CPI Financial

Al Hilal Bank launches #child #safety campaign by distributing car seats to new families

Al Hilal Bank has distributed car seats for newborns at Danat Al Emarat Hospital for Women & Children in Abu Dhabi, as part of its new initiative for promoting child safety in the UAE. The Car Seat initiative forms part of the bank’s long-term Corporate Social Responsibility (CSR) programme. Alex Coelho, the CEO of Al Hilal Bank, said the Bank takes CSR very seriously and is proud to play a role in providing support to local families. Mohammed Ali Al Shorafa Al Hammadi, CEO & MD of United Eastern Medical Services (UEMedical) stressed on the importance of such campaigns in the UAE. Government led research found that the majority of parents still do not believe in the importance of car seats. An astonishing 34% saw no necessity to buy them, 28% do not know which seat to buy, while 15% believe that passengers holding children is safe enough. The new programme will be complemented by an extensive car seat awareness campaign on social media and across Al Hilal Bank branches, with the objective of reinforcing the importance of car safety for children.

Tadhamon International Islamic Bank ratings affirmed

Capital Intelligence Ratings has affirmed the credit ratings of Tadhamon International Islamic Bank (TIIB), based in Sana'a, Yemen. The Bank’s Long- and Short-Term Foreign Currency Ratings (FCRs) are both maintained at 'C', reflecting the volatile operating environment and devastated economy. TIIB has confirmed to CI Ratings that it is not currently in default of any obligations. All ratings remain on a 'Negative' Outlook. The rating is supported by adequate liquidity. Real estate and other investments outside of Yemen represent around 40% of the balance sheet. The Support Rating is adjusted to '5' from '4' based on the low likelihood of support from shareholders and the authorities, and their ability to provide timely assistance.

ADIB recognised for CSR initiatives from UN Global Compact subsidiary

Abu Dhabi Islamic Bank (ADIB) has been awarded for its commitment to corporate social responsibility (CSR) from the regional CSR Network Consultancy, a member of the United Nations Global Compact initiative. The award was presented to Mohammed Al Fahim, Regional Head of Corporate Banking at ADIB. ADIB has a proven track record of CSR initiatives, including launching blood donation campaigns, sponsoring mass weddings and organising a range of activities during Ramadan. The bank adopted design principles aimed at minimising both energy and water inputs and waste outputs. In addition, ADIB Future’s Champions League was a recipient of the Gold Prize for the Best Sports CSR Initiative, and Bronze winner in the Youth Development Project of the Year at the 2017 Sports Industry Awards. ADIB also maintained its commitment to recruit, develop and promote local talent through its youth development programme.

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.

ICD and Saturna launch #sustainable Islamic #fund

The Islamic Corporation for the Development of the Private Sector (ICD) and Saturna have announced the launch of the ICD Global Sustainable Fund. The fund is designed for investors who seek to align their investment goals with social values. The launch of the fund enhances Malaysia’s position as the marketplace of innovation. ICD serves as one of the Fund’s seed investors and advisor, while Saturna is the Fund’s investment manager. The Fund will invest at least 80% of its net assets in equities of global issuers that demonstrate sustainable characteristics. The firm uses a proprietary ESG rating system to identify issuers with sustainable characteristics. Investors can buy the Fund with no sales charge, paying only low administrative fees and transparent distribution fees.

Fitch Rates Bank Jambi's First #Sukuk Issuance 'A(idn)'

Fitch Ratings Indonesia has assigned a National Long-Term Rating of 'A(idn)' to PT Bank Pembangunan Daerah Jambi's proposed Sukuk issuance. The proposed issuance is the bank's first sukuk with a total amount of IDR 120 billion and a maturity of three years from the issuance date. 'A' National Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. Bank Jambi's rating reflects Fitch's view that the bank is important to the regional government of Jambi province on Sumatra island. Bank Jambi is owned by the government of Jambi province and by the governments of various municipalities. Although Bank Jambi is a small bank in the Indonesian banking industry, it has a strong franchise and has an important role in supporting development in the region.

Fitch: Dana Gas case highlights #Sukuk's legal uncertainties

According to Fitch Ratings, credit rating implications for sukuk arising from Dana Gas's attempt to have its mudaraba sukuk declared unlawful will take time to emerge. The impact of the move remains unclear until all relevant proceedings are resolved. Fitch added that sharia compliance typically does not have credit implications for Fitch-rated sukuk. Fitch does not rate Dana Gas or its sukuk. Dana Gas started court proceedings in the UAE to have its sukuk declared unlawful and unenforceable in the UAE. Sukuk regulations have been introduced and updated in several countries in recent years, but standardisation, harmonisation and legal precedents are limited in most jurisdictions. This case could set an important precedent for the relationship between sharia compliance and credit risk, and give greater clarity on enforceability.

Moody's: Dana Gas Shari'ah breech is credit negative for #Sukuk investors

Dana Gas petitioned the English High Court of Justice for injunction after commencing legal proceedings in Sharjah courts to have its Mudharaba Sukuk declared unlawful. Dana Gas publicly stated on 13 June 2017 that its $700 million Sukuk in its present form is not Shari'ah compliant and is therefore unlawful in the UAE. If the company's petitions are upheld by the Sharjah courts, it would trigger a standstill on the two upcoming contractual payments, a credit negative for the Dana Gas Sukuk investors. Although most investors regard the company’s announcement as a tactical move in its debt negotiations, a ruling in favour of Dana Gas would potentially send shockwaves among Islamic finance and Sukuk investors.

Islamic finance #risks raised by Dana Gas case

Dana Gas applies Shari’ah non-compliance as a cause for restructuring. Dana Gas has proposed a restructuring to holders of its $700 million of Sukuk maturing in Oct 2017. Its proposal is on the basis that these Sukuk are no longer Shari'ah compliant because standards of interpretation have changed since they were issued in 2013. Dana Gas is seeking to have its existing Sukuk declared invalid in a UAE court and this court has granted Dana Gas an injunction protecting it from claims until the case is decided. If the precedent of revisiting Shari'ah compliance infects the Islamic finance industry, there is greater risk of a loss of confidence in other markets too. There are many examples of distressed conventional bond borrowers engaging in opportunistic negotiating positions. The result was higher cost of borrowing for them rather than for the broad asset class.

IIRA maintains ratings of #Bahrain Islamic Bank

Islamic International Rating Agency (IIRA) has reaffirmed ratings of Bahrain Islamic Bank (BIsB) at BBB/A2 on the national scale and BBB-/A3 on the international scale. IIRA added that the bank’s rating outlook is constrained by the macroeconomic environment and tougher industry conditions for banks in the Gulf. Given the presence of external, regional concerns, the outlook on international scale ratings is assessed as Negative. Impairment in recent financings remains minimal, indicating improvement in the bank's business underwriting capability. However, overall asset quality concerns remain notable. IIRA has assigned BIsB a Fiduciary Score of 71-75, which signifies that the rights of various stakeholders are adequately protected.

Global #Sukuk Market Outlook: the surge in Sukuk issuance isn't the new normal

The Sukuk market performed strongly in the first half of 2017 as issuance increased by 37.7% in the first six months of the year. This was primarily driven by the jumbo local and foreign currency issuances by some GCC governments. Sovereign issuers turned to Sukuk because wanted to diversify their investor base and to benefit from the good liquidity conditions in local and global financial markets. S&P Global Ratings expects the volume of Sukuk issuance to remain strong in 2017, but this is likely to be the exception rather than a new norm. In their view, the large transactions in the first half of 2017 are unlikely to be repeated in 2018. It remains to be seen if the recent developments in Qatar will impact issuance out of the country. Qatar was placed under sanctions by a group of governments that cut diplomatic ties and trade and transport links.

Middle East and other sovereign #investors put major asset allocation decisions on hold

Invesco has released its fifth Invesco Global Sovereign Asset Management Study. The study was conducted amongst 97 individual sovereign investors and asked them to rate the importance of economic and geopolitical factors on their investment strategies. Middle East and other sovereign investors see low interest rates as the greatest tactical asset allocation factor. Brexit and the US election results are expected to grow in importance for future allocations, as the implications of political shifts on investment performance becomes clearer. Sovereign investors have ranked the US as the most attractive market. However, long term confidence is still restricted by concerns about growing protectionism limiting access for foreign sovereigns. The UK saw the biggest drop in attractiveness and Continental Europe's attractiveness has also fallen. However, Germany stands out from its European neighbours because of its perceived safe haven status. Despite target return gaps increasingly widening, geo-political uncertainty is causing sovereign investors to make fewer allocation changes than at any point in the last five years.

The IFSB releases the Islamic Financial Services Industry #Stability #Report 2017

The Islamic Financial Services Board (IFSB) has released the fifth edition of its annual Islamic Financial Services Industry Stability Report 2017. The Report finds that despite subdued growth conditions, the global IFSI has been able to sustain its total assets value at approximately $1.9 trillion in 2016. The Report illustrates areas that could be further strengthened across all sectors of the IFSI (banking, capital markets and Takaful), many of which will require measured efforts by the national authorities to address the emerging risks. Secretary-General of the IFSB, Zahid ur Rehman Khokher, stated that Islamic financial services industry withstood the challenging operating environment. However, it moved away from the double digit growth trajectory witnessed in the previous years. He added that this slowdown underscores the importance of strengthening the resilience of the Islamic financial system.

IDB/World Bank #report details role of Islamic finance in ending poverty

A report published by the Islamic Development Bank (IDB) Group and World Bank Group has outlined the potentials of Islamic finance in curbing income inequality and ending poverty worldwide. The report was unveiled by IDB President, Dr Bandar Hajjar, on the sides of the 42nd Annual Meeting of the IDB Group in Jeddah. It details the trends in Islamic finance, identifies the major challenges and recommends policy interventions to leverage Islamic finance. The report notes that the Islamic banking sector needs innovative risk-sharing products and services, enhanced scale and access to Islamic finance, improved liquidity and stability, and bolstered human capital and literacy in Islamic finance. The report also provides an overview of recent policy initiatives taken by several IDB member countries to promote shared prosperity.

Hogan Lovells advises on the first #Sukuk to be listed on ISE's Global Exchange market

Hogan Lovells has advised Aktif Bank on the first Sukuk ever to be listed on the Global Exchange Market of the Irish Stock Exchange (ISE). The $118million Sukuk was issued under a mudarabah structure with GAP Insaat Yatirim ve D?s Ticaret, a Turkish construction company. While the Irish Stock Exchange has listed Sukuk historically, this is the first Sukuk to be listed on the ISE's Global Exchange Market. The Hogan Lovells team was led by Imran Mufti (Partner, Dubai), with support from Annalisa Feliciani (Counsel, Rome), Ahmet Kalafat (Senior Associate, Dubai) and trainees Marjun Parcasio and Luigi de Angelis. Onur Aksoy from Aktif Bank said this Sukuk represents a milestone for Islamic capital markets originating out of Turkey. He added that Aktif Bank was pleased to work with the Hogan Lovells team, benefitting from their deep understanding of Islamic finance and capital markets.

$453 million in infrastructure projects for Islamic Development Bank members

A total of $453 million worth of infrastructure projects for five member states has been approved by the Islamic Development Bank (IDB). The approval was given ahead of its annual meeting of the Board of Governors on 17-18 May 2017 in Jeddah, Saudi Arabia. IDB also approved three special assistance projects worth $580,000 for Bosnia and Herzegovina, Kenya and Rwanda. The President of IDB, Dr. Bandar Hajjar, underlined the role of infrastructure projects in order to accelerate development activities. He notied that the meeting addressed in detail youth economic empowerment and the significant opportunities created for youth through infrastructure projects.

Gulf Islamic Investments expands #investments into lucrative transportation and logistic

Gulf Islamic Investments (GII) successfully completed a Shari’ah compliant growth capital financing round for transportation company Bion Group. The UAE-based Group provides both heavy haul transportation services and the manufacturing of heavy transport equipment. Pankaj Gupta, Co-Founder and Co-CEO of Gulf Islamic Investments, said this partnership was an excellent opportunity for Bion Group to take advantage of the uptrends in the ever-increasing construction sector. Noas Al Rawi, CEO of Bion Group, said that with GII's assistance Bion will improve its services portfolio and increase production capacity. He added that Bion will target the refrigerated transportation sector and further consolidate its position in the country’s construction sector.

QInvest and GCC investor launch “Magnolia Fund” to invest in #US #residential #market

#Qatar's QInvest announced its collaboration with a GCC institutional investor to create the Magnolia Real Estate Fund. The fund has already completed its first acquisition of an asset in Colorado, USA. The acquisition was funded using an Ijarah property debt structure. The Magnolia Fund is focused on investing in the fast-growing, income-generating multifamily residential market in the US. The Fund is building a portfolio of assets in the sector and plans to make more acquisitions during 2017. The newly acquired asset is located in Fox Creek, Thornton, a northern suburb of Denver, Colorado. The asset is projected to yield net cash in excess of eight per cent on annual basis and a net IRR in the range of 12-13%. The multifamily manager TruAmerica has co-invested in the asset and will oversee the day-to-day operations of the property.

Baker McKenzie wins major #litigation case for Dubai Islamic Bank

Global law firm Baker McKenzie has successfully acted for Dubai Islamic Bank in its defence of a $2 billion claim brought against it in the English Commercial Court. The claim was brought by Plantation Holdings, a holding company owned by an Argentinian-resident property developer. The allegation was breach of contract related to plot of land on the outskirts of Dubai, which Plantation had planned to develop into a high-end luxury lifestyle and equestrian complex. The Bank took security over the project as part of the restructuring of a $500 million debt owed to it as a result of a complex receivables financing fraud. The case was heard in an eight week trial, with evidence from witnesses from seven jurisdictions. The court ruled that Plantation's principal director had made up evidence and that another of Plantation's witnesses had manufactured documents, Plantation has been ordered to pay 70% of the Bank's costs on the indemnity basis. The nature of the case also resulted in examining the volatility of the Dubai property market and the functionality of its property registration system, as well as the Dubai authorities' approach to financial misconduct.

IFC makes equity #investment to expand payment infrastructure in the Middle East and Africa

IFC, a member of the World Bank Group, has announced an equity investment of $30 million via the consortium fund Network International to expand the payment infrastructure in the Middle East and Africa. Network International is jointly controlled by the Emirates NBD Bank and Warburg Pincus/General Atlantic consortium. The investment will help the company expand and modernise its banking client network in the Middle East and Africa. The investment is expected to allow MSMEs to access card-based payments and develop digital data records, to help them grow their customer base. Bassel Hamwi, Head of the IFC Middle East and North Africa Fund, said the shared infrastructure brings down costs and boosts financial inclusion, while reducing the risk of fraud.

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