In this week’s IFN Weekly Market Roundup, we take a look at consistent players and a promising newcomer in the sovereign Sukuk market; Malaysia’s prominence in potential corporate issuances; Iran’s lookout for bilateral relationship opportunities with other nations; the Middle Eastern efforts in enforcement and regulation; and crucial industrial moves in banks and exchanges.
The government of Malaysia issued a GII Murabahah facility on the 15th February 2017. The issuance, maturing on the 15th August 2024, is worth RM4 billion (US$900.64 million). The stock, GL170002, has an average yield of 4.045% and received 393 bids.
Indonesia will conduct an auction of sovereign Sukuk on the 21st February to finance the 2017 State Budget, targeting to raise IDR6 trillion (US$450 million).
Iran is considering the capital market to increase financing, according to Shapour Mohammadi, the head of Iran’s Securities and Exchange Organization, who said that the government and the private sector should issue Sukuk and Murabahah bonds, and the issuances should be made available to the private sector and the public.
NON SOVEREIGN SUKUK
Dubai Islamic Bank listed its US$1 billion Sukuk on NASDAQ Dubai, bringing the total value of the bank’s Sukuk listings on NASDAQ Dubai to US$4.25 billion. Warba Bank is promoting its US$250 million Sukuk this week, according to the Al-Anba newspaper. The roadshow for the issuance will be carried out in Singapore, Hong Kong and Dubai before ending in London.
In Malaysia, Khazanah Nasional will seek the approval of holders of the RM1 billion (US$224.66 million) Sukuk Ihsan under the Sustainable and Responsible Investment Sukuk framework to open the program to retail investors. Digi has received approval from Securities Commissions Malaysia for its Sukuk programs, an Islamic medium-term note program with a 15-year tenor; and an Islamic commercial paper program with a seven-year tenor, with a combined limit of up to RM5 billion (US$1.12 billion) in nominal value. Tanjung Bin Energy Issuer will hold a meeting today with Sukukholders of a Sukuk Murabahah program of up to RM4.5 billion (US$1.01 billion) to discuss the proposed refinancing of a junior term loan facility, according to a filing with Bank Negara Malaysia. SapuraKencana TMC’s RM7 billion (US$1.57 billion) Sukuk Murabahah has been approved by Sukukholders unanimously on the 27th January 2017.
The International Islamic Liquidity Management Corporation’s US$840 million three-month tenor Sukuk facility, to be issued on the 22nd February, was oversubscribed by US$2.3 billion with a total of 15 bids.
BANKING AND FINANCE
In the UAE, National Bank of Abu Dhabi and First Gulf Bank will officially launch its merged entity on the 1st April 2017. The shares of the new company will commence trading from the next day.
In the UK, Al Rayan Bank will be supporting Islamic Relief in a Shariah compliant microfinance project in the Republic of Mali to aid local women and provide them with opportunities to start their own Shea butter business. Islamic finance expert Richard Thomas, OBE FCSI, was accorded the Freedom of the City of London in a ceremony held at the Chamberlain’s Court.
Dubai issued Law No. 03 of 2017 that requires the transfer of the responsibilities of the Dubai Economic Council (DEC) to the Department of Economic Development (DED). The new law also annuls Law No. 28 of 2007 on the DEC and any other legislation that contradicts or challenges its articles. Employees of the DEC will be transferred to the DED without prejudice to their vested rights.
Saudi’s Capital Market Authority has approved new corporate governance regulations, consisting of the composition of the board of directors and committees; and companies’ external auditors and internal control procedures which require boards of directors to disclose all information to shareholders and dealers to ensure transparency in transactions.
Malaysia’s Bank Rakyat inked an MoU with Bank Rakyat Indonesia in a bid to enter the Indonesian market. The partnership is aimed at providing money order services to over 700,000 Indonesians in Malaysia.
In Russia, the president of the Republic of Tatarstan, Rustam Minnikhanov, expressed his willingness in promoting the IDB’s efforts in training the country’s professionals in Islamic banking.
As part of its efforts to revitalize the country’s banking relations with other nations following the lifting of its sanctions last year, Iran has sought to increase partnerships with other nations, according to media reports. The Central Bank of Iran and Japan’s Financial Service Agency signed an exchange of letter to ease banking relations and to promote the exchange of experience related to supervision. Iran is also looking into increasing collaborations with Azerbaijan’s commercial banks to develop a banking account and bank card systems that would work with the currencies of both countries. Luxembourg and Iran signed an agreement to provide greater protection for investors in both countries.
Pakistani Islamic banks are in midst of talks with the Pakistan Mercantile Exchange to develop a commodity Murabahah trading platform to manage their excess liquidity. According to The News, efforts are underway for a potential system that would integrate the platform with international exchanges in Dubai, London and Malaysia.
New York-listed SPDR Gold Trust – the world’s largest gold-backed ETF – was certified as Shariah compliant by Amanie Advisors. The exchange-traded fund holds 836.7 tonnes of bullion worth US$33 billion.
The Company for Cooperative Insurance signed a contract with Saudi Arabian Airlines to provide medical insurance services to Saudi Airlines’s employees and their families. Orient Takaful also renewed its insurance coverage deal for Hilton Hotel Groups for hotels in the cities of Hurghada and Alexandria, according to Amwal Alghad.
Tadawul has nominated Sarah Al Suhaimi as its board chairperson replacing Khalid Al Rabiah, and Abdulrahman Al Mofadhi as the vice-chairman. Sarah is CEO of NCB Capital and the first woman to chair the bourse.
Sohail Abbasi is now heading the Islamic banking business of Pakistan’s Bank Al Habib. The UAE’s Commercial Bank International appointed Hessa Al Ghurair, who is also the bank’s chief human resources officer, as its head of corporate social responsibility. London’s Gatehouse Bank announced the appointment of Charles Haresnape as its new CEO as Fahed Faisal Boodai, currently the interim CEO of the bank, steps down. Bank Sohar of Oman welcomed Pieter De Witt as the bank’s new CFO and Khalid Khalfan Rashid Al Subhi as the new assistant general manager and head of compliance.
Hong Kong Exchanges and Clearing appointed Ferheen Mahomed as its group general counsel, overseeing its legal services department and legal function, including the teams at the London Metal Exchange (LME) and LME Clear.
As part of its efforts to increase its presence in the region including in the Islamic capital market industry, Bursa Malaysia announced changes to its organizational structure where Selvarany Rasiah is now the new chief commercial officer, a newly created role; Azalina Adham, formerly the director of strategy and transformation, is the new COO; and Yew Yee Tee, formerly the head of enforcement, will now assume the role of chief regulatory officer.