IslamicFinance.de

The Islamic Corporation for the Development of the Private Sector the private sector arm of Islamic Development Bank Group and the African Export-Import Bank signed a line of financing agreement for a $100-million facility on December 24th in Jeddah.

The $100-million line of financing facility will be utilized by Afreximbank to provide Shariah-compliant financing to small and medium-sized enterprises in its member countries in Africa. Afreximbank has a solid pipeline of projects in the industrial, communication, technology, health care, construction and agricultural sectors that would be financed by the ICD line of financing.

Al-Rajhi Capital said, the initial public offering period of Al-Rajhi REIT Fund will run from Jan. 1 to Jan. 14. The fund will have a size of $ 282 million, according to the fund manager. Some 42.67 million units will be offered to investors at SR 10 each.
“The Sharia-compliant fund aims to acquire or invest in income-generating commercial, office, and educational assets, as well as warehouses, which are mainly located in the Kingdom, except for Makkah and Madinah,” was said in a statement.
The preliminary portfolio comprises 13 assets that generate income at the end of January and July of every year.
The fund’s assets are spread across various sectors in the Kingdom: Retail 54 %, warehouses 12 %, offices 26 % and education 8 %. Eligible investors are Saudis, GCC nationals, foreigners residing in the Kingdom, institutions, companies, and investment funds operating in the Kingdom, along with other Qualified Foreign Investors.

Saudi Arabia hired Citigroup, JPMorgan Chase and HSBC as global coordinators on its international Islamic bond sale. The kingdom also picked Deutsche Bank and BNP Paribas among others as lead managers for the sale. The sukuk could come as soon as this month. Saudi secretary-general of the Finance Committee, Mohammad Al Tuwaijri, announced in December the kingdom's plans to raise between $10 billion and $15 billion from international bond markets in 2017 and sell about 70 billion riyals locally. The world’s biggest oil exporter is considering international and domestic debt issues to help finance its budget deficit.

The Islamic Corporation for the Development of the Private Sector (ICD), a development finance institution of the Saudi Arabia-based Islamic Development Bank (IsDB) and the Caisse des Dépôts et Consignations Deposit (CDC), a financial institution backed by the government of Gabon, recently announced that they have signed a memorandum of understanding for the creation of a private equity fund to support small and medium-sized enterprises (SMEs) in Gabon and elsewhere in Central Africa.The goal of the fund is to foster the growth of SMEs that have been ill-served by banks and thus to grow the region’s economy as a whole.
As of October 13, 2015, ICD reported total assets of USD 1.7 billion and annual income of USD 97 million. No financial information for CDC is available. CDC has a balance sheet of XAF 195 billion (approximately USD 315 million).

The President of Kazakhstan, Nursultan Nazarbayev met with the President of the Islamic Development Bank (IsDB), Dr. Bandar Hajjar, on an official visit to the Kingdom of Saudi Arabia. President Nazarbayev praised the cooperation between IsDB and his country and congratulated Dr. Hajjar on his recent assumption of duties as the new IsDB Group President. President Nazarbayev plans to launch the program 100 Steps, which is designed to introduce structural and economic reforms to Kazakhstan. The program also envisages the launching of Astana International Financial Center as a center of excellence for financial services at regional and global level. President Nazarbayev called on IsDB to provide technical support in the fields of development and Islamic finance. Dr. Hajjar assured that the IsDB Group would provide the required technical assistance to support President Nazarbayev’s initiatives.

The Saudi Capital Market Authority (CMA) has been recently accepted as an institutional member of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The official signing ceremony was held at the CMA’s headquarters in Riyadh on 13 October 2016. The membership agreement was signed by Mohammad Bin Abdulla Al Jadaan, Chairman of CMA, and Hamed Hassan Merah, Secretary General of AAOIFI. Al Jadaan said the CMA was pleased to forge such a professional relationship with AAOFI, as their cooperation had always been successful. They had several joint activities and events, including a major international conference at al-Madinah al-Munawwarah and several training programs on essentials of Islamic finance and economics.

Saudi Arabia's Bank Al Bilad priced an Islamic bond issue worth 2 billion riyals ($533 million) at 200 basis points above the three-month Saudi interbank offered rate. The sukuk have a tenor of 10 years, with the bank having the right to call the bond at the end of the fifth year. They were sold through a private placement. Bank Al Bilad said the raised funds would support its capital base in line with Basel III standards.

Saudi Arabian construction firm Abdullah Abdul Mohsin Al Khodari and Sons has renewed an existing 132 million riyal (Dh129.2 million, $35.2 million) Islamic credit facility with Samba Financial Group. The facility will provide bonding commitments as well as capital and working capital requirements for projects and general business. Credit limits for projects covered by the facility will range from 36 to 60 months. Khodari has also won a 69 million riyal contract from the kingdom’s Ministry of Environment, Water & Agriculture for the maintenance of water networks. The financial impact of the project is expected to start in the third quarter.

Saudi companies willing to become public holding firms have slowed down the process, following a drop in prices of new companies listed in local share markets dealings. The forbearance of Saudi companies affected the region’s market. Saudi share market concluded the first week sessions with a slight drop and it closed at 6,212 points amid USD613.3 million (SAR2.3 billion) monetary liquidity, which is considered the least in five years. Saudi Arabian Monetary Agency (SAMA) continued its positive movements to enhance performance of local insurance companies.

This case study reports on three governance challenges overcome by a diversified family enterprise from the Kingdom of Saudi Arabia. One of the early lessons for the family was to separate emotions from business. They did this by appointing independent directors whose role was to set the strategy behind the business. In order to engage everyone, they established a family assembly, where each and every branch would always be fairly represented. The family assembly membership was and still is based on merit, and its chairman is always the eldest member of the family.

Interview with director and head of Islamic Corporation for Development's India operations.
For the first time, the Jeddah-based Islamic Development Bank has forayed into a non-member country by announcing setting up of a non-banking financial company in India through its 100% subsidiary Islamic Corporation for the Development of the private sector. Based on the Islamic principle of not charging interest on loans, ICD will operate through a registered office in Mumbai, with prominent businessman from Gujarat, Zafar Sareshwala, heading its India operations as director. In an interview with Vinay Umarji, Sareshwala talks about how the NBFC will play a catalyst for small businesses by sharing their profits and losses instead of charging interest on finance extended.

What kind of entity is Islamic Development Bank setting up in India? How will it function?

Rapid growth among Saudi Arabia's Islamic insurers will benefit the domestic bond market but bypass dollardenominated issues due to regulations that keep insurers' investment close to home, experts and executives said.

Strong growth in the takaful, or insurance industry has underpinned hopes it will give a boost to the market for Islamic bonds, or sukuk.

Insurers are important investors in conventional fixed income markets, but sukuk have been mostly bought by Western investors such as hedge funds and banks.

Eastern District Cooling Co. Ltd., a wholly-owned subsidiary of Zamil Industrial Investment Company (Zamil Industrial), has signed with The National Commercial Bank (NCB), the first non-recourse project financing done in the region for a district cooling project. In November 2007, Zamil Industrial signed a 22-year Energy Performance contract with Saudi Basic Industries Corporation (SABIC) for the complete outsourcing of process and comfort cooling, including the building of a central cooling plant to supply 20,000 tons of refrigeration within the premises of
Saudi Iron & Steel Company (Hadeed) in Jubail Industrial City.

For the second year in a row Al Rajhi Bank has achieved first place ahead of 80 other large Saudi companies participating at the Saudi "Competitiveness for Responsibility" awards. Held as part of the Global Competitiveness Forum activities, the ceremony honouring the participants was organised by Saudi Arabian General Investment Authority with the support of the King Khalid Charitable Foundation.

Mr. Abdullah Bin Sulaiman Al Rajhi, Managing Director and Chief Executive Officer of Al Rajhi Bank announced that the bank has achieved a net profit for 2009 amounted to SAR 6,767 million ($1,804 million) compared to SAR 6,525 million ($1740 million) in 2008 with a rise of 4 per cent.