Finance

DP World shareholders clear way for London listing

Ports operator DP World, a unit of conglomerate Dubai World, said shareholders approved an amendment allowing the firm to seek a listing on the London Stock Exchange. Voting results from the firm’s annual general meeting were released in a statement to the Nasdaq Dubai bourse. DP World also said shareholders voted in favor of a buyback proposal for a “limited number” of ordinary shares. It did not give a specific figure. The firm, which is not included in Dubai World’s restructuring plan, is one of the largest port operators in the world and is 77 per cent owned by the state-linked conglomerate. Earlier, DP World had reported a rise in first-quarter container volumes and forecast improved earnings.

Bahrain: Banking on the future

Bahrain is looking to consolidate its position as one of the key players in the Islamic finance sector, working to build on its current position of strength and ensure it has the skills base to launch further expansion in the future. At the end of 2009, 27 of the 140 banks operating in Bahrain were Compliant-compliant lenders, with combined assets of US$25.5 billion, more than 10 per cent of the sector's total. In addition, at the beginning of 2009, there were 18 takaful (Islamic insurance) companies and one retakaful firm based in the Kingdom, out of a total of 177 insurance policy writers with offices in Bahrain. Though Bahrain's financial services sector managed to ride out the storm of the international economic crisis, with most Islamic banks and insurance firms posting solid profits and many increasing their asset bases, there is one key area where many are having trouble in boosting their credit - human resources. The conventional financial services sector is certainly already strong in terms of skilled personnel, but continuing expansion in the Islamic banking segment will likely require a larger inflow of highly trained labor. According to Garry Muriwai, the director of the Bahrain Institute of Banking and Finance (BIBF), there is a pressing need to deepen the pool of available trained and experienced staff able to work in the sector. In an effort to bridge the skills deficit, Bahrain's Waqf Fund for Research, Education and Training is working with local and international organizations to enhance the knowledge of those already employed in the sector and to help channel those about to embark on a professional career into the Islamic finance industry. (Source: OBG)

Bahrain: Deloitte to launch ME Islamic finance group

Deloitte, a leading accounting and consulting firm, has announced plans to launch its Middle East Islamic Finance Group in Bahrain besides the unveiling of its new Islamic Finance portal. The Middle East Islamic Finance Group represents a significant investment by Deloitte, with the appointment of dedicated Islamic Finance specialists from across audit, consulting and financial advisory services. The launch of the group and the new portal form an integral part of a Deloitte s wider global Islamic finance group initiative and further demonstrates the firm s strong commitment to serving the Islamic Finance Industry and market participants in the region, it stated. The team has the added dimension of the newly formed Islamic Finance Knowledge Centre based in Bahrain, designed to provide thought leadership and research. Together the Group will represent an unrivalled depth and breadth of expertise, the company said.

S&P assigns first two regional credit ratings in the Gulf

Standard & Poor's Ratings Services announced it had assigned its first regional credit ratings in the GCC following the launch of the new ratings scale in February this year. Jan Willem Plantagie, Dubai-based head of Standard & Poor's in the Middle East, commented: ""We have had considerable interest from local companies in our new regional ratings for the GCC and we are delighted to publish the first of what we hope will be many regional credit such ratings. These local ratings help investors and others better compare the relative credit risk of debt issuers across the region, and we believe they will contribute to better informed, more liquid and more efficient debt markets in the Gulf." S&P said it had assigned its 'gcAA' regional credit rating scale for the Gulf Cooperation Council to United Arab Emirates (UAE)-based insurer Emirates Insurance Co. (PSC). The company's global long-term counterparty credit and insurer financial strength ratings of 'BBB+' remain unchanged. The outlook is stable. It also assigned its 'gcAA' regional credit rating scale for the Gulf Cooperation Council to Bahrain-based insurer Bahrain National Insurance Co. BSC (BNI).

Ahli United Bank stake being sold to Qatari investors

Up to five Qatari individuals are aiming to buy a 25 per cent stake in Ahli United Bank, Bahrain's biggest lender, with the aim of turning it into a wholly Islamic bank, a source familiar with the matter said. AUB said Kuwaiti investment firm Tamdeen and other unnamed shareholders had agreed to sell the stake in the Bahraini bank to an undisclosed buyer from the Gulf Arab region, in a deal estimated at about US$1.3 billion. The lack of details about the deal, particularly there being no name of the buyer, cast doubts on whether it would go through, which weighed on AUB's stock after it initially gained.

Kuwait's IIG defaults on US$200m sukuk

Kuwait's International Investment Group (IIG) said it was unable to pay the coupon of a US$200 million sukuk, in at least the third regional default of an Islamic bond since the financial crisis began. In a filing with Nasdaq Dubai, IIG said: "Kindly be advised that IIG has communicated to the sukuk holders through IIG Funding Limited (Issuer of its US$200 million Sukuk) of its inability to make the periodic distribution amount of US$3,353,062.50, due on April 12..." Kuwaiti investment houses were hard hit during the financial crisis and Investment Dar was the first company in the region to default on a major sukuk in May 2009.

Deutsche Bank looks to Saudi mortgage market for expansion

Deutsche Bank has launched a Compliant-compliant mortgage joint venture in Saudi Arabia in anticipation of a surge in housing demand in the kingdom. Deutsche Gulf Finance, which has an initial capitalization of about US$110 million (AED404m), will be 40 per cent owned by the German bank’s Riyadh branch, with the remainder held by a group of Saudi-based investors. It will focus on Saudi Arabia, but has plans to expand into Bahrain, Qatar and Kuwait. The new company has started financing completed units, as well as those still under construction. Investment opportunities are opening up in the kingdom’s property market as homes are built for the country’s rapidly rising population. The German bank’s research suggests Saudi Arabia will need 1.2 million more homes by 2015. Lenders and investors are anticipating the enactment of a new mortgage law, which is expected to stimulate the low and middle-income sectors by making it easier for Saudi nationals to own their own homes. Only one in five Saudi citizens owns a home. Deutsche Bank estimates that the legislation will trigger new demand of about 55,000 units a year.

Infrastructure and economic diversification to drive Saudi private equity market

With the steady population growth propelling continuous infrastructure development, Saudi Arabia is considered the next big market for private equity and venture capital investors, according to investment specialists in the MENA region. Infrastructure investments amounting to billions of dollars will be required to fund this growth. It is estimated that approximately US$20 trillion will be spent on infrastructure in the emerging markets within 10 years, and global PE houses will invest a considerable percentage of this amount. The attractiveness of the Saudi market to private equity investors has grown sharply in recent years. This has been a function of new private-sector opportunities created by the broad economic diversification and liberalization beyond oil and gas, said Amr El-Barbary, Managing Director at Citadel Capital, the leading private equity firm in the Middle East and Africa with investments of US$8.3 billion spanning 14 countries and 15 industries.

Middle East equity derivatives market set to expand - NASDAQ Dubai Survey

The Middle East equity derivatives market is likely to expand in 2010 compared to last year’s levels, according to 79 per cent of fund managers and brokers polled by NASDAQ Dubai. A total of 87 per cent described equity derivatives as useful tools for managing risk, while 72 per cent said their organization was interested in learning more about the uses and benefits of equity derivatives. The survey received responses from representatives of 40 fund managers and brokerage firms who attended the FOW Derivatives World Middle East conference in Dubai in March. Jeff Singer, Chief Executive of NASDAQ Dubai, said: “The survey shows that investors are poised to make increasing use of the Middle East equity derivatives market, which is still in its infancy and has potential for rapid growth. NASDAQ Dubai will continue to drive the development of the market forward, by expanding its product range and by educating finance professionals and the public about the advantages that equity derivatives offer NASDAQ Dubai launched the UAE’s only equity derivatives platform in November 2008. Trading volumes have expanded from 90 in January 2009 to several thousand every week by the end of the year.