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Islamic Finance News: Rising oil prices improve performance of the markets

  • Gulf markets rise this week and the performance of Qatar, followed by Dubai and Saudi Arabia were at the top, while the setback list was empty despite the emphasis on the US interest rate hike and the proportions of the reason for the rise to a decline in US inventories and fears of a global lack of stock has exceeded price per barrel of $ 50 for the first time in several months Weathered expectations and analysts expect that if the price level continued to be up it will be one of the reasons that the Gulf markets will stay qualify for positive performance.
  • The World Bank cut its forecast for global growth for 2016 from 2.9% to 2.4% analysts said lower expectations about the global economy from the effects that face today’s markets, but rising oil it is possible to cover the negative ones.
  • Oman: The bonds and Sukuk market in Oman grew by 53.75 per cent to reach RO 1.869 billion ($4.86 billion) in 2015 from RO 1.216 billion ($3.162 billion) in 2014. This was revealed by Abdullah bin Salem al Salmi, Executive President of the Capital Market Authority (CMA) on the sidelines of the launch of Oman Chapter of the Dubai-based Gulf Bond and Sukuk Association (GBSA) here. The new Sukuk Regulation provides more certainty and improves the prospects for companies to raise funding from the capital market.An increasing number of companies are taking advantage of bonds and Sukuk to diversify their financing source away from the traditional banking sector. The Oman Chapter of GBSA consisting of key market players. Oman will act as a resource for the Oman authorities to help grow the market. The launch of the Oman chapter was timed to follow the release of the new Sukuk regulation by the CMA for any Sukuk issuances and to support the growing interest among Oman companies to tap into capital market financing. The Sultanate of Oman is poised to raise US$2.5bn after launching five and 10-year bonds, according to a lead. A US$1bn five-year note will price at 245bp over mid-swaps while a US$1.5bn 10-year tranche has launched at plus 320bp. Oman is rated Baa1 by Moody’s and BBB- by Standard & Poors.
  • Saudi Arabia: Investment banks are racing to participate in the shares of oil giant state-owned Saudi Aramco as a gateway to the deals profitable they expect to flow from Saudi plan to reform its economy and provide comfort to the investment banks. struggling with the decline in revenue with the slowdown in the global economy. The Saudi government on Monday released the National Plan for the transition, Qaimhb 110 pages of policies and objectives for 2016-2020, which aims to reduce the economy’s dependence on oil. A large part of a campaign of reform in the long term, known as Vision 2030, announced by Deputy Crown Prince Mohammed bin Salman in April, and this includes the initial public offering less than 5 percent of the value of Aramco for sale. Has made investment banks in Saudi Arabia banks only $ 1.75 billion in fees in the last ten years in the past decade banks achieved the highest fees in 2007. show the data as a comparison, working in acquisitions of banks on Mannesmann by Vodafone in 1999, and got more than $ 530 million and the largest ever toll fees. In the past, Saudi companies were able to borrow very cheaply from local banks which held enormous stockpiles of oil sales but now it has resulted in lower oil prices and shrinking domestic liquidity forcing companies to look internationally.
  • Dubai: Dubai Islamic Bank issues 3.16 billion dirhams ($860.3 million)open subscriptions to support the capital base of the United Arab Emirates’ largest sharia-compliant lender. The bank is offering 988.4 million new shares to shareholders in total, with subscription open on the basis of one new share for every four currently held, according to a document detailing the offering. Shares are priced at 3.2 dirhams each, a substantial discount to Monday’s closing share price of 4.95 dirhams. Rights issues in the Gulf are traditionally sold at substantial discounts to the stock price to attract local subscribers. Those wishing to sell their rights to buy new stock can do so until June 13, with the subscription period for the capital increase closing on June 20. DIB’s total capital adequacy ratio, a key indicator of a bank’s financial health, stood at 15.6 percent at the end of March, according to its financial statement, above the UAE’s regulatory minimum of 12 percent. ($1 = 3.6730 UAE dirham).
  • Egypt: Faisal Islamic Bank of Egypt registered a year-on-year rise of 3.7 percent in its volume of businesses reaching 57.87 billion Egyptian pounds ($6.5 billion) by the end of May 2016. By the end of May 2015, the bank registered a volume of businesses worth 55.8 billion pounds. Total assets hiked to 56.89 billion pounds by the end of May 2016, compared to 54.58 billion pounds, marking a 4.2 percent rise. Faisal Bank’s current accounts and saving pools rose 3.6 percent to record 50.54 billion pounds.
  • Philippines: Philippine Governments Plans to sell Islamic bonds but its success may depend on how generous Manila is on pricing and the Middle East investors’ response to new entrants in the market. The Philippines’ incoming finance minister is looking at raising debt via Sukuk and yuan borrowings to diversify its debt profile but has yet to firm up plans. A Sukuk from these debutante countries could help widen a market that is dominated in Asia by sovereign deals from Malaysia and Indonesia with Gulf region investors traditionally favouring investment-grade paper from familiar names.
  • China: Chinese President Xi Jinping unveiled the Silk Road Economic Belt and the 21st-century Maritime Silk Road initiative now known as One Belt One Road (OBOR) in order to actively develop connectivity and economic cooperation with countries mainly between China and Eurasia. The initiative aims to build a community of shared interests destiny and responsibility with mutual political trust economic integration and cultural inclusiveness. Initiating investment and developing economic trade communications with Islamic countries is one of the important components of the OBOR strategy and this is detailed in the “Vision and Actions on jointly building the Silk Road Economic Belt and 21st-century Maritime Silk Road” published by the government on 28th March 2015 (“Vision and Actions”). Compared to traditional financial products. Islamic finance has developed significantly due to its high flexibility of business low-risk low debt requirements and the need to use real estate as collateral. In 2014, Sharia compliant financial institutions represented approximately 1% of total world assets at around US$2 trillion. The latest study shows that by 2020, the value of the global Islamic financial market will rise to US$3.25 trillion.