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WORLD TAKAFUL CONFERENCE: GCC SOVEREIGN ISSUANCE CAN BE HUGELY INSTRUMENTAL FOR TAKAFUL STABILITY

Middle East Global Advisors, 23-year financial intelligence platform, launched groundbreaking World Takaful Report with critical insights for industry
The 11th annual World Takaful Conference concluded its two-day proceedings on Tuesday to overwhelming praise from the Takaful industry, following the launch of a unique intelligence report by the forum’s conveners, Middle East Global Advisors.
The Finance Forward World Takaful Report: Connecting the Dots, Forging the Future was launched as part of WTC’s commitment to supporting the Takaful industry through insightful and groundbreaking intelligence. The Report provides a way forward to addressing various challenges ranging from price wars and pricing regulation, to closing the gap of human capital, and includes contributions from UK & Netherlands-based boutique consultancy, Takaful Outsource.
The report was launched on Monday by Sahar Kazranian (Acting CEO of Middle East Global Advisors) who shared key insights of the report, which is based on expert analysis and feedback from leading industry practitioners. She said: “Takaful is an essential part of the Islamic financial ecosystem and is spreading beyond its core markets. The pace of growth has not matched up with the momentum seen in the Islamic banking segment, leaving significant ground for changes to help the industry scale.”
She said that although over-competitiveness and price wars were major challenges faced by the industry, the huge rise in GCC sovereign issuance is a potential boon for the Takaful industry: “Two of the three leading markets globally, namely Saudi Arabia and the UAE, will see a $58 billion issuance in bond and sukuk in 2016 alone. This is important given that pressure on underwriting profits means that sustainable investment returns will be critical for long-term growth.”
She concluded: “We see regulators becoming more stringent on what investments are permissible for takaful operators, and our survey of industry leaders reflected a shift away from equity and commodities markets – so the potential new supply of Sharia-compliant fixed income can be hugely beneficial.”
With specialist contributions from Takaful Outsource and comprehensive survey of industry practitioners by Middle East Global Advisors, the Report will be instrumental to help industry players navigate the regulatory, economic, demographical and technological landscape in uncertain times.
The World Takaful Report was launched to an audience comprising of high profile guests and dignitaries from Dubai Islamic Economy Development Centre, Dubai International Financial Centre, Islamic Insurance Association of London, Insurance Authority UAE, PwC, Moody’s, EY, Swiss Re, Munich Re, Noor Takaful, Watania, Emirates RE and many more organisations.
The 12th annual edition of WTC will take place in April 2017. For more information, visit www.meglobaladvisors.com.
Business
Chipmakers in drought-hit Taiwan order water trucks to prepare for ‘the worst’

TAIPEI (Reuters) – Taiwan chipmakers are buying water by the truckload for some of their foundries as the island widens restrictions on water supply amid a drought that could exacerbate a chip supply crunch for the global auto industry.
Some auto makers have already been forced to trim production, and Taiwan had received requests for help to bridge the shortage of auto chips from countries including the United States and Germany.
Taiwan, a key hub in the global technology supply chain for giants such as Apple Inc, will begin on Thursday to further reduce water supply for factories in central and southern cities where major science parks are located.
Water levels in several reservoirs in the island’s central and southern region stand at below 20%, following months of scant rainfall and a rare typhoon-free summer.
“We have planned for the worst,” Taiwan Economy Minister Wang Mei-hua told reporters on Tuesday. “We hope companies can reduce water usage by 7% to 11%.”
With limited rainfall forecast for the months ahead, Taiwan Water Corporation this week said the island has entered the “toughest moment”.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, this week started ordering small amounts of water by the truckload to supply some of its facilities across the island.
“We are making preparations for our future water demand,” TSMC told Reuters, describing the move as a “pressure test”. The chip giant said it has seen no impact on production. Both Vanguard International Semiconductor Corporation and United Microelectronics Corp signed contracts with water trucks and said there was no impact on production.
Vanguard said it has started a drill to truck water to its facilities in the northern city of Hsinchu.
Taiwanese technology companies have long complained about a chronic water shortage, which became more acute after factories expanded production following a Sino-U.S. trade war.
(Reporting By Yimou Lee; additional reporting by Jeanny Kao; Editing by Simon Cameron-Moore)
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Oil slips after U.S. crude stocks rise amid deep freeze hit to refiners

By Sonali Paul
MELBOURNE (Reuters) – Oil prices fell in early trade on Wednesday after industry data showed U.S. crude inventories unexpectedly rose last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.
Crude stockpiles rose by 1 million barrels in the week to Feb. 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll.
API data showed refinery crude runs fell by 2.2 million bpd.
U.S. West Texas Intermediate (WTI) crude futures were down 55 cents or 0.9% at $61.12 a barrel at 0136 GMT, after slipping 3 cents on Tuesday.
Brent crude futures fell 38 cents, or 0.6%, to $64.99 a barrel, erasing Tuesday’s 13 cents gain.
Investors will be awaiting confirmation from the U.S. Energy Information Administration later on Wednesday that crude inventories rose last week, despite the hit to shale oil production amid the unprecedented icy spell in the U.S. south.
“The key question is how quickly does U.S. oil supply recover. It looks like supply will recover faster than refineries, and supply is going to outpace demand in the next few weeks. That will give negative weight to the market,” Commonwealth Bank analyst Vivek Dhar said.
The price retreat is being seen as a pause following a rally of more than 26% to 13-month highs in both Brent and WTI since the start of the year.
Prices have jumped due to the U.S. supply disruption and supply discipline by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, led by an extra 1 million bpd cut by Saudi Arabia.
At the same time stimulus spending to boost growth, investors rotating into commodities, and hopes that the rollout of vaccinations could lead to an easing of pandemic restrictions are all buoying oil prices.
(Reporting by Sonali Paul; Editing by Edwina Gibbs)
Top Stories
Oil settles mixed amid post-storm uncertainty

By Laura Sanicola
NEW YORK (Reuters) – Oil prices settled near year-long highs on Tuesday on signs that global coronavirus restrictions were being eased, although concerns about the pace of a U.S. economic recovery and the return of Texas oil production kept gains in check.
U.S. crude settled down 3 cents to $61.67 a barrel, still close to its highest levels since January 2020. Brent crude <LCOc1> settled up 13 cents, or 0.2%, to $65.37 a barrel.
Both contracts rose more than $1 earlier before retreating.
Shale oil producers and refiners in the southern United States are slowly resuming production after 2 million barrels per day (bpd) of crude output and nearly 20% of U.S. refining capacity shut down because of last week’s winter storm.
Traffic at the Houston ship channel was slowly returning to normal. Production, however, was not expected to fully restart soon and some shale producers forecast lower oil output in the first quarter.
Some oil production may never come back, commodities merchant Trafigura said on Tuesday.
After the cold snap, U.S. crude oil stockpiles were also seen falling for a fifth straight week, while the inventories of refined products also declined last week, an extended Reuters poll showed.
“It appears that last week’s severe cold spell and related Texas power outage could be affecting the weekly EIA data into the middle of next month,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
There were also concerns over the U.S. economic recovery, which the chair of the Federal Reserve, Jerome Powell, said remained “uneven and far from complete.”
He said it would be “some time” before the central bank considered changing policies it had adopted to help the country back to full employment.
Commerzbank analyst Eugen Weinberg said the recent oil price rise was buoyed by upbeat price forecasts from U.S. brokers.
Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously, and $75 in the third quarter from $65 forecast earlier.
Morgan Stanley, which expects Brent to reach $70 in the third quarter, said new COVID-19 cases were falling while “mobility statistics are bottoming out and are starting to improve”.
Bank of America said Brent prices could temporarily spike to $70 in the second quarter.
(Reporting by Laura Sanicola in New York; Additional reporting by Bozorgmehr Sharafedin in London and Jessica Jaganathan in Singapore; Editing by Matthew Lewis and Mark Heinrich)