IFN weekly market roundup: 20th – 26th January 2018

Date: Jan 2018

Daily Cover

Here are the top stories you need to know for this week:

Strong Sukuk pipeline

Apart from the sovereigns like Malaysia, Indonesia, Iran, Kuwait and Bangladesh, among others, tapping the Islamic debt capital market, it seems that non-sovereigns are also playing their part with dollar issuances of their own.

Dubai Islamic Bank (DIB) will begin marketing its Reg S dollar Sukuk of up to US$5 billion on the 29th January while Saudi’s Salman Abdullah Bin Saedan Real Estate Group has engaged Bahrain’s Ibdar Bank to arrange a US$1 billion Sukuk program.

TII considers voluntary winding up

The International Investor (TII), a Kuwaiti Islamic investment bank, is considering liquidating its assets to meet its debt obligations as it was not able to reach a settlement with its major creditors, according to a source.

Ethiopia’s Islamic banking industry grows

Despite the lack of a sophisticated Islamic banking regulatory framework, Ethiopia’s Dashen Bank will commence Islamic banking services on the 5th February 2018 on a window basis. The bank has developed a Shariah governance framework and created a five-scholar Shariah advisory committee; and is in the midst of finalizing its five-year Islamic finance strategy.

Islamic fintech venture builder in the works

Singapore-based Ethis has courted new angel investors for its Malaysian and Indonesian businesses, allowing the firm to scale up and expand its offerings beyond crowdfunding, as it primes itself to become a Shariah compliant fintech factory developing new ideas and concepts, IFN can exclusively reveal. The group’s Malaysian operation, Ethis Ventures, will function as an Islamic venture builder by September 2018.

IDB support for Togo to go 

On Monday, it was reported by local media outlet Ici Lome, that the IDB has suspended its funding to all approved projects in Togo for 2018 as the African country voted against a UN resolution condemning the US recognition of Jerusalem as the Israeli capital; and that the Arab Bank for Economic Development in Africa, the Kuwait Fund for Arab Economic Development and the Saudi Fund for Development are expected to follow suit.

Saudi to include Islamic tranche in loan refinancing

Saudi Arabia is looking to include a Murabahah tranche in its plan to refinance the US$10 billion loan secured in 2016, which was the first significant international borrowing for the Kingdom in a decade. Requests for proposals for the refinancing as well as for further US dollar debt capital market issuance and financing supported by export credit agencies of other countries have been sent.

New Islamic banking model spreads to Saudi Arabia

Following on from its test pilot stage in Bangladesh launched last April, the Islamic Corporation for the Development of the Private Sector is bringing the Biniog Sathi model, which combines banking with Zakat and Sadaqah, to Saudi Arabia. JANA Bena’a Productive Families of Saudi Arabia will implement the model in its Qard Hasan program.

MBSB and AFB move forward with merger

The shareholders of Malaysia Building Society (MBSB) have agreed to merge with Asian Finance Bank, which would create the country’s second-largest fully-fledged Islamic bank in Malaysia. The amalgamation is expected to conclude in the first quarter of the year. MBSB has for years been on the lookout for a new partner in order to facilitate its transformation into a fully-fledged Islamic bank from an exempt finance company. It was involved in a tripartite merger negotiation with CIMB and RHB Capital, which was called off in 2015.

Citigroup Saudi Arabia forms board

Citigroup’s return to Saudi Arabia after withdrawing from the market in 2004 is moving apace. The group, which has received regulatory approval to conduct investment banking activities in the Kingdom, has confirmed its board lineup.

Doha Takaful to go public

Qatar Central Bank has approved the conversion of Doha Takaful from a branch to a limited liability company during the interim period, and to eventually transition to a public shareholding company in the future. If the operator goes public, it would expand the relatively small universe of Shariah compliant financial institution stocks.

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