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Global sukuk market seen to grow; Access Bank Ghana to raise capital

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Global sukuk market seen to grow; Access Bank Ghana to raise capital

* The global sukuk market is set to grow in 2018 as a number of governments seek to diversify their financing and meet the liquidity needs of Islamic retail banks, according to Moody's. Niger, Kenya, Ghana, Morocco, Tunisia and Algeria all plan to take advantage of the asset-based nature of sukuk financing to fund infrastructure development. Moody's noted that a number of factors will support sovereign sukuk issuance, including high borrowing needs for Gulf Cooperation Council states, which the agency expects to reach approximately $148 billion.

MIDDLE EAST AND NORTH AFRICA

* Moody's said the outlook for GCC banks is stable overall reflecting strong financial fundamentals, particularly in the largest banking systems, that provide resilience to profitability and loan quality challenges from slower economies. However, the agency noted that fiscal and geopolitical risks continue to pose challenges for various countries, specifically in Qatar, Oman and Bahrain.

* The heads of state of Saudi Arabia, the United Arab Emirates and Bahrain did not attend the GCC meeting hosted by Kuwaiti Emir Sabah al-Ahmad Al Sabah, in an apparent snub to Qatari leader Tamim bin Hamad Al Thani, who was present at the summit, which also ended a day early, Bloomberg News reported. Saudi Arabia, the UAE, Bahrain and Egypt have been in an ongoing diplomatic row with Qatar since June. Meanwhile, the UAE and Saudi Arabia announced an economic and military alliance, threatening the future of the GCC, the Financial Times noted.

* Banks in the UAE are expected to adjust their fees in anticipation of the application of the value-added tax early next year, Emarat Al Youm reported.

* Bahrain-based Securities and Investment Co. BSC (c) has called for a Dec. 11 shareholders meeting to consider repurchasing up to 42,848,774 shares of the company with a nominal value of 100 fils per share, representing up to 10% of the company's issued and outstanding share capital.

* MEDGULF Cooperative Insurance and Reinsurance Co. said it might not be able to comply with a required solvency margin set by Saudi Arabian Monetary Authority by the Dec. 31 deadline.

* Mizrahi Tefahot Bank Ltd. said it has completed negotiations with its employees' organization and signed on Dec. 3 a special collective agreement for 2016 to 2021, thus ending a labor dispute.

* A.M. Best has removed from under review with positive implications and affirmed the financial strength rating of B++ (Good) and the long-term issuer credit rating of "bbb" of First Insurance Co. Ltd. The outlook assigned to the financial strength rating is stable, while the outlook assigned to the long-term issuer credit rating is positive.

* A.M. Best has assigned a financial strength rating of B++ (Good) and a long-term issuer credit rating of "bbb" to Al Ahlia Insurance Co. BSC. The outlook assigned to the financial strength rating is stable, while the outlook assigned to the long-term issuer credit rating is positive.

* Capital Intelligence Ratings affirmed the long-term foreign-currency rating and raised the short-term foreign-currency rating of Al Rajhi Banking & Investment Corp.

* The Central Bank of Egypt said it has also paid back $2 billion to the African Export-Import Bank under a repurchase agreement, bringing the regulator's total repayment to $4 billion, Reuters reported, citing El-Borsa. The Middle East News Agency previously reported that the regulator paid back $2 billion of a $3.2 billion loan to Afreximbank, with the remaining $1.2 billion planned to be paid by December-end.

* The World Bank's Board of Executive Directors approved a $1.15 billion development policy financing loan for Egypt to support the country's economic reform program. The World Bank said the loan includes financing contributions of $500 million and $150 million from development partners African Development Bank and the U.K., respectively.

* The Central Bank of Egypt says its financial reserves continue to improve in the wake of the country's IMF bailout, increasing by $20 million in the course of November, to $36.72 billion, Egypt Independent reported.

* The Export Development Bank of Egypt (SAE) said it will sign a $500 million exclusive joint agreement with the African Export-Import Bank and Export Credit Guarantee Co. of Egypt on Dec. 8, according to Reuters.

* EU finance ministers have added Tunisia to a blacklist of non-cooperative tax jurisdictions, Jeune Afrique reported. There are now 17 jurisdictions on the Council of EU Finance Ministers' list. The EU's Tunisian office said the decision could be reversed through actions by Tunisia, while former Tunisian Finance Minister Hakim Ben Hammouda said the government was not taking the issue seriously enough.

EAST AND WEST AFRICA

* Nigeria's credit profile is constrained by the continued exposure of the sovereign balance sheet to shocks, weak institutions and elevated deficits, Moody's said in a report. Until a durable increase in non-oil revenue is achieved, the Nigerian government's balance sheet will remain exposed to further shocks, the agency noted.

* Switzerland said it was returning to Nigeria $321 million diverted by Sani Abacha, who ruled Nigeria from 1993 to 1998, Financial Afrik reported. The funds were initially deposited in banks in Luxembourg. Abacha is accused of embezzling $2.2 billion from his country's central bank.

* The Central Bank of Kenya is set to hold its next monetary policy committee meeting Jan. 22, 2018. The regulator held its benchmark lending rate at 10.0 % at its last meeting in November, Reuters noted.

* Access Bank (Ghana) Plc will seek shareholder approval to raise 150 million Ghanaian cedi through a bond program and 300 million cedi through a rights issue as part of efforts to meet the new capital requirement set by the Bank of Ghana, Graphic Online wrote. Banks in Ghana have a December 2018 deadline to meet the new requirements.

* The specter of a devaluation of the CFA franc hovers over the Central African region, despite regular denials from such officials as Abbas Mahamat Tolli, the governor of its central bank, Jeune Afrique said. A devaluation would see the costs of debts increase for countries that have recently launched Eurobonds, such as Cameroon, Gabon, Ivory Coast and Senegal.

* Meanwhile, a study by S&P Global Ratings indicated that the two monetary unions in Africa — the Central African Economic And Monetary Community and the West African Economic and Monetary Union — using the CFA franc are facing stiff scrutiny of the long-term sustainability of their currencies, which are pegged to the euro. The agency, however, noted that despite these pressures, a sudden and significant drop in the value of the Central African and West African CFA francs is not currently expected.

CENTRAL AND SOUTHERN AFRICA

* Until the end of the year, Angola is expected to address a total of 225 billion kwanzas of bad loans, or three quarters of the country's bad loans, according to Recredit, the company created to deal with the country's nonperforming assets, Macauhub wrote.

* The IMF said it has started two weeks of planned talks with the Republic of the Congo over a bailout package to help ease the African country's rising debt, Reuters wrote.

* Angola's Debt and Securities Exchange has all the necessary infrastructure to start operating with corporate shares, according to the market commission administrator, Ottoniel Santos, Angola Press reported. The launching of the first issuing is only depending on the companies.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: CTBC Financial penalized over bail money; Sonali Bank seeks to recover funds

Europe: Portugal's Centeno to head Eurogroup; Basel rules deal seen this week

Latin America: BBVA accepts Scotiabank offer; Indusval to develop digital platform

North America: BBVA accepts Scotiabank offer for BBVA Chile; BMO fiscal Q4 profit slips

North America Insurance: CVS-Aetna deal would form health conglomerate; Irma claims top $6B in Florida

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Sheryl Obejera, Henni Abdelghani, Pádraig Belton and Mariana Aldano contributed to this report.

The Daily Dose Middle East and Africa has an editorial deadline of 5 a.m. London time. Some external links may require a subscription.