growth has also been influenced by lower economic activity across all GCC states, as governments are trying to reduce or delay their spending due to lower revenues from hydrocarbon sales,” Mujkic added.

#Indonesia takes big step towards #boosting I#slamic #finance industry

Indonesia, that is so far a behind in developing a comprehensive Islamic finance industry, has taken a big leap towards the creation of a supportive framework for Shariah-compliant banking end of July. On that day, the country’s President Joko Widodo inaugurated the National Committee for Shariah Finance, as part of the government’s push to make Indonesia a global hub for the Islamic financial industry.
It has been tasked to accelerate, expand and develop Shariah-compliant financial services to support the country’s development, National Development Planning Minister Bambang Brodjonegoro said in a statement. The ministry is the one that introduced its master plan for the development of the country’s Islamic finance future last year.

New #Efforts to #Boost #Sharia #Banking in #Indonesia

Although between 85 and 90 % of the Indonesian population is Muslim, Islamic banking, also known as sharia banking, remains underdeveloped in the country. In 2016 sharia banking assets only accounted for 5.3 % of total assets in Indonesia's banking sector. But at the same time in countries like Saudi Arabia and Malaysia these figures are much higher at 51.1 % and 23.8 %, respectively.
In order to boost Islamic banking in his country, President Joko Widodo formed the National Committee for Sharia Finance. This institution was installed to investigate and tackle the challenges surrounding sharia banking in Indonesia. Together with the Indonesian Islamic Economy Expert Association, KNKS is tasked to unite the vision and strategy of all stakeholders in this industry and turn the country into a global center for Islamic banking.
General Chairman of the IAEI Bambang Brodjonegoro said, the challenges in Indonesia's Islamic banking industry involve both the supply and demand side. The lack of business sectors that are based on Islamic banking makes it tough for the industry to develop, he added.

#Saudi finance ministry says domestic #sukuk program established

Saudi Arabia's ministry of finance has established a program to issue local currency sukuk, as the government covers a large budget deficit caused by low oil prices. The program has been submitted to the Capital Market Authority, the ministry said without specifying when the first sukuk issue would take place. Saudi commercial bankers said they expected the first issue in the next few days and believed 10 billion riyals ($2.7 billion) would be offered. The ministry noted that 13 domestic banks had qualified to participate in the sukuk issues. The Saudi government issued its first international sukuk in April and raised $9 billion.

Alinma Bank's CEO on Growth Strategy, #Sukuk Issuance

In this interview Abdulmohsen Al-Fares, CEO of Alinma Bank, discusses the growth in the company's balance sheet, credit growth, their Sukuk issuance and competition from other banks. Alinma Bank has maintained its growth pace and Al-Fares is optimistic about the upcoming Saudi Arabian government sukuk. It is an opportunity not only for companies and banks, but also for the secondary markets. Timing and size of the sukuk has not been decided yet. In his opinion, competition from other banks will not affect Alinma Bank, as they will compete only in very small segments, not in retail. He added that the stand-off with Qatar would not have a negative impact on the Saudi economy, as the kingdom's economy is strong and the economic relationship with Qatar is small in size.

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