Corporate Finance

Dana Gas and partners start arbitration case against MOL over #Kurdistan settlement

Dana Gas and its partner Crescent Petroleum have begun arbitration proceedings against Hungary's MOL Group over Dana's settlement agreement with the Kurdistan Regional Government (KRG). The KRG agreed to pay $1 billion to the consortium and to reclassify some additional $1.24 billion from debt to outstanding costs. MOL is unsatisfied with the way Dana Gas, Crescent Petroleum and the Pearl consortium handled the settlement and would have pursued a final litigation and enforcement outcome against KRG instead. Dana and Crescent Petroleum own a combined 70% stake in the Pearl consortium, while Austria's OMV, Germany's RWE, and MOL each own 10%. The KRG settlement boosted Dana's cash balance and lifted the company's stock on the Abu Dhabi stock exchange by 14%. Last week Dana bondholders requested a $300 million cash paydown, but Dana refused the proposal and the case is now being disputed in a London High Court.

EGP 11.7bn funding portfolio of #corporate finance in Abu Dhabi Islamic bank by end of June 2017

The corporate sector in #Egypt acquired EGP 11.7bn of the total loans portfolio in Abu Dhabi Islamic Bank-Egypt until the end of June 2017. The bank continued its programme to fund small and medium enterprises (SMEs). The sector continued its growth also in the field of retail banking, reaching EGP 4.3bn, whereas the volume of the portfolio managed by the treasury sector in the bank is estimated at EGP 12.2bn. Abu Dhabi Islamic Bank-Egypt revealed its business results for H1 2017, where total net profits during that period reached EGP 339m with EGP 148m increase by 78% compared to H1 2016. Total revenues reached EGP 1.841bn compared to EGP 1.225bn, with a growth of 50%. The volume of growth in total assets reached 30% by the end of June 2017 compared to June 2016. In its report the bank stressed its commitment to developing the technological infrastructure and investing in human resources.

#Dana #Gas said to see creditors turn debtors as #showdown deepens

The standoff between Dana Gas PJSC and its bondholders carries on after the company that’s trying to void $700 million of its own debt was said to believe investors may even have to pay the company.
Dana Gas says a court battle with holders of the Islamic securities, or sukuk, may see it having to return less than 10 % of the amount it borrowed. In a second scenario, it believes creditors may have to pay it as much as $150 million, and that the case may last more than 10 years. The Gas company had announced plans to restructure the debt in May, this week retracted an offer to replace the bonds and is pursuing a resolution in court. It said in June the debt was no longer Sharia-compliant. Investors questioned the validity of the claim since neither sukuk regulations nor UAE laws governing the matter have changed since they were issued in 2013.

Dana Gas receives partial payment of $50m from #Egypt

Dana Gas has received an initial payment of $50 million (Dh184 million) from the Egyptian government as partial payment of its outstanding receivables. This payment represents 18% of Dana Gas Egypt’s total overdue receivables of $283 billion (Dh1.038 billion) as of the end of first quarter 2017. Dana Gas, which pumps most of its gas at fields in Egypt and Iraq, is seeking to recover payments from both countries for overdue bills. The company was owed $1 billion from Egypt and the self-governed Kurdish region in northern Iraq. CEO Patrick Allman-Ward had previously said that the company will not make any new investments in Egypt due to delay in receiving payments. In the first quarter 2017, Dana Gas reported gross revenues of $118 million and net profit of $11 million. Overall group production was 69,900 barrels of oil equivalent per day, 16% higher compared to first quarter of 2016.

Metito's experience with islamic finance in Africa

Metito is the largest privately held water treatment company in the Middle East. Metito’s African operations account for nearly about a third of its revenues and the current backlog is around $300 million. Metito approached Islamic banks in early 2014 to tap on their resources to support the Group’s growth. As of today, a major of the long-term financing that the group has received in GCC region is comprised mostly of Shari'ah-compliant financing tools. The total size of Islamic financing facilities currently in use stand at around $150 million and the share is expected to increase over the next 12 months. The Group has so far availed three types of Islamic finance financing tools, Musharakah, Ijarah and Murabahah. CFO Wafic Ghanem said Metito has not yet considered tapping into Sukuk issuance for its African business given the infancy of Sukuk market in the continent.

Corrigenda: Wafic Ghanem has been reported being Group CEO before.

Trump policies, higher rates may spark emerging market #debt crisis

US President Donald Trump has been accused of courting international trade friction and a new international debt crisis. There were already signs given the huge debt built up over a decade of record low interest rates, and that rates had begun rising. The next international debt crisis could well be in the emerging market corporate sector. Global debt has reached US$217 trillion, equal to a record 325% of global gross domestic product. Investors in Brazil, South Korea, Thailand, Chile, Czech and Malaysia especially have been big borrowers. While most of this has been in local currencies, corporates in India, Saudi Arabia, Turkey and Russia as well as Hong Kong and Singapore have borrowed heavily in foreign currency. This creates a currency mismatch situation.

#Zurich: #Responsible #Finance & Investment Summit 3-4 May 2017

Summit will explore intersection of #fintech, #ESG and #Islamicfinance. #RFISummit17

January 24, 2017, Zurich, Switzerland –

Bringing together a diversity of perspectives is critical for continuing the growth occurring within responsible finance. On this premise, the Responsible Finance & Investment Summit 2017 will convene in Zurich, Switzerland from 3-4 May 2017 around the theme “Building Bridges, Expanding Impact”.

Recent estimates from industry stakeholders show continued growth in responsible finance assets in many geographies and sectors. Responsible investment in Europe grew by 42% during the past 2 years, while in the U.S., assets grew by 33%. In Islamic finance, which has a global presence with a significant presence in Europe, the Middle East and Asia, growth in the last 2 years has been 21%. Identifying actionable areas for collaboration will support continued growth towards a more sustainable financial system.

CIMB IB top lead manager for bonds, #sukuk

CIMB Investment Bank (CIMB IB) came out tops on RAM Rating Services' league tables for both corporate bonds and sukuk as at end-September 2016, after having arranged RM21.25 billion worth of RAM-rated corporate bonds and sukuk. The amount represents 56% of the RM37.88 billion RAM-rated corporate bonds and sukuk in the first nine months of the year. In terms of sukuk programme value, Maybank Investment Bank (Maybank IB), which has arranged RM12.54 billion or 72% of RAM-rated sukuk, takes the lead. As at end-September 2016, outstanding corporate bonds stood at RM536.5 billion, while the gross issuance of corporate bonds and sukuk amounted to RM66.4 billion, almost 50% higher than last year’s January-to-September period. RAM anticipates the corporate bond market to chart a steady course through the remainder of 2016.

Elizabeth Warren wants feds to answer for lack of Wall Street prosecutions

Elizabeth Warren wants the FBI and Justice Department to explain why no bankers were prosecuted for the 2008 financial crisis. She wants the agencies to explain why they didn't act on the recommendations from the Financial Crisis Inquiry Commission to prosecute top Wall Street executives. The commission was charged with investigating the cause of the 2008 financial meltdown. Warren said the commission recommended actions against 14 Wall Street firms including Citi, Fannie, Merrill and AIG, as well as Freddie Mac, Goldman Sachs, JPMorgan, Credit Suisse, UBS, Societe General, PriceWaterhouseCoopers, Moody's, Washington Mutual and Lehman Brothers. Some of those firms reached civil settlements with authorities, but none faced criminal charges.

#QIB forges ‘strategic partnership’ with Jaidah Equipment

Qatar Islamic Bank has announced that it will be the preferred financing partner of Jaidah Equipment under the terms of the strategic partnership QIB forged with the Qatar-based equipment dealer.
QIB general manager of Wholesale Banking, Tarek Fawzi, and Jaidah Equipment managing director, Ayman Ahmed, led the official signing before senior executives from both organisations at QIB’s corporate headquarters in Doha.
As part of the agreement, customers of Jaidah Equipment who would like to purchase new equipment are entitled to use the bank’s Fleet and Heavy Equipment Financing scheme, which was introduced last year as part of QIB’s Aamaly programme, a collection of products and services designed specifically for small and medium-sized enterprises.
Through its Aamaly programme, QIB aims to foster the growth of SMEs and help diversify the country’s economy in line with Qatar National Vision 2030.
“We are pleased to be partnering with Jaidah Equipment. This new relationship enhances the value of QIB’s Aamaly programme and makes it easier for SMEs to expand their businesses in the growing Qatar market,” Fawzi said.

ADFG and Bahrain’s GFH to launch Islamic bank in Abu Dhabi

Abu Dhabi Financial Group (ADFG) and Bahrain’s GFH Financial Group are jointly setting up an Islamic bank in Abu Dhabi’s new financial free zone with initial capital of $100 mn. ADFG's CEO Jassim Al Seddiqi said the bank will open very soon, it will be run as a commercial bank accepting offshore deposits and dealing in dollars. ADFG has recently raised its stake in GFH to 11.74% from 10% and the two firms are seeking other joint opportunities for the future.

Bahrain's GFH to list Khaleeji bank subsidiary in Dubai

GFH Financial Group plans to list its Bahraini subsidiary Khaleeji Commercial Bank in Dubai and acquire a financial services company to increase shareholder value. GFH's CEO Hisham al-Rayes said the company wants to regarded by investors as a financial holding company rather than an investment bank. The company aims to generate around 15% of its income over the next two years from real estate investments, which will be managed by a new Dubai-based operation called GFH Real Estate.

International Islamic Trade Finance Corporation names CEO

The International Islamic Trade Finance Corporation (ITFC) has appointed Hani Salem Sonbol as its CEO. As ITFC is an autonomous member of the Islamic Development Bank (IDB) the announcement was made at the 41st annual meeting of the IDB in Jakarta. Sonbol expressed his thanks to Ahmad Mohamed Ali, president of IDB’s board of directors. He held several leading positions, including deputy CEO of ITFC, director of the IDB Group Regional Office in Rabat, and director of trade finance and development department at IDB.

Bank Muamalat signs #corporate integrity pledge with MACC

Bank Muamalat CEO Datuk Mohd Redza Shah Abdul Wahid and MACC deputy chief commissioner Datuk Seri Mustafar Ali signed the Corporate Integrity Pledge of Malaysia Anti-Corruption Commission (MACC). The signing ceremony was also witnessed by Bank Muamalat chairman Tan Sri Dr Mohd Munir Abd Majid. The signing of the pledge signifies Bank Muamalat's declaration against corrupt practices and its resolve to work towards a highly principled business environment.

How Does Unethical Conduct Get Normalised in Banking?

The call to set up a Royal Commission on Banking has set in motion the debate on ethics in banking and finance, and the possible remedies to overcome the problem of unethical conduct. It is accepted that the problem is systemic, and yet the remedy suggested is at the individual level - for example the Banking + Finance Oath. The latest Panama Papers scandal dwarfs the past scandals yet again. As long as the money banks can make out of the deals is in excess of the fine they pay, such scandals will continue.

Fitch: Transparency still a weakness in GCC corporates

Fitch Ratings has cautioned that the ratings of Gulf Cooperation Council (GCC) privately-owned corporates are being constrained by relatively weaker corporate governance than their developed market peers. The ratings agency said in a statement that this is mainly due to the absence of an effective independent board, weak transparency and limited disclosure practices and a move in this direction will still take time.

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Relaunch IslamicFinance.de Newsletter - Free Download

Dear Reader,

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Bi-annual Bulletin on the Malaysian Islamic Capital Market by the Securities Commission Malaysia

Contents
Revised Shariah Screening Methodology: 1
Expands ICM’s Global Reach
SHARIAH
New Shariah Advisory Council Resolutions 3
DEVELOPMENT
Region’s First Structured Covered Sukuk 7
Royal Award for Islamic Finance Calls for Global 9
Nominations
SC and Autoriti Monetari Brunei to Strengthen 9
Efforts in Greater Cross-border Activities
SC Leads Islamic Finance Taskforce to Publish a 10
Report on Enhancing Infrastructure for ICM
REGULATORY
IFSB-IOSCO-SC Collaborate on Disclosure 11
Requirements for ICM Products
SC Revises Equity Guidelines for SPACS 12
Technical Note on the Application of SC’s 13
Guidelines In Relation to Non-Tradable and
Non-Transferable PDS and Sukuk
FEATURES
2013: Another Resilient Year for the Global 14
Islamic Finance Industry
Global Islamic Funds Industry: Achieving 18
Growth Under Challenging Times
Harmonisation of Shariah Rulings 22
in Islamic Finance
News Round-up 29
STATISTICAL UPDATES
Malaysian ICM – Facts and Figures 32
Free download below at source:

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How to achieve a soft landing of a deleveraging, while growing economy?

For many years we see in the media experts believing in inflation and even hyper inflation. However, in the same time we face proponents warning against deflation. So far we all noticed.

Only a about a week ago I read an article by Myret Zaki clarifying that unfortunately inflation and deflation co-exists.

Myret Zaki's thesis is that we face inflation on financial markets, and deflation in the real economy (in French):

http://www.bilan.ch/myret-zaki/redaction-bilan/inflation-et-deflation-co...

In my view there is a general major shift in the price matrix and I still try to figure the magnitude and implications thereof. It is a bit irritating as at University we learned about neutrality of money:

http://en.wikipedia.org/wiki/Neutrality_of_money

This means any extra supply will increase prices equally, 5 % more money, all prices going up 5 %. Pretty plausible at first hand. However, it seems it does not work in reality any more (or never did).

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