IslamicFinance.de

Bahrain-based Ibdar Bank has announced the appointment of Mr. Basel Al-Haj-Issa as the Bank's new Chief Executive Officer, with effect from 1 September 2014. Mr. Al-haj-Issa is a senior banker with over 20 years of international exposure in Islamic Investment and Commercial Banking in the GCC and MENA, CIS and South East Asia. Prior to joining Ibdar Bank, he was the Chief Executive Officer of Saba Islamic Bank - Republic of Yemen. Prior to that, he was the Director of Financial Institutions Development Dept. at the ICD - managing a portfolio of 25 financial institutions in over 20 countries. Mr. Al-Haj-Issa holds a Master degree in Business Administration and Bachelor of Science (Mathematics) from Marshall University, USA.

Banks with experience arranging Islamic bond sales may stand to benefit from the potential opening of Saudi Arabia’s debt market to foreign investors. There’ll be a lot of potential for non-Saudi banks to get involved on the advising and arranging side. Besides, they’re also some of the biggest sukuk buyers. Saudi Arabia is working on new rules aimed at promoting the local currency bond and sukuk market. The rules are expected to allow foreign investors to buy local currency bonds for the first time and could be published early next year. The new rules for the debt markets are also expected to stipulate that ratings companies will need to have a local presence to rate domestic securities. Saudi Arabia is de facto leader of OPEC and plans to remove some restrictions to lure capital to the $745 billion economy.

Standard & Poor's (S&P), one of the world's leading rating agencies, has reaffirmed the Islamic Development Bank 's ( IDB ) 'AAA' rating with a stable outlook. The first AAA rating report on IDB was issued in 2002. S&P recognized IDB as having an extremely strong financial profile underpinned by robust capitalization and high liquidity levels; as well as a very strong business profile emanating from the Bank's important policy role in promoting social and economic development across member countries and Muslim communities in non-member countries. The report emphasized the strong relationship, extraordinary support and preferred creditor treatment which IDB enjoys from its member countries.

Gulf emirate Sharjah launched its first sovereign sukuk on Wednesday, a 10-year, 750-million-US-dollar Islamic bond with a 3.764 percent yield. Following a press conference in Sharjah on Wednesday to announce the issue, the government said the bond had been more than 10 times oversubscribed, drawing in 7.85 billion dollars in orders from 250 investors. Regional investors accounted for 50 percent of these, with British investors accounting for 20 percent, other European investors 11 percent, and those from Asia 14 percent. The bond was originally priced at 100 basis points over midswaps, but this was later tightened to 120 points in response to the high demand, before the government finally decided on 110 points. The bond will now be traded on the Nasdaq Dubai exchange and the Irish Stock Exchange.

Sharjah has announced initial price guidance of 120bp area over mid-swaps for a US dollar benchmark-sized 10-year sukuk. That follows initial price thoughts of low-mid 100s over mid-swaps, released earlier on Tuesday. Demand for the bond, which is expected to price on Wednesday, is more than US$4bn. HSBC, KFH Investment, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered are the lead managers on the Reg S sukuk.

Saudi Islamic investment firm Itqan Capital plans to expand its investment and advisory activities in the kingdom after it received regulatory approval to boost its capital. The firm will increase its capital by 100 million riyals ($26.6 million) to 173.4 million riyals by the end of October, said Adil Dahlawi, managing director and chief executive of Itqan Capital. Itqan currently manages four sharia-compliant funds: a money market fund and three real estate funds. New product launches are scheduled this year with two funds in the pipeline, the first of which is a private equity fund investing in the Saudi education market, Dahlawi said. About half of all assets under management in Saudi Arabia follow Islamic investment principles.

Kuwait Finance House (KFH) has taken the top spot among banks locally and the 161st place globally, among the list of the top 1000 banks worldwide issued by "The Banker" international magazine. It’s worth noting that KFH’s leadership and the diversity of its investments through presence in various areas of investment as well as the global expansion provides the bank with investment opportunities. KFH posted in the first half of this year a gross profit of KD 144.032 million (USD 510.887 mln), and net profit for shareholders was KD 54.568 million (USD 193.555 mln) with an increase of 10% over the same period last year. Total Assets increased by 11 % over the same period last year to reach KD 16.7 billion (USD 59.3 bln), shareholders’ equity reached KD 1.7 bln (USD 6.1 bln).

A new screening method for sukuk, developed in cooperation with Saudi Arabian financial institutions, aims to reduce the cumbersome approval process that these instruments often require. San Francisco-based IdealRatings said its product addressed compliance hurdles faced by sukuk investors contending with multiple structures and disparate opinions. The product reviews and categorises sukuk to allow Islamic banks to adhere to their own guidelines more efficiently, reducing the time and costs of due diligence in each deal. The service was developed over the past two years in consultation with Islamic financial institutions, in particular Saudi firms.

Deyaar Development is planning to build a Sharia-compliant hotel and furnished apartment tower in the Al Barsha area of Dubai. The company confirmed the project, estimated to cost around AED450 million (US $123 million). Deyaar owns two adjacent plots of land in Al Barsha spanning a total of 71,000 square feet. The project is in the preliminary design stage. Earlier this week, Deyaar launched a new project in Dubai called Montrose, featuring a hotel apartment tower and two residential towers. In March, the company said it had allotted up to one million square feet for hotel and serviced apartment projects in prime locations in the city in the coming years.

Goldman Sachs is preparing to issue benchmark-sized, U.S. dollar-denominated sukuk with a wakala structure after announcing plans to meet fixed income investors, according to leads. The investment bank plans to issue the sukuk through the JANY Sukuk Co vehicle after meeting investors in the Middle East on Sept. 10 and 11, a document from lead managers said. Goldman Sachs picked itself, Abu Dhabi Islamic Bank, Emirates NBD, National Bank of Abu Dhabi and NCB Capital to arrange the investor meetings.

International ratings agency Fitch on Thursday upgraded Al Hilal Bank and affirmed 8 other banks and one non-bank financial institution rating. Fitch said it had upgraded Al Hilal Bank's (AHB) Viability Rating (VR) and affirmed the VRs of the other seven banks and all other ratings. The affirmation of the banks' Long-Term IDRs, Support Ratings and Support Rating Floors, reflects the extremely high probability of support available from the UAE authorities and governments, if required. Abu Dhabi Islamic Bank, Al Hilal Bank, Dubai Islamic Bank, Mashreqbank, Commercial Bank of Dubai, RakBank, Sharjah Islamic Bank, Bank of Sharjah and Dunia have been rated in the report.

For the second year in a row, Bahrain has been named the GCC's leading Islamic finance market and second out of 92 countries worldwide. This is according to the Islamic Corporation for the Development of the Private Sector-Thomson Reuters Islamic Finance Development Indicator (IFDI). As well as being highly-ranked in terms of the kingdom's commitment to research and training and local awareness of the industry, Bahrain was also ranked as having the best governance in Islamic finance in the world. The report praises the well-established regulatory framework covering all sectors, and high levels of disclosure. The IFDI is a measure of five key components to evaluate Islamic finance in 92 countries - quantitative development, governance, corporate social responsibility, knowledge and awareness.

The launch of "Murabaha" through equities programme by the Bahrain Bourse (BHB) has moved closer to implementation with the exchange appointing Dr Shaikh Osama Mohammed Bahar as its Sharia adviser. His scope of work will include the review and approval of all Sharia-compliant securities, funds, and other investment instruments. The role will also include the review of all Sharia-based products to ensure compliance with underlying Sharia principles. In addition, he will be responsible for the issuance of Sharia statements (fatwa) with regards to Sharia-compliant securities listed on the bourse, and supervising its operations to ensure their compliance with underlying Sharia principles. BHB's strategy aims at enhancing market liquidity, and providing a wider range of products and solutions.

Malaysia and the Gulf Cooperation Council (GCC) countries remain the leaders in the Islamic finance industry, despite the emergence of new participants vying to get a piece of the pie. Bahrain Economic Development Board chief economist, Dr Jarmo Kotilaine, said an established financial industry required many component parts for its sustained development and the Islamic finance architecture was much more developed and complete in the Gulf and Malaysia than any other part of the world. Other centres can support the global growth of Islamic finance but are unlikely to challenge the established role of Southeast Asia and the Gulf, he said.

Saudi Arabia’s central bank has published new consumer lending regulations which give it the power to cap retail lending at individual banks and limit the fees that banks can charge. The rules could dent profit growth at banks, especially those that rely heavily on retail activity. The regulations, published on the Saudi Arabian Monetary Agency’s (SAMA) website, state that SAMA may, at its discretion, impose a restriction on a creditor under which its consumer financing portfolio may not exceed a specified percentage of its total financing portfolio. They also state that all fees, costs and administrative services charges collected by banks must not exceed either 1 percent of the financing amount or SR5,000 whichever is lower.

Having completed the acquisition of Barclays retail banking division in the UAE on September 1st, Abu Dhabi Islamic Bank has seen little change in its market growth. The $177 million deal will give ADIB access to Barclays’ 110,000 customers in the Emirates, as well as 145 staff members that will continue to work from existing branches. Having been hit with a $453m fine for its involvement in the Libor interest-rigging scandal back in 2012, Barclays has been stripping assets and jobs in an effort to boost profits. As such, the ADIB deal is, in fact, overshadowed by a far larger sale, as Barclays announced the sale of its Spanish retail, wealth management and corporate banking business for $1.04 billion to CaixaBank.

Rajhi Capital has started the offering period for the Al Rajhi Sukuk Fund. The Sukuk fund is an open ended fund designed to capture the opportunities available within the Shariah-compliant universe of sovereign, quasi-sovereign and corporate Sukuk, issued locally, regionally, as well as globally. The Fund will also invest in other income generating assets, within its mandate comprising of Commodity Murabaha Placements, Islamic Placements, Structured Islamic Products and Commodity Mudaraba Funds. The benchmark of the Fund is 3 month USD LIBOR 75 bps. Al Rajhi Capital is offering a special incentive whereby the subscription fees are waived for all new subscriptions until September 11 2014.

Oman is expected to issue 500 million rials ($1.3 billion) worth of conventional and Islamic sovereign debt early next year, and aims to choose the arranging banks in October. Last month, the finance ministry received applications from banks to arrange the issuance, with plans to raise 300 million rials via conventional bonds and 200 million rials with sukuk, said Jamil Al Jaroudi, chief executive of Bank Nizwa. The issuance would be in local currency and would apparently be separate from an international, U.S. dollar-denominated sovereign bond issue which Oman has said it may conduct. It is expected to be in the market in the first quarter of 2015.

Sharjah gears up for its first Shariah-compliant bond sale this month. The emirate may price the debt to yield 2.5 percent to 3 percent if it’s a five-year issue. That compares with a yield of about 2.66 percent on non-Islamic notes due 2019 for Dubai, which doesn’t carry a rating. Sharjah’s A3 rating at Moody’s Investors Service, a grade four levels above junk, widens the pool of investors who can buy the debt. Moody’s cited the emirate’s “strong” fiscal and government-debt position, which may appeal to some money managers in Asia and Europe whose fund rules prevent them from holding non-rated or below-investment-grade debt. The emirate will meet investors in the U.A.E., Saudi Arabia, Singapore, Malaysia and the U.K., and will sell a sukuk subject to market conditions.

Dubai Islamic Bank has ruled out seeking a controlling stake in Bank Panin Syariah, and its plans are limited to raising its stake in the Indonesian lender to 40 percent from 25 percent now, its chief executive Adnan Chilwan said. Dubai Islamic bought 2.42 billion shares in the listed sharia-compliant lender in June, its first foray into southeast Asia. In May, the bank said it hoped to reach 40 percent before the end of the year, using its own cash to fund the purchase. Under Indonesian rules, foreign ownership of local lenders requires regulatory approval to go above 40 percent. Last month, Indonesia's financial services authority said it was preparing a five-year industry blueprint that would address foreign ownership limits.