IslamicFinance.de

Dana Gas and its partner Crescent Petroleum have begun arbitration proceedings against Hungary's MOL Group over Dana's settlement agreement with the Kurdistan Regional Government (KRG). The KRG agreed to pay $1 billion to the consortium and to reclassify some additional $1.24 billion from debt to outstanding costs. MOL is unsatisfied with the way Dana Gas, Crescent Petroleum and the Pearl consortium handled the settlement and would have pursued a final litigation and enforcement outcome against KRG instead. Dana and Crescent Petroleum own a combined 70% stake in the Pearl consortium, while Austria's OMV, Germany's RWE, and MOL each own 10%. The KRG settlement boosted Dana's cash balance and lifted the company's stock on the Abu Dhabi stock exchange by 14%. Last week Dana bondholders requested a $300 million cash paydown, but Dana refused the proposal and the case is now being disputed in a London High Court.

Algeria’s new government will introduce Islamic finance and develop its stock market to draw more investment into the economy. The country currently struggles to cope with a sharp fall in energy earnings. Prime Minister Ahmed Ouyahia plans wider reforms and the start of fracking for shale hydrocarbons to boost oil and gas revenue. Algeria's finances have been hit by a more than 50% drop in crude oil prices since mid-2014, the government said 2017 would end with real difficulties, while 2018 looked to be even more complex. Algeria has failed in the past to modernise its stock market and has a very low level of liquidity. Its firms currently rely on state finances, which in turn depend on the oil and gas sector. The government plans to continue spending cuts, including subsidies, but analysts say spending cuts alone may not be enough to tackle the crisis. Foreign exchange reserves fell to $105 billion in July this year from $193 billion in May 2014.

American International Group (AIG) has placed the first Shariah-compliant mergers and acquisitions (M&A) insurance policy in the Middle East and North Africa region (MENA). AIG’s Warranty and Indemnity insurance product helps protect buyers and sellers from financial losses if misrepresentations occur. Buyers can distinguish bids, sellers can reduce indemnity obligations. AIG was advised by global law firm Norton Rose Fulbright, led by corporate/M&A partner Adjou Ait Ben Idir. Associates were Agnieszka Braciszewska (lead associate), senior associate Rachel Moylan (IT/IP aspects) and of counsel Louisa Lynch (real estate aspects). Partner Dominic Stuttaford advised on tax aspects. Mark Storrie, M&A Manager at AIG said M&A insurance provided a unique solution for MENA clients investing both in the region and globally. He was very pleased to have placed the first M&A policy in the region.

Bahrain’s Al Baraka Bank deems that the regulatory framework in Morocco is conducive for the launch of an Islamic finance venture. The Bank’s Chief Executive, Adnan Ahmed Yousif said Al Baraka targets the expanding Islamic finance in Morocco in effort to diversify assets and revenues in Africa. Morocco is attractive for Islamic banks because of a competitive landscape that is free from large western lenders. Yousif added that reforms were being considered, but complete tax neutrality towards Islamic finance contracts was still needed. Bahrain’s Al Baraka group forged a partnership with Morocco’s BMCE Bank of Africa to create AL Baraka Maroc, which aims at creating a network of 25 agencies in Morocco.

Turkey's Deputy Prime Minister in charge of the economy Mehmet Simsek announced that they have established the infrastructure of the interest-free insurance system. He noted that there have been no separate regulations for Islamic insurance or insurers so far, adding that the regulation is of great importance. He suggested that many questions in the framework of Islamic insurance will be answered with the new regulation. Simsek informed that in addition to serving interest-sensitive citizens, the system will also attract capital from the Gulf countries to Turkey. The system is based on the UK model, which is seen as an opportunity for Turkey as well. The Deputy Prime Minister also pointed out that one of the most important opportunities that the system brings to citizens is the balance return.

#Iraq’s Kurdistan region will immediately pay $1 billion to UAE-based Dana Gas and its partners to settle a long-running London court case. The full and final settlement of the $2.24 billion case is the latest effort by the semi-autonomous region to put its finances in order ahead of a referendum seeking independence from the government in Baghdad. Kurdistan has ramped up oil sales independent from Baghdad and is hoping to raise gas exports. The settlement is significant for both parties, with Kurdistan settling the dispute at a time it is working on reshaping public finances. For Dana, the Kurdish settlement will be eagerly watched by its bond holders which are disputing Dana's move to restructure its $700 million sukuk on the grounds it is no longer sharia-compliant.

The corporate sector in #Egypt acquired EGP 11.7bn of the total loans portfolio in Abu Dhabi Islamic Bank-Egypt until the end of June 2017. The bank continued its programme to fund small and medium enterprises (SMEs). The sector continued its growth also in the field of retail banking, reaching EGP 4.3bn, whereas the volume of the portfolio managed by the treasury sector in the bank is estimated at EGP 12.2bn. Abu Dhabi Islamic Bank-Egypt revealed its business results for H1 2017, where total net profits during that period reached EGP 339m with EGP 148m increase by 78% compared to H1 2016. Total revenues reached EGP 1.841bn compared to EGP 1.225bn, with a growth of 50%. The volume of growth in total assets reached 30% by the end of June 2017 compared to June 2016. In its report the bank stressed its commitment to developing the technological infrastructure and investing in human resources.

The Maroccoan Bank Al Yousr, the participatory subsidiary of the BCP Group in partnership with Guidance Financial Group has opened its headquarters in the capital Casablanca. After the approval and publication of the compliance notices on the 20th July relating to the model of an account agreement and the Mourabaha Immobilière contract issued by the Shariah Committee on Participatory Finance, Bank Al Yousr officially started its banking activities beginning of August.
The participatory bank is the third of its kind to start its activities, after Bank Assafa, a subsidiary of Attijariwafa Bank, and Umnia Bank of CIH Bank.

Deux banques islamiques ou ''participatives'' ont démarré mercredi 26 juillet 2017 officiellement leurs activités au Maroc. Le takaful n’existant pas encore sur le marché, explique Adnane El Guetari, le directeur général d'Umnia Bank. Si les Umnia Bank et Bank Assafa se sont engagées dans ce créneau pour des opérations de base, toute la profession attend cependant la réaction de la Banque centrale du Maroc, Bank Al Maghirb, et les modèles de contrats contrat ijara et au placement des dépôts d’investissements. Selon l’agence américaine de notation Standard & Poor's, la finance islamique pourrait représenter entre 10 et 20% du système bancaire du Maroc.

Abdellatif Jouahri, gouverneur de Bank Al-Maghrib, a annoncé la première émission de sukuks aura lieu le 15 septembre prochain. Après le lancement en mai dernier de Umnia Bank, Attijariwafa bank a présenté dernièrement à la presse sa nouvelle banque participative, Bank Assafa. Cinq banques participatives ont été agréées par Bank Al-Maghrib en début d’année. BMCE Bank of Africa s’est associée à Al Baraka Banking Group du Bahreïn, la Banque centrale populaire (BCP) au groupe saoudien Guidance Financial Group, et le Crédit Agricole du Maroc à l’Islamic Corporation for the Development of the Private Sector (ICD).

The Istanbul Chief Public Prosecutor’s Office issued detention warrants for 78 senior executives of Bank Asya, which was confiscated by the Turkish government. Bank Asya was associated with the failed coup attempt on July 15, 2016 due to its links to the Gülen movement. Forty-seven of the 78 bank executives have been detained so far on suspicion of membership in an armed terrorist organization and financing a terrorist organization.
Immediately after the putsch, the Justice and Development Party (AKP) government along with President Recep Tayyip Erdogan pinned the blame on the Gülen movement. According to a report by the state-run Anadolu news agency, 154,694 individuals have been detained and 50,136 have been jailed due to alleged Gülen links.

The Middle East has been a late adopter of financial technology, or fintech. According to Accenture, of more than $50bn in fintech investment globally since 2010, only 1% has gone to the Middle East and North Africa. Now several cities are racing to establish themselves as fintech hubs. Last year Cairo launched two accelerators and Abu Dhabi has created the region’s first regulatory sandbox, allowing new products to be tested for two years without full regulatory compliance. In March Abu Dhabi signed an agreement with the Monetary Authority of Singapore to undertake joint fintech projects and Dubai’s new fintech accelerator has already begun accepting applications. Bahrain, too, has teamed up with Singapore to develop a fintech ecosystem. Fintech can serve the masses of migrant workers in need of remittance services and it can also bring cheaper services to the unbanked. According to the World Bank, over four-fifths of the population in the region are unbanked, which means a higher proportion than anywhere else in the world.

According to Fitch Ratings, Islamic banking products in Morocco could expand their deposit bases by 5 to 10%. Fitch notes that the ability to grow the deposit base is positive for Morocco’s economic development because deposits represent about 70% of banking sector funding. The experts also noted that banking penetration is already high in Morocco, with 70% of adults holding a bank account. Therefore, participation banking is unlikely to take a significant market share from the well-established conventional banks. Growth rates in the Moroccan banking sector have been volatile in recent years, reflecting unsteady economic trends. Deposit growth has outstripped loan growth, but credit demand is set to accelerate. The ability to offer participation banking services could broaden the pool of potential depositors in the country, mitigating the competitive pressure.

The World Bank Group has committed US$50 million to support the Government of Jordan in maintaining primary and secondary health services to poor uninsured Jordanians and Syrian refugees. The assistance approved today is part of a larger US$150 million project, which is financed by the Islamic Development Bank and the World Bank. The Jordan Emergency Health Project will help the Ministry of Health continue to provide critical health care to target populations. According to Aaka Pande, World Bank Senior Health Economist, the refugee influx has been associated with a reemergence of communicable diseases such as tuberculosis and measles. Moreover, the influx has led to increased waiting times and a shortage of health workers. In addition to its short-term objectives, the project aims to prepare a roadmap of ways to improve the efficiency of the health system in the medium to long term.

A delegation from the Central Bank of Turkey will soon meet their Iranian counterparts in Tehran to remove hurdles in the way of bilateral banking relations. Particular difficulties include Iranian citizens' bank accounts in the Turkish Halkbank. The banking ties were overshadowed by the detention of a senior Halkbank official in the US in March for allegedly violating Iran sanctions. Mehmet Hakan Atilla was accused of conspiring with Reza Zarrab, an Iranian-Turkish gold trader, to channel hundreds of millions of dollars through the US financial system on behalf of Iranian companies. Turkish Minister of Economy Nihat Zeybekci is also scheduled to visit Iran on June 21 to negotiate a preferential trade agreement between the two sides.

The first Islamic bank in Morocco, Umnia Bank, has opened its doors five months after the central bank's approval. The North African country long rejected Islamic banking because of concern about Islamist movements, but its financial markets lack liquidity and investors. Umnia Bank is a joint venture of Qatar International Islamic Bank (QIIB) and Moroccan lender Credit Immobilier et Hotelier (CIH Bank). Umnia recently opened a total of three agencies, two in Casablanca and one in Rabat. The bank plans to open more branches throughout the country. Morocco is the most advanced of North African neighbours in developing Islamic finance. Tunisia and Algeria are also starting to explore the sector.

Le lancement officiel des activités de Wifak International Bank s’est tenue dans le hall du nouveau centre d’affaires au nord de Tunis. Wifak Bank a eu son agrément de la Banque centrale de Tunisie (BCT), le 8 octobre 2014. Selon M. Mellousse, Wifak Bank va, dans une première étape, mener ses activités à travers 9 agences réparties dans diverses régions du pays. La nouvelle banque proposera à ses clients un bouquet de services et produits bancaires modernes et innovants conformes aux dispositions de la finance islamique. Il convient de noter que les 3 banques islamiques tunisiennes ambitionnent d’atteindre, d’ici 2022, 15% des actifs bancaires contre 7% actuellement. La concurrence entre les banques islamiques et classiques est donc sérieusement lancée.

Dana Gas has received an initial payment of $50 million (Dh184 million) from the Egyptian government as partial payment of its outstanding receivables. This payment represents 18% of Dana Gas Egypt’s total overdue receivables of $283 billion (Dh1.038 billion) as of the end of first quarter 2017. Dana Gas, which pumps most of its gas at fields in Egypt and Iraq, is seeking to recover payments from both countries for overdue bills. The company was owed $1 billion from Egypt and the self-governed Kurdish region in northern Iraq. CEO Patrick Allman-Ward had previously said that the company will not make any new investments in Egypt due to delay in receiving payments. In the first quarter 2017, Dana Gas reported gross revenues of $118 million and net profit of $11 million. Overall group production was 69,900 barrels of oil equivalent per day, 16% higher compared to first quarter of 2016.

Egypt’s central bank is launching its anticipated microfinance initiative to support the country’s small and medium-sized businesses. According to the new initiative, the banks will not be obliged to establish a special unit for microfinancing; as they can provide both direct and indirect lending to clients. The Central Bank of Egypt (CBE) plans to allocate 20 billion Egyptian pounds ($1.2 billion) for the microfinancing activities in the country. CBE deputy governor Gamal Negm announced earlier that the central bank is preparing the ground to launch an initiative dedicated for the microfinance sector before the end of this month.

The World Economic Forum’s Middle East and North Africa meeting takes place this year at the Dead Sea in Jordan. The meeting’s formal programme has the theme: Enabling a Generational Transformation, and is based on three interrelated pillars: two long term and one urgent. The first long term pillar focuses on how to enable innovation and youth empowerment by using new technologies like bio-tech, nano-tech and artificial intelligence. These new technologies will continue to develop, so training people in these areas will be a long-term solution in creating new jobs for young people. The second pillar is about finding a framework for an inclusive economic transformation. The third and more urgent pillar is the search for how to best cope with the vast humanitarian crisis in the region. The common thread in all three strands is an optimism that anarchy and sectarian chaos can be defeated.