Reuters

British judge to issue ruling on $700 million Dana Gas #sukuk case soon

British High Court judge George Leggatt said that he would not further adjourn a trial in the Dana Gas case and would issue a judgement soon. Dana is claiming it does not need to redeem its $700 million sukuk, which matured at the end of last month, because the instruments became invalid under UAE law. Dana had asked for further postponement of the trial pending developments in a UAE court, where motions in the case have also been filed.

#UAE's Dana Gas profit boosted by financial settlement with KRG

Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion payment as part of a settlement agreement with the Kurdistan Regional Government (KRG). The agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier. The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs. The company is at the centre of a legal dispute after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant. It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. Dana claimed being confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

#Saudi's Jabal Omar picks two banks for #sukuk sale early next year -sources

Saudi Arabia’s Jabal Omar Development Company has hired two banks to manage a sukuk sale which could exceed 4 billion riyals ($1.07 billion). Bank Albilad and GIB Capital were hired to arrange the issuance, which is planned for the first quarter of 2018. The property developer's sukuk would be among just a few corporate debt sales expected over the next few months, as the Saudi market is still largely dominated by government bonds. The government has issued a total of 47 billion riyals through monthly sukuk sales since July, and is likely to continue. Jabal Omar’s flagship Mecca development project includes residential units, hotels and commercial malls. The company has raised a number of large bank loans over the past few years, and the sukuk proceeds would be used to refinance its existing bank debt.

Unified industry practices key to Islamic finance growth: AAOIFI

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will prioritize wider adoption of its standards by engaging national regulators in key markets. Islamic finance has grown fast in part due to self-regulation, but the approach is now viewed as a barrier to growth. AAOIFI secretary-general Hamed Hassan Merah said wider adoption had a direct link to the qualitative growth of the industry. AAOIFI has recently signed Borsa Istanbul and the Saudi Arabian Monetary Agency as institutional members. Special attention will be given to Malaysia and the convergence of AAOIFI standards with the local rules. An AAOIFI survey of 213 scholars found 78% of respondents favour making AAOIFI sharia standards mandatory. On the other hand, 82% of respondents said Islamic finance institutions should adopt them on a voluntary basis.

MIDEAST #DEBT-#Qataris hold non-deal bond roadshows as rift drags on -sources

Qatari banks have met investors in Europe and Asia to gauge their interest in potential U.S. dollar bond issues. Access to international debt markets has become problematic since the diplomatic crisis has erupted. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar, accusing it of supporting terrorism. Cross-border deposits accounted for about a quarter of Qatar's total deposits, so banks started to look for alternative funding. Al Khalij Commercial Bank, Doha Bank, Qatar International Islamic Bank and QNB have all met investors in recent weeks. Feedback was positive, but investors also made clear that issuers would have to pay premiums in order to attract sufficient demand. According to an international portfolio manager, the premium that Qatari banks would have to pay is about 30-40 basis points. A second fund manager said Qatari banks would have to pay up not only because of the increased political risk, but also because of general market conditions in the region.

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.

#Russia's Sberbank considers Islamic finance entity, to propose regulatory change

Sberbank is considering setting up an Islamic finance entity and will propose regulatory changes to facilitate sharia-compliant business. Vnesheconombank and Tatfondbank are also developing Islamic finance products. Legislation will need to be passed in Russia to make Islamic finance cost-effective. Taxation is often an obstacle, as transactions have double or triple tax duties since they require multiple transfers of underlying assets. Sberbank is currently testing pilot transactions in leasing, financing food production and trading. Oleg Ganeev, deputy chairman at Sberbank, said the decision on whether to set up a separate entity could come by next year. He added that local businesses could also consider issuing sukuk, as they have a variety of tangible assets that can support such deals.

Qatar International Islamic Bank readies $2 bln #sukuk programme

Qatar International Islamic Bank has finished creating a $2 billion sukuk issuance programme and is preparing to issue it when market conditions improve. Qatar's access to international bond markets has become problematic since Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with the country. Instead of debt markets banks have turned to privately placed bond and sukuk deals, as well as bilateral loans. Qatari banks are facing greater urgency to secure funding because banks from the four Arab countries have been withdrawing deposits from Qatar. Last month the largest Qatari lender, Qatar National Bank, raised $630 million in Taiwan’s Formosa bond market. Commercial Bank of Qatar is also considering whether to borrow money on the Taiwanese bond market.

#UAE court postpones judgment at Dana Gas #sukuk hearing - source

A judge at a United Arab Emirates court has postponed the ruling in the Dana Gas sukuk case. Dana is refusing to make payments on the sukuk, which will mature this month. It argues that changes in Islamic finance over recent years have made the bonds unlawful in the UAE. The postponement means the next major development in the dispute may occur in a London High Court, where fund manager BlackRock and Deutsche Bank are representing the sukuk holders. In late September, High Court judge George Leggatt said he would adjourn the London trial until October 12.

#Nigeria's 100-bln-naira debut sovereign #sukuk oversubscribed by 5.8 pct -debt office

Nigeria’s government launched a 100-billion-naira debut sovereign sukuk on the domestic market. According to the Debt Management Office, the sukuk was oversubscribed by 5.8%. The bond is structured as a lease and guaranteed by the government of Nigeria. The seven-year Islamic bond fetched 105.87 billion naira in subscription from retail and institutional investors.

Creditors tell High Court that Dana Gas #sukuk get-out is "absurd"

According to creditors, Dana's claim that it does not have to pay back its Islamic bonds because they are no longer sharia-compliant is "absurd" as repayment under such a scenario is covered in the original paperwork. United Arab Emirates energy producer Dana Gas said in June that its $700 million sukuk were unlawful and began proceedings to have this confirmed in British and UAE courts. The case could set a precedent for other sukuk issuers to refuse to redeem their debt obligations. Legal representatives for the creditors have asked the court to dismiss the Dana Gas claim and asked for permission to serve an exercise notice so they would be able to take action. Dana Gas and Deutsche Bank were not in court because of a last minute injunction obtained from a UAE court preventing them from taking part. Judge Leggatt said he would adjourn the trial until Oct. 12 to see if the Sharjah court in the UAE would lift the injunction preventing Dana Gas and Deutsche from participating in the UK proceedings.

London judge postpones decision on Dana Gas #sukuk hearing

A London High Court judge will decide on Friday whether to continue proceedings on the validity of $700 million sukuk issued by Dana Gas. United Arab Emirates producer Dana Gas started proceedings in June to have its sukuk declared invalid and unlawful because of changes in the interpretation of Islamic finance. A last-minute injunction obtained by some shareholders prevented Dana Gas from participating in the trial. High Court judge George Leggatt on Tuesday adjourned the trial and decided to reserve judgement until Friday. The outcome of the trial could have significant repercussions for sukuk issuers and investors worldwide, as it could set a precedent for other issuers. The case is being disputed in UK and UAE courts because while the purchase undertaking is regulated by English law, the mudarabah agreement underlying the sukuk structure is regulated by UAE law.

#Algeria turns to Islamic finance, bourse to rescue 'worrying' economy

Algeria’s new government will introduce Islamic finance and develop its stock market to draw more investment into the economy. The country currently struggles to cope with a sharp fall in energy earnings. Prime Minister Ahmed Ouyahia plans wider reforms and the start of fracking for shale hydrocarbons to boost oil and gas revenue. Algeria's finances have been hit by a more than 50% drop in crude oil prices since mid-2014, the government said 2017 would end with real difficulties, while 2018 looked to be even more complex. Algeria has failed in the past to modernise its stock market and has a very low level of liquidity. Its firms currently rely on state finances, which in turn depend on the oil and gas sector. The government plans to continue spending cuts, including subsidies, but analysts say spending cuts alone may not be enough to tackle the crisis. Foreign exchange reserves fell to $105 billion in July this year from $193 billion in May 2014.

#UAE to reopen, #Kurdistan #deal to boost #Dana #Gas

The stock markets in the United Arab Emirates look likely to trade softly as they reopen on Monday after the Eid holidays, although Abu Dhabi's Dana Gas might just rise sharply after it reached an agreement on overdue payments from the government of Kurdistan.
The markets in the UAE are the only ones open in the Gulf. Others, like Egypt, will pick up trading later this week. There is no fresh, major corporate news in the UAE except Dana's settlement, which will see Kurdistan immediately pay Dana's consortium $1 billion, including $400 million that will be used for investment in the region. Dana will receive 35 percent of the money. In addition to Dana's share of the $600 million payment, "Future benefits to Dana Gas should be much larger, given the massive resource potential of the two fields, Khor Mor and Chemchemal. Dana Gas's share of 2P reserves in the two fields amounts to close to 1 billion barrels of oil equivalent, with huge upside", said Allen Sandeep, head of research at Cairo-based Naeem Brokerage. He continuid: "Overall, we view this as a major positive development for Dana Gas."

Gotta have faith: The rise of #religious #ETFs

There is a growing number of faith-based exchange-traded funds that attempt to marry moneymaking with religious principles. In the spring, Silicon Valley-based Inspire Investing launched its Global Hope Large Cap and its Small/Mid Cap Impact ETFs, pledging to apply Christian values as a screen. Those products join Global X’s Catholic Values ETF, which applies the investment guidelines of the U.S. Conference of Catholic Bishops. Inspire’s funds have garnered a respectable $80 million in their first six months and CEO Robert Netzly believes that biblically responsible investing will be the fastest-growing investment niche over the next decade. Investment giant Blackrock offers Islamic-oriented ETFs that are shariah-compliant. There are not any specifically Jewish-themed ETFs at the moment, but this can change easily. Juggling core values and full-on capitalism, however, remains a delicate business.

#Kurdistan pays $1 billion to Dana Gas, partners to settle London case

#Iraq’s Kurdistan region will immediately pay $1 billion to UAE-based Dana Gas and its partners to settle a long-running London court case. The full and final settlement of the $2.24 billion case is the latest effort by the semi-autonomous region to put its finances in order ahead of a referendum seeking independence from the government in Baghdad. Kurdistan has ramped up oil sales independent from Baghdad and is hoping to raise gas exports. The settlement is significant for both parties, with Kurdistan settling the dispute at a time it is working on reshaping public finances. For Dana, the Kurdish settlement will be eagerly watched by its bond holders which are disputing Dana's move to restructure its $700 million sukuk on the grounds it is no longer sharia-compliant.

#Nigeria to offer liquidity support to boost Islamic banking

Nigeria’s central bank is setting up two financial instruments to provide liquidity support to boost Islamic banking. The central bank has been working to set regulatory ground rules for sukuk and takaful to try to emulate the success of the industry in Malaysia. Islamic banking services are currently offered by the Islamic window of Sterling Bank, Stanbic IBTC and Jaiz Bank, but Nigeria wants to increase the sector. The country is gradually opening up to Islamic finance to bring non-interest banking to over 80 million Muslims. In October the regulator granted liquidity status at its discount window for banks' investment in Islamic bonds issued by national governments, and for banks’ liquidity ratios. Nigeria launched a 100 billion naira ($318 million) debut sovereign sukuk in the local market in June to help develop alternative funding sources.

#Qatar banks seek Asian, European funding as diplomatic crisis bites

Qatari banks are turning to Asia and Europe for funding after clients from other Arab states pulled billions of dollars from their accounts. Analysts warn that more heavy withdrawals are likely in the coming months. Qatar Islamic Bank has recently raised funds through private placement deals in Japanese yen and Australian dollars. It is now exploring more such deals in Europe and Asia, as well as a certificate of deposit program and a Murabaha facility. Many Qatari banks are facing greater urgency to secure funding since June when the United Arab Emirates, Saudi Arabia, Egypt and Bahrain imposed a boycott on Qatar, accusing it of funding terrorism. Qatar denies the allegations. The crisis has led to an outflow of around $7.5 billion in foreign customers' deposits and a further $15 billion in foreign interbank deposits and borrowings. In response, Qatar's government deposited nearly $18 billion with local banks in June and July.

#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.

#Islamic #Development #Bank seeks #proposals for #dollar #sukuk

According to sources, the Saudi Arabia’s Islamic Development Bank has asked banks for proposals to arrange a U.S. dollar-denominated sukuk. The bank in Jeddah is a regular issuer of international Islamic bonds. The new sukuk, possibly with a five-year maturity, could be issued in the next month or two. The deal will probably have a size of between $1 - $1.5 billion. Banks were given a deadline of July 26 to respond to IDB’s request.

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