GCC

Amlak meeting to consider job cuts

Amlak Finance, the mortgage financer will consider job cuts at its board meeting on 31 January the company announced in a statement along to discuss the merger proceedings with Tamweel and earnings. Amlak and Tamweel will be both taken over by Abu-Dhbai based Real Estate Bank, merge with the Emirates Industrial Bank under the new name Emirates Development Bank according to reporting by the state news agency WAM in November.

ALAFCO Aviation Lease And Finance Company Financial Results

ALAFCO Aviation Lease And Finance Company released their Financial Results as published on Zawya on 27 January. Ahmad A. Alzabin announced that the operating profit of the company during the 1st quarter of the current fiscal year that ended 31 December 2008 reached KD 3 million, and that ALAFCOearned a net profit of KD 1.45 mn. The company's assets reached KD 281.21 mn and shareholders equity reached KD 82.29 mn during the quarter.

New Saudi-Arabian Property Financer as JV between Al-Khabeer and Al Mutajara

Al-Khabeer Merchant Finance Corporation built a Joint-Venture with Al Mutajara installments company to establish ‘Dari for Home Loans,’ a new SAR 1 bn capitalised Saudi joint-stock company-under development stage, which will specialise in financing the construction and purchase of houses and residential properties in accordance with Islamic Sharia principles.

Dari Home Loans will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. It will not include property developers among its pool of clients.

Dari Home Loans is currently appointing personnel and officials for managing its human resources and is negotiating with a global partner for the transfer of management experience to this sector in the Kingdom. Al-Khabeer is adopting its turnkey and integrated banking solutions to develop Dari, as Al-Khabeer directs the finance and advisory for the company. The new property funding firm’s founders are confident that it will be fully established in a short span of time given the strength of the Kingdom’s economy.

Mohammad Sheikh is Chief Operating Officer of Dari Home Loans.

Dow Jones Islamic Market Index Monthly Performance Report

Press Release - full text attached:

New York (January 27, 2009) — Based on the close of trading on January 26, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -5.55% month-to-date, closing at 1646.71. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -9.00%, closing at 131.03.

- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased -9.90%, closing at 1252.00. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of -11.40%, closing at 90.89.

- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1596.39, a loss of -7.60%, while the pan-European blue chip Dow Jones STOXX 50 Index lost -10.97%, closing at 1926.07.

Gulf Finance House Outlook To Negative On Deteriorating Operating Environment; 'BBB-/A-3' Ratings Affirmed

Press Release
PARIS (Standard & Poor's) Jan. 26, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Bahrain-based Gulf Finance House (GFH) to negative from stable. At the same time, we affirmed the 'BBB-/A-3' long- and short-term counterparty credit ratings on the bank.

"The outlook revision reflects the increasingly difficult environment in which the bank operates, which is likely to limit its capacity to execute new transactions and therefore lead to a weaker financial performance," said Standard & Poor's credit analyst Emmanuel Volland.

In addition, the value of GFH's own investments, largely illiquid by nature, is set to decline. On a positive note, we believe that the nature of these assets means that they are less subject to marked-to-market deterioration than those of GFH's peers.

Investment Dar appoints Credit Suisse as financial adviser

AMEinfo reported on 25 January that Kuwait-based financial services company Investment Dar has appointed Credit Suisse Group to advise the firm on its financial strategy.

Saudi banks suffer end of year losses

Joanna Hartley reported on 24 January that the Saudi banking sector has posted poor results for the last quarter of 2008 impacted by the global economic environment according to Fitch rating, saying that 2009 will be challenging. The preliminary 2008 results released by the 10 main commercial banks in the kingdom confirmed that the last quarter of 2008 was the worst quarter of the year for all. Despite this the 10 banks remain among the highest rated by Fitch Ratings across the GCC region and generally have sound domestic franchises.

The expectation of tougher conditions for the banks and lower profitability in the coming months resulted in most banks' individual ratings being downgraded in December 2008. Their long-term issuer default ratings largely remain driven by the extremely high probability of support from the Saudi Arabian government (rated 'AA-').

2008 Sees Worst Decline in Sukuk Market, Improvement in Islamic Syndicated Lending, Says IFIS

IFIS published a report on 24 January discussed on Albawaba that Sukuk or Islamic bond markets have witnessed a dramatic decline during 2008, especially during the 4th Quarter, which was the lowest since 2002, and 2008 was a worse year for sukuk than both 2006 and 2007 with no issuances even of a Dollar Sukuk and the total amount dropping to only USD 584 mn in Q4 2008. South East Asia was more severely impacted than the GCC in 2008, with issuance falling by 76% down to USD 6.57 bn for the entire year. The decline in the GCC was quite severe as well, however, with issuance falling to USD 9.06 bn, a 51% drop. The global total for sukuk issuance, USD 15.77 bn, was 66% lower than the figure for 2007. This is the first year on year drop in sukuk issuance since the year 2000.

Islamic syndicated lending expanded from USD 19.6 bn in 2007 to USD 27.2 bn in 2008, a 32% increase. But as with credit markets worldwide, Islamic syndicated lending froze almost completely in Q4 2008.

Bahrain Islamic Bank lowers profits marginally

Bahrain Islamic Bank announced on 21 January that its financial results for the year 2008, decreased to BD 22.3 mn net income from BD 25 mn for the year 2007, after making provisions against contingences that may arise in case the current international financial and economic crisis continues further.

The board of Directors has decided to propose to the Bank's AGM the distribution of 20% of dividends of paid up capital as of 31st December 2008 as 10% cash and another 10% bonus shares.

Largest Islamic bank to be launced by June

Liau Y-Sing reported on 23 January that the largest Islamic bank is announced to be launched in June operating out of Bahrain with a paid up capital of USD 11 bn; the Islamic Development Bank being the largest shareholder according to Sheikh Saleh Abdullah Kamel, chairman of the General Council of Islamic Banks and Financial Institutions. The bank, which has yet to be formally named, has been in the pipeline for several years and is currently undergoing final review by IDB on its capital input. While a total of $1 billion will be raised by private investors, including IDB, the other $10 billion is expected to come from an IPO on the Bahrain stock exchange, Sheikh Saleh Abdulla Kamel is cited.

Moody's may downgrade Alaqaria rating

Tradearabia reported on 22 January that Moody's Investors Service has placed the A2 local and foreign currency issuer ratings for Qatar Real Estate Investment Company (Alaqaria) under review for possible downgrade. The moves comes following the new Qatari government directive to merge Alaqari with Barwa Real Estate Company. Moody's has also placed the $300 million Trust Certificates (sukuk) issued by Qatar Alaqaria Sukuk Company (QASC) under review.

GCC Islamic insurance sector set to grow 25%

Ghazanfar Ali Khan reported in Arab News on 22 January that the Islamic insurance (Takaful) market will grow five fold over the next 10 years while the market for Shariah-compliant insurance will be worth USD 14 bn by 2015 being said at an Islamic insurance conference. Since 2000, Islamic insurance has been growing at more than 15 percent per annum, yet the market is still at its tip, especially in the Middle East and Southeast Asia, said a report released on the occasion.

According to the report, insurance premiums paid in Muslim nations are equal to between 0.5 percent and 5 percent of gross domestic product. That compares with between 10 percent and 15 percent in developed markets. The event has been organized by the Islamic International Foundation for Economics and Finance, an affiliate of the Muslim World League, in cooperation with the Islamic Research and Training Institute.

Sukuk market struggles

Shanthy Nambiar and Aloysius Unditu reported on Bloomberg on 21 January about the outlook of the Sukuk market. A long line of sovereign and corporate issuers in GCC and Asia are delaying their issuance due to market constraints.

The average extra yield on corporate and government sukuk above the London interbank offered rate, or Libor, is now 11.1 %, up from 1.9 % a year ago, according to HSBC-DIFX indices. That spread widened to a record 11.9 % in December, compared with 6.97 % for non-Islamic bonds in the Middle East.

Islamic finance media house set up

Shariah consultancy Yasaar has announced the launch of a dedicated Islamic finance media entity called Yasaar Media. Yasaar Media recognises that there is a serious need for an information provider in the Islamic finance industry that produces in-depth reports and studies on specific market niches, asset classes and countries.

The people behind Yasaar Media are Paul McNamara and Majid Dawood.

Emaar Properties in USD 4 bn borrowing plan

John Irish and Jason Benham reported on Reuters on 20 January about the financing needs of Emaar Properties, Dubai both conventional euro medium term note and Islamic. The notes would be listed on the London Stock Exchange, with HSBC and Royal Bank of Scotland acting as lead arrangers..

Sukuk Manfa’a with a value exceeding SAR 857 mn

According to CPIFinancial on 21 January, Al Salam Bank-Bahrain works with Tadhamon Islamic International Bank in agreement with Rawacheen Al Hijaz to issue Sukuk Manfa’a with a value exceeding SAR 857 mn on Burj Al Jewar, a commercial/residential tower overlooking the Holy Mosque in Mecca. Rawacheen Al Hijaz will act as the lead manager of the Sukuk Manfa’a.

The Sukuk program will give each Sukuk holder the right to benefit from the unit for a period of 19 Hijri years either to use it or sell, lease to others, grant or bequeath. The holders can also exchange their unit with another.

Mashreq Capital To Launch USD 50 mn Regional Sukuk Fund

Mirna Sleiman, Dow Jones Newswires reported on 19 January that Mashreq Capital will launch a USD 50 mn Sukuk fund in Q.
Abdul Kadir Hussain, CEO, sees a target return of between 12% and 20% over the next 12 months.

Global Investment House begins operations in Saudi Arabia

Global-Saudi is an investment bank with a capital of 50 million Saudi riyals. It carries out conventional and Islamic financial services such as the establishment and management of investment funds, portfolio management, international brokerage, private and public placement, underwriting, advisory, dealings as a principal and as an agent as well as custody. Additionally, Global-Saudi obtained approval from the Authority to launch 3 Investment Funds, which are the Global GCC Market Fund, Global GCC Equity Fund and Global Saudi Equity Fund (Noor Fund).

Al Khabeer Signs MoU with Jazan Development Co. for Jazan Economic City

Al-Khabeer Merchant Finance Corporation announced on 12 January 2009 to create a SAR 400 mn real estate fund for the benefit of Jazan Economic City projects.

Middle East Carbon Trade Market

Karen Remo-Listama reported in Emirates Business 24/7 on 13 January that Carbon trading can fetch Gulf USD 5bn annually citing Armen Vartanian, Director at EcoVentures, the Middle East and North African (Mena) as there is no single project on carbon trading. Announcement of DMCC were out and also Doha Bank plans an exchange for carbon trading and works with the San Francisco, California-based RainTrust Foundation on the Qatar exchange project and has then secured expressions of interest from Citigroup and Credit Suisse Group. Chief Executive Officer Raghavan Seetharaman said the bank would invest USD 27 mn in its electronic Qatari exchange, and has so far spent USD 7 mn on a plot of land in the USD 2.6 bn Energy City business park that Qatar is building. The start depends on the overall market conditions. Masdar launched already in February 2008 a project to develop a national CO2 capture network capable of creating a significant reduction in Abu Dhabi's carbon footprint.

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