Al Arabiya

Coincidental documents reveal Iranian Guard smuggled billions via Bahraini bank

Iranian owners of a Bahraini bank complained about Bahrain to an international arbitration court in the Netherlands. Bahrain responded with documents proving that $7 billion was smuggled through suspicious accounts with the consent and knowledge of the bank’s management. Future Bank was closed in 2015, but documents prove Iran’s secret assistance in evading international sanctions and smuggling billions of dollars over more than a decade. Bahraini officials criticized Future Bank for allowing the cleric Isa Qassim to make cash deposits totaling millions of dollars over several years, and directing some of the money to a charity linked to terrorism. Audits revealed then that in hundreds of cases, bank transfers were accompanied by specific instructions to avoid references to Iran or Iranian banking codes.

What the West doesn’t understand about #UAE foreign #aid

In 2013, 2014, and 2016, the UAE was the world’s biggest international donor, disbursing billions of dollars each year. In 2015, it had the fourth highest aid per capita in the world. Most westerners have no idea that the UAE is so active in foreign aid. Around 90% of its foreign aid is developmental with the rest going on humanitarian and religious/cultural assistance. The recipients are primarily developing Arab and Islamic countries, including Egypt, Yemen, and Jordan. A key factor is a difference in Islamic and secular westerner attitudes to charity. When Islamic banks in the Gulf region are solicited for funds to support civil society projects, they often donate only on the condition that their donation be anonymous. Going forward, transparency efforts must continue. However, the UAE must also work hard to protect the dignity of its aid recipients via appropriate levels of discreetness.

The #continuing allure of #Islamic #finance

The total Islamic finance industry was estimated at around $ 1.9 trillion in assets for the year end of 2016, and it pales into insignificance compared with traditional finance. However of special interest is the growing popularity of Islamic finance from both the Muslim and non-Muslim financial institutions and investors. Islamic assets are very much concentrated in the banking sector which holds $1.5 trillion in total, with the Islamic bonds or sukuks worth $320 billion, and investment funds and insurance or so called takaful worth $56 billion and $25 billion respectively.
The majority are purchase and sale or murabaha and leasing or ijara transactions. Some major Gulf companies are turning to the sukuk market to raise funds, with Saudi Aramco and the Government of Saudi Arabia both successfully launching sukuk tranches which were heavily oversubscribed.

ANALYSIS: Can GCC Islamic banks escape the oil-price cycle?

More and more stakeholders concede that the Shari’ah-authorized way of banking has hit a glass ceiling. They acknowledge that Islamic banking and financial services have largely failed to innovate at the speed they were expected to. It is also admitted that Islamic finance is caught in an oil-price cycle, definitely in the Gulf and wider Middle East region. Global rating agency, Standard & Poor’s, estimates that Islamic banks in the GCC are expected to face a tough year ahead. According to S&P Head of Islamic Finance, Mohamed Damak, GCC Islamic banks’ asset quality indicators will deteriorate in the second half of this year and in 2018. Very few Islamic banks have set aside significant amounts of profit-equalization reserves. As for oil price, both Islamic and conventional banks are affected and must adopt a new strategy that is not highly dependent of energy prices. For that a diversification of the economy is needed, which doesn’t seem to be happening anytime soon.

Etihad could raise $1 bln in planned #sukuk debut

Etihad Airways plans to issue a debut US dollar-denominated benchmark sukuk and will soon meet investors to determine its size, maturity and interest rate. Investors said the sukuk could be as large as $1 billion. HSBC, JP Morgan, National Bank of Abu Dhabi, Abu Dhabi Islamic Bank, Dubai Islamic Bank and First Gulf Bank are the deal underwriters, according to an investor presentation dated Nov. 3. The airline, whose credit is rated A by Fitch, reported total revenues of about $9 billion in 2015. At the end of last year it had 121 aircrafts and it plans to take delivery of a further 188 by 2026.

Youth should be the main priority for Muslim leaders

As the 13th OIC (57-member Organization of Islamic Cooperation) Heads of State Summit gets under way in Istanbul this week, it is important to remember that whilst many Muslim countries are known for oil and gas, this is not, however, their most valuable resource, and it is not the only sector that needs to be invested in. Our youth will last longer than our oil reserves, and their worth is impervious to price fluctuations and market forces. Investment in youth is now a top priority for Muslim countries, because if we do not invest in our young people, someone else will – this is a free market. This is why the Islamic Conference Youth Forum for Dialogue and Cooperation (an OIC affiliated international institution headquartered in Istanbul) have convened a youth summit.

Iran to get $32 bln of unfrozen assets after sanctions end

Iran will receive $32 billion of unfrozen assets after sanctions were lifted in a deal with world powers over its nuclear programme, Iranian central bank chief Valiollah Seif said Tuesday. Seif was quoted as saying that $28 billion (25.8 billion euros) would go to the central bank and $4 billion will be transferred to the state treasury as the share of the government. The unfreezing of assets comes after the U.N. atomic watchdog confirmed at the weekend that Iran had complied with measures imposed by the deal with global powers reached in Vienna in July. The central bank plans to keep the funds in centralized and safe accounts abroad, he added.

Iranian investment in Dubai property likely to rise

Iranians are likely to become major buyers of Dubai property again if sanctions against the Islamic Republic are lifted, providing a much-needed fillip to the emirate's real estate sector. Dubai property prices have fallen slightly this year, ending a sustained rebound from 2008-9 crash after tougher regulations to deter speculators, a slump in oil prices and weakening confidence in the global economy dampened sentiment. In 2010, Iranians were the fourth largest foreign buyers of Dubai property, behind India, Britain and Pakistan, and accounted for 12 percent of real estate transactions.

Saudi Arabia’s Almarai to issue 2 bln riyal sukuk

Saudi Arabian dairy producer Almarai will issue a senior sukuk of up to 2 billion riyals ($533 million) to help finance investment plans, it said on Tuesday in a statement published on the bourse website. The sukuk will be offered to local investors and is subject to market conditions, it said in its statement, adding it had mandated HSBC Saudi Arabia and Samba Capital and Investment Management Co to act as joint lead managers.

New markets for Islamic finance emerging, study finds

New markets for Islamic finance are emerging, with African countries launching debut sovereign sukuk and East Asian countries enabling their domestic markets to tap into Islamic financing, a glimpse of the 2015-2016 edition of the ‘State of the Global Islamic Economy’ said ahead of the Global Islamic Economy Summit that will run in Dubai on Oct. 5-6, 2015. The Islamic Development Bank (IDB) and the Bill & Melinda Gates Foundation have formally launched a $500 million grant facility to address poverty and diseases in IDB member countries. Meanwhile, European banks in Russia and Germany, for example, are also investing in Islamic finance through debut sovereign sukuk and Islamic banking windows.

Kuwait Finance House plans to sell stake in Nafais Holding

Kuwait Finance House plans to shed its stake in education investment company Nafais Holding. KFH is currently restructuring its activities, which could also include a sale of assets such as its Malaysian business. This is ahead of planned divestments by its largest shareholder, the Kuwait Investment Authority. The Islamic bank is the second-largest shareholder in Nafais with a 19.01 percent stake. Nafais, involved in education, healthcare, financing and investment, has a market capitalisation of around $206 million, which would value the bank's stake at close to $40 million. The Islamic bank only acquired the Nafais stake in March 2014 from Aref Group Company.

Kuwait preparing Islamic bond legislation to help finance budget-min

Kuwait is preparing legislation to facilitate issues of Islamic bonds by the government as it assesses options to finance a big budget deficit caused by low oil prices, Finance Minister Anas al-Saleh said. Early this month, Kuwait’s parliament approved a budget for the current fiscal year that envisages a deficit of 8.18 billion dinars ($27.0 billion) - nearly half total spending - because of oil’s plunge since mid-2014, which has slashed energy export revenues. The government is looking at ways to save money by limiting energy subsidies and other handouts, and this has worried a public used to a lavish cradle-to-grave welfare system.

CEO of Saudi’s Al Rajhi Bank resigns, new head appointed

Al Rajhi Bank, Saudi Arabia’s second largest bank by assets, is to replace its chief executive, with the new head’s priority likely to be reversing its fortunes after seven straight quarterly profit drops. Suleiman bin Abdul Aziz al-Zabin resigned as chief executive for personal reasons, effective May 17, it said on Sunday in a statement. His replacement would be Steve Bertamini, who had been appointed chief executive, effective from May 18, it said. The bank’s consumer business has been hit by new rules and tougher competition from other lenders in the kingdom. It has one of the highest exposures in the financial sector to the retail segment.

Turkey aims at luring foreign investment from Gulf region

The second International Investment Summit held in Istanbul between April 29-30 gathered international investment funds and investors from Qatar, Saudi Arabia, Kuwait and the United Arab Emirates, in total managing about 1.5 trillion dollars of Gulf investment funds. Turkey’s Science, Industry and Technology Minister Fikri I??k stated that Turkey is making huge efforts to facilitate foreign investments over the last decade, both for encouraging them to make joint ventures with the domestic firms and also investing jointly in third countries. Last year, Turkey has attracted about six billion U.S. dollars of foreign direct investment, while the country aims to reach 80 billion U.S. dollars annually.

Bahrain central bank puts Iran-linked bank, insurer into administration

Bahrain’s central bank said on Thursday it had placed two Iran-linked companies, Future Bank and Iran Insurance Co, into administration to protect the rights of depositors and policyholders. In a brief statement, the central bank did not elaborate on why it took the action or give any information about the two companies. Future Bank, based in Manama, is a commercial bank which was founded in 2004 as a joint venture between two Iranian banks - Bank Saderat and Bank Melli - and Bahrain’s Ahli United Bank. Iran Insurance Co is the Bahrain branch of an Iranian government-owned insurer. It was not immediately known whether the action against the two companies in Bahrain was related to international sanctions against Iranian institutions.

Turkey's Alkhair Capital plans expansion, eyes Islamic bond advisory

Turkish Islamic asset manager Alkhair Capital plans to launch new funds this year and will start a service to advise on Islamic bonds, its general manager Ali Ilhan said. Alkhair Capital, majority-owned by Bahrain's Bank Alkhair, is the only full-fledged Islamic investment firm in the country, with AZ Global and BMD Securities offering some sharia-compliant products of their own. Last month, the firm raised its capital to 5 million lira ($1.86 million) from 2 million lira, to meet new capital requirements coming into force in July, a move that will also help fuel its expansion drive.

Turkish Treasury borrows around 1.8 bln lira in 2017 sukuk

The Turkish Treasury said on Wednesday it issued a lira-denominated sukuk with a volume of 1.8 billion lira ($736 million). The instrument will mature on Feb. 15, 2017, the Treasury said on its website. With the latest sukuk, the Treasury's outstanding lira-denominated sukuk amount has increased to 6.8 billion lira. Treasury also has $3.75 billion worth of outstanding dollar-denominated sukuk.

Morocco to create sharia board to oversee Islamic finance: decree

Morocco is to create a sharia board of Islamic scholars to oversee the country's fledgling Islamic finance industry. Called the Sharia Committee for Participative Finances, the board will be composed of 10 Islamic scholars plus at least five financial experts. The members of the committee will be named by the president of the country’s Islamic Scholars Council, the bulletin said. The board will approve the conformity of the Islamic products proposed by the participative banks, as they will be known under the legislation, and insurance (takaful) to sharia law. It will also oversee the central bank decisions regarding the participative finances sector.

Credit guarantees look to widen Islamic finance landscape

Credit guarantees are gaining traction in Islamic finance, helping a wider range of firms to tap the market for sharia-compliant debt, which remains stubbornly reliant on sovereign and quasi-sovereign issuers. A growing number of guarantors are developing expertise in this area, aiming to facilitate Islamic transactions both large and small. Among them is Britain's export credit agency, UK Export Finance, which plans this year to guarantee an Islamic bond (sukuk) issue for the first time under a capital market guarantee product that it launched in 2010. Demand is also growing for guarantees in markets where credit and political risks pose a greater challenge.

Islamic finance looks to outgrow bad habits as it expands

After a year of landmark deals which are opening new markets for Islamic finance, the industry is under fresh pressure to address some of its shortcomings and prove that it is not just an imitation of conventional finance. Islamic finance was launched to promote Muslim values such as equity, risk-sharing and social inclusion, but those values may sometimes be getting lost. That's why the Islamic Development Bank is leading calls for Islamic banks to strengthen their moral foundations and promote real economic activity instead of monetary speculation. This will require the sector to go back to the drawing board and develop genuine Islamic finance products that are not only profitable but support socioeconomic development.

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