Dubai plans to create the world’s largest Islamic bank within five years, spending as much as $1 billion on individual acquisitions in countries as far apart as Indonesia, Egypt and Britain, Noor Islamic Bank said.
Noor, which is 25 percent owned by the government of Dubai and 25 percent by the emirate’s ruler, plans to spend between $500 million and $1 billion each time on a “few” acquisitions in Europe, Asia and North Africa, Chief Executive Officer Hussain al-Qemzi told Reuters on Tuesday.
“We aim to be the largest Islamic bank within five years,” Qemzi said in his office in Dubai, two days after the lender officially started operations. “Acquisitions will be the main way because there is no time to grow organically,” he said.
Noor aims to be the world’s biggest Islamic bank by assets and countries of operation, with a focus on the largest Muslim nations such as Turkey, Egypt, Pakistan and Indonesia, Qemzi said.
Saudi Arabia’s Al Rajhi Bank, the world’s largest Islamic lender, had assets worth $33 billion at the end of September. Gold ETF: Dubai, the region’s gold trade hub, will see the launch of the Middle East’s first gold exchange traded fund (ETF) in 2008, a senior World Gold Council official said on Tuesday.
“We are on track to launch gold ETFs in Dubai this year,” said Moaz Barakat, managing director of the industry-sponsored WGC in the Middle East, Turkey and Pakistan. “Our delegation from London is coming to Dubai next week to discuss it; the listing would be either on the Dubai International Financial Exchange (DIFX) or Dubai Financial Market (DFM).”
ETFs are listed on the stock exchanges and are a popular investment vehicle for the precious metal in Western economies. Investors do not need to take physical delivery of the metal as the issuers buy matching gold to keep in their vaults.
“The market here is very interested in gold ETFs and it is offering secure exposure,” Barakat said. Changes in gold and silver ETF holdings are closely watched by market participants because sharp inflows in gold ETFs could be a bullish signal as it shows longer-term retail and institutional investors are entering the market.
WGC-sponsored gold ETFs now hold more than 700 tonnes of gold worth nearly $19 billion. The Dubai ETFs will comply with Islamic law or Sharia which bans the charging of interest, equating it with usury, and prohibits investment in businesses that trade in alcohol or gambling, Barakat said.
Dubai is a long-established market for gold bullion and jewellery, wholesale and retail, fuelled by strong demand from the Arab world and India, the world’s main gold market. The Gulf commercial hub launched the region’s first gold futures exchange in 2005 as the economies of Gulf Arab nations boomed on a windfall oil income.