IslamicFinance.de

The total value of new issuances in the Aggregate Gulf Cooperation Council (“GCC”) Bonds and Sukuk market, during the first half of 2013 (“H1 2013”) was USD 45.5 billion, a 4.6% increase in comparisonto the respective period of 2012 (“H1 2012”).

Bahrain's Ithmaar Bank has announced its chief executive Mohammed Bucheerei is to retire at the end of August and be replaced by Ahmed Abdul Rahim, currently general manager, as acting head. Bucheerei led the bank's transition from an Islamic investment bank to a retail Islamic lender offering a range of Shari'ah-compliant products.

Qatar-based Barwa Bank recently announcd aseries of changes to its leadership team including the promotions of Khalid Al-Ahbabi to General Manager, Wholesale & Business Banking and Hussain al-Abdulla to General Manager, Personal Banking & Wealth Management, a new role for Keith Bradley as Group Chief Operating Officer & General Manager International as well as the appointment of Nasser Mohamad Al-Hajiri as Chief Administrative Officer. Each individual has several years of experience in the banking sector.

Kuwait's Warba Bank will be listed on the country's stock exchange tomorrow after a restriction on public trading of the stock ended. A majority of the shares in the lender, set up with a capital of 100 million dinars ($351m), were gifted to Kuwaiti nationals as part of the state's wealth sharing, with each citizen receiving 684 shares. The remaining 24 per cent is owned by the sovereign wealth fund Kuwait Investment Authority. The listing does not include sale of any new shares. Shareholders were restricted from trading their stock on the exchange for three years after the April 2010 establishment date.

The Islamic Development Bank (IDB) will boost its sukuk programme by more than 50 per cent by year-end as demand for financing from member countries, including Turkey and Morocco, grows. IDB aims to raise its medium-term note programme to US$10 billion (RM33 billion) from US$6.5 billion, so that it is ready to tap the market at any time. The increase will be the largest by value since the programme was started in 2005 by the almost 40-year-old bank.

Saudi British Bank (SABB), an affiliate of HSBC Holdings and the kingdom's third-largest listed lender by market value, is reportedly aiming to sell a Tier 2 capital-boosting Islamic bond before the end of the year. HSBC is advising SABB on the potential riyal-denominated transaction.

Experts say that 85 percent of Saudi families do not save money and resort to diving into their savings or borrowing to meet their needs. The absence of savings is one of the biggest weaknesses of the Saudi economy. The spirit of consumption is dominant and this negatively affects economic growth and increases the rate of inflation due to the increased rate of consumption. Due to the absence of a culture of saving, Saudi families are exposed to financial woes every month, not because they earn a low income but because they never learned to save money and engage in financial planning. Most Saudi families suffer from over-spending and sometimes spend 10 percent more than they earn. This urges them to borrow money.

Capital Intelligence (CI) has assigned Gulf Finance House (GFH) Long and Short-Term Ratings of 'BB-' and 'B', respectively. The ratings are supported by a significant reduction in leverage as a result of debt repayment and increases in equity, the successful restructuring of debt with an extended repayment period, and the return to profitability in 2012. The factors currently constraining the ratings are the forced debt restructuring in 2012, tight liquidity (although this improved in H1 2013), an encumbered asset base, a small balance sheet coupled with single name and sector concentrations in the asset base, reliance on deal flow for income generation, and the still challenging investment environment.In view of the improvement in both liquidity and leverage in H1 2013, a 'Positive' Outlook is assigned to the ratings.

The number of the I phone Quran application users that was launched by Kuwait Finance House (KFH) 3 years ago has reached a million and 800 thousand, around 1800 daily users. The third version of I phone Quran application has high resolution, in addition to having the numerous features like night Reading and different color schemes. Moreover, the number of Android users of the Quran application has increased to reach 50 thousand, about 60 users a day. The Android app has been recently launched with many distinguished features, and users can download the application for free by typing 'KFH' during the search. KFH is keen to upgrade its applications and its programs on the internet. KFH is also eager to use advanced technology to serve the public, since this is part of its social responsibility.

Nakheel has released interest and profit payments of AED197 million (US$53.7 million) to its lenders in compliance with its restructuring requirements. The company emphasized that it remains focused on meeting its commitments in accordance with the terms set out in its company restructure and revised business plan. Nakheel's commitment, achievements and newly-announced projects will continue to contribute to the growth of Dubai’s real estate and tourism sector, including the government target of 20 million annual visitors to Dubai by 2020.

Abu Dhabi Islamic Bank (ADIB) plans to expand in North Africa as the lender seeks to access more-populous markets. The bank applied for licenses in Algeria and Libya and is considering Tunisia and Morocco, Chief Executive Officer Tirad Mahmoud said. Interest in Shariah-compliant banking has increased since 2011, when revolts in North Africa catapulted Islamists to power. Moreover, the bank wants to be better placed to serve companies, such as Dubai-based mall operator Majid Al Futtaim, which operate across the Middle East and North Africa and rely on global lenders such as HSBC Holdings Plc (HSBA) and Citigroup Inc. Mahmoud said MENA expansion is essential to capture market share from foreign lenders.

Just above 95 per cent of employees in the Middle East Africa region believe corporate social responsibility (CSR) is very important and are keen to engage in more community service work, according to Bayt.com survey. Almost 90 per cent of the respondents in the survey consider CSR to be a moral responsibility for corporations. The survey found that respondents across the Mena region are eager to dedicate themselves to CSR work, with 73 per cent preferring to give time and effort towards charitable causes rather than merely donating money. According to the survey, respondents would like their company to be involved in helping the poor or those with special needs (51.2 per cent), providing free education and scholarships (20.4 per cent) and saving or protecting the environment (11.2 per cent).

Oman Development Bank (ODB) is considering the launch of an Islamic window to offer Sharia-compliant products to small and medium-sized firms. After Oman adopted Islamic finance in December by issuing regulations for the sector, developing Islamic finance and smaller firms are two policies which the government hopes will cut unemployment. Government-owned ODB is likely to opt for an Islamic window instead of a full-fledged conversión into an Islamic bank. The Islamic window is not expected to start operating before the end of this year. Under the rules for Islamic windows, ODB would only be able to offer Islamic products through stand-alone branches, which would require converting some of its existing 15 branches or opening new ones.

Dubai Islamic Bank (DIB) is to offer UAE nationals mortgages worth 100 per cent of their property in conjunction with the Mohammed Bin Rashid Housing Establishment. DIB will offer housing loans worth up to Dhs2 million over a 25-year period, with interest rates starting at 3.99 per cent. The announcement by DIB is in partnership with the Mohammed Bin Rashid Housing Establishment (MRHE), which ‘aims to enhance the quality of life for UAE nationals living in Dubai by helping them access superior housing’. The move flies in the face of impending regulations from the UAE’s Central Bank that is expected to cap lending for local first-time homeowners to 80 per cent of the home’s value and 75 per cent for expatriates, with lending for additional homes expected to be capped at 65 per cent and 60 per cent.

A bachelors degree in Islamic banking and finance programme has been inaugurated by Al Khawarizimi International College (KIC). The new programmes will start from September 1. KIC said the programme will develop a clear understanding of the structure of the Islamic finance industry. The bachelors degree will provide students with the opportunity of learning Islamic principles and methods of banking, economic, finance and accounting through Sharia. Moreover, KIC is also planning to offer more higher education programmes in Islamic economics such as Islamic hospitality and Islamic insurance. According to KIC, graduates rarely face difficulties in finding employment opportunities.

The Islamic Development Bank and Saudi Fund for Development have provided finances amounting to $ 21.7 billion for 90 projects in the Bank's Member States in Africa, Asia, and Middle East. In its annual report for the year 2012, the Islamic Development Bank pointed out that the projects were in fields of infrastructures, agriculture, rural development, health, education, transport, energy, and water.

Zaheeruddin Khalid, director of portfolio management at Saudi-based Jadwa Investment, said that the mutual funds market is dominated by asset managers backed by commercial Banks. However, in the segregated accounts market, Jadwa Investment is one of the major players along with the big five. He moreover explained that Shariah-compliant products investing in Saudi Arabia have generally had performance similar to the conventional products. Shariah-compliant versions of most conventional products are available in the Saudi market. Most innovations are taking place in the private investment product side instead of the public products (mutual funds) because of higher demand for the former, he added.

Kuwait Finance House (KFH), represented by the Personal Finance Department, has organized a meeting with suppliers of installments finance. The meeting discussed the current market conditions and how to find means to improve it in a beneficial way to all parties on the one hand, and catering to clients' needs on the other. Personal Finance Executive Manager at KFH Talal Al-Hnaidi said, on the sideline of the meeting, that the bank is keen on organizing continuous forums and meetings with large companies and institutions. Moreover, Al-Hnaidi mentioned that KFH supports merchants and communicates with them to discuss the market conditions and to share ideas, thoughts and information that can serve the progress business and can contribute in strengthening the economy and obtaining growth.

Inflated valuations and a reluctance to relinquish control are preventing smaller insurers in the GCC from consolidating, and in a move to avoid reporting losses, they could distort market pricing for all, according to the RatingsDirect analysis from Standard & Poor's Ratings Services. The reports adds that a small number of well-established insurers are reaping the benefits of the fast-growing insurance markets in the GCC region. The GCC insurance sector grew to nearly $16 billion in terms of gross premium written and we observed growth rates of over 10 per cent in the region's largest insurance markets in 2012. Ample capital is available within the industry to back the growth in insurance premiums. Both regional and international investors are looking for a slice of the business because of the growth potential. This creates a highly competitive marketplace in which all companies are contending for profitable business. The ensuing competition puts pressure on margins.

Arcapita Bank announced the sale of 3PD Holding, Inc. (3PD), a last-mile logistics company in the United States and Canada, for $365m. 3PD was acquired by XPO Logistics Inc., a transportation logistics companies serving North America. Arcapita acquired a majority stake in 3PD in 2006 and afterwards provided investment capital to 3PD. Its portfolio managers worked closely with the founders and management of 3PD to develop and deliver a strategy that propelled the business to a market leadership position despite a weak economy. Profitability has since grown by over 70%. The sale of 3PD to XPO is considered to be strategically the right step in the business' development.