The week brought in promising head starts and prospective outlooks as the end of the second month of 2017 draws closer. In a span of seven days, we witnessed Hong Kong dominating the sovereign Sukuk space; Malaysia taking up the corporate sector; more banks looking to a future in compliant products and services; regulators and authorities collaborating to increase global Islamic finance standards; and industrial moves and strategical reshuffles mostly from banks and insurance companies.
The government of Hong Kong extended its Sukuk curve with a US$1 billion 10-year tenor Reg S Sukuk facility; its previous two issuances were for five years. The paper, priced at 3.13%, was almost twice oversubscribed, with orders worth US$1.72 billion
Saudi Arabia called for proposals from banks for its potential US dollar Sukuk, according to Reuters quoting unnamed sources. Citibank, HSBC and JPMorgan will be acting as the global coordinators. Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, Morgan Stanley, MUFG and NCB Capital are reported to be involved.
Oman mandated Alizz Islamic, Citibank, Dubai Islamic Bank, Gulf International Bank, HSBC, JPMorgan and Standard Chartered to manage a Sukuk sale worth approximately US$1.5 billion to US$2 billion, as reported by Global Capital.
The corporate issuance space was dominated by Malaysia throughout the week. YTL Power International proposed a RM2.5 billion (US$561.04 million) Sukuk Murabahah facility to fund the equity contribution of a 1,320 MW coal-fired power plant in Indonesia and a 470 MW oil shale power plant in Jordan.
IFN learned that the Malaysian Ministry of Finance is evaluating a Sukuk plan by Malaysia Debt Ventures (MDV). SapuraKencana Petroleum announced the signing of seven-year multicurrency financing facilities approximately worth US$1.5 billion with a range of Malaysian, regional and international banks, involving an issuance of approximately RM3.6 billion (US$806.78 million) of unrated Sukuk.
Tanjung Bin Energy Issuer passed a resolution to refinance a junior term financing facility during an extraordinary general meeting with Sukukholders of a Sukuk Murabahah program of up to RM4.5 billion (US$1.01 billion).
In the Gulf, Qatar Islamic Bank obtained approval from its ordinary general assembly to raise the limit of its perpetual additional Tier 1 Sukuk from QAR5 billion (US$1.37 billion) to QAR7.5 billion (US$2.06 billion), which also approved a recommendation to distribute a 47.5% cash dividend.
Turkey’s Eximbank announced its plans to develop a credit rating system and Sukuk among others by the end of 2017, according to Anadolu Agency.
In its latest report, the IMF called for the Islamic banking industry to establish a policy framework and environment that promote financial stability. The global foundation also encouraged increased efforts to diversify the sovereign Sukuk markets.
The World Bank Group and the IDB announced the publication of a global report on Islamic finance subtitled ‘A Catalyst for Shared Prosperity?’ The report discusses trends in Islamic finance, identifies major obstacles in the industry and recommends policy interventions to boost the market.
BANKING AND FINANCE
In Africa, The Popular Credit of Algeria Bank is planning to venture into Shariah compliant financing from 2018 onwards, according to its CEO as reported by local media.
In the Middle East, Warba Bank announced its plan to raise the allocated amount of the acquisition of financing portfolios from Al-Mulla International Financing from KWD30 million (US$97.99 million) to KWD50 million (US$163.32 million). Alizz Islamic has launched new Shariah compliant commercial financing products for salaried customers. Saudi-based Middle East Paper Company reached an agreement with Saudi British Bank to renew its Islamic credit facilities, according to a bourse filing.
In Asia, Bank of Maldives Islamic established its first home construction and real estate financing facility, according to Dr Aishath Muneeza, IFN Correspondent and the chairperson of the Maldives Center for Islamic Finance. Pakistan’s Securities and Exchange Commission approved the prospectuses of two new Modarabas: Habib Metro and Orient Rental.
Norton Rose Fulbright and Chadbourne & Parke confirmed that both firms will be merging in the second quarter of 2017. The firm will adopt Norton Rose Fulbright’s name after the merger.
The Dubai Financial Services Authority has inked an agreement with the European Securities and Markets Authority as an effort to share information and increase partnership in Dubai International Financial Center-based central counterparties’ compliance with the European Market Infrastructure Regulation’s conditions.
Borse Dubai, the parent company of Dubai Financial Market, and NASDAQ signed a technology deal to boost the infrastructure of Dubai’s stock exchanges. Under the agreement, NASDAQ would be providing a new INET-powered, multi-asset trading technology engine called NASDAQ Matching Engine; a cash equities clearing module called NASDAQ Packaged Clearing; and enabling an in-memory-vetting model on the central securities depository solution under the new NASDAQ Financial Framework architecture.
Audit regulators under the ASEAN Audit Regulators Group (AARG) comprising Malaysia’s Audit Oversight Board, Indonesia’s Finance Professions Supervisory Center, Singapore’s Accounting and Corporate Regulatory Authority and Thailand’s Securities and Exchange Commission; and the four largest audit firms in the region comprising Deloitte Touche Tohmatsu, EY, KPMG and PwC, agreed to work toward achieving a reduction of at least 25% in the number of listed companies’ audits with inspection findings. AARG also announced that the World Bank’s Center for Financial Reporting Reform is collaborating with experts from the East Asia Pacific region of the bank’s Global Governance Practice to secure funding and provide technical assistance to enhance audit oversight in the member nations.
KBW Investments launched Crestmount Capital which focuses its funding on Shariah compliant investments. The company also announced that Crestmount Fund I, its premier Shariah compliant real estate investment fund, achieved the full subscription of AED267 million (US$72.68 million).
QInvest exited from the St Edmund’s Terrace LP Fund, a Shariah compliant London residential real estate fund.
Zurich Takaful Malaysia launched Takaful SeniorGold, a Family Takaful plan, offering coverage to senior citizens.
Bahrain Kuwait Insurance Company (BKIC) is set to purchase Bahrain Islamic Bank’s entire stake in Takaful International Co.
Qatar Islamic Bank has appointed new board members and elected Sheikh Jassim Hamad Jassim Jaber Al Thani as the bank’s chairman and Abdullatif Abdulla Al Mahmoud as the vice-chairman; Bank Nizwa has elected acting CEO Khalid Al Kayed as its CEO; SHUAA Capital has appointed Hisham Al Rayes to replace Hamad Al Sagar who resigned from the board of directors; Dr Ghassan Abdulrahman has resigned from the board of Malath Cooperative Insurance and Reinsurance Company; Fitch Group has appointed Ian Linnell as the president of Fitch Ratings; and Slaughter and May, elected Dan Schaffer as its new partner in the firm’s Pensions and Employment Group.