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The Daily Roundup

Meydan to launch AED1bn Islamic financing facility with ADIB as bookrunner – Ford backtracks on plans to build US$1.6bn plant in Mexico – Bankruptcy filings in Brazil hit an 11-year high – Argentina’s new Treasury Head proposes broad tax reform – India’s growth hit by recent demonetization – Glencore and QIA finalize Rosneft stake buyout deal – Czech Republic sees state budget surplus for the first time in 20 years

Jan 4, 2017 // 3:53PM

MIDDLE EAST & TURKEY

Meydan, a diversified business group based in Dubai, is set to launch a AED1bn Islamic financing facility, required to fund its ongoing District One luxury residential area project. Abu Dhabi Islamic Bank (ADIB) has acted as the sole bookrunner and mandated lead arranger, while Dubai Islamic Bank and Al Hilal Bank were both mandated lead arrangers for the financing, which matures in December 2018.

AFRICA

Morocco's Central Bank has approved five requests to open Islamic banks in the country and allowed three French banks to sell Islamic products. Islamic banks and insurers are setting up in Morocco after new legislation allowed them into the market, while the Central Bank has set up a central sharia board with a body of Islamic scholars to oversee the new sector.

The Kenyan shilling weakened on Tuesday as importers sought to fill their dollar requirements after the holidays. As of Tuesday, commercial banks posted the shilling at 102.75, down from 102.55 at the close of trade on Friday.

Tanzania is in talks with banking giant Credit Suisse for a US$300mn loan that would go towards financing infrastructure projects, the country's finance minister Philip Mpango told reporters. According to Reuters, the minister is said to be in separate talks with other lenders, including the Kuwait Fund for Arab Economic Development, the Abu Dhabi state fund Mubadala Development and the OPEC Fund for International Development (OFID) for an unspecified amount of loans. Tanzania plans to borrow a total of US$936mn from external non-concessional sources in the 2016/17 fiscal year.

AMERICAS

US car manufacturing giant Ford Motor Co. announced it is scrapping plans to build a US$1.6bn plant in Mexico, after coming under criticism by President-elect Donald Trump for shifting small-car production south of the border. The U.S. automaker instead will build two products at a factory in Wayne, Michigan, protecting about 3,500 jobs. Mexican peso slipped as much as 0.3% against the dollar on the news, hitting a two-month low.

Filings for bankruptcy protection in Brazil hit an 11-year high as ongoing recession continues to hamper businesses. Bankruptcies increased to 1,863 in 2016, up 44.8% from 2015, according to Serasa Experian data, quoted by Reuters. Small-sized companies led the January-December count with 1,134 filings, followed by mid-sized firms with 470 and around 259 large entities.

Argentina's new Treasury Minister Nicolas Dujovne, appointed after the role of Finance Minister was split in to, said he would propose a broad tax reform focused on slashing taxes on salaries and banking. Dujovne said the tax burden on salaries was "ridiculous" at around 40% and pushed workers into the informal sector. According to the minister’s estimates, up to 35% of Argentina's economy was informal.

ASIA

Latest data on India’s economy is fuelling concerns that the recent demonetization is impacting growth. India’s services sector is set to contract for a second straight month, with Nikkei India Services Purchasing Managers’ Index, standing at 46.8 in December - some way off the 50 mark that would signal growth. Earlier this week figures showed that manufacturing sector will shrink for the first time in a year, dragging down the composite PMI to 47.6, the lowest since at least 2013.

RUSSIA, CIS & EUROPE

The consortium of Glencore and Qatar Investment Authority (QIA) announced the closure of the deal to buy out a 19.5% stake in Russian state-run oil company Rosneft’s, the Swiss-based company said in a stamen. Earlier this week Italian bank Intesa Sanpaolo confirmed that it would help finance half of the deal, providing a loan for up to 5.2bn euros (US$5.4bn), with the rest of the funding coming from a syndicate of Russian and international banks.

The Czech Central State budget reached a CZK61.77bn (US$2.38bn) surplus in 2016, the Finance Ministry announced on Tuesday, showing the first positive since 1995. While a surplus had been expected for several months due to a strong economy and labour market, low interest rates and a sharp drop in state investments, its size exceeded expectations of around CZK20bn.

After winning the parliamentary election last December, Romania's ruling Social Democrat Party has announced the line-up of the new cabinet on Tuesday. The new government will include veteran lawmaker Viorel Stefan as Finance Minister, pending approval from parliament and the junior coalition party ALDE.

Inflation in Kazakhstan slowed to 8.5% in 2016 from 13.6% in 2015, the Statistics Committee said on Wednesday. Inflation in December slowed to 0.9% from 1.2% in November, the committee added.

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Bonds & Loans
January / March 2020

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