The Financial Thread

[Bahraini Spirit]

Hi, well it's about time we have a thread related to financial news, enjoy:

BMA & TOCOM join hands, sign MoU
The Bahrain Monetary Agency (BMA), the central bank and financial services regulator of the Kingdom of Bahrain, and The Tokyo Commodity Exchange (TOCOM), the world's leading bullion and energy exchange, have today signed a Memorandum of Understanding (MoU) aimed at developing cooperation between the two institutions.

The MoU was signed, at TOCOM's premises in Tokyo, by H.E. Rasheed Mohammed Al Maraj, Governor of the BMA, and Mr. Masaaki Nangaku, Chairman of TOCOM. Also present was H.E. Khalil Ibrahim Hassan, Bahraini Ambassador to Japan.

The MoU provides a formal framework for a cooperative relationship between the BMA and TOCOM. The two institutions intend to develop an institutional framework to enable financial institutions, brokers and others in Bahrain to conduct transactions on the TOCOM that comply with the requirements of the Shari'a, Commodity Exchange Law of Japan and the general rules of the Exchange.

Based on the MOU, TOCOM and the BMA will engage in sharing the Exchange documentation and obtaining approval from BMA's Shari'a Advisory Board to designate the TOCOM as the BMA's approved and preferred trading house for oil exchange transactions conducted in accordance with Shari'a requirements.

'We are delighted to enter into this agreement with The Tokyo Commodity Exchange (TOCOM),' said Mr. Al Maraj, following the signing of the MoU.

'We are keen to work closely with TOCOM and co-operate in developing commodity based contracts that are in line with Shari?fa principles.'

Commenting on the occasion, Mr. Nangaku said, 'It is an honor for TOCOM to establish such a partnership with the Bahrain Monetary Agency (BMA).'

'Since the creation of TOCOM in 1984, one of TOCOM'?'missions has been to contribute to the development of the global and Asian marketplace. We are very much delighted to having this opportunity to cooperate with BMA to further expand the scope of this mission by making TOCOM markets available to financial institutions in Bahrain.' Bahrain is the leading international financial center in the Middle East region, he pointed out.

The BMA is seeking to develop Shari?fa compliant products, which enable Islamic financial institutions to trade in various types of commodities listed on the TOCOM. The assets of the global Islamic banking industry are currently estimated to exceed US$250 billion.

TOCOM hopes the alliance with the BMA, which enjoys a reputation of being the most innovative and highly regarded regulator in the Middle East, will promote market growth by attracting new market participants from Bahrain with the support of the BMA, and will strengthen TOCOM's position as the provider of benchmark prices to the world market, and expand the trading of commodities by Islamic financial institutions.

[Bahraini Spirit]

AFS and Euronet Worldwide join forces to launch Euronet Middle East


Arab Financial Services Company B.S.C (c) (AFS), the region's leading provider of electronic payments and consumer finance outsourcing services has announced in September 2005, the launch of a joint venture with Euronet Worldwide, Inc. (Nasdaq: EEFT), a worldwide renowned electronic payments provider to boost ATM and POS driving in Middle-East and North Africa.

The new joint venture company, 'Euronet Middle East', will offer unsurpassed outsourcing capabilities to banks and financial institutions across the Middle East, North Africa and Pakistan.

Euronet Middle East will be based in the Kingdom of Bahrain and will provide bank clients with debit card management and operational services, ATM and POS outsourcing services, Chip card issuing services, and Gateway services to Visa/MasterCard and National switches. The company will also provide value added services including bill payment and GSM top-up transactions, among others.

Euronet Middle East will have the region's largest state-of-the-art card processing centre with a scalable capacity, utilizing Euronet's core software product, Integrated Transaction Management (ITM), which currently drives Euronet's processing centers in Europe and Asia Pacific. Moreover, Euronet Middle East has been licensed and regulated by Bahrain Monetary Agency.

Ghazi Abdul Jawad, chairman of AFS, said: 'The joint venture allows AFS to leverage its card outsourcing market leadership in the region with Euronet's proven software solutions and outsourcing services. Our strong business foundations and cultural affinity in the region, along with the technical and management support from Euronet, will ensure the success of this new venture.'

AFS will provide Euronet Middle East with the market reach required to gain a strong foothold in the region and Euronet will provide the technical expertise to operate the debit switching, ATM and POS outsourcing business model.

'The new joint venture allows Euronet to take advantage of the growing demand for innovative financial outsourcing solutions in the region and establish a world-class processing centre locally,' said John Romney, Euronet Worldwide Managing Director of EMEA region. 'This mutually-beneficial venture ensures that client banks in the region will benefit from the combined strengths and capabilities of Euronet and AFS.' added Romney.


'Euronet Middle East will operate the largest card processing and Management center in the Middle East with a capacity of 30 million transactions per month. Our state-of-the-art technology and consultancy services along with our dedicated account management resources will ensure that our client banks receive unsurpassed service quality which will enhance their retail banking performance.'

added Mr. Sael Al Waary, Chairman, Euronet Middle East.

[Pearl of the Gulf]

December 1, 2005

A call for bankers and financial regulators to put into practice “wholeheartedly” the Basel II accord was made by Bahrain Monetary Agency governor (BMA) Rasheed Mohammed Al Maraj yesterday as he opened a high-level symposium on the global implementation of new international bank-capital rules.

The one-day event, titled “Basel II and Risk Management: Meeting International Standards,” was organised by the Institute of International Finance, a Washington, DC-based global association of financial institutions.
Present at the event were senior regulators and bankers including Charles Freeland, Deputy Secretary-General of the Basel committee of the Bank for International Settlements. Discussions focused on the Basel II accord and its implementation in the Gulf region. Participants represented senior officials from the region’s central banks and industry executives.

Al Maraj urged the financial-service industry in the region to implement Basel II “wholeheartedly” as the new capital rules have the potential for bringing about significant improvements in both the quality of supervision by regulators and risk management by banks. “Basel II constitutes the most significant change to banking regulation in nearly 20 years.”

BMA has endorsed the new accord and intends to implement it in two stages: pillars 2 and 3 (supervisory and disclosure requirements) in 2007, followed by pillar 1 (minimum capital requirements) from 2008 onwards. The event is sponsored by Gulf International Bank and Arab Banking Corporation.

[Pearl of the Gulf]

MENAFN - 05/12/2005

A central bank with a $1.32 billion capital will be established in Manama to replace the Bahrain Monetary Agency to meet the Kingdom's comprehensive development plan for the banking sector, Bahrain Tribune reported.

The bank might have branches inside and outside the Kingdom to facilitate its activities. It will be an autonomous commercial and financial organization and have its own budget.

The bank in association with the Ministry of Finance will protect the local currency's value through ensuring certain growth in economy.
It will also fulfill the duties of the government's bank, in terms of advices and being the representative of the government at Arab and international monetary agencies.

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[Bahraini Spirit]

The Bahrain Monetary Agency (BMA) has granted licences to the Global Islamic Clearing Company (GICC) - an Islamic brokerage company - allowing liquidity clearing in the region, as well as another licence for the establishment of an Islamic investment advisory and consultancy firm specialising in structuring Islamic commodity funds.

The GICC is being established as a joint venture between Bahrain-based Islamic Finance Consultants (IFC) and UK-based financial services firm Dawnay Day Global Investment.

The GICC will undertake Islamic assets facilitation and liquidity clearing from its base in Bahrain.

Currently, liquidity management by Islamic banks is largely transacted through commodity murabaha contracts, via brokers in London.

With the establishment of the GICC, Islamic banks in Bahrain and the region will be able to manage their wholesale and retail liquidity more efficiently in the regional time zone.

"The Bahrain operation of GICC will provide a platform in the region for Islamic banks to interact, raise and place funding," said BMA licensing and policy director Ahmed Al Bassam.

"The establishment of the GICC will add greater sophistication to the Islamic banking industry and will add value to the development of Bahrain as a well-rounded and mature centre for Islamic banking and finance."

The Dawnay Day Group, founded in the UK in 1928, specialises in financial services and property investment, while Dawnay Day Global Investment Limited - also based in London - provides specialist services to clients across the Middle East.

The investment advisory and consultancy firm will be established by professional investors in Islamic funds and the proposed firm plans to offer technical support relating to the structure and acceptability of trade and commodity transactions in compliance with Sharia principles.

"The BMA remains committed to supporting the advancement of Islamic financial services and enable the industry to capitalise on the tremendous opportunities opening up in the wider Middle East region," said Mr Al Bassam.

On its part, the BMA continues its work in developing Islamic debt market instruments.

The BMA also works on a number of market development issues, including a new licensing framework, which will provide additional flexibility to financial institutions wishing to do business in and from Bahrain.

"We welcome the continued interest from financial institutions and groups in doing business from Bahrain," said Mr Al Bassam.

"It is a demonstration of the excellent reputation the country enjoys as an international financial centre."

[Moody]

Good news, they will be inline with the LMC now,,

[Bahraini Spirit]

The world's first education, training and research centre for Islamic finance was announced by the Bahrain Monetary Agency (BMA) and the Bahrain Institute of Banking and Finance (BIBF) yesterday.The Centre for Islamic Finance Studies, which becomes operational next month, is being financed by an endowment fund which has been created through a BD500,000 contribution from the BMA, with more support pledged by six other Islamic banks to be announced later.

The fund's target is BD3 million with an additional BD500,000 sought for a physical expansion of the BIBF to accommodate the new centre.

BMA Governor Rasheed Al Maraj said the centre is envisaged as a catalyst for the next phase of development of the Islamic banking and finance industry.

He said the qualifications offered would create a new generation of professionally and technically qualified Islamic bankers and other professionals for the industry.

BIBF director Khalil Nooruddin said the centre will include a number of highly specialised professional programmes, including Certified Sharia Scholar (CSS), Certified Sharia Auditor (CSA) and Certified Islamic Accountant (CIA).

"There has been a need from the Islamic finance centre to have Sharia scholars who have a qualification to show their level of training," he said.

The centre will also fund research projects to stimulate product innovation.

Mr Nooruddin said the centre will offer courses to bankers based in Bahrain, the Gulf and internationally.

"In addition to face to face courses, there will also be distance learning," he said.

The centre will also co-ordinate with organisations serving the industry to create an International Accreditation Board to set standards for and endorse its programmes.

The announcement was made at a Press conference held on the sidelines of the 12th World Islamic Banking Conference (WIBC) was opened yesterday under the patronage of Prime Minister Shaikh Khalifa Bin Salman Al Khalifa.

More than 700 delegates from about 30 countries are taking part in the event at the Gulf Hotel's Gulf International Convention and Exhibition Centre (GICEC).

[Bahraini Spirit]

More consolidation is needed to strengthen the Islamic finance sector and allow it to compete more effectively with conventional banking giants, said Bahrain Monetary Agency (BMA) Governor Rasheed Al Maraj.He said many product areas in banking are now heavily concentrated in just a handful of banks.

"Only 25 banks account for roughly 40 per cent of the total assets of the world's top 1,000 banks and this trend towards market consolidation looks set to continue," he said.

"By way of comparison, the largest Islamic bank is nearly 100 times smaller than the largest of these global banks.

"Islamic banks need to consolidate and increase their financial strength if they are to meet the challenges posed by better resourced competitors."

Mr Al Maraj said regulators such as the BMA should not force these mergers into being but should provide a strong regulatory framework for them to take place smoothly.

He was speaking at the opening of the 12th Annual World Islamic Banking Conference (WIBC) yesterday at the Gulf Hotel's Gulf International Convention and Exhibition Centre (GICEC).

The two-day event, under the patronage of Prime Minister Shaikh Khalifa Bin Salman Al Khalifa, is organised by Dubai-based Mega Events.

More than 700 delegates from more than 30 countries are taking part in the event, being held under the theme Unlocking Market Opportunities: Consolidation, Innovation and Growth.

The delegates engaged in stimulating debate on major issues in the interactive conference sessions, which are being moderated by BBC Middle East Business Report presenter Nima Abu-Wardeh.

The World Islamic Banking Exhibition was also inaugurated by Mr Al Maraj.

It showcases leading Islamic banks, finance companies, media, insurance companies and information technology (IT) providers.

Chief executive officers from leading Islamic financial institutions debated the findings of the WIBC McKinsey Competitiveness Report 2005-2006 at the closed-door CEO Strategy Session.

The report by leading international strategy consultancy McKinsey and Company was launched at a pre-conference session on Saturday and highlights Industry trends and market performance insights.

[Pearl of the Gulf]

The first-ever dedicated bank for the tourism sector called International Tourism Bank (ITB), with a paid-up capital of $1 billion and issued capital of $2 billion, will usher in a new era in the development of the tourism industry in the Middle East, chairman and the managing director of Bahrain-based Investors Bank, Sami Al Bader, said yesterday.
ITB, under formation, will be based in Bahrain and open its doors for business early next year.
Al Bader, who also chaired Investors Bank's extraordinary general meeting (EGM), told Bahrain Tribune that the bank which had posted $60 million in net profit in the first 11 months of this year against just over $2 million in net profit last year, would be listed on the Bahrain Stock Exchange (BSE) on Tuesday.
Founder shareholders of ITB are keen to list the new entity on the Bahrain Stock Exchange with the intention to cross-list at Kuwait and Dubai bourses. "We have conducted successful road shows across the world in an effort to introduce the unique project to the outside world as well as Middle Eastern countries.
"Investors Bank, Bahrain, a financial consultant to the new project, is working with the founding shareholders to finalise the size of shareholding for founding members and public shares." ITB is a major step forward to consolidate the tourism and leisure industry of the Middle East region under one umbrella.
The idea had been endorsed by the chairman of the Arab Tourism Council, one of the major promoters of the ITB. Al Bader said: "In the Arab region we have billions of dollars in tourism projects in addition to billions of dollars spent every year by Arabs on tourism.
"The birth of ITB will give a new dimension to Arab tourism, either in projects or in the tourism industry itself." Al Bader added: "We have some very liberal and pro-active regulatory authorities in the Arab world, and ITB would based in one of the best suitable countries. The new entity aimed to consolidate the tourism sector of the Arab region by providing investments, services and technical support to tourism companies.

[Pearl of the Gulf]

Bahrain Tribune - 23/12/2005

In order to protect public money, the National Audit Court will extend its jurisdiction to all private companies and establishments which have 25 per cent and more public capital.
The Chamber of Deputies discusses tomorrow a parliamentary bill to vest more powers in the court which supervises only companies with more than 50 per cent public capital.

The courts monitors the financial affairs of government organisations and companies to prevent corruption and compiles its findings and observations in an annual report which is passed by the legislative authority.
The Bahrain Chamber of Commerce and Industry, however, fears that the bill might lead to red-tapism and unwarranted control on investment activities which might discourage foreign investors.

The BCCI says many companies might not be able to keep their trade secrets and the government would impose its decisions on the private sector.
The BCCI also fears that the Kingdom's years of hard work to establish a strong foundation and favourable environment for investments would be wasted if expatriate businesses were to leave for nearby countries which have more flexible rules and regulations.

Another argument the BCCI propounds is that the government invests its money in projects in and outside the Kingdom and the bill would increase the workload on the court.
The BCCI also opposes the proposed punishments such as life sentences for corrupt individuals, calling them too severe as they would scare away foreign investors.

Deputies Abdulhadi Marhoon, Hamad Al Muhanadi, Yousif Zainal, Abdulnabi Salman and Yousif Al Hirmi, who have tabled the bill, argued that the draft law aimed to fill the legislation gap and offer the highest protection possible to public money.

"Some laws are outdated or need to be updated to cope with the increasing number of white-collar crimes especially those involving public money," Marhoon said.

"The bill also aims to involve the public in the fight against corruption and to protect the kingdom's financial resources."
He said through the bill, the government could further protect foreign capital and encourage investors to establish businesses in the Kingdom.
The Legal Affair Directorate, however, feels the bill is not required because the Panel Code Law had enough teeth to protect public money.

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[Pearl of the Gulf]

i think that’s the right time for this decision, with more companies launching their IPOs someone needs to keep an eye on what’s going on.

[Bahraini Spirit]

Sounds good, I wish they introduced this way before. But yalla, better than never. Jail sentences for corruption are good, life sentence is too much.

[Bahraini Spirit]

MANAMA: Bahrain is launching a comprehensive plan to cut red-tape and streamline administrative procedures for investors, it was revealed last night. Details of the plan, being co-ordinated with the Economic Development Board, will be unveiled today.

Industry and Commerce Minister Dr Hassan Fakhro, who chaired a meeting of a taskforce in charge of identifying obstacles hindering trade activities, said the ministry has approved several measures in a bid to reduce bureaucracy.

Under the new procedures:

* Shares of joint stock companies can now be traded without seeking prior approval from the ministry to amend their internal laws;

* Private sector employees will also be allowed to trade in shares of joint stock companies unless there's a conflict of interest;

* Companies have also been given the green light to hold their annual and board meetings via conference calls or video calls;

* Companies can update their data electronically by liaising with Bahrain Investors' Centre.

A circular has already been issued to the investors' centre and Commercial Registration staff urging them to implement the new procedures.

A series of on-site workshops and training courses will be held to familiarise staff with the new procedures.

The Foreign Ministry has also agreed to open a liaison office at Bahrain Investors' Centre for on-the-spot ratification of trade agreements.

Commercial registers are also being reconsidered so as to accommodate more than one trade operation.

[Pearl of the Gulf]

Kuwaiti, Saudi investors form Tourist Bank in Bahrain

MANAMA, Dec 23 (KUNA) -- Most of the investors of the still forming Tourist Bank (TB) in Bahrain were Kuwaitis and Saudis, said here on Friday TB's concessionaire, Investors Bank.

Chairman of Investor's Bank Sami Al-Bader expected today, in a press statement, the TB to start functioning in Bahrain as soon as it would be established during the first quarter of 2006 with a capital of USD 2 billion. The first bank in the region to be specialized in tourism, he explained, would seek to develop tourism projects, in addition to attracting investors and urging them to convey grand projects in the region.

He noted that TB would implement two projects in Bahrain: the first project is to establish a shopping mall with tow residential towers valued at USD 100 billion; and the second project is to establish a resort valued at USD 70 million. (end) na.

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[Pearl of the Gulf]

i’m sure the 100billion figure in a typing error and it should be 100million but I very interested in hearing about these two projects.

[Bahraini Spirit]

Haha $100 billion, that'll be the biggest project in history.

[Pearl of the Gulf]

what do you expect kuwait news agency full of errors..

[Pearl of the Gulf]

Bahrain Tribune - 28/12/2005

The consolidated balance sheet of the banking system in Bahrain, comprised of full commercial banks (FCBs), offshore banking units (OBUs) and Investment banks (IBs), increased by $4 billion reaching $134.2 billion at end-November 2005, compared with $130.2 billion at end-October.

The Bahrain Monetary Agency (BMA) in monthly statistics released yesterday said that the foreign assets also increased by $3.2 billion and reached $11.59 billion against $110.30 billion in October.

The domestic assets reached $20.6 billion in November as compared with $19.9 billion a month earlier.

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[Pearl of the Gulf]

4 billion dollars in a single month!! that’s really impressive.

[Bahraini Spirit]

That's a healthy increase, should be great. I think we should have at the end of the year around 385 financial institutions.