Dubai Islamic Bank (DIB) will become the majority shareholder in Tamweel, one of the UAE's two big Islamic mortgage providers, paving the way for an end to almost two years of financial limbo. The deal is expected to lead to the long-awaited resumption of trading in Tamweel shares. DIB said yesterday it would increase its 20 per cent stake in Tamweel to 57.33 per cent, taking full control of a company it started in 2003 in a joint venture with Dubai World.
Tamweel, which amassed a portfolio of loans valued at about Dh10 billion (US$2.72bn) during Dubai's property boom, faltered at the end of 2008 when it struggled to secure financing to sustain its lending activities. It ceased doing business that November as a government panel contemplated a merger with Amlak Finance, the country's second Islamic mortgage provider. A source familiar with the talks said the increase of DIB's stake probably meant the merger plan was dead.
The transfer of control to DIB will allow Tamweel to resume lending, according to a statement from the Dubai Media Office. Adnan Chilwan, the head of retail and business banking at DIB, said shares would remain suspended in the short-term pending the outcome of a review of Tamweel. "We are reviewing Tamweel's business model and I can assure you that the shares will not be suspended for one day longer than is required," he said.
Shares of both Tamweel and Amlak have been suspended since merger talks began, frustrating investors and spurring a grey market in the securities. "This strategic move is the culmination of intensive efforts over the past few months to resolve the stalemate at Tamweel that will allow the company to resume its core activity of providing mortgages and real estate financing," the Dubai Media Office said. "The move will give new momentum to the local mortgage market, which has entered a recovery phase after a series of decisive measures taken by the Government in the wake of the recent global financial crisis."
After the transaction, Istithmar World, which owns about 20 per cent of Tamweel, will transfer its share to DIB along with other institutional shareholders including HSBC Dubai Capital Group (DCG), which owns 8.82 per cent, and Dubai Investment Group (DIG), a subsidiary of the Dubai Government-owned Dubai Holding. The companies would not say what price DIB would pay for the bigger stake but DIB has been accounting for its existing holding at Dh2.30 per share.
"All majority shareholders of Tamweel, including Istithmar, DIG and DCG among others, are satisfied with the process", said Abdullah al Hamli, DIB's chief executive. "Through this transaction, DIB will effectively buy out the larger stakeholders and be in a position to provide strong support to the mortgage lender going forward." The deal could be a mixed blessing for Tamweel and DIB, analysts say. While it was a victory for both Tamweel and for the resumption of mortgage lending in Dubai - Amlak and Tamweel together are estimated to hold more than half of all mortgages in the UAE - taking control of Tamweel could entail some financial stress for DIB. As the majority owner, DIB will have to consolidate Tamweel's profits and losses into its own financial performance at a time when the bank is trying reduce its exposure to property in the UAE.
"This adds another Dh9bn to Dh9.5bn in mortgage loans for DIB, which already has about 40 per cent of its loan book in real estate and mortgages," said Murad Ansari, a banking analyst at EFG-Hermes. "What that means is that DIB's total lending to real estate and mortgages would account for roughly about 50 per cent of its total loan book, so there's obviously added risk and we understand real estate is going through a difficult phase now where there is still risk of further write-downs and defaults."
Despite the halt on lending almost two years ago, Tamweel has shown improving financial results during the suspension. After taking Dh188.1 million in losses between the final quarter of 2008 and the second quarter of last year, the company reported modest profits for four quarters in a row, the latest a Dh5.4m gain in the second quarter of this year. The backing of DIB will give Tamweel access to funding at lower interest rates and resolve problems caused by using short-term borrowing to finance longer-term mortgages, a model that fell apart when banks and investors withdrew funding during the financial crisis. The takeover also removes another impediment to Dubai's economic recovery following the resolution this month of Dubai World's $24.9bn debt restructuring with 99 per cent of its creditor banks.
The burning question now, analysts say, is what happens to Amlak. Tamweel had long been rumoured as ripe for a takeover by DIB but analysts say Amlak has no obvious white knight, although it is understood that a combination with Emirates NBD could be in the works. Amlak, which was set up by Emaar Properties in 2000, has reported Dh385m of losses between the final quarter of 2008 and the second quarter of this year.
"From our perspective our link-up with DIB is the solution for Tamweel," said Wasim Saifi, the chief executive of Tamweel. "For Amlak whatever the solution is, at some stage it will come out but we're not aware of what the solution is."
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THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
THE SPECS
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Transmission: 8-speed automatic
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Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
The specs: 2018 Peugeot 5008
Price, base / as tested: Dh99,900 / Dh134,900
Engine: 1.6-litre turbocharged four-cylinder
Transmission: Six-speed automatic
Power: 165hp @ 6,000rpm
Torque: 240Nm @ 1,400rpm
Fuel economy, combined: 5.8L / 100km
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
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The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Breaking News: The Remaking of Journalism and Why It Matters Now
Alan Rushbridger, Canongate
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Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
More on Palestine-Israeli relations
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Yemen's Bahais and the charges they often face
The Baha'i faith was made known in Yemen in the 19th century, first introduced by an Iranian man named Ali Muhammad Al Shirazi, considered the Herald of the Baha'i faith in 1844.
The Baha'i faith has had a growing number of followers in recent years despite persecution in Yemen and Iran.
Today, some 2,000 Baha'is reside in Yemen, according to Insaf.
"The 24 defendants represented by the House of Justice, which has intelligence outfits from the uS and the UK working to carry out an espionage scheme in Yemen under the guise of religion.. aimed to impant and found the Bahai sect on Yemeni soil by bringing foreign Bahais from abroad and homing them in Yemen," the charge sheet said.
Baha'Ullah, the founder of the Bahai faith, was exiled by the Ottoman Empire in 1868 from Iran to what is now Israel. Now, the Bahai faith's highest governing body, known as the Universal House of Justice, is based in the Israeli city of Haifa, which the Bahais turn towards during prayer.
The Houthis cite this as collective "evidence" of Bahai "links" to Israel - which the Houthis consider their enemy.
MATCH INFO
Manchester City 1 (Gundogan 56')
Shakhtar Donetsk 1 (Solomon 69')
Mercedes V250 Avantgarde specs
Engine: 2.0-litre in-line four-cylinder turbo
Gearbox: 7-speed automatic
Power: 211hp at 5,500rpm
Torque: 350Nm
Fuel economy, combined: 6.0 l/100 km
Price: Dh235,000
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
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ALL THE RESULTS
Bantamweight
Siyovush Gulmomdov (TJK) bt Rey Nacionales (PHI) by decision.
Lightweight
Alexandru Chitoran (ROU) bt Hussein Fakhir Abed (SYR) by submission.
Catch 74kg
Omar Hussein (JOR) bt Tohir Zhuraev (TJK) by decision.
Strawweight (Female)
Seo Ye-dam (KOR) bt Weronika Zygmunt (POL) by decision.
Featherweight
Kaan Ofli (TUR) bt Walid Laidi (ALG) by TKO.
Lightweight
Abdulla Al Bousheiri (KUW) bt Leandro Martins (BRA) by TKO.
Welterweight
Ahmad Labban (LEB) bt Sofiane Benchohra (ALG) by TKO.
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR) no contest.
Lightweight
Mohammed Yahya (UAE) bt Glen Ranillo (PHI) by TKO round 1.
Lightweight
Alan Omer (GER) bt Aidan Aguilera (AUS) by TKO round 1.
Welterweight
Mounir Lazzez (TUN) bt Sasha Palatkinov (HKG) by TKO round 1.
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR) by KO round 1.
