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Pakistan’s Dollar Sukuk Extend Losses; Yield Highest Since Sale

Pakistan’s dollar-denominated Islamic bonds fell for a ninth straight day, pushing the yield up 2 bps to 7.48 percent, highest since debt sold in November. Pakistan issued $1b of the 6.75% notes last month in its first dollar sukuk offering since 2005; the sale was 5 times oversubscribed.

Indonesia plans fivefold rise in project sukuk sales

Indonesia is ramping up financing for new President Joko Widodo’s US$439 billion (RM1.52 trillion) development programme, planning an almost fivefold increase in sales of project sukuk. The government is seeking to raise 7.14 trillion rupiah (RM196 billion) from notes that will fund construction ventures next year, compared with 1.5 trillion rupiah this year. That will help finance its estimated spending of about 5,519 trillion rupiah from next year to 2019 to build roads, railways and power plants. Indonesia is diversifying its sukuk to help boost syariah-compliant banking assets as a share of the total from 4.7 per cent, less than a fifth of Malaysia’s.

Capital Adequacy: Al Baraka Bank complies with Basel III requirement

The General Council for Islamic Banks and Financial Institutions (CIBAFI) held an In-focus session on Basel III and Islamic banks during the 21st World Islamic Banking Conference (WIBC) in Bahrain. The three prominent Islamic banks, Islamic International Arab Bank, Al Baraka Banking Group, and Bank of Khartoum, showed that they currently have sufficient levels of capital, far beyond what is required under Basel III. Al Baraka Banking Group's recent issuance of Tier-1 Basel III-compliant Sukuk in Pakistan reflects the Group's desire to adapt positively to the dynamic nature of regulatory regimes in the years ahead rather than any shortage of capital.

38% increase in sales in 2014: Tokio Marine Family Takaful MD

Tokio Marine Family Takaful’s newly appointed Managing Director Masaya Inagaki comes to Egypt with great expectations for the Egyptian insurance market. Inagaki said that providing a service with high quality at a reasonable price for customers is a core concept in Japanese culture, and that he is determined to apply that in Egypt. His goal is to make Tokio Marine Family Takaful the number one Takaful company in the country, he added. The company also intends to cooperate with banks in light of the new regulations issued lately by the Central Bank to activate banking insurance.

Turkiye Finans applies for 143 mln lira sukuk

Turkish Islamic lender Turkiye Finans Katilim Bankasi has applied to issue 143 million lira ($60.5 million) via sukuk. The sukuk will be issued through TF Varlik Kiralama, a wholly-owned unit of Turkiye Finans, which has a focus on loans to corporate clients. No tenor or details of underlying assets were given for the deal. Separately, the bank has also received regulatory approval for a 71 million lira sukuk for trailer manufacturer Tirsan Treyler Sanayi ve Ticaret.

Islamic Bank of Britain shareholders endorse Al Rayan Bank name change

Shareholders of the Birmingham-based Islamic Bank of Britain have given their approval to change its name to Al Rayan Bank. As a result of the rebranding, the bank has introduced a new Al Rayan Bank logo and brand identity, which are being implemented across its website, literature and branches. Al Rayan Bank’s activities will continue to be monitored by an independent Sharia supervisory committee and a dedicated compliance officer. It will continue to operate as a UK regulated bank and customers’ deposits will remain protected by the Financial Services Compensation Scheme.

Africa eyeing major Islamic finance push

Africa is not only ready for Islamic finance but also is aiming to take its stand in the global Islamic finance arena, according to Abdelilah Belatik, secretary-general of Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI). Human capital development remains one of the main pillars in establishing sound Islamic financial services practices in Africa, especially with the recent regulatory development, he said. CIBAFI has completed a 'Certified Islamic Banker' training for 48 top level executives from 10 banks in Mauritania. The professional development training programme was co-organised by CIBAFI and the Islamic Development Bank (IDB).

Kuwait- Global sukuk issuances hit USD 114 bln over 11 months - KFH report

Between January-November 2014 , the global primary sukuk market recorded total issuances of USD 114.7 billion, compared to USD 105.7 billion in the same period last year. An important supporting factor for sukuk issuances are the major infrastructure needs in the GCC, South Asia, South East Asia and Africa. Islamic financial institutions (IFIs) globally are working towards full-compliance with Basel III; in this regard, recent sukuk issuances by IFIs in the GCC and Malaysia suggest that Basel III-compliant sukuks are a viable mechanism to meet the enhanced capital adequacy and liquidity standards.

Sukuk affected by oil price fall

Islamic bonds from the Gulf Cooperation Council (GCC) are heading for the worst month in more than a year after oil prices plunged to the lowest since 2009. Sukuk in the six-nation bloc, home to about a third of the world's proven oil reserves, lost investors 0.7 per cent so far this month, poised for the worst performance since August 2013. Middle East sukuk also underperformed non-Shariah compliant debt from the region last week. However, even after this month's drop, GCC sukuk have returned an average 5.8 percent to investors this year. Nevertheless, a prolonged period of oil price weakness will inevitably impact liquidity and credit risks in the GCC region.

Western Union launches financial literacy programme for UAE migrant workers with support from UAE Labour Ministry

The Western Union Company has launched “Apna Sapna”, a Financial Literacy Programme for migrant workers in the UAE to help them develop the awareness and skills to manage their finances and plan for the future. “Apna Sapna”, which in Hindi means “Our Dream”, is endorsed by the UAE Labour Ministry and aims to address the challenges of migrant workers who are often unsure about how to achieve their long-term financial goals. With the “Apna Sapna” programme, Western Union intends to train 3,000 people over two months through face-to-face training sessions which will take place across a number of labour camps in the UAE.

Bank Nizwa’s sharia supervisory board assesses opportunities to extend Islamic financing products

Oman's Bank Nizwa recently held its 11th Sharia Supervisory Board meeting to discuss proposals for additional Sharia compliant financing solutions to meet the growing needs of the Bank’s individual and corporate customers. Dr. Jamil El Jaroudi, CEO of Bank Nizwa said the regular meetings allow the Bank to assess the performance of current products and services while also identifying the best approach for launching new propositions. The Board’s decisions are guided by the Islamic Banking Regulatory framework issued by the Central Bank of Oman, as well as the Sharia standards issued by the Auditing and Accounting Organization for Islamic Financial Institutions in Oman.

Private-sector moves keep Tunisia’s Islamic finance hopes alive

Amen Bank, Tunisia’s second-largest private sector bank, launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. In October, El Wifack Leasing said it had received central bank approval to become the country’s third full-fledged Islamic bank, with 150mn dinars ($80mn) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the Islamic finance industry which has been waiting for the government to issue a debut Islamic bond. Earlier this year the private sector arm of the Islamic Development Bank teamed up with Tunisia’s newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30mn fund to support local businesses.

SUKUK PIPELINE - Issue plans around the world

The Thomson Reuters Global Sukuk Index is at 115.95508 points, up from 115.82559 at the end of last month and 109.78969 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 113.77886 points, against 113.92596 at end-November and 107.28036 at the end of 2013. The following are some of the sukuk issues in the pipeline: 1Malaysia Development Bhd has postponed the sale of up to 8.4 billion ringgit ($2.41 billion) of sukuk to 2015, while Indonesia's finance ministry plans to sell retail sukuk worth around 20 trillion rupiah ($1.63 billion) in April. Turkiye Finans has received regulatory approval to raise 71 million lira via sukuk, but no timeframe was given.

NCB Capital sponsors financial education lab at Effat University

NCB Capital has sponsored a new fully equipped lab at Effat University in Jeddah as part of its commitment to spread financial literacy among Saudi Youth. The lab comprises of 25 computer machines and includes hardware and software which help students to monitor financial markets and train them on making sound investments. Sarah Al-Suhaimi, CEO of NCB Capital, said that education sector is a key part of NCB Capital’s corporate social responsibility activities. By sponsoring this initiative, NCB aims to forge a collaborative relationship with Effat University in order to support financial knowledge among the students, and to also introduce them to the world of investment, she added.

Dubai Trade to add another leader in cargo insurance

In line with its commitment to foster the cargo insurance facilities, Dubai Trade has signed an agreement with Dar Al Takaful to provide the marine and cargo insurance services through Dubai Trade's online platform "Tradeshield" which has been launched earlier this year. The agreement was signed by the CEO of Dubai Trade, Eng. Mahmood Al Bastaki, and Mr. Saleh Al Hashmi, the Managing Director of Dar Al Takaful . Dubai Trade allows clients to easily complete the end-to-end process of purchasing cargo insurance online through its website.

Ogier advises Shariah-compliant Gatehouse Bank plc on its joint venture with Sigma Capital

A combined team of partners and associates from the corporate and finance groups of Ogier's Cayman office recently advised Gatehouse Bank plc on its joint venture with Sigma Capital, for the construction of an initial 927 new rental homes, with a total development cost of approximately £110 million.

First HK sukuk listed in Dubai

Dubai saw on Thursday the listing of the very first Islamic bond in its stock market by China's Hong Kong Special administrative region. The listing of the one-billion U.S. dollar sukuk marks Dubai as one of the top three listing venues in the world for sukuk, with a currently listed nominal value of 24.05 billion dollars. The Nasdaq Dubai competes with the sukuk hubs in Kuala Lumpur and in London. A total of 14.15 billion dollars of sukuks have been listed on Dubai's exchanges so far in 2014, up 107 percent from 6.85 billion dollars in 2013.

Private-sector moves keep Tunisia's Islamic finance hopes alive

Tunisia's Amen Bank launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. Moreover, El Wifack Leasing said it had received central bank approval to become the country's third full-fledged Islamic bank, with 150 million dinars ($80 million) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the industry which has been waiting for the government to issue a debut Islamic bond. Meanwhile, the Islamic Development Bank teamed up with Tunisia's newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30 million fund to support local businesses.

Bahrain's GFH inks JV deal to kickstart $3bn Tunis project

Bahrain-based Gulf Finance House has signed a joint venture with France's Alliance International Holding which is likely to kick-start the Tunis Bay project. Tunis Bay is part of the overall $3 billion Tunis Financial Harbour project. Alliance International Holding is a French consortium which specialises in the building of golf course projects and new community developments. It said it has signed a deal with the GFH-owned Tunis Bay Project Company which will see more than 800,000 sq m of land developed into a golf course with surrounding villas and apartments. Construction work by the joint venture will start next year as part of the first phase of the Tunis Bay development.

The IFSB Admits Five Organisations into Its Membership

The Council of the Islamic Financial Services Board (IFSB) has today resolved to approve the applications of five financial institutions as Observer Members of the IFSB. The newly admitted Observer Members are: Bank Muamalat Indonesia; Mellat Investment Bank (Iran); Qatar First Bank; Turkiye Finans Katilim Bankasi; Al Masraf - Arab Bank for Investment & Foreign Trade (United Arab Emirates). The 184 members of the IFSB comprise 59 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (Takaful) sectors in 44 jurisdictions, as well as eight international inter-governmental organisations, and 117 market players.

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