IslamicFinance.de

Abu Dhabi Islamic Bank will convene shareholders on June 21 to vote on a rights issue worth Dh504 million ($137.2 million) and raise its sukuk limit to $3 billion from the existing $2 billion ceiling. Under the rights issue plan, 168 million shares will be offered at a price of Dh3 per share, equating to a 40 per cent discount to Wednesday's closing share price. Shareholders will be allowed to subscribe for 56 new shares for every 1,000 they currently own. Adib will also seek shareholder assent to expand its existing Tier 1 sukuk programme to $3 billion from $2 billion.The bank wants to keep expanding its retail network in the UAE, as well as its financing in the SME, large and emerging corporate segments.

Saudi Binladin Group has begun marketing a 364-day sukuk issue to local investors in the kingdom which could raise up to one billion riyals ($265 million) for the construction firm. The transaction is being managed by BNP Paribas' Saudi unit and the investment banking arm of Gulf International Bank. Funds from the deal will be used to finance costs related to its work at the King Abdulaziz International Airport in Jeddah. The last time Binladin Group was in the bond market was in July 2013, when it sold a 1bn riyal 364-day sukuk, which carried a profit rate of 2.5 per cent. That transaction was arranged by the same two banks appointed for the current issue.

Sukuk issuance by governments around the world is expanding, helping to bring Islamic finance into the mainstream. However, the sovereign issues are not encouraging sukuk sales by companies. Last year saw debut sukuk issues by the governments of Britain, Hong Kong, Luxembourg, Senegal and South Africa. Hong Kong tapped the market for a second time this week with a $1 billion deal. Since the five debut sovereign sales, no company has issued sukuk in those five economies. As a result, sovereign and quasi-sovereign issuers accounted for 85 percent of the $113.9 billion of sukuk deals done globally in 2014, and that proportion shows no sign of changing.

Alkhair Islamic Bank Bhd (AKIIB) has appointed Datuk Adissadikin Ali as its new chief executive office, succeeding Ikbal Daredia effective June 1, 2015. The bank said on Friday that Adissadikin would be responsible for the development of AKIIB, as it is the first Islamic bank in the country to conduce a full range of non-Malaysian ringgit banking activities. He will also oversee all aspects of AKIIB business in Malaysia and the surrounding regions. Meanwhile, it noted that Adissadikin has 15 years experience in the financial services sector which gave him wealth of management and leadership exposures in the industry.

Abu Dhabi Islamic Bank will ask shareholders for permission to expand its existing Tier 1 sukuk issue, originally sold in 2012, by $2 billion to $3 billion, it said in a bourse filing on Thursday. The increase is subject to regulatory approval, the Abu Dhabi lender said. The Abu Dhabi lender will also ask shareholders to vote to increase the bank's capital by 168 million dirhams ($45.74 million) through a rights issue.

Hong Kong recently issued $1 billion five-year sukuk. Pricing was aggressive, with the $1 billion sukuk pricing at Treasuries plus 35bp. The sharia-compliant note had a profit rate of 1.894%. However, the leads took comfort in the fact that there were solid anchor orders in place before launching the deal. Roadshows were held in key Islamic centres including Kuala Lumpur, Saudi Arabia, the Emirates and London and much of those orders came from reverse enquiries from roadshows. The sukuk gathered an orderbook of $2 billion from 49 accounts. Given that it was an ultra-low yielding AAA product, banks treasuries took close to three quarters of the deal. Central banks and sovereign wealth funds took close to a quarter of the deal.

Saudia Arabia’s Al Khozoma Management Company is conducting a feasibility study to develop a Sharia-compliant resort in the Maldives. Some 4,120 holidaymakers from the Middle East visited the Maldives this year, representing a market share of 3.7 percent. In January 2014, the ADK company in association with Turkish hotel giant Caprice Gold announced plans to build the first Islamic resort in the Maldives. The five-star, 673-room resort was to be built on Shaviyani Atoll Gaakoshibee. However, the two companies reportedly cancelled the agreement late last year.

Over the years, there have been a number of cases involving suicides due to the inability to settle debts. Defaulters can end up in jail over bounced cheques, lose their jobs, have their visas blocked, and taken to criminal and civil court. In the face of the impending consequences, the defaulters sometimes resort to extreme measures. Many debtors who are stuck in a rut are nevertheless determined to settle their dues. Their biggest concern is that due to the rigid bank rules, they are effectively unable to find a middle road till the time their issue is resolved. Many who have little financial literally and lived a credit card swipe-happy life end up in a continuous state of shock, weighed down by interest and other charges.

Indonesia will become a founding member of a cross-border sharia-compliant infrastructure bank to help boost infrastructure development in various countries. The bank, named Islamic Investment Infrastructure Bank, will be cofounded with Turkey and the Saudi-based Islamic Development Bank (IDB), according to Finance Minister Bambang Brodjonegoro. To qualify as a founding member, Indonesia must contribute more than US$300 million. The sharia infrastructure bank is expected to be established in the second half of this year, following Indonesia’s announcement to join as one of the founding members in the upcoming China-led Asian Infrastructure Investment Bank (AIIB), which is also expected to help finance the country’s infrastructure projects.

Indonesia is set to co-found a new cross-border Islamic (sharia-compliant) infrastructure bank together with Turkey and Saudi-based Islamic Development Bank (IDB). Indonesian Finance Minister Bambang Brodjonegoro said that Indonesia will contribute more than USD $300 million as start-up capital for the establishment of the new bank, named Islamic Investment Infrastructure Bank (IIIB), which aims to boost infrastructure development in various countries. The bank is set to be established in the second half of 2015. Muliaman D, Chairman of the Financial Services Authority (OJK), recently stated that Indonesia and Turkey are competing to become host of the Islamic Investment Infrastructure Bank’s headquarters.

The Thomson Reuters Global Sukuk Index is at 118.48549 points, down from 118.50812 at the end of last month but up from 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 117.40807 against 117.54139 at end-April and 113.69014 at end-2014. Sukuk in the pipeline include: Indonesian leasing company Adira Dinamika Multi Finance aims to sell bonds worth 2.5 trillion rupiah ($190 million), split into a 2 trillion rupiah conventional portion and a 500 billion rupiah sukuk portion. Oman plans to sell its first sovereign Islamic bond, an issue of 200 million rials ($520 million) of sukuk, through a private placement and will launch subscriptions soon. Saudi British Bank plans a riyal-denominated sukuk issue.

Hong Kong Government has successfully sold its second Islamic sukuk bond to raise US$1 billion in its latest effort to promote Islamic finance in the city. The Hong Kong Monetary Authority, which handled the issue on behalf of the government, said on Thursday that the issue was popular and it received US$2 billion in orders from 49 global institutional investors including central banks and sovereign funds among others. The orders were double its US$1 billion issue size. The five-year bond was priced at 1.894 per cent, which is lower than last year’s issue and is 35 basis points over 5-year US Treasuries. The new government sukuk will be listed on June 3 in the stock exchange of Hong Kong, Nasdaq Dubai and Bursa Malaysia.

Abu Dhabi Islamic Bank will ask shareholders for permission to expand its existing Tier 1 sukuk programme to $3 billion from $2 billion, it said in a bourse filing on Thursday. The increase is subject to regulatory approval, the Abu Dhabi lender said. It will also ask shareholders to vote to increase the bank's capital by 504 million dirhams ($137.2 million) through a rights issue.

Absa Islamic Banking business has seen growth across South Africa and the continent in recent years. The appointment of Uwaiz Jassat as the head of Islamic Banking will further help the Group to achieve its goals regarding Islamic Banking. Uwaiz has been in an acting role heading up Islamic Banking since October 2013. In this time Islamic Banking has enjoyed growth with more than 120,000 customers across the continent. Uwaiz joined Absa in 2009 and held a number of roles in the financial services industry in prior years. Apart from his leadership of the Islamic Banking team he brings with him additional skills having founded Takaful South Africa – an Islamic insurance offering.

Hong Kong sold US$1 billion (RM3.6 billion) of Islamic bonds in its second sukuk issue since the city’s debut in 2014. The five-year debt was priced at 1.894 per cent, with orders amounting to US$2 billion, according to a government statement. The city sold the same amount and tenor in September at 2.005 per cent, which drew bids for US$4.7 billion. Those notes last yielded 2 per cent. The city sold its latest bonds at a spread of 35 basis points above similar-maturity US Treasuries. That compares with 23 basis points for its debut offering. Standard & Poor’s assigned a preliminary AAA credit rating to the deb, the same as the government.

The world is sinking under too much debt and an ageing global population means countries' debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned. Andrew Wilson, head of Europe, Middle East and Africa (EMEA), said growing debt piles around the world posed one of the biggest threats to the global economy. The Organisation of Economic Co-operation and Development (OECD) has also sounded out a warning about Japan's growing debt pile. The Goldman chief also said that warnings about liquidity shortages in the market were being "overplayed", especially with regards to the corporate bond market.

Prime Minister Datuk Seri Najib Razak today urged Japan to partner Malaysia in engaging in Islamic finance-related activities and tap the huge global market. With Japanese industrial expertise and technology, and Malaysia’s technical expertise in Islamic finance, he said there was an opportunity to establish a formidable alliance. On a much larger scale, he said that in late 2013, China announced the plan to establish the Asian Infrastructure Investment Bank or AIIB, and currently has 57 charter members and a paid-up capital of US$50 billion.He added that Malaysia understands and respects that Japan has reservations over the AIIB, but regardless of the vehicle, it is apparent that Asian countries need to invest in tangible infrastructure assets.

Moody's Investors Service says that the Indonesian government's (Baa3 stable) Islamic finance roadmap will encourage consolidation among smaller Islamic banks in the country, and foster the development of a larger domestic Sukuk market. The consolidation of state-owned and commercial Islamic banks will increase the size of the banks' capital bases, improve cost efficiencies, and allow increased underwriting in the corporate and infrastructure sectors. Moody's report points out that Islamic banks operate less extensive branch networks when compared to conventional banks, and their capital bases are smaller. Their riskier customer base has led to non-performing financing ratios that are consistently higher than the comparable non-performing loan ratios at conventional banks.

The International Shari'ah Research Academy for Islamic Finance (ISRA) and the Securities Commission Malaysia (SC) have launched a joint publication on "Islamic Capital Markets: Principles and Practices." The textbook serves as a vital source of reference to academicians, students and practitioners on the key principles underlying the Islamic capital market operations and its practices. It covers a variety of topics related to Islamic capital markets, including Shari'ah, regulatory and corporate governance frameworks, risk management, accounting and taxation, sukuk, the equity market, unit trust funds, ETFs, REITs, private equity and venture capital, derivatives and structured products. As the co-publisher and co-sponsor of the textbook, the SC is confident that the textbook will enhance the skills of the Islamic capital market talent pool.

The Islamic Development Bank 's total funding portfolio for Egypt has reached US$12.5 billion, including US$3.1 billion in 2014, director country department Mohammad Al-Saati said. The IDB official has referred that his bank had signed financing agreements for important projects in Egypt, including US$450 million for South Helwan power station, US$460 million for Sharm El-Sheikh Airport, and US$220 million for Egyptian-Saudi electricity grid linkage project. Towards bolstering its partnership with Egypt, IDB will sign within the third quarter of this year a new agreement to launch a representative office in the North African country, Al-Saati noted.