Bahrain's financial sector contributes about one third of the country's GDP and employs about 3 per cent of its workforce. Phil Weymouth / Bloomberg News
Bahrain's financial sector contributes about one third of the country's GDP and employs about 3 per cent of its workforce. Phil Weymouth / Bloomberg News

Arcapita failure puts focus on Bahrain



Bahrain's banking sector has come under intense scrutiny after one of its flagship investment banks filed for bankruptcy protection.

Arcapita Bank sought protection under Chapter 11 of the US Bankruptcy Code on Monday after it failed to secure agreement from its creditors on a US$1.1 billion (Dh4.04bn) debt facility that was due to mature this month.

Bahrain's financial sector contributes about one third of the country's GDP and employs about 3 per cent of the nation's workforce, according to the IMF. But the total assets of its banking sector are about 12 times the size of its economic output and the government lacks the wealth of other oil-rich Gulf states.

Bahrain's offshore banking sector, which recycles international liquidity throughout the Gulf, is heavily reliant on funding from European banks, which are quickly withdrawing capital amid sector-wide deleveraging as a result of the euro-zone sovereign-debt crisis.

"The volatile nature of foreign liabilities placed in Bahrain's wholesale banks was exposed during the Arab Spring," analysts from Moody's Investors Service wrote in a report released on Monday.

"Direct exposure to the domestic operating environment is limited but increased risk perception and sustained outflows would trigger a significant slowdown in business volumes and pose some serious structural challenges for this industry."

During the first six months of last year, $19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.

Banks have also redeployed staff from Bahrain to other points in the region throughout the past year.

BNP Paribas, the biggest international lender in the kingdom, relocated as many as 30 employees from its wealth management division to Dubai, according to sources close to the bank.

Crédit Agricole closed its Middle East office in Manama to move staff to Dubai last August, Reuters reported at the time.

Société Générale also closed its private-banking office in the country as part of a cost-cutting drive, centralising its Middle Eastern private-banking operations in Dubai.

Bahrain's banking system had some differentiating factors that could convince foreign capital to stay put, particularly in the Islamic finance and asset management industries, said Jean-Michel Saliba, a Middle East economist at Bank of America Merrill Lynch.

"They have some advantages, but they've been eroded by the geopolitical uncertainty in Bahrain, and there's no clear way of how they're going to resolve this," he said.

Liquidity injections worth €1 trillion (Dh4.87tn) provided by the European Central Bank to European banks beginning last year, may slow the withdrawal of funds from Bahrain and elsewhere in the Gulf, but it would not reverse it, Mr Saliba said.

A number of hedge funds and asset managers have withdrawn operations in favour of Dubai, with some citing the kingdom's political unrest last year as the final straw.

Others pointed to regulatory uncertainties after the collapse of The International Banking Corporation and Awal Bank.

The investment fund industry, which manages assets equivalent to about 80 per cent of Bahrain's GDP, was fearing a hit from any regulatory backlash against the financial services sector, said one private banker at a major Swiss bank.

Yields on Bahrain's 10-year government bonds, which pay a coupon of 5.5 per cent, initially rose by 35 basis points to 5.74 per cent in tradingsince Arcapita filed for protection from its creditors. They have since retreated to 5.716 per cent.

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Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

THE DETAILS

Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez

Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.

COMPANY PROFILE

Name: N2 Technology

Founded: 2018

Based: Dubai, UAE

Sector: Startups

Size: 14

Funding: $1.7m from HNIs

Results

5pm: Al Falah – Maiden (PA) Dh80,000 (Turf) 1,200m; Winner: Bshara, Richard Mullen (jockey), Salem Al Ketbi (trainer)

5.30pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 1,400m; Winner: AF Musannef, Tadhg O’Shea, Ernst Oertel

6pm: Al Dhafra – Maiden (PA) Dh80,000 (T) 1,600m; Winner: AF Mualami, Antonio Fresu, Abubakar Daud

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7pm: Al Mafraq – Handicap (PA) Dh80,000 (T) 1,600m; Winner: JAP Almahfuz, Royston Ffrench, Irfan Ellahi

7.30pm: Al Samha – Handicap (TB) Dh80,000 (T) 1,600m; Winner: Celestial Spheres, Patrick Cosgrave, Ismail Mohammed

The Specs

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Transmission: Six-speed automatic
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The Comeback: Elvis And The Story Of The 68 Special
Simon Goddard
Omnibus  Press

MATCH INFO

Barcelona 2
Suarez (10'), Messi (52')

Real Madrid 2
Ronaldo (14'), Bale (72')

Huddersfield Town permanent signings:

  • Steve Mounie (striker): signed from Montpellier for £11 million
  • Tom Ince (winger): signed from Derby County for £7.7m
  • Aaron Mooy (midfielder): signed from Manchester City for £7.7m
  • Laurent Depoitre (striker): signed from Porto for £3.4m
  • Scott Malone (defender): signed from Fulham for £3.3m
  • Zanka (defender): signed from Copenhagen for £2.3m
  • Elias Kachunga (winger): signed for Ingolstadt for £1.1m
  • Danny WIlliams (midfielder): signed from Reading on a free transfer
UAE currency: the story behind the money in your pockets
COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Sreesanth's India bowling career

Tests 27, Wickets 87, Average 37.59, Best 5-40

ODIs 53, Wickets 75, Average 33.44, Best 6-55

T20Is 10, Wickets 7, Average 41.14, Best 2-12

'The Woman in the House Across the Street from the Girl in the Window'

Director:Michael Lehmann

Stars:Kristen Bell

Rating: 1/5

Dirham Stretcher tips for having a baby in the UAE

Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:

• Buy second hand stuff

 They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.

• Get a health card and vaccinate your child for free at government health centres

 Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.

• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.

Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.

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Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.

UAE v IRELAND

All matches start at 10am, and will be played in Abu Dhabi

1st ODI, Friday, January 8

2nd ODI, Sunday, January 10

3rd ODI, Tuesday, January 12

4th ODI, Thursday, January 14

Law 41.9.4 of men’s T20I playing conditions

The fielding side shall be ready to start each over within 60 seconds of the previous over being completed.
An electronic clock will be displayed at the ground that counts down seconds from 60 to zero.
The clock is not required or, if already started, can be cancelled if:
• A new batter comes to the wicket between overs.
• An official drinks interval has been called.
• The umpires have approved the on field treatment of an injury to a batter or fielder.
• The time lost is for any circumstances beyond the control of the fielding side.
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• The team gets two warnings if they are not ready to start overs after the clock reaches zero.
• On the third and any subsequent occasion in an innings, the bowler’s end umpire awards five runs.

THE SPECS

Engine: Four-cylinder 2.5-litre

Transmission: Seven-speed auto

Power: 165hp

Torque: 241Nm

Price: Dh99,900 to Dh134,000

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A meeting of young minds

The 3,494 entries for the 2019 Sharjah Children Biennial come from:

435 – UAE

2,000 – China

808 – United Kingdom

165 – Argentina

38 – Lebanon

16 – Saudi Arabia

16 – Bangladesh

6 – Ireland

3 – Egypt

3 – France

2 – Sudan

1 – Kuwait

1 – Australia
 

Tightening the screw on rogue recruiters

The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.

 Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.

A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.

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The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.

Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.

Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment

But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.

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The BaaS ecosystem

The BaaS value chain consists of four key players:

Consumers: End-users of the financial product delivered

Distributors: Also known as embedders, these are the firms that embed baking services directly into their existing customer journeys

Enablers: Usually Big Tech or FinTech companies that help embed financial services into third-party platforms

Providers: Financial institutions holding a banking licence and offering regulated products