CPI Financial

#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.

#Bahrain's Bank Alkhair sells stake in Turkish investment firm

Bahrain’s Bank Alkhair has sold its majority stake in Turkish investment firm Alkhair Capital, as the lender exits some markets. Bank Alkhair entered the Turkish market a decade ago, acquiring an initial 75% stake in the investment firm. The bank has faced a challenging business environment over the past year and is currently streamlining its business lines. Additionally, the bank sold its stake in Pakistani lender Burj Bank and in 2017 the firm upgraded its business licence in the UAE and expanded its capital markets business in Saudi Arabia in a bid to focus on other markets. Now Bank Alkhair has received approval to transfer its 95.79% stake in Alkhair Capital to Ankara-based A1 Capital. The value of the transaction was not disclosed.

Noor Bank rolls out Noor Wealth

Noor Bank has launched Noor Wealth, a Shari’ah-compliant platform offering tailored product mixes. Noor Wealth targets customers with a minimum of AED 367,300 of assets under management or a minimum salary of AED 50,000. The bank offers mutual funds among other 10 lenders in the GCC and it also offers access to fixed-income products through its Sukuk platform and Islamic structured products. Noor Wealth collaborates with Knight Frank to offer global physical real estate services for its customers. Mufazzal Kajiji, Head of Retail Banking at Noor Bank, said that Noor Wealth currently serves clients from 10 countries and is in the process of expanding.

Lombard Odier launches Shari'ah-compliant #investment offering

Lombard Odier has launched a full suite of Shari'ah-compliant investment solutions. Arnaud Leclercq, Limited Partner at Lombard Odier Group said that since the offering began as a bespoke creation for one client, it has grown from a $10 million to in the hundreds of millions, primarily for investors in the Middle East. Lombard Odier's Islamic investments have averaged 4-5% returns since 2012. The goal is to reach $1 billion in total Islamic investment the next 3-5 years. The investments are a mix between Sukuk and equities. Equities are chosen using a combination of MSCI's Islamic Index and Lombard Odier's in-house experts. The clients serviced with these solutions are primarily from the UAE, Saudi Arabia, and Kuwait. Lombard Odier plans to increase its presence in the Middle East with an office in Abu Dhabi.

Islamic wealth management and its relevance in modern times

The objective of Islamic wealth management is economic justice through equitable distribution of wealth. This by no means restricts private ownership and entrepreneurship but a wider circulation of wealth and invested in socially beneficial economic activity. To serve social justice, wealth is not considered legitimately earned unless the risk-and-rewards are both shared in a financial contract: so one-sided no-risk-sharing contracts are not permitted. Islamic wealth management involves wealth generation, accumulation, preservation, purification and distribution. Creation of wealth is defined more broadly than in conventional practice. A set of filters are applied to financial transactions that ensure permissibility. Impermissible gains are expected to be distributed to the needy as a method of purification or cleansing. The process of cleansing applies in corporate finance and investment as well.

Global #Sukuk issuances surges 44 per cent in Q1

According to the latest statistics by RAM Ratings, a total of $12 billion worth of Sukuk was issued in March 2018, bringing global Sukuk issuance to $30 billion in Q1 2018, a 44.4% surge from $20.8 billion for the same period last year. The increase is likely due to a boost from Saudi Arabia with issuance reaching $6.5 billion as at end-March 2018. Malaysia had issuances rising from $9.6 billion to $11.5 billion, accounting for the second-largest year-on-year increase, followed closely by Indonesia at $5.5 billion, the UAE at $3.3 billion and Turkey at $1.4 billion. Malaysia retained the top spot in terms of global Sukuk issuance with a 38.2% market share worth $11.5 billion as at end-March 2018. Saudi Arabia stayed in second place with a 21.7% share worth $6.5 billion, Indonesia closed on third place with 18.2% and the UAE with 10.8%.

Al Hilal Bank and ADGM to collaborate on knowledge-based initiatives

Al Hilal Bank and Abu Dhabi Global Market (ADGM) have signed a Memorandum of Understanding (MoU) to develop a strategic collaboration. The MoU focuses on the utilisation of ADGM Academy, the newly established financial educational centre. The MoU provides Al Hilal Bank with The Academy’s network of trainers, internationally renowned curriculum and ADGM’s business ecosystem. Al Hilal Bank Senior Managing Director Sultan Al Mahmood said this partnership represents a unique learning and development opportunity for employees to develop a best practice financial education. The signing ceremony took place on Monday, 16 April 2018 at the ADGM Academy, located on Al Maryah Island. It was attended by H.E. Ahmed Ali Al Sayegh, Chairman of ADGM and H.E Khalaf Abdulla Rahma Al Hammadi, Vice Chairman of Al Hilal Bank.

First full-fledged Islamic bank approved in #Afghanistan

Afghanistan’s central bank has granted a license to the Islamic Bank of Afghanistan (IBA). IBA Chief Financial Officer Faizan Ahmed said the bank had completed the conversion of its balance sheet. It plans to introduce wealth management products and launch new digital banking services in the coming months. Afghanistan’s banking sector is small, but Islamic finance is seen as an important feature that could help attract more people into the financial system. IBA estimates that only 5.7% of the population has dealings with the banking sector and the majority of the country in unbanked. Islamic banking has been offered in Afghanistan by a handful of firms through so-called Islamic windows, but there have been no full-fledged Islamic banks so far. Lenders with Islamic windows include Afghan United Bank, Ghazanfar Bank and Afghanistan International Bank.

ADIB funds GBP19 million acquisition of Bristol's The Hub

Abu Dhabi Islamic Bank (ADIB) has arranged an Islamic financing transaction to fund the acquisition of The Hub, located at the Aztec West Business Park, Bristol. The transaction is worth GBP19.35 million and is arranged on behalf of a private Saudi-based client. The Hub is a regional UK office for Atkins, a multinational design, engineering and project management consultancy. The building has been awarded a BREEAM excellent rating, as overall carbon emissions are more than a third lower than expected for a building of its size. ADIB opened its office at One Hyde Park in London in May 2012 and was the first UAE-based bank providing Islamic financial services to be licenced to operate in the UK, being one of the six banks that are fully Shari'ah-compliant.

#UK Islamic bonds to be worth GBP58 billion by 2028

UK’s Gatehouse Bank has calculated that the value of Sukuk assets listed on the London Stock Exchange (LSE) would double to GBP57.8 billion in the next decade, if issues continue at their current rate of growth. Sukuk only began life in the UK in 2007, but their numbers have been swelling at an annual rate of around 5%, though they are still little understood. Gatehouse Bank CEO Charles Haresnape sees this growth as a huge opportunity for Britain. He urges the Government to capitalise on this week's summit on Islamic finance and make it more than just a single effort for one large oil company to list on the LSE. He believes an on-going trade mission is needed to make London the world centre for all Islamic finance.

Saudi CMA approves Bank AlJazira's proposed rights issue

The Saudi Capital Markets Authority has announced its resolution approving Bank Aljazira’s request to increase its capital by way of rights issue valued at SAR 3,000,000,000. The offering price and the number of shares will be determined after market closing of the same day in which the extraordinary general assembly meeting is held. After reviewing the bank’s application in light of the governing regulatory requirements, the CMA has issued its resolution approving Bank Aljazira’s capital increase request. The CMA’s approval merely means that the legal requirements as per the Capital Market Law and its Implementing Regulations have been met.

Dubai Islamic Bank issues $1 billion senior unsecured #Sukuk

Dubai Islamic Bank (DIB) has announced the successful pricing of $1 billion Sukuk issued with a five-year tenor. The issuance carries a profit rate of 3.625% and is the first dollar benchmark Sukuk transaction from the GCC in 2018. The orderbook was driven by strong demand across the globe, including Middle East, Europe, Asia and North America, and across a broad spectrum of investors base. According to DIB's Group CEO Dr. Adnan Chilwan, the strong investor interest demonstrates not only the continued attraction of DIB, but also the resilience of the Sukuk market in general. Bank ABC, Dubai Islamic Bank, First Abu Dhabi Bank, HSBC, J.P.Morgan, KFH Capital, Sharjah Islamic Bank and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners while Union National Bank and Boubyan Bank acted as Co-Managers on the offering.

Ibdar Bank: Islamic #fintech will foster a culture of change

In this interview Ayman Sejiny, CEO of Ibdar Bank, speaks about the future of Islamic finance. Ayman Sejiny believes that fintech is going to be one of the biggest drivers of change in the new Islamic banking era. Fintech initiatives will not only improve existing customer’s banking experience, but also have the potential to bring the two billion financially-excluded individuals into the banking system. Malaysia, Indonesia, the UAE and Bahrain, driven by an influx of start-ups in the crowdfunding and payment space, have already positioned themselves to lead the field. They started to formally regulate crowdfunding and implement sandboxes or special fintech licencing schemes. These markets should therefore see huge growth in crowdfunding, P2P and payments platforms and even an increase in the use of AI in the form of robo-advisers. The UK and even the US will also see more investment in fintech startups to meet the demand for Shari’ah products in these markets. Ibdar Bank has set out a comprehensive plan for the engagement with fintech service providers.

Global #Sukuk issuance to gain momentum in 2018 as new players enter market

Moody's estimates that total Sukuk issuance will reach around $95 billion by the end of this year, after more than $85 billion in 2016, including more than $50 billion of Sukuk issuance by sovereigns. According to Moody's Vice President Christian de Guzman, sovereign Sukuk issuance volumes will continue to grow in 2018 as governments look to diversify their financing mix and satisfy the liquidity needs of Islamic retail banks. A number of factors will support sovereign Sukuk issuance, including high borrowing needs for GCC sovereigns, which Moody's expects to reach around $148 billion in 2018. Malaysia remains the largest Sukuk market with an estimated 43% of total sovereign Sukuk outstanding, followed by Indonesia with 30%. Indonesia's issuance will likely grow with the government's efforts to develop the Islamic finance sector.

MoU signed to support creation of #Sukuk sector in #Kenya

Nasdaq Dubai and the Nairobi Securities Exchange have signed a Memorandum of Understanding (MoU) to facilitate the creation of a Sukuk sector in Kenya. The MoU was signed in Dubai by Hamed Ali, CEO of Nasdaq Dubai, and Geoffrey Odundo, CEO of the Nairobi Securities Exchange. Hamed Ali assured that by cooperating and sharing expertise, the two Exchanges will provide powerful support for the growth of Islamic finance in Kenya. Geoffrey Odundo said the development of the Islamic capital markets can provide significant support for funding national development while strengthening international relationships. Other recent steps for the sector include a Sukuk transaction on Nasdaq Dubai’s Murabahah financing platform carried out by the Africa Finance Corporation.

Tirad Mahmoud resigns from ADIB

The Board of Directors of Abu Dhabi Islamic Bank (ADIB) has accepted the resignation of Tirad Mahmoud from his position as Group CEO. Mahmoud has beon medical leave from March 2017. Khamis Buharoon, ADIB’s Vice Chairman, will continue as acting CEO. Mahmoud joined the bank as a CEO in 2008 and was able to grow ADIB from a domestic market player to a leading regional bank with presence in six countries and a customer base of around one million customers. ADIB has an asset base of more than AED121 billion. In its most recent quarterly results, ADIB reported a 13% rise in third-quarter net profit.

ADIB hosts regulatory compliance #forums for banks from #Sudan and #Iraq

Abu Dhabi Islamic Bank (ADIB) held forums on the international regulatory environment for banks from Sudan and Iraq to support their increasing integration into the global economy. The forums followed the lifting of the United States' longstanding sanctions against the government of Sudan on 12 October 2017. Andreas Meletiou, ADIB’s Head of Global Financial Institutions, said the seminars were equally important for transfer of knowledge and experiences, as well as for deepening networks. The two separate forums gathered around 50 bankers from each country to discuss the evolving international regulatory environment for financial institutions. They addressed issues such as Basel III and IFRS 9 requirements as well as anti-money laundering measures. ADIB, which has a large retail and corporate banking operation in its home market of the United Arab Emirates, also operates a wide international network, including Egypt, Iraq, Sudan and the United Kingdom.

APICORP lists $500 million #Sukuk on Nasdaq Dubai

Nasdaq Dubai has welcomed the listing of a $500 million Sukuk by APICORP, the development bank of the Arab world’s oil and gas industries. The transaction is APICORP’s second Sukuk listing on Nasdaq Dubai, as the first was in January 2016. The Sukuk was issued under a $3 billion Sukuk programme and is aimed at diversifying its funding sources. APICORP’s activities include equity investment, debt financing, financial advisory and energy research services. Sukuk listings in the Emirate currently totals at $52.97 billion. 11 Sukuk listings have taken place so far in 2017 on Nasdaq Dubai with a total value of $10.25 billion.

Islamic Development Bank (IDB) celebrates listing $1.25 billion #Sukuk on Nasdaq Dubai

Dr. Zamir Iqbal, Chief Financial Officer of the Islamic Development Bank (IDB), rang the market-opening bell to mark the listing of a $1.25 billion Sukuk on Nasdaq Dubai. 53% of the five-year Sukuk issuance was acquired by investors in the EMEA region, while 47% went to investors based in Asia, with an annual return of 2.261%. The IDB is one of the largest Sukuk issuers on Nasdaq Dubai, with a current total of eight listings valued at $10.25 billion. The bell-ringing ceremony was attended by Hamed Ali, CEO of Nasdaq, as well as Azahari Bin Abd Kudus, Capital Markets Manager of the IDB. Dubai is a leading international centre for Sukuk activity, with Sukuk listings in the Emirate currently totalling $52.47 billion.

Dagong and IIRA maintain the Ratings of Al Baraka Banking Group and revise the Outlook Upwards

Dagong Global Credit Rating and Islamic International Rating Agency (IIRA) have jointly maintained the ratings of AlBaraka Banking Group (ABG) at BBB+/A3. At the same time, IIRA has re-affirmed the national scale ratings of ABG at A+/A2. Outlook on the assigned ratings has been revised to 'stable' from 'negative' indicating the macroeconomic and political stability in ABG’s core countries. ABG operates through a globally diversified franchise spread across 11 jurisdictions in Europe, Africa and Asia. ABG’s ratings derive strength from the recent tier 1 Sukuk issuance this year. While the Group’s subsidiaries are individually governed by their supervisors, the Group maintains close coordination and oversight. Furthermore, Bahrain's institutional framework for Islamic banks ensures adherence to a strong framework for Shari'ah governance.

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