Boom and bust...

54 days to go Home Contact Us Subscribe Advertise Events Training REDmoneyGroup Boom and bust... Every market has a cycle, with phases that circulate as the economic wheel turns. This week we take a look at what the current trend towards a bull market means for the GCC – and whether the rock bottom borrowing rates will stand the test of time as concerns accumulate that the region could be heading towards yet another bubble. Can the authorities prevent a repeat of 2009? Only time will tell. Our IFN reports this week run the gauntlet of the globe, with news brought to you of Pakistan's new privatization program; the fall of Saudi giant Al Rajhi Bank; the ongoing conversion trend towards Islamic banks; and the growing potential for the Gulf healthcare sector. Our case study looks at Cagamas’ Islamic medium-term notes program while our in-house analyses cover Senegal and leasing. We have an issue crammed with contributions for you this week: including special reports on the UK from Nicholas Judd of 90 North Real Estate Partners and Mark Watts of NBAD Asset Management Group as well as one on Islamic finance fees and charges from ISRA’s Mohamed Fairooz and Lokmanulhakim Hussain; country feature on Senegal by Lamine Mbacke of African Institute of Islamic Finance; and sector features on leasing by Charles Yeterian of Novus Aviation Capital and Dr Shahinaz Latif from the Egyptian Financial Supervisory Authority. We also bring you a Takaful feature from Srikandi Utami of Sun Life Financial Indonesia. As we move into the last week of Ramadan, the markets are looking rosy. We can all hope that this encouraging evolution continues into Eid. Cover Story Rock bottom borrowing costs drive GCC boom In a turn that looks worryingly familiar, the GCC economy is once again surging forward based on exceptionally low borrowing costs and a booming real estate market that is blithely refinancing to take advantage of the rock bottom prices... (Click to read full report) Shariah Pronouncement: An Islamic bank intends to offer financing at preferential profit rates to its staff to help them purchase vehicles (Click to read full report) IFN Reports: Conventional banks switching to Islamic operations — testament to the industry’s capabilities Islamic finance: A healthy pipeline for Saudi healthcare The fall of a giant — can Al Rajhi rise again? Islamic entities lead Pakistan privatization program IFN Country Correspondents: France: Islamic finance task force to attract liquidity into infrastructure projects Sri Lanka: Domestic market sees dynamic growth IFN Country Analysis: Senegal: Sukuk dreams realized IFN Sector Analysis: Islamic leasing: Going global Special Reports: UK economy returns to growth, real estate sees concurrent surge Fee and charges in Islamic finance The UK: An economic AND Islamic powerhouse? Case Study: Cagamas issue: The largest commodity Murabahah variable rate IMTN (Click to read full report) Features: Senegal issues Sukuk, becomes strong contender for West African Islamic finance hub The government of Senegal issued a Sukuk of XOF100 billion (US$208 million) that closed on the 18th July, tapping a global market that could surpass record issuance of US$46.5 billion in 2012, according to arrangers ICD and Citigroup... (Click to read full report) Aircraft leasing: A first class opportunity for Islamic financing Aircraft leasing was initially conceived as a tax efficient means of financing increasingly expensive commercial aircraft. The need for this financing product emanated from the quantum leap forward in mass air travel which began with the advent and widespread adoption of the jet airliner in the early 1960s... (Click to read full report) Islamic leasing — the preferred choice Ijarah leasing is a mode of finance that has been growing in popularity across multiple sectors and markets as a cost-effective method of financing both in the banking and non-banking sectors, either directly or through independent subsidiaries... (Click to read full report) MicroTakaful in Indonesia: A new business opportunity MicroTakaful has a vast potential customer market around the world, and Shariah compliant microinsurance is making strides in emerging markets across the globe... (Click to read full report) DEALS Indonesian Sukuk auction falls below IDR1.5 trillion (US$129.15 million) target with sales of IDR245 billion (US$21.09 million) Central Bank of Bahrain’s monthly Sukuk Ijarah oversubscribed by 240% Highway concessionaire LEKAS seeks junior Sukukholders’ approval to amend provisions in project documents pursuant to letter from government Full settlement and cancellation of Alloy Properties RM240 million (US$75.35 million) medium term notes program confirmed Ministry of Finance mandates Dubai Islamic Bank Pakistan to lead manage upcoming US$1 billion international Sukuk deal IILM reissues US$860 million short-term Sukuk, fully subscribed Turkiye Finans taps into the Malaysian debt capital market with landmark Sukuk program NEWS Sudan mulling US$50 million Shariah compliant financing facility offered by Kuwait Fund for Arab Economic Development to finance development projects Egypt’s Sukuk law could be presented to parliament at the end of the year World Bank approves US$300 million interest-free loan for Egyptian micro and small enterprises A greater number of banks should offer Shariah compliant financing options according to finance minister Muslim women entrepreneurs network issues communiqué urging federal government to further strengthen Islamic banking sector to attract Nigeria’s unbanked population Bank Asya offloads stakes in two subsidiaries to raise capital Murray Financial System Inquiry asking for tax rules on Islamic financial products and services to be clarified by the Australian government Azerbaijan executes 41 projects worth US$7.2 billion with the help of 14 financial institutions including the IDB Bank Islam Malaysia raises its base financing rate to 6.85% following increase of national overnight policy rate by the central bank Veteran Islamic banker Dr Ziauddin Ahmad passes away at 84 Investment banks approach Maybank for M&A possibilities as rival CIMB enter tripartite merger negotiation OIC delegation visits Cambodia for conference on Islamic education and economic development Interest-free micro loans provider Akhuwat makes foray into Shariah compliant agricultural financing space with Mudarabah company Gulf Finance House reveals details on DUBAILAND mixed use residential development project Watson Farley & Williams to enter Middle Eastern market by opening office in Dubai General Council for Islamic Banks and Financial Institutions prepares Strategic Plan for 2015-18 Merger for Islamic megabank will not go ahead if there are unfavorable risks, says CIMB Group head Islamic economies to grow in importance over the next decade, according to industry head Noor, QIB and Warba Bank collaborate in a US$155 million landmark Islamic financing facility Al Rajhi Bank adjusts proposed cash dividend for the first half of 2014 following lower reported profits Shariah board reviews and approves Maisarah Islamic Banking Service’s products DP World replaces existing US$1 billion financing facility with new US$3 billion loan comprising of a US$610 million Islamic tranche NBK Research places ‘hold’ recommendation on Qatar Islamic Bank shares Dana Gas agrees to increase share capital by AED7.3 million (US$1.99 million) through convertible Sukuk Aabar Investments in negotiations to increase stake in Arabtec Holdings, according to reports Jadwa Investment sees potential for investment in Saudi’s healthcare sector Al Alamiya for Cooperative Insurance Company receives regulatory approval to increase capital to SAR200 million (US$53.32 million) Al Rajhi’s profit continues to tumble because of high provision for bad loans, says analyst Gulf Capital considers raising capital through IPO to fund investment and regional expansion Gulf Finance House named as stock to watch by analyst Emirates NBD repays final AED4 billion (US$1.08 billion) in outstanding support according to UAE ministry of finance Trading resumes on Masraf Al Rayan stock following suspension due to incomplete details for recent real estate deal New Shariah compliant interim lending facility for UAE banks to be launched soon Oman Arab Bank’s Al Yusr marks the end of its first year of operation Banks prepare for discovery of bad customer debt ahead of full scale operations for Al Etihad Credit Bureau Sharjah Islamic Bank launches summer personal finance promotion Abu Dhabi Islamic Bank promotes smart money management with personal finance payment holiday for Ramadan Commercial Bank of Kuwait’s upcoming Basel III-compliant conventional bond may put a dent on its plan to convert into an Islamic bank Saudi Arabia leads GCC IPO tally for the first half of 2014 Ministry of Economy releases new rules allowing UAE firms to use existing shares when listing on local exchanges or raising fresh equity capital Islamic banking profit pool to reach US$30.5 billion by 2018, says Dubai Chamber Faisal Islamic Bank of Egypt’s half-year results show 5.2% dip in net profit Shuaa Capital posts almost five times as high in net profit for the second quarter Takaful Oman Insurance Company concludes first six months of the year with net loss of OMR964,000 (US$2.5 million) Dubai Financial Market reports net profit of AED252.2 million (US$68.73 million) for the second quarter of 2014 Egyptian Takaful Insurance Company reports premiums of EGP318.5 million (US$44.42 million) for financial year 2013/2014 Al Salam-BMI Bank merger boosts Bank Muscat’s second quarter earnings by 22.3% Al Khaleej Takaful Group discloses net profit of QAR47.65 million (US$13.07 million) for the first half of 2014 National Bank of Oman sees net profit up 25% for the three months period ended 30th June 2014 Arabian Shield Cooperative Insurance Company announces net profit of SAR2.1 billion (US$559.07 million) for the second quarter Commercial Bank of Dubai sees highest ever first half results in 2014 National Bank of Kuwait posts 29% growth in net profit for the second quarter Saudi United Cooperative Insurance Company continues to make losses in the second quarter Aggregate balance sheet of Bahrain’s Islamic banks totals US$24.2 billion, according to central bank data Abu Dhabi Islamic Bank announces 22.5% jump in net profit to AED454.8 million (US$123.80 million) for the second quarter United Arab Bank announces net profit of AED328 million (US$89.29 million), an increase of 26% for the first six months of the year Al-Ahlia Insurance Company reports net loss of SAR466,000 (US$124,232) Alahli Takaful Company announces 309.2% leap in second quarter net profit Allied Cooperative Group reports SAR2.88 million (US$767,785) in net profit for the second quarter, a gain of 89.11% Kuwait Finance House announces 6.4% increase in net profits for the second quarter of the year Saudi Arabian Cooperative Insurance Company continues profit growth with 43.11% quarter-on-quarter increase Saudi banks see 11.1% rise in accumulated profit for the second quarter, reaching SAR11.1 billion (US$2.95 billion) BBK concludes second quarter with 8.6% growth in net profit Dar Al Arkan Real Estate Development Company sees six month net profit of SAR369.2 million (US$98.42 million) Sharjah Islamic Bank realizes 50% jump in second quarter net profit Ten percent growth in half yearly net profit for Qatar International Islamic Bank TAKAFUL Tunisia’s National Constituent Assembly adopts draft law establishing a regulatory framework for Takaful Arab Orient Takaful raises paid-up capital to EGP100 million (US$13.95 million) by injecting EGP22 million (US$3.07 million) Sun Life Financial Indonesia opens its first Shariah marketing office in a move to develop an Islamic business unit in South Sumatra Aljazira Takaful to provide one-year insurance cover for Bank Aljazira’s personal finance portfolio EFU General Insurance to enter Islamic insurance market with Takaful window Takaful House to discuss new investment opportunities in upcoming meeting Phoenix of Zambia Assurance Company to launch Takaful product next month Takaful Ikhlas allocates RM45,000 (US$14.128.70) for CSR program dedicated to children Prudential Assurance Malaysia welcomes opportunity for Takaful expansion in Sarawak Tadawul suspends trading of Arabia Insurance Cooperative Company as the operator suffers 73.64% in losses against its capital Takaful Malaysia targets RM20 million (US$6.3 million) 2015 profit boosted by new SME product to be launched in December Saudi stock exchange suspends shares of Saudi Indian Company for Cooperative Insurance Company ASSET MANAGEMENT Solicitors Regulation Authority removes reference to Law Society’s practice note on Islamic wills from guidance following heavy criticism Banco do Brasil to conduct second roadshow for debut Islamic fund before launch Islamic funds manage US$75.1 billion globally in the first half, according to report Emirates REIT signs new corporate Ijarah facility worth US$29.13 million with Emirates Islamic RATINGS RAM places CIMB Group Holdings, RHB Capital and Malaysia Building Society on rating watch due to ongoing merger negotiations National Bank of Abu Dhabi receives ‘A’ financial strength rating from Capital Intelligence Kuwait Finance House affirmed at ‘BBB’ by Capital Intelligence supported by the bank’s dominance in Kuwait’s Islamic banking sector CIMB Group Holdings receives ratings advice from Moody’s and MARC following announcement of proposed merger with RHB Capital and Malaysia Building Society Capital Intelligence affirms Bank Sohar at ‘BBB+’ Fitch affirms ratings for five banks in Oman MARC withdraws ‘AAIS’ rating on Alloy Properties’ RM240 million (US$75.6 million) Sukuk Musharakah program following early redemption and cancellation RAM maintains ‘AAA’ rating on Industrial Bank of Korea’s conventional and/or Islamic medium-term notes program MOVES Qatar Financial Center Authority appoints chief financial and tax officer Bill Voge to succeed Robert M Dell as Latham & Watkins’ global chair and managing partner Securities Commission Malaysia appoints INCEIF adjunct professor as member of its Shariah Advisory Council Alizz Islamic Bank announces key senior appointments National Bank of Abu Dhabi names Jonathan Macdonald managing director and head of syndicated finance Deloitte appoints Zahi Zeini to lead Bahrain practice National Bank of Abu Dhabi appoints global energy head to support plans for expansion into energy and resources