Saturday, April 24, 2010

Dubai World update and more

In contrast with the 1% rate offered to debt holders by Nakheel, the company has offered trade creditors tradable sukuk with a 10% coupon. The distinction, as described in a Reuters article is that it will allow trade creditors to monetize the sukuk at a better price. However, this could also make debt holders reject the restructuring plan. The price trade creditors could receive from selling the sukuk would depend not only on the coupon, but on the perceived ability of Nakheel to make good on its obligations following the approval of the restructuring plan. Local banks are seeking better terms in the Dubai World restructuring plan.

Rushdi Siddiqui writes in Gulf News about the need for Islamic financial institutions to view public relations as an important part of business development to expand their appeal.

Other News

  • A contributor to describes the potential for Islamic microfinance and laments the shortage of Islamic banks becoming involved with microfinance.
  • The sukuk market is not expected to regain its growth until 2011-2012 according to analysts. 2010 is expected to be flat compared with 2009, where there was significant recovery after a multi-year low in 2008.
  • The Saad Group has yet to reach an aggrement with the banks to whom it owes at least $6.5 billion.
  • Without naming The Investment Dar, Lahem al-Nasser, writes a damning criticism of their challenge in the case surrounding the wakala agreement with Blom Bank in Asharq Alawsat calling their legal claims 'Machiavellian". Andrew Cunningham, the managing director of the Financial Services Volunteer Corps adds his thoughts in a Financial Times opinion piece.
  • Islamic banks in Malaysia and the UK plan further cooperation to increase the number of cross-border transactions.

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