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Thursday, 28 November 2013

Halal Products Not Only For Muslims – Expert

It is a mistake to market Halal products to Muslims only and more must be done to increase their marketability, one expert has said at the Global Islamic Economy Summit.

In a passionate speech, which drew spontaneous rounds of applause from the packed audience in Dubai, Saleh Lootah, managing director of Al Islami Foods, argued for a single global Halal standard to help grow the market.

“Is Halal only for Muslims? This is what we have to change, our mindsets,” Lootah said.

“Halal products are not only for Muslims, as Islam is not only for Muslims – this is the problem.”
Lootah argued that poor food packaging as well as the taste of Halal products was not good enough and needed to be improved to help grow the market. He also said the media has not positively portrayed Halal products.

“We’ve got away with this so far [the packaging, the taste].We must deliver Halal to its best…and this is what we are trying to do, to position Halal in the right way.”

Halal food and lifestyle sector expenditure reached $1.62 trillion in 2012 and is forecast to hit $2.47 trillion by 2018.

Lootah argued that the lack of a universally recognised standard for Halal, and disagreement between regions over who has the better standard, was restricting market growth.

“We make it complicated for ourselves – the differing standards between regions. The best muftis [experts in Islamic law] are the consumers themselves. We have to let them decide,” he said.

“The lack of standardisation is the main issue hindering the growth of the Halal food sector.
“Adapting a common standard for Halal food is the first step to having a proper infrastructure in OIC [Organisation of Islamic Cooperation] countries.”

Lootah was joined on stage by Gerald Lawless, president and Group CEO of Jumeirah Group, who revealed the hotel chain is planning to do more to meet its customers’ religious and cultural needs.

“It’s important to know the food here [in Dubai] is Halal and is of the highest quality,” Lawless said.

“We need to be sensitive of our guests’ preferences around the world. In London during the summer time it is almost the Middle East. Some guests may want a Koran in their room and not a Bible.

“Dubai has huge opportunities in the Halal travel sector, especially from the GCC” he added.

(Gulf Business / 25 Nov 2013)
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Expo 2020 Win to Boost Dubai Sukuk on Spending: Islamic Finance

Dubai sales of Shariah-compliant debt are set to surge should the emirate win Expo 2020 as the sheikhdom finances the building of roads, railways and an airport expansion for the event.
The second-richest member of the United Arab Emirates is one of four cities competing for the world fair, which will be awarded today by the Bureau International des Expositions in Paris. A win would spur construction projects, higher government spending and more issuance, Hussain Al Qemzi, chief executive officer of Noor Islamic Bank, said in an interview at the Global Islamic Economy Summit in Dubai yesterday.
Dubai would spend almost 6 billion euros ($8.1 billion) on infrastructure projects ahead of the expo, Sheikh Ahmed bin Saeed Al Maktoum, head of Dubai’s Supreme Fiscal Committee and chairman of Emirates Airline, said Nov. 17. The sheikhdom set a three-year timetable to become the capital of the Islamic economy globally, and state-owned companies, including Emirates and the Dubai Electricity & Water Authority, have sold sukuk in 2013.
“The Expo would mean significant infrastructure spending,” Adnan Chilwan, CEO of Dubai Islamic Bank PJSC (DIB), said in an interview at the conference yesterday. “Raising funds would require the right financial structures and, in my mind, capital market transactions, bonds or sukuk will see a surge. The way the wind is blowing, sukuk may be the preferred route.”

‘More Credibility’

Sukuk issuance is set to jump from just over $51 billion this year to about $60 billion in 2014, Moody’s Investors Service said in a report dated yesterday. The yield on Dubai’s $650 million May 2022 bond has risen 49 basis points this year to 4.81 percent at 12:30 p.m. in Dubai, according to data compiled by Bloomberg. That compares with a 96 basis-point increase in 10-year Treasuries to 2.72 percent.
The emirate’s credit-default swaps, contracts for insuring its debt against default for five years, tumbled to 217 basis points yesterday from 445 at the end of 2011.
“If you look at Dubai’s CDS compared to what they were during the crisis they have substantially come down,” Chilwan said. “A win of the Expo would give Dubai more credibility and something to look forward to” which could further lower borrowing costs, he said.

Desert Venues

Winning the Expo could boost Dubai’s economic growth to 6.4 percent over the next three years, Barclays said in a research note yesterday.
The emirate will speed up plans for a 5 billion-dirham ($1.36 billion) expansion of the city’s metro network if it wins the bid, Dubai’s Roads & Transport Authority said in June. A new purpose-built exhibition center with themed pavilions will be constructed in the desert south of the city, according to Dubai’s bid website.
The potential increase in spending raises risks of further debt accumulation by Dubai entities, Barclays said. The emirate roiled global markets with a request to delay $25 billion of debt payments in 2009. Government-related companies including Dubai World Corp. and Nakheel PJSC were forced to re-negotiate with lenders.

Sao Paulo

Turkey’s Izmir, Russia’s Ekaterinburg, and Brazil’s Sao Paulo are also in the running to host the more than 160-year-old event. Confidence has been building in Dubai, where sukuk yields, particularly for real-estate developers, have fallen amid expectation of a win.
Emaar Properties PJSC (EMAAR), developer of the world’s tallest tower, saw yields on its $500 million sukuk due August 2016 tumble 88 basis points this year to 3.53 percent yesterday, according to data compiled by Bloomberg. The yield on Nakheel’s 4.27 billion-dirham sukuk due the same month slid 226 basis points, or 2.26 of a percentage point, to 7.01 percent.
“Expo is only part of the Dubai story,” Moinuddin Malim, chief executive officer of Mashreq Al Islami, said in a Nov. 25 interview at the conference in Dubai. “They have a very good master plan. Hopefully when they win the Expo, we will see that plan put through its paces.
(Bloomberg / 27 Nov 2013)
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