Posted on 01 December 2009 by Laxman | Email|Print
From Reuters: Dubai’s Nakheel, developer of man made islands in the shape of palms, said on Monday it has asked for three of its listed Islamic bonds, or sukuk, on Nasdaq Dubai to be suspended until it is in a position to inform the market more fully.
“Following the announcement on Wednesday November 25 from the government of Dubai, Nakheel has today asked for all three of their listed sukuk to be suspended until it is in a position to fully inform the market,” it said in a statement on the Nasdaq Dubai…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Business24-7.ae: As Dubai World moves to seek a standstill on the group’s debt for a period of six months, a top official from Dubai Government has made it clear that the government has not guaranteed any of these debts.
The issue gains greater significance now as the nearest repayment falls on December 14 when the $3.5 billion (Dh12.8bn) sukuk matures…………………………….Full Article: Source
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From Bloomberg: Dubai World said it began “constructive” talks with banks to restructure $26 billion of debt, including liabilities owed by units Nakheel World and Limitless World.
Debt from subsidiaries such as Infinity World Holding, Istithmar World and Ports & Free Zone World will be excluded from the negotiations because those companies “are on a stable financial footing,” Dubai World, one of the emirate’s three main state-related holding companies, said in a statement…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Reuters: The market has recovered from the initial panic over a possible default on debt issued by Dubai World, and many are assuming that the United Arab Emirates will stand behind the bonds.
But under Islamic financing rules, creditors may be required to take a haircut. Guarantees on debt are prohibited by the shariah, which requires investors to accept risk in exchange for profits. Indeed, there were already questions about the legality of Dubai World’s debt arising from the principal guarantee of the bonds…………………………….Full Article: Source
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From Nytimes.com: The debt crisis in Dubai is about to test one of the fastest-growing areas in banking — Islamic finance — and put the emirate’s own opaque judicial system on trial, according to bankers and experts in finance.
Issuance of loans and bonds that comply with Shariah, or Islamic law, has skyrocketed in recent years, as oil-rich Middle East nations ramped up spending and the global credit crunch led debt investors into emerging markets…………………………….Full Article: Source
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From FT Alphaville: When is a sukuk not a sukuk? When it fails to be shariah compliant, of course. And the key issues, it seems, that may or may not make a sukuk shariah-compliant relate to principal protection and the bondholder’s unsecured status.
After all, if there’s one tenet that applies to sukuk bonds more than any other it’s the concept of “no risk, no reward”. The idea of principal protection in that case goes completely against the ethos of Islamic finance…………………………….Full Article: Source
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From Gulf-daily-news.com: Dubai’s government yesterday said it was not responsible for the debts of its flagship conglomerate, offering little clarity on a plan to delay billions in debt repayments that has rattled world markets.
Dubai last week raised fears of a second bout of global financial turmoil by asking for a six-month repayment freeze on debt issued by Dubai World and its unit Nakheel…………………………….Full Article: Source
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From WSJ: This city-state’s announcement last week that it would seek to delay debt payments represents the latest in a string of troubles for its ruler, Sheik Mohammed bin Rashid Al Maktoum, and a coterie of economic advisers struggling with the fallout of the global economic crisis.
Over the last several decades, Dubai’s debt piled up as government-related companies borrowed to fund development at home and acquisitions abroad, to extend the emirate’s wealth and international reach…………………………….Full Article: Source
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From Arabianbusiness.com: A member of Dubai’s ruling family said on Monday he had made “significant investment” in the emirate’s bonds following a government decision to renegotiate the debts of its flagship company.
Sheikh Maktoum Hasher Maktoum Al Maktoum, CEO of the UAE-based conglomerate Al Fajer Group and nephew of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, told Arabian Business that he made the investment across three of the Dubai’s bonds on the first day of trading following the Eid break…………………………….Full Article: Source
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From Maktoob.com: The credibility of the United Arab Emirates finance sector will suffer unless the authorities and lenders move quickly to assuage fears that Dubai’s debt trouble are spiralling out of control, analysts and bankers say.
Dubai, one of the seven emirates that make up the UAE, said on Wednesday it planned to restructure one of its holding companies, a shock announcement that triggered global concerns about the emirate’s ability to meet its debt obligations…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Tradearabia.com: As at November 29, National Bank of Abu Dhabi (NBAD) had $345 million exposure to the Dubai World Group, according to a company statement.
The exposure comprises the following: $114 million nominal invested in the Nakheel December 2009 Sukuk and marked Available for Sale and marked to market through equity……………………………Full Article: Source
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From Tradearabia.com: Two Kuwaiti banks have exposure of around $118 million to Dubai World and its subsidiary Nakheel, the central bank governor told state news agency Kuna.
Gulf Bank had KD28 million ($98 million) worth of non-cash facilities with Dubai World due next June, while Ahli Bank of Kuwait had $20 million worth of bonds from developer Nakheel, Sheikh Salem Abdul-Aziz al-Sabah said…………………………….Full Article: Source
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From Tradearabia.com: Contagion effects for Abu Dhabi from the restructuring of Dubai World debt will be ‘unavoidable’, ratings agency Moody’s said on Monday, and the restructuring could lead to downgrades for UAE bank ratings.
‘The contagion effect for Abu Dhabi will be unavoidable, as doubts will be raised as to how Dubai is going to finance its growth,’ Moody’s analysts said in a weekly note…………………………….Full Article: Source
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From Thestar.com.my: The debt payment crisis of conglomerate Dubai World will not adversely affect the Islamic finance industry in Malaysia as it has limited exposure to the sheikhdom’s debt, according to industry observers.
CIMB Islamic Bank Bhd CEO Badlisyah Abdul Ghani said the situation in Dubai was purely a credit issue and applicable for both conventional interest-based and Islamic capital market in the Middle East…………………………….Full Article: Source
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From Thejakartapost.com: The Indonesian government would continue with its plan to issue Islamic bonds, or sukuk, next year despite the recent turmoil in the financial market following the fallout from Dubai’s worrisome debt problems.
Debt management director at the Finance Ministry, Rahmat Waluyanto, told Kompas.com that the government would continue to issue sukuk bonds through retails, block booking, private placement and global issue…………………………….Full Article: Source
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From Thelawyer.com: Trowers & Hamlins has acted on Islamic investment bank Gulf Finance House’s (GFH) $500m (£301m) capital raising exercise.
Finance partner Neale Downes led the Trowers team that advised the longstanding client on a $300m rights issue and the first of two $100m tranches of Islamic finance fundraising…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Btimes.com.my: Gneral Electic Capital Corp(GE), the world’s biggest non-bank finance company, will list a US$500 million Islamic bond on the Malaysian exchange, Bursa Malaysia said in a statement today.
The five-year Islamic bond is structured based on the globally accepted Syariah principle of Sukuk Al Ijara…………………………….Full Article: Source
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From Tradearabia.com: Lebanon set price guidance for a $500 million two-tranche bond on Monday, a source at one of the lead managing banks said.
Price guidance is around 6.0 per cent for a $250 million five-year tranche and 7.125 per cent for a $250 million 15-year tranche…………………………….Full Article: Source
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From Cpifinancial.net: As part of the tie-up, SALAMA will offer a range of Shari’ah-compliant funds intermediated by Allfunds Bank, along with its Islamic insurance cover on a common platform.
As a result of the tie-up, SALAMA customers will now have direct access to the largest Shari’ah range of Islamic funds through SALAMA products…………………………….Full Article: Source
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From Arabnews.com: The imminent relocation of Mukhtar Hussain, the global head of HSBC Amanah, the Islamic banking division of the HSBC Group, to Kuala Lumpur, the Malaysian capital, raises perhaps more questions about the future direction of HSBC Group’s Islamic finance business.
Hussain has hitherto been located in Dubai, the traditional global headquarters of HSBC Amanah…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Menafn.com: The Council of the Islamic Financial Services Board (IFSB), which is chaired by Muhammed Al-Jasser, governor of the Saudi Arabian Monetary Agency (SAMA), admitted eight new members to the organization at its 15th meeting held last week in Kuala Lumpur, Malaysia.
The two most significant new members are Banque centrale du Luxembourg, the central bank, and the Central Bank of Turkey both as associate members. This makes Banque centrale du Luxembourg the first central bank in the European Union to become a member of the IFSB, whose mandate is to set prudential and regulatory standards for the global Islamic financial sector…………………………….Full Article: Source
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From Menafn.com: Muhammed Al-Jasser, governor of the Saudi Arabian Monetary Agency (SAMA), is the new kid on the block, taking over as the new Saudi banking regulator in April this year. With his stint as an IMF executive director for Saudi Arabia and his postgraduate education in the US, he has indeed become a sophisticated and savvy operator.
He brims with confidence and he talks the talk and walks the walk as the gatekeeper of the Saudi financial and economic sector, potentially one of the most influential in global finance because of its huge petrodollar surpluses and the fact that the Kingdom is the world’s largest oil producer and exporter, and as such exercises a vital role as swing producer in global oil market dynamics…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Business24-7.ae: Islamic financial institutions (IFIs) have been very “generous” in giving returns to their depositors compared with their conventional counterparts, analysis of the trend in the “interest expense” in the case of conventional institutions and “profit rate” in the case of Islamic entities shows.
While Dubai Islamic Bank (DIB) paid Dh1.3 billion from the “total profit” of Dh3.1bn as share of profits to its depositors for the first nine months in 2008, the profit distribution dropped only marginally for the first nine months of the current year despite a sharp fall of about Dh660 million in the bank’s total profit to Dh2.4bn…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Forbes: Malaysia’s capital market regulator said on Monday it has revised its list of Islamic stocks to add 13 counters and drop four.
In a regular review which is done twice a year, the Securities Commission said it has included mobile phone firm Maxis Bhd, shoe sole maker Multi Sports Holdings , property company TA Global Bhd, ship builder TAS Offshore Bhd and nine others to the list…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Ameinfo.com: As cautious optimism returns to the global economy and financial markets begin to move towards stabilisation and economic recovery, The WIBC Competitiveness Report 2009/10, produced in collaboration with McKinsey and Company, will be officially launched on the 7th of December 2009 at the 16th Annual World Islamic Banking Conference (WIBC 2009).
Now in its 6th annual edition, the 2009/10 Report will provide new insights on how the leading Islamic financial institutions are adapting as they grapple with the need to manage risk, seek new growth markets, deliver on market expectations as well as remain competitive…………………………….Full Article: Source
Posted on 01 December 2009 by Laxman | Email|Print
From Reuters: A Swiss vote to ban new minarets could irk some Muslim investors at a time when Swiss private banks are hoping to replace dwindling growth in European and U.S. assets with fresh funds from emerging markets.
Switzerland has traditionally attracted wealth from the Middle East due to its political stability and proximity to the region. French-speaking Geneva has been the main Swiss hub for Arab clients, bankers say, although no there are no official figures available due to Swiss bank secrecy law…………………………….Full Article: Source
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