IslamicFinance.de

Sheikh Abdullah Salem Al Salmi, executive president of the Capital Market Authority of Oman, said the Islamic insurance law is in the last stages of completion.

The Islamic Development Bank (IDB) Group announced the launch of the US$2 billion Islamic Development Bank Infrastructure Fund II (the IDB Fund II), on the occasion of the 40th anniversary of the IDB. The IDB Fund II will have a broad sectorial focus beyond core infrastructure sectors of power, telecommunications, transportation, and will include investment in oil and gas, refinery and petrochemicals, steel and aluminum, mining, logistics and an allocation for healthcare, education, and financial services. Its several founding investors have aggregate commitments totaling US$750 million for the first closing.

Saudi Postal Corporation and Alinma Bank, one of the fastest growing banking institutions in Saudi Arabia, have entered into an agreement with Western Union to offer Western Union money transfer services in the kingdom. Under the agreement, remittance services will be offered through the Ersal money transfer service which is the money transfer joint venture launched by Saudi Post and Alinma Bank in 2013. Starting in Ramadan, the service will be available at 15 post office locations across the kingdom, taking the number of Western Union locations in the country to over 200.

The spread of Islamic trade finance is boosting demand for Shariah-compliant reinsurance in the Gulf, trade credit insurer Euler Hermes says, predicting the sector could eventually account for over a third of its business in the region. Euler Hermes, part of Germany’s Allianz insurance group, is involved in the business because it is one of the region’s biggest trade credit insurers. The company launched a Shariah-compliant trade credit insurance product in 2008 and the business began growing substantially three years ago, now accounting for about 10% of Euler Hermes’ total GCC business. Euler Hermes’ GCC operations had total turnover exceeding $40mn last year, and exposure to its clients of more than $12bn.

Government-owned Al Hilal Bank PJSC raised $500 million from the sale of perpetual bonds. The Shariah-compliant securities, which don’t mature, will pay a coupon of 5.5 percent. Pricing was tightened from an original guidance of about 6 percent as bids of about $5 billion were received. Al Hilal Bank, Citigroup Inc., Emirates NBD Capital Ltd., HSBC Holdings Plc, National Bank of Abu Dhabi PJSC and Standard Chartered Plc managed Al Hilal’s bond sale. The lender has the fifth-highest investment grade rating at Moody’s Investors Service.

Shaikh Abdulmalik bin Abdullah al Khalili, Minister of Justice, has officially launched the first full-fledged Islamic insurance in the country called Takaful Oman, in the presence of Sayyida Rawan Ahmed al Said, Managing Director and CEO of Takaful Oman Insurance Company, Ahmed Ali al Mamari, Acting General Manager, Directorate of Insurance Supervision, CMA, and a number of dignitaries and senior executives from various sectors at the InterContinental Muscat. Al Madina, which has a customer base of 37,000 policy holders, expects the market to grow between RO60 million to RO70 million in worst case scenario and RO150 million to RO180 million in best case scenario in the next three to five years.

The Islamic Development Bank Group is holding its Annual Meeting in Jeddah, Saudi Arabia, from 22-26 June 2014 and celebrating the IDB’s 40th Year Anniversary. The meetings will be attended by finance and economy ministers of the (56) member countries and more than 1,000 delegates. The Annual Meeting of the IDB Group will take place over a five-day period in conjunction with sub-meetings. Meanwhile, on the occasion of the 40th Anniversary of the IDB Group, a number of events will be held including a forum titled “Fostering Dynamic Ecosystems in Developing Economies”, which will be held on June 23, 2014. In addition, an exhibition on innovation will be held alongside the Annual Meeting, with more than 40 innovative projects and solutions from 19 member countries.

Fitch Ratings has affirmed the Islamic Development Bank's (IDB) Long-term Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook and its Short-term IDR at 'F1+'. The affirmation and Stable Outlook reflect the following key rating factors: IDB is one of the strongest-capitalised multilateral development banks rated by Fitch, with an equity-to-assets ratio of 54% and a debt-to-equity ratio of 79.5% at end-1434H (3 November 2013). Credit risk remains moderate, other risks are manageable. Profits are moderate compared with commercial banks, but are steady and in line with peers, ensuring regular equity strengthening. Shareholder support, a secondary rating driver, remains strong.

The investment banking arm of Saudi Arabia’s Al Rajhi Bank has received regulatory approval for its first mutual fund that will invest in sukuk. Interestingly, Al Rajhi has never raised money through a sukuk issue itself. The fund, in the pipeline since 2012, has reportedlly been prompted by a growing number of client inquiries about investing in sukuk. Sukuk issuance in Saudi Arabia rose to the equivalent of $15.2 billion through 20 deals last year, compared to $11.2 billion through 18 deals in 2012. However, a number of the kingdom’s sharia scholars view trading in sukuk as outright trading of debt, which is banned by Islamic principles.

Kuwait's Capital Markets Authority (CMA) has rejected an appeal by Bahrain-based Gulf Finance House (GFH) against the regulator's decision to monitor its Kuwait-listed shares. The CMA decided to monitor the stock after it was traded in high volumes ahead of a company disclosure last year. GFH, which said the events were unrelated, appealed last month. However, the CMA commissioner board has maintained its previous decision in this respect after reviewing the details of the subject. In recent months, Kuwait's regulator has been clamping down on what it sees as unusual market activity.

Al Madina Insurance anticipates a robust growth in takaful insurance business in Oman, if the trend in neighbouring countries is any indication. Al Madina expects the market to grow between OMR60 million to OMR70 million in worst case scenario and OMR150 million to OMR180 million in best case scenario in the next three to five years, the company's chief executive officer Gautam Datta said. He added his company did not change the premium, after converting it into an Islamic insurance company from January this year. Referring to re-insurance, he said Al Madina has a re-insurance programme of over 55 per cent and is planning to expand its retail and personal lines portfolio.

Middle Eastern investors are expected to spend $180 billion in commercial real estate markets outside of their own region over the next decade, according to the latest research from global property advisor CBRE. Europe is the preferred target with 80% of the $180 billion (around $145 billion) targeted for the region over the next 10 years. While some increase in interest towards the Americas is expected, the need for Middle East investors to diversify away from US dollar-dominated investments will counteract the fundamental attractiveness of real estate as an asset choice. CBRE estimates that about 10% of the capital (around $18 billion) will flow into the region.

Khaleeji Commercial Bank (KHCB) has launched an investment account based on the Sharia principle of Mudharabah. The Call Mudharabah Account combines a current account with the concept of profit sharing of the Mudharabah Investment Account. The Call Mudharabah Account is open to companies as well as individuals who are residents of Bahrain and the GCC for a minimum BD10,000 deposit. Linked to a current account, one can make a host of transactions such as redemptions and increments, withdrawals and debits, as well as use ATM facilities and acquire 24-hour online access on the KHCB e-banking system.

According to a recent IFC study on Islamic banking opportunities across small and medium enterprises in Mena, there is potential gap of up to $13.2 billion for Islamic SME financing across nine countries in the region. The study, carried out in Iraq, Pakistan, Yemen, the Kingdom of Saudi Arabia, Egypt, Lebanon, Morocco, Tunisia and Jordan, shows that approximately 35 per cent of SMEs are excluded from the formal banking sector because of the lack of Islamic products, despite huge demand. A high level of risk aversion by banks, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products have been identified as lack of bank funding to SME sector in the region.

Saudi Telecom Company has issued a debut Islamic bond worth 2 billion Saudi riyals ($533.3 million) after receiving good demand. The 10-year Islamic bond carries a floating profit rate of 70 basis points over three-month SIBOR and was offered under its newly established 5 billion Saudi riyals private placement sukuk program. The debut Sukuk issuance of STC was almost two times oversubscribed. J.P. Morgan Saudi Arabia, NCB Capital Co. and Standard Chartered Capital Saudi Arabia were joint arrangers of the sukuk program as well as joint managers on the debut issue.

Bahrain’s Gulf Finance House has become entangled in a dispute with a former executive at its Dubai-based private equity unit who the company alleges falsified invoices to siphon almost $5 million into bank accounts controlled by him. David Haigh, who was the deputy chief executive of GFH Capital until resigning this March, was arrested shortly after he arrived in Dubai about a month ago and has been in detention since. Legal authorities in Dubai are weighing criminal charges, according to an emailed statement from GFH, while the company has also filed a civil suit against him in the Dubai International Financial Centre. Mr. Haigh denied the GFH allegations.

Abu Dhabi government-owned Al Hilal Bank may sell a benchmark-sized Tier 1 capital-boosting sukuk after announcing plans to meet fixed income investors, joining a raft of issuers from the United Arab Emirates taking advantage of benign markets. The unlisted Islamic lender has chosen itself as well as Citigroup , Emirates NBD, HSBC, National Bank of Abu Dhabi and Standard Chartered to arrange roadshows. A benchmark-sized, U.S. dollar-denominated sukuk offer with a perpetual lifespan may follow the investor meetings, subject to market conditions. Al Hilal will meet investors in the Middle East on June 15 before moving to Hong Kong on June 17, followed by Singapore on June 18. After a day in London on June 20, roadshows end in Switzerland on June 23.

Asya Katilim Bankasi AS (ASYAB), the Turkish banks in talks to sell a stake to Qatar Islamic Bank, has hired Goldman Sachs Group Inc (GS:US) as exclusive financial adviser on the deal. The Istanbul-based lender said in March that it was in exclusive talks with QIB for a strategic partnership, while the Doha-based bank said it was interested to take a stake in the lender. Bank Asya, in today’s filing, didn’t give more details. Bank Asya fell 2.9 percent to 1.66 liras at 10:35 a.m. in Istanbul. It’s gained about 14 percent this year.

Dubai Islamic Bank PJSC (DIB) has completed their first phase of accumulating shares in PT Bank Panin Syariah Tbk (Bank Panin Syariah) in Indonesia. As per the envisaged plan, DIB has completed the acquisition of 24.9% shares in Bank Panin Syariah by acquiring 2,427,750,000 shares. Afterwards, DIB will initiate formal regulatory approval process to obtain "Significant Shareholder Status" from the Financial Services Authority (OJK) to complete phase 2 of the share purchase plan by increasing its stake in Bank Panin Syariah to up to 40%. Bank Panin Syariah is currently controlled by PT Bank Panin and operates through a network of 10 branches. The bank is listed on the Indonesia stock exchange.

AHAB outlines a comprehensive settlement proposal to a group of banks and financial institutions with claims against the company. These asserted by banks, total billions of dollars, arise out of liabilities incurred through a massive fraud perpetrated by Maan Al Sanea in his time a head of the Money Exchange division of AHAB. The liabilities have so far spawned more than 70 lawsuits in at least 10 countries over the past five years.