National Bonds registers record sales of Dh1b

National Bonds, the Shariah-compliant national savings scheme of the UAE, yesterday announced it has achieved record-breaking sales in the first five months of 2008. The company's sale of bonds touched Dh1 billion at the end of May 2008, an increase of 150 per cent compared to Dh409 million for the same period in 2007.

Growth from the beginning of the year shows an increase in customer numbers by 21 per cent and total volumes by 58 per cent. Mohammed Qasim Al Ali, CEO of National Bonds Corporation, said that the surge in sales was driven by the company's strategy to increase awareness of the value of savings among all UAE residents. "The simplicity of investing in our bonds has made us a household name in the UAE. The savings habit is getting ingrained deeper in the UAE society as demonstrated by the growth of 150 per cent in the number of bond sales in 2008 compared to the same period in 2007." Al Ali added that the company's stellar performance in 2007 has greatly strengthened investor confidence: "Earlier this year, we disbursed an annual profit of 6.03 per cent, which is higher than that of any other comparable savings product in the market.

The key value proposition is that our bonds are priced as low as Dh10 and can be purchased from over 300 locations in the UAE. Today, our 420,000 bondholders come from all walks of life, which is testament of our efforts in making National Bonds everyone's favourite place to save. "We have invested in several key initiatives to enhance customer experience with National Bonds. Among them is an automation system that once implemented will immediately provide customers bond certificates at the time of purchase. This will accelerate their enrollment for the next draw. National Bonds is also looking at other convenient tools by offering customers alternate channels to purchase bonds from the comfort of their home or office. "

/Khaleej Times/

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Emcredit gets check default data from Dubai Public Prosecutors

Emcredit, the United Arab Emirates' first credit rating bureau, said Dubai Public Prosecution agreed to supply it with information on lawsuits resulting from bounced checks.

The data will be fed into Emcredit's emBounce data product to help lenders in the Gulf state better assess credit risk, Emcredit said in an e-mailed statement today.

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Consumers call on banks to stop hoarding rate cuts

UAE banks should be forced to pass on successive US interest rate cuts to their customers, according to the latest ArabianBusiness.com spot poll.

Discontent has been growing among homeowners in the Gulf state over banks' unwillingness to pass on the cuts, which should have sent mortgage rates tumbling.

The US Federal Reserve has slashed interest rates seven times since September, bringing down the cost of borrowing to just 2%.

The UAE pegs its currency to the ailing US dollar, which forces the Gulf state to mirror Fed monetary policy in order to maintain the relative attractiveness of the dirham.

However, banks have resisted lowering their rates to below a range of between 7.1-8.5%, infuriating customers who feel they are paying over the odds on their mortgages.

An overwhelming 76.4% of respondents to the poll said the successive interest rate cuts should be applied to mortgage and loan customers, since banks are “getting their money cheaper than ever”.

A further 13.3% said banks should pass the cuts to “an extent”, but agreed that if customers are told mortgage repayments vary according to underlying interest rates then banks should honour that.

The remaining 10.1% said banks should not have to pass the cuts on, and should “make hay while the sun shines” by using cheaper borrowing rates to improve their profit margins.

/Arabian Business/

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"Dar Takaful" shares available for acquisition

Founders of "Dar Takaful", a public joint stock company, announced that shares of the company will be available for acquisition starting the 1st of July 2008. With a total of Dh100 Millions distributed over 100 Million shares, and a nominal value of one Emirati Dirham per share, the company will offer 55 Million shares for public acquisition, representing (55%) of the total capital for a nominal value of Dh1 per share. In addition to 3.5 fils per share as issuance expenses.

This announcement regarding "Takaful House", comes inline with the continuous success achieved by "Mawarid Finance", which attained a net profit of Dh95.1 Millions in a period less than 1 year from its launch. "Mawarid Finance" is considered one of the major investors of "Takaful House".

The chairman of the "Takaful House" founders committee, Mohammed Musabah Al Neaimi clarified that company shares are available for companies and individuals (Nationals '&' GCC Citizens), and the companies registered in the UAE owned by nationals.

Al Neaimi reviewed the conditions of shares acquisition, and clarified that the minimum limit for subscription was set at 25000 shares for each form, with multiples of 1000 shares. He also stated that the 1st of this coming July will witness the meeting of the first founding general assembly.

The Chairman of the founders committee further pointed out the key differences between Conventional insurance and Islamic insurance ( Takaful ), which comes in compliance with the teachings of Islamic Sharea, and has always been received well by clients seeking alternative for the conventional insurance. To do away with prohibited "Riba" associated with interest schemes. Takaful insurance is a kind of mutual collaboration and cooperation between clients, who are partners in liability.

In addition to the above, Takaful insurance is distinguished from other schemes, which consider insurance amount surplus as profit for the company in case of no accidents or damage. However, in Takaful, this surplus is distributed on clients insured at the company as determined by the "Fatwa and Sharea Monitor Authority".

Al Neaimi anticipated a rise in the shares of Takaful companies in the UAE insurance market, due to the success of the Islamic banking scheme, and the series of success achieved by Takaful scheme insurance companies. in addition to the client's awareness about the difference between commercial and Takaful insurance. Clients are keen to avoid suspicious dealings associated with "Riba", hence, they targeted the Takaful market, which scored an income of around $6 Billion in 2006.

He further pointed that the UAE provides a suitable environment to become an international capital for Islamic dealings and Takaful activities, as proved. Therefore, we can say that "Takaful House" came to exist in the right time and place. Al Neaimi also pointed that four Takaful companies are operating in the country currently, with total installments of Dh832 Millions collected by the four companies, what represents 11% of the total size of the market. Based on figures, this sector of the market is witnessing a great deal of growth, knowing that the concept of Takaful was introduced to markets recently.

The chairman of the "Takaful House" founders committee, Mohammed Musabah Al Neaimi, said that according to studies and reports, the country had 48 insurance companies by the end of 2006 (24 local and 24 foreign). National insurance companies set a new record of Dh4.6 billion until June 2007, according to the last half financial results of all national insurance companies Listed in the local. Results also indicate an increase in the total net profits of up to Dh1,114 billion compared with profits of up to Dh541 million during the same period of last year, thereby realizing the growth rate of 112%, which is a positive indicator that confirms companies have moved beyond the plight of fluctuations in the stock market and securities in 2006.

Al Neaimi reviewed the activities to be conducted by the company in the areas of Takaful insurance and reinsurance based on the Islamic concept of Takaful, including cars, property, against fire, ships and shipping, work risks, personal accidents, engineering, construction, various accidents, civil liability, health and family, consultancy regarding Takaful insurance and reinsurance.

He announced that after closing the shares acquisition, " Takaful House" would request to the securities and commodities authority, as well as the Dubai Financial Market to include its shares in the later. He assured that the offering the shares came in accordance with the terms and conditions applicable to the securities and commodities authority in the UAE, adding that shares has not been registered with any other regulatory body in another country.
/WAM/

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Dewa sets Islamic bond price guidance

Dubai Electricity and Water Authority (Dewa) has set initial price guidance for its Islamic bond at between 100 basis points to 125 basis points over six-month Emirates Interbank Offered Rate, two bankers said.

The state-owned utility is returning to the market after postponing the sale of dollar-denominated bonds in November.

The bankers, who attended a Dewa roadshow, declined to be identified. The utility's latest sale is priced in dirhams. The five-year sale of the floating rate Islamic bonds (sukuk), is managed by Barclays Capital, Citigroup, Dubai Islamic Bank and Emirates Bank International.
/Reuters/

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Medical insurance premiums set to increase

The rising cost of medical treatment will lead to an increase in medical insurance premiums in the UAE, a senior insurer said. "With premiums on medical insurance having dropped to a very low level in the past, the trend is all set to be reversed in the coming years in line with the increase in medical inflation," James Cooper, sales director, William Russell, a UK-based company with over 15 years of experience in looking after insurance needs of expatriates around the world, told The Business Weekly in an interview.

"I am not sure whether falling premiums will be sustainable in the long-term. In fact, we are seeing a huge increase in premium in the Far East, with China reporting a hefty increase between 10 to 22 per cent," he added.

With globalisation and an open economy it would be very difficult to imagine what the situation will be in the UAE two to three years down the line. "We anticipate that the premiums will increase in line with worldwide medical inflation.

Because the medical treatment costs are increasing in the UAE just as they are in China and the US. The premiums would have to reflect that increase as the insurance companies can't afford to swallow the hike," he said.

First venture

This is the first major venture of William Russell in the region and the company was attracted by the new legislation launched by Abu Dhabi to make healthcare mandatory with Dubai and other emirates following suit. "We had concentrated our efforts for many years in the Far East, Hong Kong and Malaysia, and felt that expanding our services here was a natural progression for us. We are looking to capitalise in the region through partnership and introducing our own range of products," he added.

Cooper was speaking to TBW on the sidelines of a function marking William Russell's entry into the region in partnership with Dubai Insurance Company. The partnership has launched a range of international health, income protection and life insurance plans designed specifically for expatriates and small to medium-sized expatriate employers.

The plans are underwritten by Dubai Insurance Company and administered by William Russell. The range includes GlobalHealth expatriate health insurance plans, GlobalLife, life insurance protection for individuals and GlobalIncome Protection, which provides a regular income if an expatriate is unable to work due to illness or injury.

"Choosing to live and work in the Gulf provides expatriates with a rewarding career and lifestyle opportunities, but they do need to make sure that they have the right insurance to financially protect income and the security of their families in the event of illness, injury or even death," Cooper said.

/The Business Weekly /

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Dubai to become one of the world's financial capitals

Dubai is picking up the mantle of the financial capital of the world, as global banking sectors London and New York continue to fade on the back of the global credit crises.

The new mantra in New York and London is "Dubai, Mumbai, Shanghai or goodbye", as job losses mount in both cities while opportunities in the east continue to rise.

Lehman Brothers on Tuesday became the latest investment bank moving one of its most senior positions to the UAE. Philip Lynch, the bank's co-head of equities for Europe and the Middle East, will be relocating to Dubai after serving more than two decades in London.

The US investment bank, which has axed over 6,000 staff in the last nine months, said the move was aimed at serving the growing needs of clients in the Gulf region and the wider Middle East.

Lynch will find himself in good company. Barclays last month dispatched Roger Jenkins, one of London's highest-paid bankers, to the emirate as chairman of investment banking and investment management.

Earlier in May Citigroup, which has so far cut 1,500 jobs because of the global credit crisis, announced it would send Alberto Verme, co-head of global investment banking from London to Dubai.

He follows Makram Azar, head of the media, consumer and retail investment banking team in Europe and the Middle East, to take the role of global head of sovereign wealth funds.

The bank has also switched Perry Hoffmeister, co-head of investment banking for Europe and the Middle East, to run its investment management arm across the same regions.

The relocation of roles from London and New York to Dubai, and to a lesser extent Mumbai and Shanghai, reflects the reshaping of global opportunities for investment banks.

With a surge in oil revenue, rapidly rising infrastructure needs, and the emergence of sovereign wealth funds at the head of M&A activity, the Middle East and Asia have become crucial for global investment banks looking to remain profitable.

Vikram Pandit, Citigroup's chief executive, is on record as saying the Middle East is the bank's priority in its focus on growth opportunities overseas.

Countries in the GCC will spend $1.5 trillion on infrastructure in the five years, according to figures published by Société Générale Asset Management, based on research by HSBC Global Research, Middle East Business Intelligence and Thomson Datastream.

Cerulli Associates, a US and Singapore-based research firm, estimated total managed assets in the six GCC countries and Egypt to be more than $1.6 trillion at the end of last year.

/Arabian Business/

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Sovereign Wealth Fund likely to boost stakes in Gulf markets

The US and European move to impose restrictions on Sovereign Wealth Fund (SWF) investments will prompt Gulf-based SWFs to further boost their stakes in the GCC stock markets, where they currently account for 27 per cent of the market capitalisation valued at $300 billion, global investment analysts said.

In the region, 36 SWFs, including seven from the UAE and eight from Saudi Arabia hold, 131 GCC listed companies. While collectively their holdings reach to about 131 companies, the top 25 companies account for 90 per cent of the total, according to Markaz in a recent research.

Investment analysts said the proposed code of conduct to be imposed on SWFs by the West, seen by many as a protectionist response to the growing influence of these funds, is likely to trigger a shift in their investment pattern that would have positive impact on the regional markets. The US and EU have both drawn up codes of conduct for SWFs.

Last month the International Monetary Fund (IMF) and 25 SWFs established an international working group to draft the first ever best practice guidelines for the state-owned funds.

"In the wake of these developments, there would be a paradigm shift in SWF’s investment policies toward equities and alternative investments and their geographical diversification," said a Dubai-based analyst.

Gulf-based SWFs have combined assets estimated to be more than $3 trillion, of which Abu Dhabi Investment Authority (ADIA) alone accounts for more than $900 billion. GCC's government-backed wealth funds and SWFs from Asian countries with large trade surpluses have hit international headlines in the last 12 months after stepping in to bail out a number of US and European banks in the wake of the subprime mortgage crisis and ensuing credit crunch.

According to some analysts, the value of assets controlled by SWFs could grow to $12 trillion by 2015 — roughly the size of the US economy's gross domestic product (GDP).

Analysts said regulatory initiatives have been fuelled by the astounding growth of SWF assets, and probably even more by a number of major investment decisions made by individual sovereign funds and other state-owned or state-controlled corporative entities. Their profile has been raised through a series of recent significant acquisitions in Europe and worldwide.

"The growing clout of SWFs is raising concerns in the West over transparency and accountability, with some claiming foreign governments may harbour political motivation when investing in the US and Europe. In what is seen as the biggest confrontation between a SWF and the West, the DP World was forced to sell US port terminal operations it acquired through its takeover of UK-based P&O amid a political firestorm that the deal posed a threat to American national security."

The West's response has come in for criticism, with wealth funds claiming that restrictions on investment will see them take their money elsewhere. The latest to slam the US-EU move is the Duke of York Prince Andrew at the World Economic Forum (WEF) in Sharm El Sheikh. He said there was no reason for countries to restrict investment by wealth funds.

Sultan bin Sulayem, the head of Dubai World, also voiced his concern over the issue, while echoing a similar warning by the Kuwait Investment Authority against the EU proposal for an SWF code of conduct.

The Organisation for Economic Cooperation and Development (OECD), a club of 30 industrial democracies, also said new laws or regulations to govern sovereign wealth funds were not needed as long as the funds are transparent and invest on commercial rather than political grounds. Angel Gurria, secretary-general of the OECD, said the Paris-based forum had not come across an example of a sovereign wealth fund acting for any reason other than the pursuit of profit.

Nermina Biberovic, a research associate of economics at the Dubai-based Gulf Research Centre, said an international dialogue should build upon existing rules and regulations within an agenda of well-defined mutual strategies. It might contribute to mutual trust while keeping markets open in times when economic ties have deepened and widened — especially in the context of the EU-GCC FTA.

According to Biberovic, the geo-economic relationship between the EU and the Gulf cannot be overlooked or understated. In 2007, the GCC member states have been able to build their net foreign asset position to $1.8 trillion, as the latest research of the Institute of International Finance indicates. The EU is attracting a significant share of these account surpluses, which might further rise, in case the Gulf States move towards an agenda of diversifying currency holdings.

"It is estimated that GCC’s capital outflows towards the European Common Market accounted for around one fifth of Gulf’s total capital outflows between 2002 and 2006. Around 20 per cent of GCC’s overall portfolio investment and around 55 per cent of Gulf’s total direct investment were directed towards the EU. While the ratio of direct investment is marginal, yet it clearly indicates a strategic alignment towards the EU."
/Khaleej Times/

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Etisalat seeks first credit rating by June

UAE telecom Etisalat said on Sunday it expects to get its first credit rating by the end of June in a bid to help its expansion overseas.

"In keeping with our future business plans and corporate strategy, we are in the process of being rated by three international agencies," Chief Financial Officer (CFO) Salem Ali Al-Sharhan told newswire Reuters.

Sharhan said the ratings would be ready towards the end of June.

Etisalat has said this year it is looking at expanding in Africa, Iran and India.

Etisalat also said on Sunday it had been approached by Iranian businessmen seeking to interest the state-controlled company in investing in Iran's telecommunications sector.

"We've been approached by some Iranian businessmen," Etisalat Chairman Mohamed Omran told Reuters. "But it is too early."

Omran declined to identify the Iranian businessmen.

An executive at Etisalat told Reuters earlier on Sunday the Abu Dhabi-listed firm had held talks with the Iranian regulator earlier this year about opportunities in Iran and is studying possibilities to enter the market.

Etisalat, the second largest mobile operator in the Gulf Arab region, is the latest Abu Dhabi corporate to seek a credit rating.

Mubadala Development Company, an investment agency for the government of the world's fifth largest oil exporter, said last week it was seeking its first rating in a bid to lower borrowing costs.

Standard and Poor's Rating Services assigned Aldar Properties, Abu Dhabi's largest real estate developer by market value, an A- long-term rating and Moody's Investor Services an A3 rating with a stable outlook in April.
/Arabian Business/

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Swiss investment bank reiterates impact of potential property bubble for Dubai

The Swiss investment bank UBS is surprised that most regional observers seems to regards inflation as the biggest macro-economic risk on the horizon… and not a potential real estate bubble. But projects could end up in default and burden the banking sector.

The premier investment bank has raised its concern regarding the risk of a real estate ‘bubble’ to the UAE economy and being a greater threat to growth than inflation. In its latest report, the Swiss bank said after 2010 the realty environment could become more challenging, leading to a slowdown in Dubai and shift the focus of the property market of Abu Dhabi.

UBS expects about 150,000 residential units to be completed in Dubai in the next two years, bringing the market into balance some time in 2010. Thereafter, the housing market might well swing into over-supply.

That risk currently appears most relevant for the high-end residential market, which is seeing much bigger supply growth than the mid-market. There are already indications that occupancy ratios in the high-end segment are markedly lower than in the mid-segment.

This could have wide-reaching impact on the economy because the construction and real estate sectors contribute heavily to GDP growth as well as creating additional spillovers in other sectors, such as banking.

In the office segment, UBS said a lot of supply is in the pipeline, entering the market between late 2008 and late 2009 in Dubai and from late 2009 in Abu Dhabi. The office market in both Dubai and Abu Dhabi is also characterized by short-ages, with occupancy rates around 98 per cent and even higher in the prime locations.

The property situation in Abu Dhabi appears somewhat different, as the construction boom is less advanced there than in Dubai. In 1999-2001, Abu Dhabi imposed a construction moratorium, the impact of which is still apparently being felt.

The average weekly gain for the UAE’s real estate stocks was 4 per cent. Sorouh Real Estate has recorded a 218 per cent growth in net profits to Dh361 million (2007: Dh114 million) for the first quarter of 2008. The improved profit performance, representing 14 fills a share (4 fills in Q1-2007), came on the back of income from land sales at Shams Abud Dhabi, which was converted during 2007 from leasehold to freehold sales, as well as the good performance of the company’s asset portfolio.

The profit generated in the first quarter was derived from operating activities with no asset revaluations. The changes at Shams Abu Dhabi also meant revenue grew strongly, from Dh280 million in Q1-2007 to Dh624 million. The management says it is pleased to report another good financial performance for the first quarter.
Sorouh’s share gained 3.6 per cent during the week.

Aldar Properties reported a 196 per cent gain in first quarter net profits to Dh1.36 billion, up from Dh450.7 million in 2007. Gross revenues were Dh2.23 billion while the earning per share came to Dh.0.59 from Dhs.0.26 a share in 2007.

Aldar has confirmed developments worth Dh10.5 billion under construction, up from Dh8.33 billion in 2007. Its net asset value was up 21 per cent to Dh9.32 billion, from Dh7.68 billion in 2007.

The financial results come a week after Moody’s Investors Services assigned long term local and foreign currency issuer ratings of ‘A3’ to Aldar. Moody has described the outlook for the firm as stable. The stock price registered a weekly gain of 4.6 per cent.

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Amlak Finance renewed its application to become a bank

Dubai-based Islamic mortgage company Amlak Finance said it renewed its application to become a bank, for which it first applied more than two years ago.
In a statement on the Dubai bourse website on Thursday, the Emaar Properties affiliate did not give more details. Becoming a bank would allow Amlak to take deposits that it could then lend on as mortgages.

The Central Bank of the UAE is thought to be reluctant to issue any more banking licences as there is currently 51 banks, up from 48 a year ago. However, the fact that the three newest banks have all been Islamic could be something that is giving Amak the courage to keep applying as the UAE hopes to become the Islamic finance hub of the Middle East, ahead of Bahrain which also saw a number of Islamic bank launches in 2007. Among the new entrants in the UAE were Al Hilal, Noor Islamic Bank and Crescent Bank.

Shares of Amlak were up 0.63 per cent at AED 4.80 on Thursday.

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UAE Central Bank keeps tabs on lending

The Central BankCentral BankCentral Bank of the United Arab Emirates is monitoring lending activity by all banks operating in the UAE to prevent a fresh bad debt crisis that could be caused by a surge in mortgage and other personal loans.
Although the country's 23 national banks and 28 foreign units are lavishing funds in personal and mortgage loans to take advantage of a surge in domestic demand, a repetition of the damaging bad and doubtful debt that jolted the banking sector in the mid-1980s is unlikely because of Central BankCentral BankCentral Bank of the United Arab Emirates's tight policy.

"The situation is different now. During the 1980s, the official lending policy was lax and there were no ceiling for credits," said Firas Al Madi, sales and marketing manager for Northern Emirates - retail banking group - at the government-controlled National Bank of Abu Dhabi (NBAD)National Bank of Abu Dhabi (NBAD).

"I know there has been a surge in lending activity recently, including mortgage loans. However, there are strict rules for lending because the Central BankCentral BankCentral Bank of the United Arab Emirates has set a ceiling for all types of loans. I can tell you that the Central BankCentral BankCentral Bank of the United Arab Emirates is monitoring the situation and we in the banks are doing the same... so, the emergence of a new bad debt problem similar to that in mid-1980s is totally out of question."

Speaking to Emirates Business at Cityscape Abu Dhabi, Al Madi said banks in the UAE had largely boosted their reserves in line with Central BankCentral BankCentral Bank of the United Arab Emirates instructions, while many of them have set up special units for all types of lending, including mortgage, personal loans, consumer loans, commercial credits, car financing and other facilities.

"Banks are largely benefiting from the surge in credits but there are certain limits and ceilings set by the Central BankCentral BankCentral Bank of the United Arab Emirates. I can tell you despite the large increase in personal loans, most banks are lending responsibly in accordance with their financial capacity and available reserves," he said. Central BankCentral BankCentral Bank of the United Arab Emirates
sources acknowledged there has been an upsurge in domestic credits by UAE banks over the past two years but added that this is normal given the sharp growth in the economy and local projects.

"The Central BankCentral BankCentral Bank of the United Arab Emirates is in full control of the lending activity by banks although we do not interfere in their daily operations," a Central BankCentral BankCentral Bank of the United Arab Emirates source said. "We have certain rules on lending for their security and safety and we expect them to abide by them. Actually all banks are complying with these rules whether concerning the loan ceiling or size of reserves."

According to the Central BankCentral BankCentral Bank of the United Arab Emirates's latest bulletin, the combined capital and reserves of the country's 51 banks shot up by nearly Dh45 billion from Dh96bn at the end of 2006 to an all time high of Dh141.1bn at the end of last March.

The Central BankCentral BankCentral Bank of the United Arab Emirates believes the large reserve base would consolidate the banking sector's financial position and immunise it against a new bank crisis. Low reserves and the absence of strict lending rules threw the UAE banking sector into its worst crisis in mid-1980s after many debtors failed to pay back to the banks because of a sharp business downturn that followed the oil boom.

The crisis, which was triggered by a rush to extend loans by banks during the oil boom, inflicted heavy losses on most of them and forced some to merge. It also prompted the Central BankCentral BankCentral Bank of the United Arab Emirates to tighten its control over the banking sector.
Central BankCentral BankCentral Bank of the United Arab Emirates figures showed strong domestic demand and a sharp upturn in real estate projects boosted banks' mortgage loans to a record Dh58.8bn at the end of 2007, up by nearly Dh19bn from the end of 2006.

Personal consumer loans also soared to a record Dh48.4 billion at the end of March this year while personal commercial loans swelled by nearly Dh23bn to reach Dh110bn at the end of 2007 from Dh87bn at the end of 2006.
/Zawya/

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du announces financing facility

Emirates Integrated Telecommunications Company PJSC (du) today announced committed financing arrangements to drive increased network investments.
The company today announced an AED3bn medium term syndicated loan facility to finance its network expansion over the coming years.

Osman Sultan, the CEO of du, said “We are pleased to have secured our medium term funding requirements through working closely with Mashreq whom we have appointed to lead the transaction on our behalf. The faster acquisition of subscribers, and consequently increased revenue, over and above that included in our initial business plan has led us to pull forward certain capital expenditure. This financing facility will enable us to roll out our network infrastructure faster so that we have the increased capability and capacity required to deliver our services to more customers across the Emirates”

Omar Bouhadiba, Head of Corporate & Investment Banking Group in Mashreq said, “We are delighted to be working with du; in underwriting this facility we have shown our commitment to the second telecom operator of the UAE. We are very pleased to lead the transaction for one of the foremost listed companies in the country, which carries behind it the ownership strength of the UAE Government. In a very short period of time, since its inception, du has surpassed all expectations and built up an envious franchise. Having led a number of high profile transactions in recent months, Mashreq will employ its vast experience and network to secure a successful syndication for du”.

It is expected that the facility will be syndicated to local and international financial institutions over the coming 3 months.

About du

du, the new telecommunications company in the UAE, launched mobile telecommunication services on 11 February 2007 across the UAE in addition to internet and pay TV services in some of the free zones of Dubai. Call Select, the first of du's nationwide Fixed line services for voice telephony, was launched in July 2007.

Among du’s many firsts is its historic Number Booking Campaign for both individuals and business, Pay by the Second billing system, Mobile TV, Mobile Payments, first of its kind ‘WoW’ recharge card (which offers customers the choice between more credit and more time) and Self Care. du business offers include Closed Business User Group and preferred International Destinations.

du’s retail network, currently numbering 16 du shops located in strategic locations across all emirates, was launched on 25 February 2007, supporting the delivery of du services to customers.

du is 40 percent owned by the UAE Federal Government, 20 percent by Mubadala Development Company, 20 percent by TECOM Investments and 20 percent by public shareholders. It is listed on the Dubai Financial Market (DFM) and trades under the name du.

du was recognised as the ‘Best Brand’ for its innovative branding and outstanding success at the Telecom World Awards Middle East 2007.

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Bank of Baroda signs MoU with Dubai Properties

Public Sector lender Bank of Baroda has informed that it has signed a memorandum of understanding (MoU) with Dubai-based real estate company Dubai Properties for financing buyers of the latter’s products in the United Arab Emirates (UAE).

Bank of Baroda is a leading Indian bank with an extensive network of over 2,800 branches in India and 71 overseas offices in 25 countries.

BoB is the only Indian bank offering full-fledged banking services in the UAE. The bank has six branches, in Dubai, Deira, Sharjah, Abu Dhabi, Al Ain and Ras Al Khaimah and an electronic banking service unit at Jebel Ali near Dubai.

In Oman, the bank has three branches. In Bahrain the bank operates one branch.

The Bank also has plans to have its presence in all Gulf Corporation Council (GCC) countries.

/TopNews.in/

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Citi launches Shariah-compliant products in UAE

Citigroup said on Monday it will be launching a series of Shariah-compliant banking products in the UAE first in order to help companies better manage their working capital needs.

The major bank said that the new banking products, which will initially be launched in the UAE before other markets, were designed for a growing number of its corporate customers who were looking for competitive Shariah-compliant alternatives to conventional products.

"The Citigroup treasury and trade Shariah-compliant services are in line with Citi's strategy to offer our clients Shariah-compliant working capital products in the UAE to be later introduced to various other markets," said Samad Sirohey, chief executive officer of Citi Islamic Investment Bank and head of Global Islamic Banking.

Citi, which also recently launched escrow services based on a Murabaha structure, said it products would include cash management products for current and saving accounts as well as trade products, which related to import finance and trade services.

The launch of the Shariah-compliant products by Citi in the region comes soon after the news that Alberto Verme, co-head of the global investment banking team, is relocating to Dubai from Citi's headquarters in Canary Wharf, London.

The Gulf shares close relations with Citigroup, with Saudi Arabia's Prince Alwaleed bin Talal currently its largest shareholder, and both the Abu Dhabi Investment Authority and Kuwait Investment Authority recent investors.

Citi, which is ranked as the world's leading bookrunner of global Islamic finance transactions, set up its global Islamic banking operations in 1981 in London.

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Physical cheques to be replaced by an image cheque

The physical cheques will go from the banking system in the UAE on November 1, 2008, and the current automated cheque clearing system (ACCS) will be replaced by an image cheque clearing system (ICCS), according to a Central Bank circular.
After the success of the parallel running of ICCS along with the automated system between October 21, 2007 to January 31, 2008 within a group of banks, the Central Bank has decided to proceed with live operation of the system from July 1, 2008.

New system

The circular explains how the new system will function. Cheques deposited by bank customers will be scanned by branches of all banks and sent to their headquarters or regional offices (for foreign banks).

Each headquarter or regional office will then send all imaged cheques to the Central Bank. Banks that do not have a central system should authorise their branches to send imaged cheques directly to the ICCS.

Payment by banks will be made against their account holder's cheque images, provided sufficient funds are available and no discrepancies are noticed. Original cheques once imaged will be sorted within the premises of the bank concerned, and sent to the issuing banks within five days, directly from the presenting banks.

At the issuing banks, original cheques received will be verified for forgery and discrepancies and the issuing bank will have 30 days to claim against the presenting bank concerned.

The issuing bank must make its claim for good value of the cheque at the Central Bank, and the original cheque should be attached for the processing at the Central Bank.

The Central Bank has further clarified that the decision of the apex bank will be binding on both the issuing bank and presenting bank.

However, both parties will have the right to go for legal recourse if they desire so.

The high-value original cheques will have to be retrieved and submitted with the Central Bank or courts as and when they are demanded, within a period stated by the Central Bank.

The Central Bank will store cheque images through ICCS for a period of not less than 20 years and will be certified to the courts, if required.

/The Business Weekly/

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Largest reinsurance firm launched

Dubai Group, the leading diversified financial services company of Dubai Holding, announced yesterday the launch of ACR ReTakaful Holdings Limited, the world's largest reinsurance company with a paid-up capital of Dh1 billion.

ACR Retakaful Holdings Limited is a joint venture between Dubai Group, Khazanah Nasional Bhd, the investment arm of the Malaysian Government and Singapore-based Asia Capital Reinsurance (ACR).

The deal was completed through Dubai Group's subsidiary, Dubai Banking Group - the global Shariah-compliant investment company. The company will focus on general (non-life), non-cyclical and large speciality risks in infrastructure and transportation industries such as aviation, marine, energy and engineering and will lead the way in channelling these traditional risks from the conventional market into Islamic compliant takaful channels.

"The joint venture comes at a time when the Middle East's retakaful market is expanding. We have a proven track record of successful accomplishments within the reinsurace sector highlighted by our Al Fajer investment in Kuwait. Through our strategic investments, we will continue to play a major role in the regional Islamic finance sector," said Soud Ba'alawy, Executive Chairman of Dubai Group. /MENAFN/

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Tamweel closes syndicated bank facility

Tamweel has closed a $235 million syndicated bank facility, which was subscribed to by both regional and international financial institutions, including some from the Far East.

“In this period of marked global financial instability, the international financial services community is more eager than ever to tap opportunities in high-growth emerging markets, especially the UAE,” says Vishnu Deuskar, Head of Global Markets at ABN Amro’s UAE operations.

ABN Amro and Noor Islamic Bank served as lead arrangers and joint book-runners for the transaction, priced in both dollars and dirhams and reaching maturity in three years.

This financing facility comes close to Tamweel’s closure of a $300 million exchangeable sukuk issue, whose order book was oversubscribed within hours of announcing in January. “The pricing, tenor and coverage of this facility are all extremely competitive, especially considering today’s challenging global economic environment,” notes Gaurav Agarwal, Chief Financial and Support Services Officer at the mortgage company.

The funds will come in handy for Tamweel’s overseas expansions, expected to contribute 30 per cent of total revenues by 2011. in February, it formalized plans to launch operations in Egypt by receiving a license from the Egyptian Mortgage Financial Authority. The launch of full-scale operations is set for the second quarter.

Tamweel already has a joint venture agreement with the Al Oula Development Co in Saudi Arabia.

Tamweel has recorded net profits of Dh176.34 million in the first three months of 2008, which represents a 246 per cent increase on the Dh50.47 million recorded last year. Islamic financing and investing assets rose to Dh6.63 billion from Dh3.01 billion a year before.

Also in the first quarter, Tamweel booked Dh2.54 billion in financed properties, while the accumulated financing assets has totaled Dh11.52 billion.

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Citigroup Inc. relocates investment banking to Dubai

Citigroup Inc. may be based in New York, but it's gaining more of a Middle East influence.

The financial conglomerate on Thursday added to its close history with the region by sending Alberto Verme, co-head of its investment bank, to Dubai. Verme will be the first major U.S. investment-banking chief stationed in Dubai and the latest in a series of ties made between Citigroup and the region's growing financial community and clout.

Citigroup said Verme's assignment "underscores Citi's commitment to the Middle East, one of the world's fastest-growing and most important regions, and is consistent with Citi's efforts to deploy its best leaders against its most important and promising growth opportunities."

In November, a cash-strapped Citigroup solicited a $7.5 billion investment from Abu Dhabi Investment Authority. That move, along with other sovereign-fund investments in U.S. financial institutions, stirred controversy about foreign intentions and the safety of U.S. banks.

But what has been new for some banks is familiar territory to Citigroup. Saudi Prince Al-Walid bin Talal owns more than 5% of Citigroup through investments he began building in the 1990s. Citigroup has a 50-year presence in the region, which it groups internally with Africa and Europe.

Critics may wonder why Dubai, part of the United Arab Emirates, a nation of only four million, and not China or India? Although the country's coffers swell with oil wealth, nearly 20% of the population lives below the poverty line.

The answer may lie in focus. China and India are building economies still largely based on manufacturing. Dubai and Abu Dhabi are aggressively building financial infrastructure as evidenced by their willingness to invest in U.S. banks and European stock exchanges.

The company said Verme will continue to share global responsibility for investment banking with Ray McGuire, who remains based in New York. /CNN/

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RERA: Four billion Dirhams deposited in escrow accounts

A total of AED4 billion have been deposited by developers in escrow accounts with 33 banks approved by the Dubai Real Estate Regulatory Agency (RERA), said Marwan Bin Ghulaita, the agency's CEO.

Speaking at the regular monthly meeting of the Dubai Property Group (DPG), Bin Ghulaita announced that the number of projects registered with RERA amounted to 1,560 projects, 476 of them have trust account. He noted that by the end of April, RERA had registered 710 developers, 1,487 brokers' offices and 2,909 agents.

RERA and Dubai Land Department representatives presented the latest procedures and regulations for registering and transferring freehold properties in Dubai to over 300 DPG members. In addition to Bin Ghulaita, Mohammed Sultan Al-Thani, Assistant Director General of the Dubai Land Department and Khalifa Al-Suwaidi, IT Director at the Dubai Land Department were present.

Al-Thani announced that electronic forms for real estate agents are ready and can be easily accessible through the Department's website, noting that by November 1st the Land Department will not clear any property transactions without these new official forms which are only accessible to RERA accredited real estate agents.

He added that the Land Department will be introducing two registration systems: one for completed property (the register) and the other for ?off plan? sales (the pre-register) in the coming two weeks. According to Al-Thani, after introducing this system, all new purchasers should go directly to the Land Department to register their property.

For his part, Al-Suwaidi introduced the land presale electronic forms to the members of the DPG announcing that the Land Department would launch a comprehensive training program covering the new procedures on May 5th. The training programs will become compulsory for real estate brokers in 2009.

According to Al-Suwaidi, these forms include full registration of buyer's information, property details, and the amount sold for. They will permit developers to input all pre-sale, change of ownership and mortgage activities. "These forms have many useful features. They are easy to use and secure and compatible with the trust accounts and the title deed system. Moreover, these forms can calculate payments and fees and issue contracts online,'' he explained.

''Use of these forms is mandatory and non-compliance would incur penalties,'' noted Bin Ghulaita who also called for developers to stop charging transfer fees. All transfers, he said, should be registered with the Dubai Land Department only.

He also noted that around 4,000 property professionals are doing business illegally in Dubai.

Bin Ghulaita added that by 2009, RERA plans to gradually incorporate all new properties and rental contracts for commercial and residential units into its registration process and aims to collect a database of rental agreements in Dubai.

"The creation of RERA, and introduction of new laws with the support of Land Department, has so far generated stability in the real estate market," said Adel Lootah, the Executive Director of Dubai Property Group. "The introduction of these forms will further help eradicate bad practice and ensuring transparency across the real estate industry which will eventually benefit the investors and developers alike and attract more investment." WAM

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