Finance

Qatar to launch secondary market for SMEs IPO

Qatar plans to create a secondary initial public offering (IPO) market dedicated to trading shares of small and medium-sized enterprises, just weeks after Dubai said it would create a similar equity market. The May 25 decision to introduce a secondary bourse in Qatar will boost investment opportunities and improve liquidity, the chairman of Qatar Exchange said. “The SME’s market will offer the investors as well more options through increasing the number of companies to invest their shares in,” vice chairman Ahmad Al Sayed said in a statement. The criteria for listing shares of SMEs on the Gulf state’s bourse will be “lighter and [more] flexible” than regulations for other institutions, he said. Source: MENAfn

Oman: Green light for IFS

The Omani government has opened its doors to Islamic banking, with Sultan Qaboos bin Said Al Said issuing a royal directive in early May allowing for the roll-out of sharia-compliant financial services and institutions. By the end of May, the Central Bank of Oman (CBO)’s board of governors had approved legislation for the establishment of sharia-compliant institutions and Islamic branches in conventional banks. The CBO additionally approved the creation of Bank Nizwa, which will be the first Islamic institution operating in the Sultanate. The central bank has stipulated, however, that existing banks in Oman cannot switch to become Islamic banks, although they will be able to offer sharia-compliant products and services. Until the Sultan’s directive was issued, Oman was the only Arab country in the Gulf without a sharia-compliant financial institution. The arrival of Islamic finance is expected to provide a boost to the Sultanate’s banking sector. According to Ernst & Young’s Islamic Financial Services (IFS) Group, Islamic institutions are expected to gain a significant share of Oman’s $42billion in banking assets, and could gain some $6billion in Islamic assets in the coming years. Source: Oxford Business Group

Moody's assigns negative outlook for First Gulf Bank's Sukuk in Abu Dhabi

Moody's Investors Service has assigned a provisional (P)A2 rating (outlook negative), to the upcoming senior trust certificates of First Gulf Bank's (FGB) subsidiary, FGB Sukuk Company Limited (""the issuer""), which is based in the Cayman Islands. The certificates will be issued under the proposed Trust Certificate Issuance Program, which is itself launched under First Gulf Bank's existing Euro Medium Term Note (EMTN) program, Global Arab Network reports according to a press statement. Source: Global Arab Network

Saudi Binladin sukuk draws $800m

Saudi Binladin Group (SBG) has successfully closed its second short-term sukuk, attracting more than SR3 billion ($800 million) of orders for a SR1 billion issue. Books were opened on July 16 and closed in the same day. The privately placed sukuk was offered to Saudi investors and issued through SBG Sukuk Company. Following on from the success of last year’s issuance, SBG’s second visit to the short-term sukuk market has managed to attract even higher demand than the previous issue allowing for a longer term instrument with tighter pricing. The sukuk has a maturity of 364 days and pays a profit rate of 2.5% per annum. The first sukuk, which was issued in July 2010, matured in April 2011. HSBC Saudi Arabia acted as the sole lead manager and book runner for the transaction and also the payment administrator and the sukuk holders' agent, while HSBC Amanah acted as the sharia advisor. The Saudi British Bank (SABB) acted as the security agent. Source: TradeArabia News Service

Abu Dhabi: Market ability

Bucking the trend in most MENA financial markets, the Abu Dhabi Securities Exchange (ADX) has performed well of late, rebounding strongly from the financial crisis and avoiding more recent downturns that some exchanges have experienced. A relatively young institution, with its predecessor, the Abu Dhabi Securities Market, established in 2000, the ADX added its 65th company – Insurance House – to its boards in June. Just less than half of the traded firms on the bourse are concentrated in the banking, insurance or financial services sectors, befitting Abu Dhabi’s aim of becoming a regional financial hub. The ADX has been one of the region’s better performers in the first half of 2011, posting more than $2.5billion in gains in June, with market capitalization rising to highs not seen since the beginning of the year. By comparison, the 14 official stock exchanges in Arab countries, excluding those in Egypt and Sudan, shed a combined $18.7billion for the month, according to data compiled by the Arab Monetary Fund. Source: Oxford Business Group

Lebanon: Balanced banking

Economic growth in Lebanon has been forecast to slow in 2011, but the country’s banking sector remains sound and showed some signs of growth earlier this year. Data reveal that the Lebanese economy has weakened in recent months, most likely the result of turmoil across parts of the Middle East and political instability at home. The tourism industry, one of the mainstays of the economy, has seen overseas arrivals fall by up to 13% this year, while hotel occupancy rates in Beirut have dropped below 50%, according to a Standard Chartered Bank report issued in late May. Real estate sales are down 21% for the first four months of 2011 compared to the same trimester last year, the Directorate of Real Estate at the Finance Ministry reported in May, while there has also been a decline in foreign trade, with both imports and exports falling after last year’s boom, when GDP grew by 7.5%. As the economy has weakened, the central bank, the Finance Ministry and agencies such as the International Monetary Fund (IMF) have lowered their expectations for growth, with most forecasts putting GDP expansion at around 2.5%. The banking sector nonetheless expanded in the first quarter of this year, at least by certain measurements. According to the central bank, aggregate domestic assets increased by 2.8% during the first three months of the year. A report issued by Bank Audi in early May said that this $3.6 billion increase was well down on the $4.7 billion rise in the first quarter of last year. Despite a $1.1 billion fall in deposits in January – the month in which the national unity cabinet led by Saad Hariri collapsed – there was a $941 million increase in deposits for the quarter. Lending by banks was also up, although the 4.3% increase for the quarter – corresponding to a total of $1.5 billion – was below that of a year before. Source: Oxford Business Group