IslamicFinance.de

Banks and companies in the Arabian Gulf may issue the most Islamic debt in three years in the fourth quarter as economic growth accelerates and Dubai’s companies reach agreements to restructure debt. The combination of declining yields in emerging markets and a successful restructuring of state-owned Dubai World’s debt may spur more sales, according to Exotix and Royal Capital PJSC.

The first trade creditor has filed a lawsuit against Dubai World's Nakheel property developer unit with the special tribunal set up to handle disputes over its debt restructuring, which could further delay a settlement. The tribunal said the suit, filed in mid-August, was served by Dubai-based Construction Delivery Group (CDG). Legal experts have said that creditor claims against Dubai World or its subsidiaries with the tribunal could potentially cause the restructuring to come to a standstill until the matter is resolved in court. Under Nakheel's restructuring plan, trade creditors have been offered 40 per cent of what they are owed in cash and an Islamic bond (sukuk) in lieu of the rest.

National Bonds is providing new hope to its customers who have accumulated loans with the launch of a new initiative that will help new & current bondholders erase their debts and begin a 'debt-free' life. National Bonds Corporation PJSC, the leading Sharia compliant saving scheme, will reward prizes totaling up to AED 2 Million in value that is in addition to its regular & richest weekly and monthly rewards, including the life-changing AED 1 million monthly prize and 22,250 prizes. This initiative is part of National Bonds' efforts to inculcate a culture of regular savings in the UAE. The strategy includes the recently launched National BondsNational Bonds
National Bonds Corporation Standing Instruction Order, a service that makes regular saving easier than ever and is available at a number of banks across the UAE. The Standing Instruction Order will allow banks to automatically deduct a monthly amount from customers to purchase bonds on their behalf, thereby eliminating the need to repeat the transaction process every month.

Tricor Group, a member of The Bank of East Asia Group, is expanding into Dubai and the Middle East through a new Joint Venture with Praesidium. JV with Praesidium will be based in the DIFC; will provide a range of outsourced services to both conventional and Islamic businesses, including global Shari’ah infrastructure support services, including bookkeeping services for Shari’ah-compliant businesses, fund administration and custody advisory services to Islamic funds.

Ethica Institute of Islamic Finance and Zawya today announced a partnership to jointly deliver online Islamic banking courses and certification. Ethica Institute's certification is chosen by more professionals and students than any other Islamic finance certificate in the world, and Zawya is widely regarded as the leading provider of business and investment intelligence in the Middle East. A partnership between Ethica and Zawya would bring unprecedented access to standardized Islamic finance training and certification to both companies' extensive community of high-end users. In the coming months the two companies intend to jointly launch a specialized Islamic finance certification focusing on Sukuk.

Albaraka Türk Katilim Bankasi A.S. (Al Baraka Turk), a subsidiary-banking unit of Al Baraka Banking Group BSC (ABG), signed a $240 million syndicated Islamic financing in Istanbul. Twenty two GCC, European and international banks (both Islamic and conventional) participated in the syndication. The syndication was arranged and managed by Standard Chartered Bank, ABC Islamic Bank (Bahrain) and Noor Islamic Bank (Dubai). The funding deal comes as part of Al Baraka Turk's strategy to further expand and diversify its financial resources and further strengthen its name in the domestic, regional and global financial markets. Al Baraka Turk will use the proceeds of the deal towards the ongoing implementation process of a range of existing and newer products and services offered by it.

Jakarta-based Bank Syariah Mandiri joined Islamic lenders worldwide to use Ramadan to remind Muslims to obey the teachings of the Prophet Muhammad that ban interest. Emirates NBD of Dubai waived payments on personal loans during Ramadan, while Maybank Islamic in Kuala Lumpur started automating charitable donations. Banks in Indonesia, the world’s most populous Muslim nation, offered limited-edition products to generate Ramadan-linked revenue and publicity. Bank Syariah Mandiri, the Islamic unit of Indonesia’s largest bank by assets, Bank Mandiri, collaborated with a local TV operator on a program aimed at promoting Shariah-compliant banking during the holy month. Shariah finance prohibits the charging of interest as well as investments tied to gambling and alcohol. Returns are generated as a share of profits from assets.

The gesture came in response to a call from President Sheikh Khalifa bin Zayed Al Nahyan. The money was handed over to the UAE Red Crescent Authority (RCA).

Nakheel PJSC’s plan to offer Islamic bonds to creditors may revive sukuk trading in the Persian Gulf after new sales fell to a five-year low, according to Moody’s Investors Service and Mashreq Capital DIFC Ltd. Thomas Barry said that contractors are likely to sell Nakheel’s sukuk to pay bills. Thomas Barry is chief executive officer of Arabtec Construction LLC. In April, the company said its trade creditors would be offered 100 percent recovery of their claims -- 40 percent through a cash payment and 60 percent in the form of a tradable sukuk. More than 80 percent of Nakheel’s contractors have agreed. Abdul Kadir Hussain said sukuk sales from the region are likely to pick up in the fourth quarter. Nakheel and its parent Dubai World, one of the emirate’s three main holding companies, are renegotiating debt terms after the deepest financial crisis since the 1930s roiled Dubai’s real-estate market and left companies unable to raise financing. Property prices have fallen more than 50 percent in the city as banks cut mortgage lending, according to estimates from Colliers International.

Kuveyt Turk Katilim Bankasi, a subsidiary of Kuwait Finance House, will pay a coupon of 5.25 per cent on Turkey’s first Islamic bond offering that was oversubscribed, said people close to the transaction. Kuveyt Turk launched the three-year $100 million sukuk on August 17. This is the first ever sukuk from Turkey and the first bank sukuk originating from Europe, according to law firm Norton Rose, which advised on the offering. “This is another significant step towards growing Islamic finance in Europe. “The sukuk by Kuveyt Turk further demonstrates continuing interest and appetite for Islamic finance within key emerging economies,” Neil D. Miller Global Head of Islamic finance at Norton Rose (Middle East), said in the statement. The joint lead managers on the transaction were Citigroup Global Markets and Liquidity Management House.

Sovereign Islamic bonds from Asia to the Persian Gulf are lowering returns on corporate sukuk for the first time in three months.

Malaysia’s Lembaga Tabung Haji fund, France’s BNP Paribas Investment Partners and Duet Mena Ltd. in Dubai forecast government debt will outperform until property prices in the Persian Gulf recover from a slump that prompted credit-ratings companies to downgrade corporate bonds.

Hawkamah issues a DRAFT Policy Brief for consultation purposes only. Please find the related full document under source.

Please submit comments and feedback to Ms. Jahanara Sajjad Ahmad , Program Manager Hawkamah, The Institute For Corporate (jahanara.ahmad@hawkamah.org) .

In the current issues the following questions are discussed:

How should we recognize excellence in the Islamic finance industry?
How do we identify greatness – of bankers and financiers, of lawyers, of consultants, of scholars?
How do we discourage a culture of „Islamic Awards for Cash??
How do we develop an „Islamic? methodology for rewarding achievement?

Debt management agency ISDM calculated the average debt load of its customers is AED500,000.

The agency has more than 3,000 clients on its books and about 70 percent of its customers are defaulting on consumer rather than business loans. About 5 % of the clients are ex-UAE residents who have skipped the country rather than face jail for their debts. Banks can recover 80 cents on the dollar through consolidation. Through a debt collection agency, may receive 40 cents on the dollar according to the firm's director Yohannes Mazeingi.

Dubai-based ISDM advises clients in debt distress to consolidate their loans and negotiate with the banks. It collects a two percent fee commission based on the overall value of the debt.

Under UAE law, bouncing a cheque is a criminal offence that can result in a jail sentence.

Satellite operator Yahsat has announced that it has secured the first Shariah-compliant insurance policy for space operations.

Standard Chartered Bank sees opportunities in Islamic derivative products but is steering clear of hedge funds, another grey area of Shariah-compliant finance, the head of its Saadiq unit said.

Standard Chartered Bank sees opportunities in Islamic derivatives products but is steering clear of hedge funds, another grey area of sharia-compliant finance, the head of its Saadiq unit said.

Property developer Nakheel, a subsidiary of Dubai World, on Tuesday named Ali Rashid Ahmad Lootah as its new chairman in a restructuring that also added four other members to the board. Lootah is also the vice-chairman of mashreq.