IslamicFinance.de

In a statement to Qatar Stock Exchange on 30 March, it was revealed that Qatar International Islamic Bank (QIIB) is planning a Sukuk issue of up to QAR 3 billion. The bank’s General Assembly gave the nod to the extension of its approval to issue Additional Tier 1 Sukuk nonconvertible into ordinary shares of up to QAR 3 billion. The meeting delegated the bank’s board of directors' to decide the size of each issuance ,terms and conditions and issuance currency. QIIB CEO Abdulbasit A al-Shaibei was quoted as saying the Sukuk would be issued before the end of April to boost the bank’s capital ratio.

Nogaholding, the holding company for oil and gas assets owned by the government of Bahrain, signed to obtain a five-year, $570 million murabaha financing facility. The Islamic funding will support investment in a number of large oil and gas projects in the kingdom, including the BAPCO Modernisation Programme, a liquefied natural gas import terminal, and the Bahrain Gas Plant Project. The facility is provided by 10 international, regional and local institutions: Arab Banking Corp, Ahli United Bank, Arab Petroleum Investments Corp, Gulf International Bank, National Bank of Bahrain, Qatar Islamic Bank, Kuwait Finance House, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas and HSBC.

Saudi's Alkhabeer Capital has released the 2016 edition of its report reviewing GCC governments’ budgets. The report analyses the latest budgets of the region’s governments, the recent reform measures announced and the broader, long-term implications of the political will to improve efficiencies, curb wasteful expenditures and instill fiscal discipline. Citing the emergence of government imperatives in the region to refocus budget priorities and reduce extravagance, Alkhabeer’s report expects expenditure levels in the GCC to reflect a cautious stance on spending as the region adopts unprecedented measures to counter the plunge in oil prices since June 2014.

World Bank Group President Jim Yong Kim, United Nations Secretary-General Ban Ki-moon and President of the Islamic Development Bank Group Dr. Mohamed Ali Al-Madani arrived in Lebanon today at the start of a joint visit to rally global support for the shared responsibility of promoting peace and development in the Middle East and North Africa (MENA) region. The three organizations are jointly supporting an initiative to raise additional financing needed to help countries in the region cope with the immediate consequences of conflict, while laying the foundations for recovery and reconstruction. Following the Lebanon visit, World Bank President Kim and Secretary General Ban will travel together to Jordan and Tunisia.

The chairman of Bahrain-based First Energy Bank, Khadem al-Qubaisi, and board member Mohamed al-Husseiny have reportedly left the bank, with a new chairman to be appointed shortly, after approval by the central bank of Bahrain. Al Qubaisi was one of the most prominent executives in the United Arab Emirates until the UAE energy minister replaced him as managing director of state-owned International Petroleum Investment Co last April. Husseiny was replaced as chief executive of Aabar last year after holding that post since 2010. Unlisted First Energy Bank reported a net loss of $375.2 million for 2015.

Delhi-based Transworld Consultants, a company specialising in laws in the Gulf states, has come out with an English version of the New Islamic Insurance Law of Oman. According to the Chief Executive Officer of Transworld Consultants, Syed Saami Mahmood, the new 58-article Law provides that the companies conducting the Takaful insurance business have to be listed on the Muscat Securities Market with a capital of RO 10 million and above. Mahmood said that the Law does not permit traditional underwriters to open Takaful insurance windows, making it mandatory for a company interested in doing the Takaful insurance in Oman to devote itself exclusively to the Islamic insurance business.

Kuwait Finance House (KFH) has received an offer from investors to buy its stake in affiliate Aref Investment Group, the country's biggest Islamic lender said in a bourse statement on Monday. Aref is a diversified investment firm which is 53 percent owned by KFH and has share capital of $400 million, according to information on the companies' websites. This offer is currently under study and no decision has been taken as yet, the statement said. KFH will disclose this offer in the event that they have reached and signed a preliminary agreement, and cannot currently determine any financial impact on its statements in the absence of an agreement as yet.

QInvest L.L.C. has announced the acquisition of ERGO Portfoy, one of the largest and fastest growing asset management companies in Turkey. Following the completion of this acquisition, QInvest Asset Management will have assets under management close to $1 billion. ERGO Portfoy has been rebranded as QInvest Portfoy and is a subsidiary of Qatar’s QInvest. The senior management of QInvest Portfoy will remain with the firm and will be led by Mr. Murat Vanli, the General Manager of ERGO Portfoy, and will continue to operate from Istanbul. The company has been granted its license to operate by The Capital Markets Board of Turkey (CMB) and is licenced to offer portfolio management to both individual and institutional investors.

Dubai Islamic Bank returned to the international debt capital markets with a very successful $500 million 5Y Sukuk issue yesterday. This deal is the first GCC bank issuance since November 2015 and essentially marks the reopening of the market after a hiatus of 4+ months. The transaction is being hailed as a tremendous accomplishment in the current environment where the GCC has gone through a well-documented change in onshore liquidity conditions and witnessed multiple rating downgrades, which have been mainly the result of the drop in oil prices. The offering was oversubscribed (2.4x) attracting more than $1.2 billion in demand from 87 investors.

National carrier Saudi Arabian Airlines (Saudia) is seeking to raise 5 billion riyals ($1.3 billion) via the first tranche of a sukuk isuance programme in the second or third quarter of this year, its director-general Saleh al-Jasser said. The funds will be used to finance fleet expansion, as the carrier aims to operate 200 aircraft by 2020. Details of the second tranche of the sukuk programme have not been determined, he added. The airline has been spinning off units in the last several years; it is now preparing documentation to hive off its cargo unit in an initial public offer of shares, Jasser said without giving details.

Kuwaiti financial firm Investment Dar has begun talks with creditors about a new 813 million dinar ($2.7 billion) debt restructuring plan after a court threw out an earlier attempt. Investment Dar, whose main assets are in finance and property, has made several efforts to pay off creditors after getting heavily indebted during the financial crisis. Its most recent plan, dubbed Dasman, failed last month when Kuwait's Court of Appeal rejected an application under the country's financial stability law to impose it on all creditors. This resulted in a company-organised creditor meeting on Tuesday, attended by around half of its roughly 80 creditors. It was reported that both sides agreed to discuss a fresh restructuring deal, which could be proposed to creditors in the coming weeks.

Dubai Islamic Bank (DIB) is expected to price a dollar-denominated sukuk of benchmark size as soon as Tuesday after releasing initial price thoughts for the offering, a document from lead arrangers showed. Pricing for the five-year sukuk has been earmarked to be in the area of 245 basis points over midswaps, according to the document. DIB chose seven banks to arrange meetings with fixed income investors in London on Monday, ahead of the possible sukuk issue, it was announced last week.

Bahrain Islamic Bank (BisB) has joined the Pearl Initiative, the Gulf business-led organization promoting a corporate culture of accountability and transparency as a key driver of competitiveness across the Region. As a partner of the Pearl Initiative, Bahrain Islamic Bank will encourage the implementation of corporate governance practices and gender diversity in leadership at workplaces throughout the region. Through its association, BisB will participate in dialogue forums and capability-building seminars, facilitate engagement with peers and work alongside Pearl Initiative to encourage social entrepreneurship across the Region.

Bank AlJazira achieved a new reward as the best Arabian donor in 2015 during the “Non-Governmental Giving Foundations in Arabian countries” conference held in Bahrain. The award was received by the Executive Director of the Community Service Programs Dr. Fahad Bin Ali Al-Olayan on behalf of the Chief Executive Officer Mr. Nabil Al-Hoshan. The award was presented by the “Regional Network for Social Responsibility” in collaboration with the United Nations Industrial Development Organization “UNIDO”; Bank AlJazira has been chosen for this award by the conference committee.

Shares in GFH Financial Group rose on Tuesday after the Islamic investment bank said it had agreed to sell a 10 percent stake in Bahraini cement producer Falcon Cement Co. GFH's Dubai-listed shares rose 2.3 percent. It has yet to trade in Bahrain. Other Dubai stocks made little headway. Rival developers Union Properties and Deyaar rose 1.2 and 1.6 percent respectively, but these are relative minnows compared with market bellwether Emaar Properties, which dropped 1.1 percent. Air Arabia fell 6.6 percent after the budget carrier went ex-dividend, helping drag Dubai's index 0.5 percent lower to 3,362 points. That trimmed the benchmark's gains since mid-January's two-year low to 28.2 percent.

Kuwait's Boubyan Bank aims to issue sukuk worth $250 million before the end of April, the lender's chief executive said on Monday. Adel Abdul Wahab al-Majed told reporters of the plan after the company's annual meeting. Boubyan Bank in January said it had received regulatory approval to issue a capital-boosting sukuk worth $250 million. Majed added that the sukuk would allow the bank to fulfill Basel III requirements and cover its capital needs until 2018.

Oil prices and regional tensions have taken their toll on the Islamic finance sector. Sharia-compliant funds suffered their worst sales in four years, falling more than 74 percent on 2014’s figures. But Magali Mouquet, executive director responsible for IR at Emirates REIT, says that as one of only three sharia-compliant real estate investment trusts (REITs) in the world, adhering to Islamic finance principles has brought only opportunities to the Dubai-based trust. Mouquet says other investors – those perhaps looking for an SRI angle rather than a focus on Islamic finance principles – are also interested in the trust, which offers ‘guaranteed transparency’.

GCC government officials confirmed that value-added tax (VAT) will be introduced as of January 1, 2018, a statement from EY said at the conclusion of the EY-hosted annual MENA Tax Conference in Dubai on March 16. The MENA tax conference featured a session on preparing for VAT in the GCC, providing status updates on the tax implementation and the actions that companies in the region need to take. The introduction of VAT will diversify government revenue sources and reduce reliance on oil revenues to finance government expenditures. The additional revenues collected are likely to fund programs for the development of job opportunities for nationals and improve education and healthcare in the GCC.

The idea of privatizing Saudi Aramco, the national hydrocarbons giant in Saudi Arabia, appears to have re-kindled the privatization fire in the Middle East. While the announcement of what could theoretically be the largest initial public offering (IPO) ever envisaged startled even seasoned market observers, its modalities and timeline remain unclear. Indeed, privatization was not on the agenda of regional governments until a few months ago, when the fiscal situation of some Gulf Cooperation Council (GCC) countries started to deteriorate due to falling oil prices. The last few years have witnessed a virtual halt in privatization activity across the Arab world due to bad experiences with previous experiments and the perception of corruption and insider dealings.

Saudi Arabia’s investment banking regulator is telling international banks to publicly disclose financial statements for the first time as the kingdom seeks to boost transparency. The Capital Markets Authority is requiring financial institutions it regulates to publish the information on their websites from April 1. The CMA has said firms must also disclose senior executives’ pay and significant risk factors. The only banks which need to disclose financial statements now are the 12 publicly traded domestic lenders regulated by the Saudi Arabian Monetary Authority. The disclosure will give insight into how much money banks are making amid a slowdown in economic growth, as well as the cost of employing top executives.