IslamicFinance.de

IFC has announced the investment of $5 million equity in Gulf African Bank, one of Kenya’s two Islamic Banks. The bank will use IFC’s financing to increase finance for retail and corporate customers, develop programs for women entrepreneurs and extend more services to small and medium businesses. Jamal Al Hazeem, Chairman of Gulf African Bank, welcomed IFC’s decision to take up a 15% shareholding stake in Gulf African Bank. In addition to the equity investment, a further $3 million trade line will be made available to Gulf African Bank under IFC’s Global Trade Finance Program.

QInvest has revealed plans to launch at least 30 Islamic funds over the next three years on a managed account platform which it introduced this week. QInvest hopes to attract an investor base beyond the Gulf through its Cayman-domiciled funds. Four Islamic funds already exist on QInvest's platform which focus on international equities. All of the funds are actively managed and the focus is on delivering strong returns over the mid- to long term, without focusing on a specific benchmark, according to Ataf Ahmed, head of investment solutions at QInvest Wealth Management.

Oman's market regulator has given its initial approval for two local firms to issue sukuk. The Islamic bonds will hit the market after clearing the formalities for final approval, said the chief executive of the Capital Market Authority, Abdullah bin Salim al Salmi, without revealing the names of the companies.

Dana Gas said it has collected a total of Dhs271m ($73.7m) in receivables so far this year. Payment delays were behind Dana Gas's default on a $1bn convertible sukuk last year on Oct. 31, the sukuk's maturity date. Dana Gas added it was on track to complete the Sukuk refinancing process in the second quarter of 2013. The sukuk-holder meeting and final shareholder meeting to approve the refinancing transaction will be held on April 23 2013.

Gulf bond issuers are tapping new bond structures and investors as the energy-rich region embarks on big infrastructure projects, bolsters ties with Asia, and capitalizes on investor appetite for its highly rated paper. With global interest rates low, bond buyers around the world are hunting for higher yields and are buying Gulf bonds. They are attracted by the region’s mostly high-rated sovereign credits and yields that are often higher than other similar-rated issues in other jurisdictions. They are being paid a premium for perceived geopolitical risk in the Gulf. Total Gulf bond issuance in 2012 rose to $42 billion from $25 billion a year earlier, including sukuk. Sukuk sales in 2012 nearly quadrupled to $21.3 billion.

Some analysts see the ambition of overtaking London as the world capital of the sukuk business, as a challenge for Dubai's initiative to become the capital of the global Islamic economy. Mohieddine Kronfol, the chief investment officer for global sukuk and fixed income business for Franklin Templeton, thinks Dubai can establish itself in a leadership position in the long-term. Kronfol believes Dubai and the region need to be more mature in their overall approach to finance if they are to lead the Islamic economy. He cites the lack of a pension fund industry, the relative immaturity of the insurance and asset management businesses as examples of lack of financial depth.

Linklaters has hired KPMG global Islamic finance head Neil Miller as its new global Islamic finance head, based in Dubai. Miller joins the magic circle firm from accountancy firm KPMG. He joined KPMG two years ago from Norton Rose, having developed a leading Islamic finance practice at the firm over around 20 years. Norton Rose moved Miller out to Dubai from London in 2009 in a bid to strengthen its Middle East practice. He previously headed Norton Rose’s Bahrain office from 1997 to 2000.

Barwa Bank expects its sukuk trading platform to become full-fledged by the year-end. Moreover, it sees the market as very competitive and lucrative with a great potential, according to chief investment officer Bashar Jallad. He said Barwa Bank was active in both the primary and secondary sukuk markets and started to act as a custodian for some of the clients. Barwa Bank’s sukuk trading platform is already functional but has not reached the optimum level, Jallad added. A focus area for the bank is relationship management.

The sukuk market had its eyes opened to an expansive new landscape this week, as Saudi Electricity Company defied the doubters to bring the first ever benchmark dollar 30 year tranche, writes Dan Alderson.

After years of giving away land to citizens, the Saudi Arabian government is left with almost no space of its own to develop in urban areas. That will delay building as the government chooses between buying back city plots whose price has been inflated by speculation or paying a premium to build in the desert. Saudi authorities plan to address the lack of available urban land as part of a national housing strategy that includes measures to combat land speculation and incentives to build. To meet its affordable housing needs, Saudi Arabia must either build in the desert or force urban landowners to develop their empty lots.

Dubai Multi Commodities Centre (DMCC) has announced the inaugural Commodity Murabaha transaction on its DMCC Tradeflow platform. The transaction took place between Noor Islamic Bank and Commercial Bank of Dubai, marking the official launch of the DMCC Tradeflow Islamic product portfolio. According to Ahmed Bin Sulayem, Executive Chairman, DMCC, the DMCC Tradeflow pioneered the use of an electronic central registry of commodity ownership in Dubai. The commodities available on DMCC Tradeflow include oil products, foodstuffs and base metals and if required these goods can be inspected easily by Shari’ah scholars.

Abu Dhabi Islamic Bank (ADIB) is providing Dhs600m financing facility to Manazel Real Estate to fund the Abu Dhabi-based company's financial obligations and capital expenditure. The financing agreement was signed by Mr. Mohamed M. Al Qubaisi, Chairman of Manazel Real Estate PJSC and Mr. Arif Usmani, Global Head of Wholesale Banking in ADIB. Manazel Real Estate PJSC, a real estate developer in Abu Dhabi, recognizes and appreciates ADIB's support to real estate developers in Abu Dhabi along with other sectors and local businesses, which contributes to the growth and development of Abu Dhabi.

Islamic finance activity has been growing 14 percent per year, with Islamic finance assets exceeding $1.1 trillion in cumulative value in 2011.Such growth has pushed more educational institutions into creating degree programs in Islamic finance. In 2005, the International Islamic University Malaysia created an Islamic banking institute that offers students Master of Science and doctoral degrees in the subject, among other universities. The classes are aimed at both familiarizing students with the history of Islamic banking products, and encouraging them to think about developing more contemporary services.

HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, Chairman of Alwaleed Bin Talal Foundation-Global and Dr. Ibrahim El-Ziq, The United Nations Children's Fund (UNICEF) Representative to the Gulf Area, signed a memorandum of understanding “MOU” on Sunday 24th March 2013, which works for children's rights, their survival, development and protection, to support a UNICEF project to provide quality basic education for girls in Yemen. Under the agreement, Alwaleed Bin Talal Foundation – Global will donate US$250,000 to 15 schools. According to the one year agreement, the targeted schools will be become more child friendly, with new educational policies at local and national levels.

The Arab League yesterday approved a Qatari proposal to set up a $1 billion fund for Arab East Jerusalem, which Palestinians want as the capital of an independent state under any peace deal with Israel. Qatar's Emir Shaikh Hamad bin Khalifa Al Thani, said his country will contribute $250 million to the fund which will be managed by the Islamic Development Bank. The Fund is to finance projects and programmes that will maintain the Arab and Islamic character of the city and reinforce the steadfastness of its people.

The African Banker Awards Committee has introduced a new category this year to recognise Islamic banking. The category, titled 'Best Islamic Finance Initiative' will go to the financial institution that has excelled in Islamic finance, in compliance with Shariah regulations and succeeded in providing ethical, reliable and affordable Islamic financial services. Sukuk, Takaful, Islamic project finance deals, Islamic commercial banking, and Islamic business banking are included in the list of eligible initiatives.Submission of entries from Banks and other financial institutions will close 25 March. The 2013 Awards ceremony will take place 29 May, 2013 in Morocco.

Insurance Australia Group (IAG) is growing in Asia, but also interested in Australia. Its chief executive Mike Wilkins recommended Australia pull down tax barriers in order to encourage Islamic finance. The federal government is yet to respond to a subsequent Board of Taxation review. Indonesia is also a target market for IAG. In order to fund its takaful liabilities, IAG would need to invest the cash flows received from policyholders into sharia-compliant products such as sukuk. At present however, because sukuk is based on several transfers of assets into and out of an SPV, the cost of issuance os well above a conventional bond.

The Securities and Exchange Commission of Pakistan (SECP) has cancelled asset management and advisory service licences of Dawood Capital Management Limited (DCML) and slapped a penalty of Rs20 million on its chief executive officer for providing undue benefits to its connected persons and close relatives. Besides, it also imposed another million rupees penalty on the chief financial officer/company secretary. Redemptions were made from collective investment schemes by the connected persons before provisioning and the connected persons, the CEO and her close relatives had averted an imminent loss of Rs18.224 million.

Malaysia is dominating global sales of sukuk in 2013 and Standard & Poor’s forecasts the trend will continue this year. Issuance in the Southeast Asian currency may account for more than 74 per cent of worldwide offerings, compared with 49 per cent in 2008. Global sales of Shariah-compliant notes, including government securities, may exceed US$100 billion in 2013 after rising 64 per cent to US$138 billion last year. Malaysia’s Islamic banking assets climbed 14 per cent last year to a record RM494.6 billion. Moreover, Shariah insurers, or takaful operators, saw assets rise 12 per cent to RM19 billion.

The takeover of EFG-Hermes Holding SAE (HRHO), Egypt’s biggest investment bank, by Qatar’s QInvest LLC is mired in delays almost a year after the transaction was agreed. The deal is set to expire on May 4 unless it receives a so- called no objection from Egypt’s regulator on the transfer of its assets to Qatar. The terms of the deal include a four Egyptian pound per share dividend once it is complete. However, EFG-Hermes’s co-chief executives are defendents on charges of illicit gains. Therefore, it is expected that the deal will not go through before the lawsuit is finalized.