IslamicFinance.de

A year after the emirate set out plans to be the Islamic economic hub, it's seven months behind schedule in setting up a centralised Sharia body that would help spur the emirate's sukuk market. Dubai is still deliberating with the federal government to establish the board, according to Abdulla Mohammad Al Awar, chief executive officer of the Dubai Islamic Economy Development Centre (DIEDC). While Islamic financial assets are set to almost double to $3.4 trillion by 2018, regulations in the industry are underdeveloped. Malaysia is one of the first countries to set up a Sharia authority as part of its central bank. The UAE Federal National Council, a half-elected advisory council with some parliamentary powers, plans to push for a central Sharia board.

Al Hilal Bank recently received Kairat Kelimbetov, the Governor of the National Bank of Kazakhstan at its headquarters in Abu Dhabi. Both parties discussed the key role of Al Hilal Bank as the first and only Islamic bank operating in Kazakhstan. Mohamed Jamil Berro, Al Hilal Bank’s Group CEO, personally welcomed Governor Kelimbetov and briefed the guest on the Islamic products offered by Al Hilal. Kelimbetov noted the role of Al Hilal Bank’s activities in the development of Islamic finance in Kazakhstan, and added that the National Bank of Kazakhstan will continue to support development of Islamic finance in Kazakhstan.

Abu Dhabi Islamic Bank (ADIB) has announced earnings for the nine months to the end of September up 21.1 per cent with customer deposits up 18.2 per cent compared to the corresponding period last year. Profit reached AED1.34bn compared to AED1.11bn for the same period last year. The CEO of ADIB said that all customer-facing units, retail banking, private banking, community banking and wholesale banking continued to grow market share and as a consequence, ADIB’s customer financing assets increased 21.7 per cent year-on-year to AED71.6bn backed by an 18.2 per cent increase in customer deposits to AED82.9bn over the same period.

Dubai has repaid $1.93 billion raised from Islamic bonds and renewed its commitment to pay back billions of dollars worth of debt on time. Dubai reportedly repaid 2.5 billion dirhams ($68 million, 54 million euros) in dirham sukuk and $1.25 billion in dollar sukuk. It said both sukuk matured on Monday. Dubai has repaid or restructured billions of dollars of debt, as the emirate’s economy recovers from its 2009 debt emergency in the midst of the global financial crisis. The International Monetary Fund estimates that Dubai and its government-linked entities face a total maturing debt of around $80 billion.

UAE-based Aafaq has carried out its first transaction on the NASDAQ Dubai Murabaha Platform, which provides Islamic financing services to individual and institutional customers. Officially launched in April 2014 by NASDAQ Dubai jointly with Emirates Islamic, the platform has completed a total of more than AED 21 billion of transactions. The platform makes use of Shari’ah-compliant Certificates that have been developed for the underlying assets of the financing transactions. Islamic banks, Islamic windows of conventional banks, and Islamic finance companies and their clients can make use of the platform through trading Certificates.

DIFC Investments, the investment arm of Dubai’s financial free zone, has set final guidance for a $700 million (Dh2.57 billion) 10-year sukuk in the range of 185 to 190 basis points (bps) over midswaps on Tuesday, according to lead arrangers. Pricing has tightened with investor orders topping $3 billion, lead arrangers said. Earlier on Tuesday, the sukuk had been marked at 195 bps plus or minus 5 bps over midswaps. On Monday, it was marked initially at the very low 200s over the same benchmark. Dubai Islamic Bank, Emirates NBD, Noor Bank and Standard Chartered are arranging the sale.

EIIB-Rasmala, the Dubai-based investment bank and asset manager, will expand its leasing and property fund products amid increased investor demand in the Arabian Gulf region. The group yesterday said that it was finalising the launch of two leasing fund strategies and planning to expand its UAE property business. This came amid a surge in demand driven by progressive regulatory activity of regional markets, particularly in Saudi Arabia and the Emirates, as well as greater investor confidence in the underlying market fundamentals of the region. EIIB-Rasmala said that it expected to raise about US$1 billion for its growing leasing and alternatives business and approximately $250 million to invest in a broad mix of property transactions in the United Kingdom.

There has been a surge in UAE's Islamic banking and capital market activities, but more government support at policy level could help speedy growth of the industry, said Hussain Al Qemzi, Group CEO, Noor Investment Group and CEO Noor Bank. Data suggests that Islamic banks’ asset growth is outstripping their conventional peers in the Gulf region especially in Saudi Arabia and Qatar due to government support. As the biggest borrowers, government entities in the Gulf need to push Islamic structures. Going forward, more Islamic issuances, especially by players who have already transacted conventional issuances, will provide greater depth to the market and confidence to investors who are yet to invest in Islamic instruments.

Economic strategist James Rickards, pointing to another collapse of the international monetary system will reveal to global financial experts in Dubai next month how new "rules of the game" will be written to prevent disaster. The American lawyer, economist, investment banker and author, says investors should not be surprised if another collapse happens soon, following previous breakdowns of the system in 1914, 1939 and 1971. His presentation will show what those new rules of the game might look like, and helps investors understand what they can do today in their portfolios to preserve wealth in the collapse and prosper in the new system. Rickards is one of the speakers at the ICA Conference taking place in Dubai from 6-9 November.

Dubai Chamber of Commerce and Industry's Sustainability Network members, in cooperation with the United Nations' World Food Programme (WFP), took part in a 'Rice Bowl Challenge' to raise awareness amongst employees on the issue of hunger and mobilise funds for WFP in the fight against world hunger on World Food Day. The Rice Bowl Challenge was a call to corporates to replace their regular lunch with a bowl of plain rice for the day. It was carried out under the umbrella of 'Eat and Feed' a fundraising initiative by the Al Aroud Group a member of the Dubai Chamber Sustainability Network. The funds collected will go to the WFP to provide food assistance to families most in need across the Middle East.

The investor group has acquired a significant minority stake in Gems Education’s emerging markets business, covering the Middle East, North Africa and East Asia.
Mumtalakat Holding Company, the investment arm of Bahrain, and Tactical Opportunities funds managed by Blackstone are the other partners in the investment consortium. Gems Education, a UAE-grown global brand that was founded 54 years ago, and is now the world’s largest provider of K-12 private education — operating more than 50 schools, educating over 140,000 students and employing over 13,000 people across 19 markets in the Middle East, North America, Europe, Asia and Africa.

The Bahrain’s stock exchange has plans to launch a financing tool and real estate investment trusts. The range of Islamic investment products will include a novel equity-based murabaha financing tool and Islamic real estate investment trusts. It is seeking to attract regional funds from bigger markets such as Saudi Arabia, Qatar and the United Arab Emirates; Islamic financial products are a major part of the strategy. The exchange aims to host trading of sukuk (Islamic bonds), which at present is mostly done over the counter, said Shaikh Khalifa bin Ebrahim Al-Khalifa.

Dubai World’s biggest creditors have agreed on a deal to renegotiate its debt repayment schedule, Shaikh Ahmed bin Saeed Al Maktoum has confirmed. Shaikh Ahmed, who is also Chairman of Dubai Civil Aviation and Chief Executive of Emirates airline and Group, ruled out any flotations of Dubai’s state-owned companies, including Emirates airline and air travel service provider dnata. Dubai World, under the revised plan, will repay the $4.4 billion tranche due in May 2015 early — likely in December or January depending on the progress of negotiations — in exchange for the $10.3 billion 2018 payment being extended until 2022. The new 2022 payment will also be augmented in a number of ways aimed at persuading creditors to grant more time.

The insurance regulator of the United Arab Emirates has said that the number of takaful insurers in the region has increased to 10. The combined premium volume totaled about 2.8 billion U.A.E. dirhams ($762.3 million). The regulator said that it will hold meetings to discuss strategies for the development of Islamic insurance industry in the U.A.E. market.

Emirates Islamic recently held interactive sessions at five schools in Dubai aimed at teaching children the importance of savings. The initiative, in partnership with Dubai Educational Zone (DEZ), is part of Emirates Islamic’s strategy to instil a savings culture in the community, and in particular create awareness amongst youth on the importance of savings. The bank plans to visit several other schools across the seven emirates to spread awareness in the coming months. Last year, Emirates Islamic created a special ‘Child Savings Account,’ to promote a savings habit for youngsters. The account is free for children and includes a hassala, the traditional Emirati savings pot, and a complimentary pre-paid card with Dhs100 credit.

The National Bank of Abu Dhabi (NBAD) has launched the NBAD Shariah MENA Dividend Leader Fund, which invests in dividend-paying companies traded on MENA equities markets. The Fund is inspired by and modeled after NBAD MENA Dividend Leader Fund (MDL) which was recently voted Newcomer Fund of the Year 2013 by Zawya. The NBAD Shariah MENA Dividend Leader Fund will invest in bourses of Saudi Arabia, UAE, Qatar, Oman, Kuwait, Egypt, Jordan, Morocco and Tunisia. The Fund is actively managed by the Equity desk of NBAD 's Asset Management Group. NBAD Shariah MENA Dividend Leader Fund is UCITS IV compliant - regulated by the Central Bank of Ireland. Northern Trust Group acts as the Fund's administrator and custodian.

New rules issued by the United Arab Emirates' securities market regulator aim to develop local currency bond and sukuk markets in the Arab world's second biggest economy. In meetings with potential issuers and financial firms in Abu Dhabi and Dubai this week, the Securities and Commodities Authority (SCA) outlined rules designed to make it faster and cheaper for companies to issue conventional and Islamic bonds, and easier for investors to trade them. If successful, the project could help to reshape corporate financing in the UAE. At present, firms rely heavily on bank loans and to a lesser extent retained earnings; local currency bond issuance is minimal, and usually only the biggest companies can afford to issue bonds in the international market.

Emirates Islamic has launched of a five year Wakala investment option, with an expected profit rate of 2.5 per cent per annum. Launched with the objective of encouraging customers to focus on long term savings, Emirates Islamic’s five year Wakala investment option is available on amounts starting from AED100,000 up to AED25 million. By offering an annual profit rate similar to what is to be paid for Zakat, Emirates Islamic is enabling Muslim customers to use their funds wisely to meet their Zakat obligations. Meanwhile all customers can benefit from the attractive profit rates. The five year Wakala requires customers to ensure that the amount invested remains locked-in for a period of five years, as early liquidation would mean loss of profit.

The Securities and Commodities Authority (SCA) has issued a new set of regulations for the bonds and sukuk market cutting the minimum value of issuance from Dh50 million to Dh10 million. The regulations include a shortened approval time of five days, and the removal of the requirement to obtain a credit rating. Additionally, bond issuers are no longer required to provide a quarterly report as they may only provide an audited annual financial statement within 180 days of the year-end. The new set of regulations aims to give momentum to the market, and strengthen the UAE’s role as a financial hub for global Islamic economy. However, the regulations do not apply to government entities and companies wholly owned by the government.

Dubai Islamic Bank PJSC (DIB) has raised loan growth forecasts for 2014 as it increases its corporate and real estate businesses amid the fastest economic expansion in the lender’s home market for at least seven years. The bank expects lending to grow 15 percent to 20 percent in 2014, more than the 10 percent to 15 percent it had previously forecast, according to Chief Executive Officer Adnan Chilwan. The company will continue to expand to take advantage of the emirate’s buoyant property market, while keeping its proportion of total lending at about 25 percent. Besides, the lender is exploring the option of setting up a new bank in Kenya by the end of the year to add to its presence in Pakistan, Jordan, and Bosnia, Chilwan said. It also expects to increase its stake in Indonesia’s Bank Panin Syariah.