IslamicFinance.de

According to a report titled "Record Low Borrowing Costs Are Boosting Gulf Issuers' Credit Quality, But Will They Last?", published by Standard & Poor's, corporate and infrastructure issuers in the Gulf region are benefitting from sustained positive macroeconomic fundamentals and strong appetite from regional and international investors. Moreover, GDP growth of 4% and above in 2013 is expected for most of the GCC nations. All GCC sovereigns have stable outlooks. The key risks to this rosy picture are an escalation in regional political instability or an unexpected fall in oil prices. Fortunately, these risks are negatively correlated, with any threat to supplies of hydrocarbons normally resulting in immediate price hikes.

The Board of Gatehouse Bank has announced its expansion in South East Asia to cement its growing operations and to ensure its proximity with its key clients, regulators and stakeholders in the region. This follows on from the £165 million acquisition of the law firm SJ Berwin’s offices in London, in collaboration with a Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

Standard & Poor's Ratings Services said that it has assigned its 'A-1' rating to International Islamic Liquidity Management 2 SA's US$500 million Islamic finance program. The vehicle has been established with the sole purpose of purchasing sovereign, sovereign-linked or supranational sukuk assets with long-term ratings that correspond to an 'A-1' rating. In addition, the vehicle is to issue short-term Sharia-compliant certificates with maturity profiles of less than one year. IILM will act as the program administrator of the vehicle.

Dubai-based GFH Capital, owners of English football club Leeds United, have confirmed the appointment of Brian McDermott as the club's new manager with immediate effect. McDermott has agreed a three-year contract and will be joined by Nigel Gibbs as his assistant. The pairing previously worked together at Reading, where McDermott won promotion to the Premier League last season. McDermott brings with him the experience of having clinched promotion from the Championship last season when he guided Reading to the Premier League.

Simply Sharia Human Capital (SSHC) is now offering the Islamic Finance Qualification (IFQ) in collaboration with the Shariyah Review Bureau (SRB). The SRB-SSHC partnership will deliver the internationally recognised and UK-certified IFQ across the Gulf region. The IFQ is accredited by the Chartered Institute for Securities and Investments (CISI), equipping candidates with a practical understanding of Islamic finance principles, products and models of business. The qualification will prepare candidates with knowledge of Islamic finance including Sukuk, Takaful, Mudaraba, Musharaka and Murabaha as well as offer an insight into the influence of Shari'ah in a business context.

The Kerala State Industrial Development Corporation (KSIDC) has partnered with Cheraman Financial Services Limited, a Kochi-based Islamic fund. KSIDC has 11 per cent share in the Rs. 250 crore fund which is a shariah-based entity aimed at funding selected sectors. Cheraman is the new avatar of the Al Baraka fund proposed by KSIDC two years ago. Cheraman has received the go-ahead from the Securities and Exchange Board of India (SEBI) and has been registered as a trust, despite the Reserve Bank of India stating that the Banking Regulation Act did not permit Islamic banking in the country.

Qatar is set to become a "key international distribution hub" for Shariah-compliant products. While infrastructure projects will feed new alternative fund structures and boost public-private partnerships, Qatar also has a long-term interest in developing as a centre for Islamic finance, The position of Islamic finance in Qatar, according to Mena Asset Management Barometer, bodes well for the future, as demand for Shariah-compliant products grows. Qatar is ranked first in Mena and the second globally in terms of opportunities for infrastructure investments. The country has outlined public investment plans worth $95bn over five years to 2016, as it prepares to host the 2022 World Cup.

Kuwaiti aircraft leasing company Alafco has hired Deutsche Bank to advise it on a potential sale of global depositary receipts (GDRs) in London. The bank is looking at Alafco’s operations to ensure it is ready for the additional scrutiny that comes with a London listing. The timing of the GDR sale and the amount, if any, that a listing could raise were still unknown. Alafco made a profit of 25.6 million dinars ($89.7 million) in its last financial year ended on Sept. 30, 2012, a 45 percent decline from the previous year.

The Council of the Islamic Financial Services Board (IFSB) has yesterday resolved to admit sevenorganisations into the IFSB membership. The newly admitted Associate Members are Indonesia Deposit Insurance Corporation, Banque Centrale Des Etats de L'afrique de L'ouest (Senegal), and the Central Bank of Tunisia. New Observer Members are SAB (France), Finance Accreditation Agency Berhad (Malaysia), RAM Rating Services Berhad (Malaysia) and Fajr Capital Limited (UAE). Consequently, the IFSB comprises now 187 members, consisting of supervisory and regulatory authorities, as well as international inter-governmental organisations, and market players.

Abu Dhabi Islamic Bank (ADIB) has closed an Dhs302m ($82m) syndicated Islamic financing deal for Emirates National Factory for Plastic Industries L.L.C. (ENPI). This financing will be used in conjunction with ENPI's recent acquisition of 100% share of ENPI Packaging Division by Saudi Printing & Packaging Company. ADIB acted as the Mandated Lead Arranger, Sole Bookrunner, Investment and Security Agent Bank for the deal. Other banks that participated in the financing deal included Al Hilal Bank, Mashreq Al Islami as Mandated Lead Arrangers, ADCB, Ajman Bank and FGB as Lead Arrangers.

Bankers have long past expressed their disappointment in the seeming inability of the International Islamic Liquidity Management Corporation (IILM) to issue its debut sukuk. After much speculation and expectation about a debut sukuk launch last April 6, IILM will eventually issue the Islamic bond in the third quarter of 2013 – a $500 million issuance. However, the Saudi Arabian Monetary Agency (SAMA) abruptly divested the IILM’s equity subscription last Friday. But what impact the Kingdom’s departure will have on the future of the IILM remains unclear. IILM also signed signed a Memorandum of Understanding (MoU) with the Asian Development Bank (ADB) in Doha on Saturday to strengthen cooperation between the two organizations.

An estimated 1.28 million clients around the world use Sharia-compliant microfinance services, a four-fold increase since 2006. The number of providers offering these products has doubled since 2006. Ninety-two percent of Sharia-compliant loans are concentrated in East Asia/the Pacific and Middle East/North Africa regions. Indonesia is home to the largest outstanding portfolio at $347 million. Despite this growth, the sector is limited in terms of the number of service providers, product offerings, and overall outreach. Experts say the most important factor is to drive down costs so that clients don’t have to choose between their religion and their wallet.

Ng Nam Sin, Assistant Managing Director of the Monetary Authority of Singapore (MAS), pointed out that, despite the expiry of certain tax incentives, Singapore is still looking to develop the city's Islamic finance capabilities. To ensure that level playing field between Islamic finance and conventional financial products, Islamic finance activities will continue to be incentivized alongside conventional finance activities under Singapore's other existing schemes. However, others have remarked that Singapore is now lagging behind Malaysia, which is establishing itself as the major Islamic financial hub in the region.

Shareholders in Kuwait Finance House (KFH) have agreed to a 20 percent capital hike, The plans to increase its capital are part of the bank's five-year strategic plan. New shares will be issued at 100 fils ($0.35) per share plus a premium of 400 fils. KFH shares are now trading at 780 fils, down 1.27 percent on the Kuwait bourse. According to Al Watan newspaper, a capital increase could boost KFH's paid-up capital to 348.5 million dinars ($1.24 billion) from 290.4 million dinars.

Gatehouse Bank announced its expansion in South East Asia following the acquisition of the law firm SJ Berwin's offices in London, in collaboration with a flourishing Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

Several airlines have indicated that they are exploring the possibilities of financing new fleet acquisitions and expansion through the issuance of sukuk or other suitable Shariah-compliant financing instruments. Bankers in the UAE and Malaysia stress that sukuk are ideal for the airline and aviation industry because of the match between the long-term nature of the assets with a regular income stream from passenger traffic. However, aviation finance industry experts emphasize that sukuk is not necessarily a better option, it is simply a different option to find a source of financing.

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.

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.

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.