IslamicFinance.de

Sustainable economic development in the Middle East and North Africa (MENA) will depend on job creation, education, poverty alleviation, and careful environmental management. Companies have a particularly important role to play through corporate social responsibility (CSR) initiatives that align with national development objectives. In order to improve CSR as a discipline, companies and governments should follow a four-step process: Define CSR for the MENA Región, Study Current CSR Activity, Identify CSR Best Practices, and Create an Environment for CSR.

Creditors of bankrupt Arcapita say the investment bank should not be allowed to foot the legal bills of lawyers from Linklaters and Freshfields who ran a failed initial public offering last year of Arcapita's real estate assets. Arcapita has so far paid $1.5 million in professional fees associated with the IPO, but last month submitted court papers looking to pay another $6.8 million to Linklaters, $1.1 million for Freshfields Bruckhaus Deringer, and $2.76 million to KPMG, which served as auditor on the IPO effort. However, Arcapita's creditors argue that the IPO's failure prevented anyone from benefiting from the professionals' work. A hearing on the matter, initially scheduled for March 18, was postponed until April 30.

In keeping with its slogan of 'the orange bank that thinks green,' Al Hilal Bank, a progressive Islamic bank, has pledged to switch off the lights in all of its branches and offices starting at 9 pm on March 23, 2013 in celebration of 'Earth Hour.' Al Hilal Bank will use the event as a platform to reaffirm its sustainability commitments and show its support for the environmental goals included in the Abu Dhabi Vision 2030 development plan. The bank has engaged in various initiatives championing the environment under its 'Go Green' strategy.

Noor Awqaf, the joint venture between Noor Investment Group and the Awqaf and Minors Affairs Foundation (AMAF), have launched a humanitarian project that will give aid agencies around the world access to relief aid Halal meat at times of natural disasters and famine. In conjunction with Awqaf New Zealand, Noor Awqaf has forged links with New Zealand’s meat producers and processors to secure a robust supply chain of quality Halal meat for distribution by aid agencies at times of natural disasters or civil emergencies. The meat will be supplied to aid agencies in sealed pouches to ensure its edibility for two years.

By the end of this year, the Islamic Economy Higher Committee will come out with a unified Islamic legislation to help encourage and support Islamic products in the emirate. The committee will also work on creating bodies or committees authorised to certify and check on the Islamic products. However this will be left optional, the Committee’s member and Director General of Dubai Department of Economic Development, Sami Al Qamzi said.

Islamic banking assets with commercial banks in the GCC grew by 14 percent in 2012, conventional banking assets grew by only 8.1 percent -- indicating the relative resilience and potential of the industry. Qatar was reportedly the fastest growing market where Islamic banking assets are expected to have grown by more than 23 percent during 2012. The outlook for the Islamic banking industry in the GCC is positive. However, Islamic banks remain technologically disadvantaged as software systems are primarily designed for conventional banking. Global Islamic banking assets with commercial banks are now at $ 1.55 trillion at end of 2012 and projected to exceed $ 2 trillion by 2015.

Islamic endowments, known as awqaf, receive donations from Muslims to operate specific social projects, such as mosques, schools and welfare schemes. Over the past few decades, awqaf have amassed a vast array of assets, from real estate to cash holdings, equities and even valuable books. However, the management of these assets has failed to keep up with their expansion. Basic changes in asset management methods could improve awqaf yields globally by between 1.5 and 2 percentage points. It can therefore be a source of long-term liabilities that the industry is desperately seeking.

Islamic International Rating Agency (IIRA) has assigned a national scale rating of A+/A-1 (QR) (A plus/A-one) to Qatar International Islamic Bank (QIIB). On the international scale, IIRA has assigned a foreign currency and local currency rating of A-/A-1 (A minus/ A-one). Outlook on the rating is 'Stable'. The fiduciary score has been assessed in the range of '70-75', reflecting strong fiduciary standards wherein rights of fund providers are adequately defined and protected. The fiduciary score captures the role of the management of the institution as Mudarib, the entity's governance practices and compliance with Shariah principles adopted by the bank.

The Saudi Arabian Monetary Agency (Sama) has announced plans to launch a real estate refinancing company with SR5bn ($1.3bn) of capital to help develop the kingdom's mortgage market. The company will be launched through the government's Public Investment Fund (PIF) or its subsidiaries, said Sama governor, Fahad al-Mubara.

Ernst & Young conducted an analysis of housing affordability, as measured by “residual income” (household budget available after paying for housing) across the Middle East. The report shows that UAE and Qatar achieve higher levels of housing affordability for nationals, while citizens of Saudi Arabia have lower residual incomes. The report suggests that it is time for governments to make step changes in their delivery models, and in particular, to shift into a more outsourced and collaborative approach with the private sector on both the supply side (new homes) and the demand side (financing products).

Although optimism regarding global economic growth prospects has increased in the last year among Middle East intermediaries, their biggest concern for global financial markets is the Eurozone crisis. The results of a poll conducted during Invesco’s seventh annual Dubai Investment Meeting, reveal that 56% of the respondents feel positively or very positively about global economic growth prospects for 2013. Furthermore, currently the most favoured asset class is equities (54%), followed by property (20%) and bonds (19%). 39% of the intermediaries believe the Eurozone crisis is the biggest issue facing global financial markets.

Fitch Ratings has assigned Saudi Electricity Company's (SEC) upcoming international Sukuk issue a 'AA-(EXP)' expected rating. The rating is in line with SEC's 'AA-' Long-term Issuer Default Rating (IDR) and senior unsecured rating and SEC's 2012, 2010, 2009 and 2007 Sukuks' ratings. The Sukuk will be issued on an unsecured and unsubordinated basis. Among other aspects, the Sukuk benefits from a negative pledge and a cross default clause. Proceeds of the issuance will be used for general corporate purposes.

Investment Corporation of Dubai (ICD) has launched the syndication of its new $2 billion conventional and Islamic financing facilities. The purpose of the facilities is to refinance the $2 billion five year tranche of the original $6 billion three and five year facilities signed on August 21, 2008. The new facilities will have a tenor of five years. The $4 billion tranche which was due in August 2011 was repaid in full. ICD will be hosting a bank meeting in Dubai during the week commencing March 24, 2013.

Tarek Ali Fadaak, a member of the Shoura Council, said the Kingdom is in need of 143,000 housing units annually. He commended the "constructive steps" taken to end the housing problem with the 500,000-unit free housing project and the adoption of a housing strategy that seeks to facilitate every citizen owning a house, in addition to the launch of the mortgage law and the Real Estate Development Fund facility. By contrast, Tunisia's Housing Minister Shahida Faraj Bouraoui said that the Tunisian government's efforts in the housing sector focuses on encouraging private companies to invest in the housing sector. Jaime Lerner, former governor of the state of Parana, Brazil, warned decision makers that their housing strategies should consider people's tastes.

In the Middle East and North Africa, many of the region’s middle-class residents have grown dependent on their governments for jobs and services. To alter this, governments must first understand the middle class. There is, however, little information on this demographic group in the MENA region. The results of a study among 1,450 middle-class people show that for the most part, they do not believe that their home countries offer them what they need to succeed. The required strategic agenda should balance development across economic, social, and cultural parameters—and meets the expectations of the middle class in order to earn their trust.

Strong investor demand supported by improving liquidity is expected to boost both issuance and performance of sukuk this year. Global issuance expanded for the fourth year in a row in 2012, growing 64 per cent to about $138 billion. While sukuk is still considered an alternative investment, it is believed to have the potential to grow, especially due to funding needs and large infrastructure investments in Malaysia and the GCC.

Saudi Electricity Co has chosen Deutsche Bank and HSBC Holdings to schedule meetings with fixed income investors from Europe and North America for possible debt agreements. The meetings would be considered as road shows, with the first to be held on March 19 in Los Angeles, CA and would end in London, UK by March 25 of this year. After these road shows, a dollar denominated bond issue would then follow depending on market conditions.

According to the executive president of Oman's central bank, Hamood Sangour al Zadjali, the country has no plans to allow foreign Islamic lenders to set up operations in the sultanate. Opportunity will be given to local banks first to see how the market develops. He mentioned that they will observe the market for two to three years and then decide whether to add more banks or not. Currently, two Islamic banks and six Islamic banking windows are operating in Oman.

Al Hilal Bank plans to issue a debut Islamic bond worth $500 million in the third quarter of this year, according to its chief executive Mohamed Berro. The bank aims to fund growth, diversify its balance sheet, and benchmark the bank in on the debt market. Al Hilal Bank mandated National Bank of Abu Dhabi, HSBC and Standard Chartered Bank for the issue. Furthermore, the bank expects to obtain a credit rating in the coming two or three months.

Ministry of Finance's Assistant Undersecretary for Economic Affairs, Mr. Yusuf Abdullah Humood said that the Bahraini private sector should benefit from the services provided by the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC). The corporation's benefits include support of exports and provision of services to exporters, banks, investors and other economic establishments. Moreover, the influx of overseas investments is increased and the necessary insurance for new projects and exports of goods is provided. Last year, the ICIEC approved to cover 6 projects of Bahraini investors and banks at the value of USD 273 million.