By Sumeet Chatterjee and Carolyn Cohn

HONG KONG/LONDON (Reuters) – Old Mutual has put up for sale its 50 percent stake in a Chinese insurance joint venture, people with direct knowledge of the matter said, as part of a revamp of the Anglo-South African financial group and amid a tough market for foreign insurers in China.

Old Mutual, which is working with financial advisers on the stake sale plan, could sell its holding in the 13-year-old life insurance joint venture with Guodian Corp to one or more local firms, said the people.

The move is part of a broader Old Mutual group restructuring exercise to exit non-core and smaller operations, they said, adding there is no certainty a deal would happen and the company could end the process if the bids don’t match its expectations.

An Old Mutual spokesman declined to comment, while an email sent to Old Mutual-Guodian Life Insurance Co Ltd did not elicit an immediate response.

Despite being the world’s second-largest insurance market, restrictive ownership limits, capped at 50 percent for foreign life insurers, and tough local competition have weighed on foreign firms’ operations and market share in China.

Chinese firms, including China Life Insurance Co, Ping An Insurance Group Co of China and a host of mid-sized insurers dominate the local market, with foreign joint ventures owning less than a 10 percent share.

The restrictive ownership limit and the tough competition from local firms, many of them state-backed, have especially impacted the smaller foreign insurance joint ventures such as Old Mutual’s in China.

In 2015, Old Mutual’s share of profit in the joint venture was 2 million pounds ($2.50 million), as per its annual report. The venture’s insurance business income in the fourth quarter of last year rose 12 percent to 118.4 million yuan ($17.16 million).

Given the venture’s small size, it was not immediately possible to estimate the potential sale value of Old Mutual’s stake, the people said. They declined to be named as they were not authorised to speak about Old Mutual’s plan, which is not public yet.

Guodian is one of China’s five major state-run power generation companies.

Old Mutual is in the midst of breaking up its business in four parts by the end of next year. The firm aims to list or sell its emerging markets business and is sharpening focus on its sub-Saharan Africa business.

The company sold a 25 percent stake in its Old Mutual Asset Management business last month to China’s HNA for $446 million, after selling its Italian wealth management business last year for $297 million.

Besides China, Old Mutual’s Asia presence includes its life insurance joint venture in India with Kotak Mahindra Group.

($1 = 0.8010 pounds)

($1 = 6.8982 Chinese yuan renminbi)

(Reporting by Sumeet Chatterjee in HONG KONG and Carolyn Cohn in LONDON; Additional reporting by Julie Zhu; Editing by Muralikumar Anantharaman)

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ABUJA (Reuters) – Nigeria’s cabinet has approved $1.3 billion of loans from international lenders to fund the newly licensed Development Bank of Nigeria, the finance minister said on Wednesday.

The money is made up of $500 million from the World Bank, $450 million from the African Development Bank, $200 million from German state bank KfW and $130 million from France’s state development agency, said Kemi Adeosun, Nigeria’s finance minister.

The loan facility is still subject to approval by the National Assembly, she said.

(Reporting by Felix Onuah; Writing by Paul Carsten; Editing by Larry King)

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JOHANNESBURG (Reuters) – South Africa’s Treasury on Wednesday said the departure of its Director General Lungisa Fuzile, whose contract was due to end in May 2018, was now imminent.

The Treasury said in a statement that Fuzile had been indicating his desire to leave the department for some time, and in the past few days he has been focusing on ensuring a smooth hand over to new Finance Minister Malusi Gigaba.

Fuzile’s departure would follow that of his former boss Pravin Gordhan, who was sacked in a cabinet reshuffle and replaced by Gigaba.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Joe Brock)

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GABORONE (Reuters) – Botswana’s economy expanded 0.1 percent quarter-on-quarter in the last three months of 2016 versus a revised 1.1 percent contraction in the third quarter, data from the statistics office showed on Monday.

On a year-on-year basis, gross domestic product (GDP) growth was at 4.2 percent in Q4 after expanding by 6.9 percent in Q3.

Statistics Botswana said the increase in growth in the quarter was due to expansions in the trade, hotels and restaurants, transport and communications sectors, while mining production continued to decline due to the closure of the country’s copper and nickel mines.

(Writing by Mfuneko Toyana; Editing by James Macharia)

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By Bernardo Vizcaino

(Reuters) – Kenya’s government has unveiled a package of initiatives under its latest budget to develop Islamic finance in the country, as part of efforts to mobilise local funds and set Nairobi as a regional hub for the sector.

The moves could spur Kenya’s decade-old Islamic banking sector and help the government fund infrastructure in a country where Muslims account for about 10 percent of the population of some 44 million.

Finance Minister Henry Rotich outlined the steps as part of the country’s 2017/2018 budget, released on Thursday, aiming to level the playing field between Islamic and interest-based transactions.

Amendments to the Public Finance Management Act will also allow the government to issue Islamic bonds, or sukuk, as an alternative funding source.

This could prove useful for a government that has set aside billions for infrastructure, with a fiscal deficit set at 524.6 billion shillings ($5.10 billion). [nL3N1H74JT]

Implementation could be quick as most changes have already been drafted by the Islamic Finance Project Management Office (PMO), a body setup by the government to coordinate efforts among its regulatory agencies.

“The primary objective is to prepare the groundwork for a sovereign sukuk but also equally to attract corporate sukuk from the region,” said Farrukh Raza, managing director of IFAAS, an Islamic finance consultancy which designed the PMO’s framework.

The government has commissioned IFAAS to run the PMO, which is working with law firm Simmons & Simmons to help develop Islamic Finance in Kenya.

The Treasury has said it is considering a debut sale of sukuk this year, although national elections in August could delay those plans.

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The amendments will benefit Kenya’s two full-fledged Islamic banks and several Islamic windows, which until now have operated by way of exemptions.

They will be joined by Dubai Islamic Bank, which last month received approval in principle for a banking license from the central bank. [nL5N1GQ3UX]

Changes to stamp duty would ensure their products are tax neutral against interest-based transactions, as the asset-based nature of Islamic finance contracts often means they can incur multiple tax charges.

This is designed to be revenue neutral to the government and would not compromise fiscal revenues, said Raza.

Exemptions to value added tax would allow returns from Islamic deposits to be eligible for deductions similar to interest-based products. This would apply to individuals, corporates and government entities, Raza said.

The budget also calls for amendments to cooperatives and savings societies, while new regulations will help setup an Islamic pension scheme based on the risk-sharing concept of takaful.

This would aid the government in achieving financial inclusion and financial diversification targets, Raza added.

(Reporting by Bernardo Vizcaino in SYDNEY; Editing by Randy Fabi)

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