IslamicFinance.de

The Silk Road Economic Belt and 21st Century Maritime Silk Road, or the One Belt, One Road (OBOR) initiative is central to China’s evolving role in the global economy. OBOR, unveiled in 2013, is China’s ambitious policy of revitalising the infrastructure of the ancient Silk Road trading routes and forging new trade routes. It offers great opportunities for the GCC in terms of inbound investments from China as well as the chance to deepen economic, cultural and diplomatic ties with Beijing. For the UAE is particularly important to showcase Dubai’s ability to provide China with a gateway to accessing regional liquidity and its expertise in Islamic finance. However, there are constraints arising out of stakeholders’ lack of familiarity with Islamic finance and the current Chinese policies and laws, which only cater for conventional financing methods.

Dubai has announced it is in advanced discussions to set up the Shari'a compliant Emirates Trade Bank which will specialise in international trade and commodity financing. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and chairman of the Executive Council, has nominated a founding committee for the establishment of the bank. Emirates Trade Bank will be the first of its kind global Shari’a compliant bank exclusively offering integrated trade solutions, through mobilising the infrastructure and logistics ecosystem of the UAE. Sami Al Qamzi, vice chairman of the Dubai Islamic Economy Development Centre (DIEDC), said the Emirates Trade Bank is set to reap synergies from Dubai's strategic positioning. On Tuesday, Sheikh Hamdan said Dubai is set to launch ambitious projects as part of a plan to transform the city into the capital of the Islamic economy by 2021.

According to a new report by Thomson Reuters, Islamic finance assets grew by 10% to reach $2 trillion in 2015. Islamic banking represented 73% of these assets, followed by sukuk which represented 17%. The increase in assets was driven by strong growth in all sectors - Islamic banking, takaful, outstanding sukuk and net value of Islamic funds. Islamic finance assets are projected to grow to $3.2 trillion by 2020, with Islamic banking reaching $2.6 trillion. The report added that the sukuk market on the other hand has struggled in the past couple of years due to the global economic uncertainty. Total issuance is expected to be around $70 billion by end of 2016.

Dubai Islamic Bank is opening subscriptions on Tuesday for a 3.16 bn dirham ($860.3 mn) rights issue. The bank is offering 988.4 mn new shares to shareholders in total, with subscription open on the basis of one new share for every four currently held. Shares are priced at 3.2 dirhams each, a substantial discount to Monday's closing share price of 4.95 dirhams. DIB is the latest bank in the Gulf to replenish reserves after a period of strong lending growth. At the end of March DIB's total capital adequacy ratio stood at 15.6%, above the UAE's regulatory minimum of 12%.

Bahrain's Al Salam Bank confirmed media reports related to a potential merger with an unnamed regional bank. One potential merger prospect is Khaleeji Commercial Bank , after Gulf Finance House, which owns 47 percent of the lender, said last week it was studying tie-up options with other Bahraini banks. In February, merger talks between Bahrain Islamic Bank and Al Salam Bank collapsed due to disagreement on valuation.

Gatehouse Bank has bought the Debenhams department store in Leeds city centre for £33.4m ($52.6m). thus, the sharia-compliant investment bank continues property acquisition in this city, the BT building in Sovereign Street being the first one. The new acquisition was chosen for its strategic location for retail and real estate fundamentals.

Saudi Binladin issued a SAR 1 billion Islamic bond, as a part of its expansion strategy. During the first 6 months of the year, total amount of issued sukuk bonds reached 13% of global Islamic bonds, due to continuous expansion of Saudi Arabian companies into funds market.