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Monday, 18 April 2016

Dubai Islamic Bank lists $500m sukuk in Dubai

The new listing of Dubai Islamic Bank's (DIB) $500 million sukuk on Nasdaq Dubai has reinforced Dubai's position as an international leader for listed Islamic bonds with a total value of $42.61 billion.
With the latest sukuk, DIB's total Islamic bond listings on the region's international exchange reached $3.25 billion and shows the rapid expansion of Dubai as the global capital of Islamic economy.
DIB's $500 million sukuk listed on the exchange on March 31. DIB had previously listed one sukuk in 2013 and two in 2015.
Dr Adnan Chilwan, group CEO, DIB said: "We are committed to economic development in Dubai and to promote the emirate's growth and success in the field of Islamic finance. Given the challenging market conditions, it was critical to have a strong credit come in and successfully close a deal. As such, this transaction effectively marks the re-opening of the GCC financial sector debt capital markets after a hiatus of four months."
Essa Kazim, governor of Dubai International Financial Centre (DIFC) and secretary-general of Dubai Islamic Economy Development Centre (DIEDC), said: "Through their location in the heart of the Muslim world, Dubai's Islamic capital markets are uniquely placed to expand in all aspects, including issuance and listing. DIB's prominence in both activities reinforces Dubai's status as the leading centre for sukuk and its growth as the global capital of Islamic economy."Abdul Wahed Al Fahim, chairman of Nasdaq Dubai, said: "As a pioneer of Islamic finance and pillar of Dubai's growth and prosperity, DIB is a key issuer on Nasdaq Dubai. Through their close cooperation, a range of government and semi-government institutions in Dubai as well as private companies are underpinning the growth of the Shariah-compliant financial markets in the region and internationally."

Hamed Ali, chief executive of Nasdaq Dubai, said: "The sukuk sector will continue to be a core focus for Nasdaq Dubai as we look forward to further listings in 2016 and beyond from a range of issuers. We are also developing further initiatives in the Islamic capital markets to provide innovative services designed to meet the evolving needs of market participants.

(Khaleej Times / 17 April 2016)
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Islamic banks hope to attract Mauritania’s deposit-wary consumers

Mauritania is turning to Islamic finance to modernise its banking sector, trying to raise the number of people with accounts from its meagre levels today and in turn increase liquidity so banks can lend more to companies.

Many of the Islamic republic’s citizens are uncomfortable with western banking, opting for informal banking collectives or just “keeping money under the bed”, says one local banking executive.

Officials say that by encouraging Islamic finance, which follows religious principles such as bans on interest and gambling, it will entice more people to enter the formal financial sector, crucial to the wider economy.

Dieng Adama Boubou, director of banking supervision at the Mauritanian central bank, says that the goal was to increase the number of people with bank accounts from 10 per cent today to 25 per cent by 2018, partly by promoting Islamic banking.

“We have a strategy of financial inclusion,” he says, adding that only 4 per cent of people had accounts in 2006. “Developing Islamic finance is a key part of that.”

Moulay Abbas, president of Banque Mauritanienne pour le Commerce International, a commercial and retail bank based in Nouakchott, says: “We are pushing more into Islamic finance, targeting traditional commercial agents who are not formally banked.”

The idea is that the push will help a still relatively under-developed financial sector. It would increase the amount of money banks hold, which would help them support the local economy by giving more long-term loans and letters of credit.

One complaint often made against the Mauritanian financial system is that it is too much driven by relationships, with tribal background and personal connections crucial to getting credit. Mr Abbas says that way of doing business is a thing of the past. “Perhaps this was true 20 years ago, but not today,” he says.

But many entrepreneurs still feel securing long-term credit is tougher than it should be. If there were more money in the system, with more consumer bank accounts, it could help alleviate the problem, say analysts.

Islamic lenders such as Banque Muamelat As Sahiha and Banque Islamique de Mauritanie have launched in Mauritania in the past few years. The country now has 15 banks and 186 branches, up from 90 in 2011.

But the industry has been tested by the low iron ore price. The IMF mission this year wrote that while there were no immediate problems “liquidity [in the banks] is declining and the sector remains vulnerable to shocks”.

The IMF urged the central bank to continue its policy of the past few years of improving the regulatory framework, which was relatively undeveloped during the period of a tough military government in the 1980s and 1990s.

European banks have been attracted to Mauritania in recent years, but have had limited success in getting a foothold. Société Générale and BNP Paribas both launched operations in the country in 2007. But BNP has since sold its stake in its Mauritanian operation to two Moroccan lenders, Attijariwafa Bank and Banque Centrale Populaire, which are turning their attention to Islamic finance.

(Financial Times / 15 April 2015)
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