Tuesday 21st April 2015
NEWS TICKER MONDAY APRIL 20TH 2015: European President Donald Tusk has called an extraordinary European Council on migratory pressures in the Mediterranean for Thursday this week to discuss how to tackle the growing tragedy of hundreds of would-be immigrants dying at sea on the way to trying to build a better life. “The situation in the Mediterranean is dramatic,” says Tusk. “It cannot continue like this. We cannot accept that hundreds of people die when trying to cross the sea to Europe. The objective of the summit is to discuss, at the highest level, what we, the Member States and the EU institutions together, can and must do to alleviate the situation now. I do not expect any quick-fix solutions to the root causes of migration - because there are none. Had they existed, we would have used them long ago. But I do expect that the Commission and the European External Action Service will present options for immediate action. And I do expect Member States will contribute immediately.” – The Nasdaq Stock Market says trading was halted today in ForceField Energy Inc (Nasdaq:FNRG) at 10:21:37 Eastern Time for "additional information requested" from the company at a last price of $3.11. Trading will remain halted until ForceField Energy Inc. has fully satisfied Nasdaq's request for additional information. For news and additional information about the company, please contact the company directly or check under the company's symbol using InfoQuotes on the Nasdaq web site - PEGAS, the pan-European gas trading platform operated by Powernext, successfully launched physically settled Spot and Futures contracts, quoted in pence per therms, for the Belgian Zeebrugge Beach (ZEE) gas hub on April 17th 2015. On the same day, a Daily Average Price index for the Zeebrugge Trading Point (ZTP) in Euros per Megawatt-Hour was introduced. The first transaction was completed on the first trading day at 08:49 AM CET on ZEE May 2015 contract at 45.025 pence per therm with a volume of 25,000 therms. This represented the first cleared futures trade ever made on the Zeebrugge hub. 14 trading members are set up for trading of the new products, with more members currently in the process of being admitted. “With the addition of the new ZEE contracts and with the ZTP and ZTPL (ZTP L-gas) products launched in July 2014, PEGAS is offering new trading opportunities through the widest range of products in two of the most important European hubs”, comments Dr Egbert Laege, chief executive officer of Powernext. Moreover, PEGAS is now providing a new ZTP Daily Average Price (DAP) index which is the weighted average of all transactions during a trading day - The value of real estate trades in Kuwait fell by 27% to KWD956m and the number of transactions fell by 28% to 692 in the first quarter this year according to statistics from the real estate registration department at the Ministry of Justice - The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) have pledged to enhance cooperation to respond more effectively to the needs of their common membership in a Memorandum of Understanding (MOU). The AMF and the IMF share common objectives of maintaining macroeconomic and financial stability, and accelerating broad-based and inclusive economic growth and job creation in the Arab region, in addition to strengthening capacity building. Under the MOU, the AMF and the IMF will continue to provide training opportunities to Arab officials, support the development of domestic capital markets in the Arab countries, and strengthen their collaboration on the Arabstat initiative, which aims at the development of efficient statistical systems in the region. The two parties also intend to carry out joint analytical work to inform Arab finance ministers and central bank governors, and to organise high level events on topics of mutual interests and priority for the region – The Kuwait Turk Bank will open in Frankfurt in July offering Shari’a compliant retail banking services having just received a licence from German market authorities. The bank already has a branch in Mannheim, but this new licence will allow it to operate as a fully functional bank in the country - The Joint Committee of the European Supervisory Authorities (ESAs) is organising the third Joint ESAs Consumer Protection Day on 3 June 2015 in Frankfurt am Main. The event will bring together, from all over Europe, thought leaders of consumer/investor organisations, national regulators, EU institutions, academics and key market participants. The keynote speech will be delivered by Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union. The focus will be on conduct risk; the next decade in the banking, insurance, pensions and securities sectors and the growing digitalisation of financial services. The Joint Committee of the European Supervisory Authorities consists of the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA), and the European Insurance and Occupational Pensions Authority (EIOPA). The Straits Times Index (STI) ended 21.94 points or 0.62% lower to 3503.25, taking the year-to-date performance to +4.10%. The top active stocks today were SingTel, which declined 1.12%, DBS, which declined 0.80%, Keppel Corp, which closed unchanged, CapitaLand, which declined 1.09% and UOB, with a 0.29% fall. The FTSE ST Mid Cap Index fell 0.32%, while the FTSE ST Small Cap Index fell 0.57%. The outperforming sectors today were represented by the FTSE ST Health Care Index, which rose 1.77%. The two biggest stocks of the Index - Raffles Medical Group and Biosensors International Group – ended 1.02% higher and 5.03% higher respectively. The underperforming sector was the FTSE ST Utilities Index, which slipped 1.65%. United Envirotech shares rose 3.15% and Hyflux declined 1.07% - The performance of the UK buy-to-let (BTL) residential mortgage-backed securities (RMBS) market remained steady in the three months ended February 2015, according to the latest indices published by Moody's Investors Service. The 90+ day delinquency rate and outstanding repossessions stood at 0.7% and 0.1% respectively in February 2015, unchanged from November 2014. Moody's annualised total redemption rate decreased to 9.3% in February 2015 from 11.2% in November 2014, representing a 17.5% drop - Proserv and hazardous environment specialist JCE Group (UK) Limited have announced a strategic working partnership in the Middle East and Africa (MEA) region. The agreement will see Proserv supporting JCE Group by offering its products and services whilst also delivering in-country engineering and technical support. Together, the companies aim to further build on their industry-leading standards of quality, service and reliability, and help cultivate a world-class QHSE culture - Deutsche Asset & Wealth Management (Deutsche AWM) has launched a physical replication exchange-traded fund (ETF) tracking the JPX-Nikkei 400 Index of Japanese stocks. At the same time, three new currency-hedged share classes of existing db X-trackers ETFs have also been listed. db x-trackers JPX-Nikkei 400 UCITS ETF (DR)1 tracks an index of 400 Japanese stocks selected on the basis of quantitative and qualitative screening. As the underlying index is not a standard capitalisation-weighted benchmark the ETF falls into the strategic beta – also known as ‘smart beta’ – category of investments.

Investors pile into Islamic bonds

Wednesday, 23 May 2012
Investors pile into Islamic bonds April and May looked to be banner months for sukuk. Two deals, one from the Saudi Electricity Company (SEC) and the other, from Banque Saudi Fransi, the Saudi lender part-owned by Credit Agricole, marked two rare but popular US dollar denominated issues which were highly prized by investors. The benchmark deals helped underscore growing investor appetite for Islamic bonds. http://www.ftseglobalmarkets.com/

April and May looked to be banner months for sukuk. Two deals, one from the Saudi Electricity Company (SEC) and the other, from Banque Saudi Fransi, the Saudi lender part-owned by Credit Agricole, marked two rare but popular US dollar denominated issues which were highly prized by investors. The benchmark deals helped underscore growing investor appetite for Islamic bonds.

Saudi Fransi, Saudi Arabia’s fifth largest bank, launched $750m five-year Islamic bond mid-month at par amid strong investor demand for the issue in mid-May. The issue is the bank’s first sukuk sale under a recently-established $2bn debt programme. The sukuk came in at a spread of 185 basis points (bps) over midswaps, at the lower end of its ­indicated range. Initial price guidance was 200bps over midswaps. The deal was heavily oversubscribed, attracting investor orders worth $4bn, under­scoring growing investor appetite for sukuk issuance. The sukuk carries a profit rate of 2.947%. Citi, Deutsche Bank and Credit Agricole were arrangers on the deal.

The deal marks the second dollar denominated sukuk emanating from the Kingdom so far this year. Saudi Electricity’s $1.75bn sukuk, issued three weeks earlier, raised the bar with some $17.5bn in investor orders.  The Saudi Electricity Company (SEC), which is rated A1/AA-/AA- all Stable, is the largest utility in the GCC. The issue was made up of a five year $500m tranche and a $1.25bn ten year element. The ­transaction was led by Deutsche Bank and HSBC marked the inaugural ­international sukuk issuance by SEC and the largest international debt capital markets issuance out of Saudi Arabia for some years. The issuer also wanted to achieve a long tenor bond supported by a diversified investor base, which the arrangers helped secure after a comprehensive global road show. The dual-tranche Sukuk transaction was well received globally and generated a large order book with over 440 investors placing orders.



Shortly after the issue the SEC’s chief executive Ali Al Barrak explained, “The sukuk issue is important to us for strengthening our funding mix, accessing longer-tenor financing, broadening our investor base and helping us become more in line with our global peers while supporting SEC’s capital expenditure requirements.”

Saudi Arabian dollar-denominated bonds come to market relatively infrequently, and attract substantial demand when they do; illustrating that Gulf issuers are benefiting from their own economic micro-climate and are providing something of an oasis for investors starved of comprehensive corporate issuance opportunities. 

Investor appetite for the deals was marked and might just be a sign of a growing preference for Islamic instruments. The evidence is still thin: however Banque Saudi Fransi’s existing $650m conventional bond, which carries interest of 4.5% and matures in 2015, was bid at just over 103.97 in the second week of May, to yield about 2.8%, coming under some selling pressure ahead of the new issue.

Also in mid May Islamic Development Bank (IDB) enhanced the size of its medium term notes (NTN) ­programme from $1.5bn to $3.5bn, which will be issued in both London and Kuala Lumpur. The IDB’s forthcoming medium term sukuk (which is expected to range between five and seven years) will be issued under this programme sometime in June and is expected to raise between $750m and $1bn. Funds will be used to provide blended credits in support of capital goods projects in member countries. IDB, which is AAA-rated, priced a $750m five-year sukuk last May at a spread of 35bps over midswaps to yield 2.35%. According to local Saudi press reports, the sukuk will be 144a-compliant and, therefore, open to investors from the United States; though the IDB did not respond to questions about its forthcoming issue. 

Elsewhere, bond traders expect the first restructuring of an Islamic bond.  United Arab Emirates’ Dana Gas, the Sharjah-based energy company, is expected to restructure its $920m sukuk in coming weeks as investor concerns have heightened over the ability of the utility to meet its payment ­commitments. Up to now no Islamic bonds have been renegotiated though there have been examples of outright defaults (in both Saudi Arabia and Kuwait).

Dana has reportedly hired Blackstone, Latham Watkins and Deutsche Bank to advise on the various options for repaying the sukuk. The company is “committed to finding a consensual solution that is equitable to all stakeholders”, it said in a statement to the Dubai stock exchange.

Meantime, the Central Bank of Bahrain (CBB) says its monthly issue of the short-term Islamic leasing bonds, Sukuk Al-Ijaara, has been oversubscribed by 175%. Subscriptions worth BD35mwere received for the BD20m issue, which carries a maturity of 182 days. The expected return on the issue, which matures in mid-November 2012, is 1.34%.

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