IslamicFinance.de

Bahrain-based investment firm Gulf Finance House (GFH) has agreed a partial sale of its stake in English football club Leeds United. GFH said the sale was agreed with British investors, whose details the firm did not specify. The investment firm did not provide details on the stake value or the size of the stake sold. GFH bought Leeds United in December 2012 through its Dubai-based subsidiary, GFH Capital, but its financial statements showed that the firm disposed off more than half of its holding less than six months later.

Across the globe governments and corporates are attempting to take advantage of low interest rates caused by the US Federal Reserve’s extraordinary bond buying programme, locking in long term borrowing at peppercorn rates. The central bank of Qatar hopes to issue a mixture of conventional and Islamic government debt with a face value of $6.6bn. The debt programme will be at the shorter end of the yield curve and will be sold in three and five year tenors. Just under half the issuance will be Sukuk, with the rest in conventional instruments. Managing duration is very important for bond fund managers as it allows them to determine the risk on their total bond portfolio for a given move in interest rates. A longer duration bond will move more in value than a bond with a shorter duration for each 0.01 per cent (or 1 basis point) move in interest rates.

Bank Aljazira has faced a lot of challenges linked to its transition from a conventional bank to a fully Shariah-compliant bank, according to Yasser Al-Hedaithy, Group Treasurer of the bank. Today, Bank Aljazira offers every conventional product available in the market, on a Shariah-compliant basis. Moreover, it has a fully independent Shariah board to ensure compliance with Islamic law. As part of its community service, the bank established a fund called Khair Aljazira Le Ahl Aljazira which helps the disabled in terms of rehabilitation, learning and other programmes. The main driver behind that success is customer loyalty. Furthermore, talents are attracted to the bank by offering attractive jobs.

Moody's Investors Service has confirmed Bahrain Islamic Bank's (BIsB) supported issuer ratings at Ba3, with a negative outlook, and affirmed its short term ratings at Not Prime. At the same time, Moody's downgraded BIsB's standalone bank financial strength rating (BFSR) by one notch to E from E+, equivalent to a baseline credit assessment (BCA) of caa1 from b3 previously. Moody's downgrade of the standalone credit profile reflects BIsB's still thin and vulnerable capital base, given the continued lack of clarity surrounding the timing, nature and amount of the anticipated capital injection. These weaknesses are partially moderated by BIsB's solid funding and liquidity position.The negative outlook on the supported issuer rating is aligned with negative outlook on the ratings of the Government of Bahrain, the ultimate provider of systemic support to the bank.

Bahraini First Energy Bank (FEB) has signed a 25-million-euro ($34 million) Murabaha facility with the Netherlands-based Kore Coal Finance, a subsidiary of Sapinda Holding. The financing will assist Sapinda in enhancing its investments in an internationally operating resource company which owns coal mining assets in South Africa. This Islamic facility supplements the recently concluded conventional profit participation note of 55m euros raised by Kore Coal Finance with a similar objective. The Murabaha facility has been structured on the basis of an attractive return and will be repaid by October 2016. FEB is acting as the investment and security agent under this Murabaha financing. The bank has an authorised share capital of $2 billion and a paid-up capital of $1 billion.

Al Wefaq Islamic Society, led by Shaikh Ali Salman, explicitly sought to achieve its political goals by putting Bahrain's leadership in an economic stranglehold. Al Wefaq failed but this organisation has cost Bahrain a lot in purely financial terms. Money was wasted on policing, rebuilding vandalised property and compensating those harmed by the unrest. The economic growth slowed down to a record low of -6.6pc in March 2011. It is estimated that the total loss to Bahrain is in the region of $3bn to $5bn. This, however, fails to reflect the sufferings of small businessmen and their families who have lost everything. Other damage done by Al Wefaq cannot be quantified, such as the economic impact when commercial banks permanently relocate to Malaysia or Dubai, and the damaged reputation.

Dubai-based Noor Bank will consider a possible initial public offering of its shares in the medium term, although there is no current need for new capital at the bank. Besides, the bank has announced it was dropping the word “Islamic” from its title after a two-year study of its brand status and positioning. The new name is a major strategic move aimed at underlining its local and international growth ambitions, according to Hussain Al Qemzi, the bank’s chief executive. This rebranding is expected to help the IPO. The rebranding will not affect Noor’s status as a Sharia-compliant financial institution. Mr Al Qemzi said that the bank would continue to look at its traditional areas for expansion: Turkey, the GCC region, and South East Asia.

Nakheel plans to prepay in 2014 more than half of its bank debt of AED6.8 billion, originally due for repayment in September 2015. The company will pay AED2.35 billion in Q1 2014, and plans an additional prepayment of approximately AED1.65 billion in Q3 2014. Moreover, Nakheel plans to make additional payments of AED3 billion by Q3 2015. Other amounts will be paid ahead of the due dates. The trade creditor sukuk, due in August 2016, will be paid on time. The company says that a robust financial performance that has significantly exceeded its revised business plan, has led to improvements of approximately AED22 billion to date over the plan period. Over the past 28 months, since the successful completion of the financial restructuring, Nakheel has continued its focus on delivering the revised business plan and creating a long term sustainable business. Besides, Nakheel also launched new development projects to revive its core business activity of property development.

Qatari banks are likely to witness poor earnings growth as their net interest margins continue to be squeezed by the cost of funds, according to SICO Investment Bank’s quarterly results preview of GCC equities. The report said Commercial Bank of Qatar (CBQ) and Qatar Islamic Bank (QIB) were expected to see higher provisioning charges caused by a rise in real-estate impaired loans, while Doha Bank’s higher net interest income year on year was expected to drive earnings. SICO also said it expected banks in Saudi Arabia to continue to report strong double digit growth, while UAE banks should witness modest lending growth as a result of limited corporate borrowing, while provisioning was expected to remain at elevated levels.

GFH Capital, a fully-owned subsidiary of Bahrain-based Gulf Finance House, yesterday announced the acquisition of a prime central London residential property. Located in Kensington, the property is a Grade II listed building, overlooking the Queens Gate Gardens. GFH Capital expects above average capital appreciation to continue over the medium term. Demand for this type of property is reportedly coming from investors all over the world. However, the firm also sees value and upside potential in other real estate markets such as the US and expects to make additional investments in these markets as well.

Borealis and First Energy Bank of Bahrain have jointly bought 20.3 per cent stake in Bulgarian Neochim AD. For the acquisition, Borealis and First Energy Bank formed a joint venture in Bulgaria called Feboran AD. Neochim is a publicly listed company and operates one ammonia plant, two nitric acid plants and an ammonium nitrate plant in southern Bulgaria. Borealis executive vice-president for base chemical Markku Korvenranta said the company believed fertilisers offer attractive business opportunities with further potential for growth particularly in Central and Eastern Europe. First Energy Bank chief executive Mohamed Ghanem said that the investment extended the bank's investment portfolio both geographically into Europe and into a fast-growing market. Furthermore, it reinforced its strategy of participating in the energy sector.

The Board of Directors of Dubai Islamic Bank approved to increase the foreign ownership limit (FOL) from the current level of 15% to 25%. The decision was taken to address the huge demand for DIB shares by large foreign institutional investors. Although a highly liquid scrip on the exchange with approximately 60% free float, the foreign ownership cap was restricting the large global institutional investors keen to participate in the organisation’s success. With the MSCI upgrade taking effect next year, the decision to raise the cap has opened doors for numerous global investors to take advantage of their emerging market allocations and invest in one of the top picks on the exchange. With the Board approval for FOL increase in place, the bank will now proceed to follow the required regulatory process to formalise this decision in due course.

GFH Capital, a fully owned subsidiary of Bahrain based Gulf Finance House, has completed the acquisition of a prime central London residential property. Located in Kensington, the property is a Grade II listed building, overlooking the Queens Gate Gardens. This investment is in line with GFH Capital's strategy to identify attractive opportunities in developed markets like the UK, where it has already made considerable investments. Demand for this type of property is coming from investors all over the world. GFH Capital expects this dynamic to continue due to the favorable conditions of London. However, the firm also sees value and upside potential in other real estate markets such as the US and expects to make additional investments in these markets as well.

Recent reports show that people in Qatar are saving less than they did earlier, and nearly half of them feel they don’t have enough for the future. There are several saving options offered by different banks in Qatar. Ahli Bank offers cash prizes for its MyHassad Savings account holders with a certain minimum balance. Besides, the bank offers Time Deposit, an investment product with fixed maturity and a fixed interest rate. Barwa Bank's saving option is the Barwa Bank Fixed Deposit with minimum QAR 15,000. Commercial Bank of Qatar has several saving products, like In Time Deposits, Young Saver Account and the Laddering Deposit Account. Doha Bank, HSBC, Qatar Islamic Bank, Qatar National Bank and Standard Chartered Bank contribute to the wide range of saving options offered by banks in Qatar.

Bank of London and The Middle East (BLME) expects Islamic bond issuance to pick up in the Gulf next year as companies refinance maturing debt in a strong economic climate. Scheduled sukuk maturities in Gulf Arab countries next year are expected to trigger a flurry of fresh issues. Many of the new sukuk will be larger than the instruments they replaced. Because of rising economic confidence in the Gulf, tenors of newly issued sukuk will likely become longer, with some moving out towards seven years from the five-year tenors which have dominated in recent years. BLME's assets under management include a $65 million sukuk fund rated A by Moody's Investors Service. Its balance sheet grew to 1.04 billion pounds ($1.7 billion) at the end of last year.

The UAE is in the final stages of creating debt issuance and listing regulations that will help develop a domestic credit market and encourage the sale of Islamic bonds. The Securities and Commodities Authority, or SCA, has circulated draft rules that for the first time to treat sukuk and non-Shariah compliant debt separately. The regulator is seeking feedback from market participants by the end of the year and “hopes” to enact the regulations early in 2014. The UAE must develop local debt markets to help state-run and private companies find alternatives to bank loans because it is the only one in the six-nation Gulf Co-operation Council that doesn’t have a domestic, local-currency debt market.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as Ruler of Dubai, has issued Law No 13 of 2013 on the establishment of the "Dubai Islamic Economy Development Centre". He also issued Decree No 42 of 2013 to form the Centre's Board of Directors, to be chaired by Mohammed Abdullah Al Gergawi. The decree is effective from the date of issuance. The Centre will have legal personality and financial and administrative independence as well as the legal capacity necessary to direct all actions and behaviours to achieve the goals of the Centre. Promoting Dubai regionally and globally as a main centre for Shariah-compliant goods and services, building a database on Islamic economic activities and encouraging recourse to arbitration in related Islamic economic activities disputes are among the key objectives of the Centre.

Gulf Finance House , the Bahrain-based investment firm which has restructured a number of debt facilities since the financial crisis, has confirmed Hisham Al Rayes as its chief executive officer. Rayes had been acting CEO since March 2012. He said in July that a leaner balance sheet and a new strategy in which it engaged more in its investments would help drive the business forward in future. Its current debt pile is less than $235 million.

Tribonian Law Advisors (TLA) acted as lead counsel to The Investment Dar K.S.C. (TID) in a transaction that involved a $1.2 billion settlement in kind with just under a third of its creditors by value. Participating creditors settled existing FSL claims at a significant discount in exchange for cash, debt and equity participation in a newly formed Jersey entity, to which various assets of TID were transferred. The debt in the Jersey entity was structured on a loan-to-value basis and provided enhanced security and information rights. Approximately 29 per cent of TID’s creditors elected to participate in the transaction. Non-participating lenders benefited from the transaction by seeing a 2.1x multiple reduction in the liabilities settled versus the realisable asset value which was contributed to the Jersey entity.

Kuwait Finance House (KFH) offered a new financing product that allows the public to purchase seats at schools and universities using monthly installments. KFH purchases seats at universities, schools, and institutes, then resells those seats to the public. People can pay through monthly installments, and the ceiling of the service is KD 15,000. The first installment can be postponed for six months, and the service is possible for all people in Kuwait, regardless of whether they are KFH clients or not. However, the service is subject to the credit rules and regulations. The person requiring the service must have an original price quote, original ID, a recent salary certificate that shows the net salary, and a balance inquiry for the clients of other banks.