Business Intelligence Middle East

Thomson Reuters and ADIB launch global awards for ethical and Islamic finance innovation

Abu Dhabi Islamic Bank (ADIB), in partnership with Thomson Reuters, have launched global awards to recognize and reward innovation in ethical and Islamic finance. Presented in three categories: Islamic Finance Industry Development Award, Ethical Finance Initiative Award, and Lifetime achievement award; these awards are designed to inspire real change in the financial services industry by recognizing and rewarding innovation that can be put into practice. Entries will be accepted from any institution, research centre, group of individuals or individual interested in shaping the financial industry within an ethical framework, with prizes of up to US$100,000 offered. A short-list of nominees for three award categories will be announced in November this year.

Deloitte launches Humanitarian Innovation Program to enhance crisis preparedness and emergency response worldwide

Deloitte Touche Tohmatsu Limited (DTTL) and its member firm network have launched the Humanitarian Innovation Program, which will deliver two global pro bono projects for humanitarian organizations. The program launches at a time when humanitarian organizations are increasingly responding to a variety of disasters, requiring an immediate response with limited resources. Deloitte’s Program aims to deliver solutions to humanitarian agencies to help them during the preparation and readiness phases, which could ultimately help to strengthen the response of the local and international community, sustain livelihoods, and save more lives. The Humanitarian Innovation Program will be open to any humanitarian organization worldwide and DTTL will receive applications through July 2013. A panel will review the applications and select two pro bono projects which Deloitte member firms will begin work on in late 2013.

Bahrain's Tadhamon Capital acquires two UK assets worth US$50 million

The Bahrain-based investment firm Tadhamon Capital acquired two assets within its prevalent Social Infrastructure Platform in the United Kingdom in the second quarter of 2013. The two transactions are valued at approximately £32 million (US$50 million) which brings the total value of the assets held under the Platform to £123 million (US$190 million). The first transaction was established between Tadhamon Capital and Maria Mallaband Care Group Ltd (MMCG) to forward fund the development of the £6.7 million 53-bed care homes in Gerrards Cross, Buckinghamshire (west of London). The second transaction builds on the Platform's existing strategic relation with McLaren Properties by arranging the acquisition of 251-bed Brunswick House student accommodation scheme in Cambridge at a value of £26 million.

Nakheel reports 57% jump in first half profit to US$327 million

Nakheel made a net profit of AED1.2 billion (US$327 million) in H1 2013, a 57% increase on a net profit of AED767 million reported for H1 2012. Revenues for H1 2013 stood at AED4.23 billion, up 36% on revenues of AED3.1 billion noted in H1 2012. The results for H1 2013 reflect the on-going support of the Government of Dubai and the commitment by Nakheel to delivering the post restructuring plan. They also demonstrate the continuing growth and strengthening of the real estate market in Dubai, and the return of investor confidence and trust in Nakheel and its projects. Besides several Nakheel projects under development, the company is evaluating a number of additional projects. Moreover, Nakheel focuses on meeting its restructuring commitments to its stakeholders by making interest payments to bank lenders and profit payments to its sukuk holders.

ADIB arranges US$360 million syndicated Islamic financing for Gulf Marine Services

Abu Dhabi Islamic Bank (ADIB) has closed a AED 1.32 billion (US$360 million) Syndicated Islamic Facility for Abu Dhabi-based Gulf Marine Services (GMS). ADIB acted as the Mandated Lead Arranger, Sole Underwriter, Sole Bookrunner, Investment and Security Agent for the facility. The deal was tailored by ADIB to meet GMS’ specific financing needs, including re-financing existing facilities and providing finance for the acquisition of 2 additional vessels. The financing will also help GMS achieve its plan to further improve and expand its fleet. The facility was very well received, as evidenced by the strong demand from local and regional banks which resulted in it being 2 times oversubscribed by 10 local and regional banks. White & Case acted as the legal counsel to the financiers, while Gibson Dunn acted on behalf of GMS.

Global sukuk issuance reaches US$61.2 billion in first half 2013, says KFH-Research

A report issued by KFH-Research states that the global sukuk market has shown resilience this year given the volatility in global bond markets as market players react to positive economic growth prospects as well as concerns over monetary policy in the US. The report mentions that sukuk issuances have kept up momentum with over US$26.6 billion placed during the second quarter, which adds to the US$34.5 billion placed during the 1Q13 to bring the first half total to US$61.2 billion. On a monthly basis, the primary sukuk market in 2013 has outpaced the previous year every month since January 2013 except June 2013. Furthermore, the report adds that the HSBC/Nasdaq SKBI Yield Index shows that overall sukuk yields have risen sharply in 2Q13, with an increase of 43.0% to the highest level in over 25 months.

UNDP and Islamic Trade Finance Corporation join hands to fight poverty in the Arab world

The United Nations Development Programme (UNDP) and the Islamic Trade Finance Corporation (ITFC) of the Islamic Development Bank agreed to cooperate in the Arab States region on fighting poverty and creating jobs. The newly-signed Aid for Trade Initiative for Arab States will spearhead trade reforms in Arab countries in the Middle East and North Africa with the aim of bringing about pro-poor economic growth. The Aid for Trade Initiative for Arab States was endorsed by the 3rd Arab Economic and Social Development Summit, held in January. It is funded by the International Islamic Trade Finance Corporation as well as the Governments of Kuwait, Saudi Arabia and Sweden and UNDP. The initiative will also be undertaken in technical cooperation with the League of Arab States.

Gulf investors regain a quiet confidence in overseas investments, finds PwC report

PwC has published its new report titled ‘Resetting the Compass: Navigating success in deal-making for mature market sellers and high growth market buyers’. Companies in high-growth markets (HGM) invested US$161 billion into mature market companies between 2008 and 2012, outstripping their combined investment of US$151 billion in the opposite direction, according to the report. In 2013, the volume of outbound deals from the Gulf Cooperation Council (GCC) to mature markets ranked higher than the average reported over the last five years. The UK and Europe continue to hold strong appeal for GCC buyers, accounting for the majority of mature market deals from the GCC. The GCC region’s sovereign wealth funds (SWFs) and state-owned enterprises continue to drive much of the outbound deal value but have cut back on the size of their overseas investments into mature markets since 2007/2008.

Dubai World makes first major asset sale since crisis

Dubai World has sold one of its UK assets as part of its efforts to repay creditors. A unit of Toronto-based investment company Brookfield Asset Management has bought logistics warehouse developer Gazeley from Dubai World subsidiary Economic Zones World (EZW). However, they did not disclose the value of the transaction. Proceeds from the sale of Gazeley are expected to go towards the repayment of a $1.2 billion loan secured by associate firm JAFZA in June last year. EZW had pledged up to US$300 million for JAFZA from the proceeds raised by the Gazeley sale, and should the sale be completed, funds will be used to part-repay the bank facility. The sale is the first major divestments of a foreign asset by Dubai World since it agreed on a debt deal with creditors in 2011. The restructuring agreement promised full repayment to creditors through a series of disposals of overseas assets.

Tharawat Family Business Forum hosts roundtable to discuss the multiple roles of Arab women in business

Family business members from North Africa, the Levant and the GCC recently gathered in Dubai for an interactive roundtable session to discuss the multiple roles played by women in family-owned businesses. Organised and hosted by Tharawat Family Business Fórum, the roundtable was an opportunity to exchange experiences and thoughts on the subject, and to analyse the development, challenges and opportunities encountered by women in family businesses. The attendees from leading regional businesses explored the variety of roles that women play with relation to the family business, be it as managers, owners or family members and custodians of family harmony. The speakers shared their insights and thoughts with an audience and engaged in interactive group work to explore the topics further.

IMF says Bahrain's growing debt may be unsustainable by 2018

According to the International Monetary Fund, Bahrain must urgently cut spending or risk unsustainable public debt as its fiscal deficit widens and oil prices decline. The smallest Gulf crude producer needs gradual fiscal consolidation equal to 7.7% of economic output over the next six budget years to contain its government debt at 40% of gross domestic product. IMF also recommended that Bahrain pare its fiscal stimulus to 0.9 percentage points of non-oil GDP from 2.1 percentage points. Bahrain’s outstanding debt including interest is about US$11.8 billion, with more than US$3 billion due this year. Moreover, investment in Bahrain’s private sector remains low, which may translate to non-oil growth of less than 4% in 2013. Bahrain is also vulnerable to oil price fluctuations.

Dubai Islamic Bank ratings affirmed by Moody's

Dubai Islamic Bank Group (DIB) today announced that its Long Term Issuer ratings have been affirmed by Moody’s at Baa1 and the outlook has been moved to “Stable”. The confirmation of DIB’s ratings reflects the recent capital injection and the expectation that asset quality pressure will ease which, in turn, should support profitability, according to Moody's. Morover, the systemic importance of the bank to the banking sector and the government ownership of 34% were also cited as some of the factors for the decision. Moody’s also affirmed the long term issuer ratings of Tamweel, which is a subsidiary of the bank (86.5% owned by DIB) at Baa3 and with the recent move by DIB to take over the company, Tamweel’s outlook on ratings has been upgraded to “Positive.”

83% of Middle East family businesses have seen sales grow in the past year, reveals PwC survey

Family businesses in the Middle East have performed well over the last year, with 83 %, reporting growth in sales in the past year, according to a Family Business Survey conducted by PwC. 23% of the family businesses in the region said that they are aiming to grow aggressively and quickly over the next five years. Moreover, raised standards of education coupled with improved economic conditions and financial opportunities have resulted in women contributing significantly towards the growth and success of family businesses. Family businesses are thriving regionally with sales growth particularly strong in retail, manufacturing and construction sectors. Recruitment of skilled staff, succession planning and family politics are some of the key challenges facing family businesses.

CSR in Saudi Arabia: Far behind or another path?

In the Middle East CSR is largely characterised by a charity mindset, easily regarded as archaic by outsiders. However, the region’s CSR focus on charity is explained by the general perception that CSR is a corporate form of Zakat, one of Islam’s five pillars, which stipulates that Muslims give a certain percentage of their wealth in charity. Saudi companies primarily focus their CSR activities on programmes that have little to do with these companies’ core activities. Some present aid to the handicapped while others support and encourage young Saudi citizens to join the labour force. Some concerns, however, receive little or no attention, such as environmental issues, human rights of guest workers or the equal treatment of women in the workplace. The CSR focus on charity is deeply rooted in religious tradition. Therefore, CSR in the Middle East will develop along its own path.

UNDP and Islamic Trade Finance Corporation join hands to fight poverty in the Arab world

The United Nations Development Programme (UNDP) and the Islamic Trade Finance Corporation (ITFC) of the Islamic Development Bank agreed today to cooperate in the Arab States region on fighting poverty and creating jobs. The first area of joint work is an initiative to boost employment through trade reforms. The newly-signed Aid for Trade Initiative for Arab States will spearhead trade reforms in Arab countries in the Middle East and North Africa with the aim of bringing about pro-poor economic growth. The Aid for Trade Initiative for Arab States was endorsed by the 3rd Arab Economic and Social Development Summit, held in January 2013. It is funded by the International Islamic Trade Finance Corporation -- a unit of the Islamic Development Bank Group -- as well as the Governments of Kuwait, Saudi Arabia and Sweden and UNDP.

Hawkamah reaches out to regional Private Equity players for greater engagement

Hawkamah’s Private Equity Task Force aims to encourage Private Equity firms to appraise or to re-appraise their corporate governance status and to adopt best practice standards. Its remit is to assist the Private Equity Industry in the MENA region by developing corporate governance principles and practice guidelines. Leonardo Peklar, Hawkamah CEO stressed that adopting a better corporate governance culture focuses on adapting the principles to regional cultural requirements and realities. Within this framework, implementing corporate governance positively impacts performance and aligns the interests of stakeholders.

Mercer shares global trends and regional practices in CSR at the 10th CSR Summit

Mercer in partnership with the Institute for International Research Middle East (IIRME), will be presenting the findings of its latest survey on Corporate Social Responsibility and Sustainability Programs, Policies and Practices in the region at the 10th CSR Summit held on May 21, 2013 at The Address Hotel Dubai Marina. Taking place over a period from April to May, 2013, the results will be ready for sharing at the conference organised by IIRME on the very same topic. The session will also provide a platform for benchmarking local practices to the global findings from the survey. The survey is open until May 1st, 2013.

Record low borrowing costs are buoying Gulf issuers' credit quality-for now

According to a report titled "Record Low Borrowing Costs Are Boosting Gulf Issuers' Credit Quality, But Will They Last?", published by Standard & Poor's, corporate and infrastructure issuers in the Gulf region are benefitting from sustained positive macroeconomic fundamentals and strong appetite from regional and international investors. Moreover, GDP growth of 4% and above in 2013 is expected for most of the GCC nations. All GCC sovereigns have stable outlooks. The key risks to this rosy picture are an escalation in regional political instability or an unexpected fall in oil prices. Fortunately, these risks are negatively correlated, with any threat to supplies of hydrocarbons normally resulting in immediate price hikes.

Gatehouse Bank opens office in Malaysia to link Islamic financial hubs

The Board of Gatehouse Bank has announced its expansion in South East Asia to cement its growing operations and to ensure its proximity with its key clients, regulators and stakeholders in the region. This follows on from the £165 million acquisition of the law firm SJ Berwin’s offices in London, in collaboration with a Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

International Islamic Liquidity Management 2 SA's US$500 million landmark Islamic Finance program assigned 'A-1' rating

Standard & Poor's Ratings Services said that it has assigned its 'A-1' rating to International Islamic Liquidity Management 2 SA's US$500 million Islamic finance program. The vehicle has been established with the sole purpose of purchasing sovereign, sovereign-linked or supranational sukuk assets with long-term ratings that correspond to an 'A-1' rating. In addition, the vehicle is to issue short-term Sharia-compliant certificates with maturity profiles of less than one year. IILM will act as the program administrator of the vehicle.

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