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Inequality, Concentration of Wealth and the Ownership Structure of Islamic Banks: Some Pertinent Issues

An important Islamic imperative is prevention of concentration of wealth among a few so that wealth circulates widely to enhance shared prosperity. In contemporary economic discourse inequality and concentration of wealth have emerged as among key causes of instability and crisis. Unfortunately, while Islamic finance has emerged as a Shari’ah-compliant industry, it does not seem to be connected with the Islamic concern about inequality and concentration of wealth. This research paper illuminates the pertinent issues in light of the experience of Bahrain as one of the hubs of Islamic banking and finance.

Don’t Believe the Hype. Wealth Taxes Are Nothing New

In July, a group of 83 of the world’s richest people calling itself Millionaires for Humanity urged governments to increase taxes on them to help deal with the economic fallout from the COVID-19 pandemic. Their idea, the latest version of a wealth tax was received as almost revolutionary. Although wealth taxes may seem bold and innovative, however, the concept is almost as old as money itself. Since the ancient Greeks there have been wealth taxes in various countries right through to the present day. More recently than the ancient Greeks, a wealth tax has been foundational to Islamic practice. The zakat functions as a 2.5% wealth tax on liquid assets. Modern wealth taxes have often failed because they haven’t learned from their historical equivalents.

Government to raise $343m from retail sukuk SR013

Indonesia's government launched retail sukuk SR013 to raise Rp 5 trillion (US$343 million) to fund the state budget in the face of the COVID-19 pandemic. The tradable debt papers, set to mature on Sept. 10, 2023, offer a fixed annual yield at 6.05%. Investors can buy the bonds for Rp 1 million to Rp 3 billion from Aug. 28 and Sept. 23 at 31 partnering distributors, which include conventional and sharia-compliant banks, as well as online investment platforms. As of Aug. 6, the government has issued Rp 236.82 trillion in domestic sukuk, which nearly topped last year’s issuance of Rp 258.28 trillion. The government raised in July Rp 18.33 trillion from government retail bond issuance ORI-017, the highest proceeds ever recorded in an online bond offering by the country.

#Kuwait's Alafco delays delivery of Airbus order

Kuwait-based Alafco Aviation Lease and Finance is to delay delivery of its aircraft order from Airbus as a result of the impact of the global Covid-19 pandemic on the aviation industry. Although the number of aircraft impacted is unclear, reports suggest Airbus currently has 43 A320neo and ten A321neo jets on order to be delivered. Future pre-delivery payments between the company and Airbus will be realigned, along with a new delivery schedule, which will result in rescheduling the upcoming pre-delivery payments for this year and the upcoming three years to year 2024 and onward. Earlier this month it was revealed that Alafco had ended a $336 million legal dispute with US aerospace giant Boeing over a cancelled order.

ITFC seals $8mln #Murabaha financing facility with #Uzbekistan's Trustbank

The International Islamic Trade Finance Corporation (ITFC) signed an $8 million worth of Murabaha-structured line of trade finance with Uzbekistan's Trustbank. The financing aims to minimise the impact of COVID-19 by supporting the import and pre-export financing needs of small and medium-sized enterprises (SMEs) in the country. ITFC CEO Hani Salem Sonbol said this operation is in addition to five other lines of finance in favour of local banks in Uzbekistan since 2018, and reflects the ITFC’s unbending commitment to the nation of Uzbekistan.

Noor Takaful presents N15m surplus cheques to policyholders

Noor Takaful has announced the distribution of surplus (cashback) payment worth over fifteen million Naira to participants who did not make claims. The company has also announced the launch of its mobile app to make its products and services more accessible to the retail market. This second batch of payment is an increase from 12 million naira distributed in 2019 to policyholders who did not make claim in that pertaining year. Acting Managing Director of the company, Aminu Tukur stated that the distribution of surplus to policyholders has continued to serve as a big pull for the Takaful insurance market with interested participants joining daily.

Arcapita and Mumtalakat Sell Stakes in NAS Neuron Health Services

Arcapita Group and Bahrain Mumtalakat Holding sold their ownership stake in Abu Dhabi-based NAS Neuron Health Services. The two companies partnered to acquire an equity stake in NAS United Healthcare Services in 2017. Umair Nizami is the Managing Director of Neuron, as well as CEO of Dubai Wing. NAS Neuron is one of the largest private TPAs of medical claims in the GCC region.

Govt to raise Rs150bln from Ijarah #Sukuk issuance

The government of Pakistan is set to raise Rs150 billion with the reopening of its existing five-year Ijarah Sukuk issuance, maturing in July 2025. The steps of reopening of existing Sukuk is similar as that of issuance of a completely new Sukuk. The Sukuk was originally issued last month. Pre-auction target was set at Rs60 billion for fixed rental rate Sukuk for August-October. The target for the variable rental rate Sukuk has been fixed at Rs90 billion. For the subsequent period, the rental rate for the reopened Sukuk would be the same as that of the first issue. Similarly, the maturity of the reopened Sukuk would also be the same as the first issue.

Fund Management: Bridging the gap between ESG and shariah-compliant investing

ESG (environmental, social and governance) investing and shariah-compliant investing share similar objectives in that they promote stewardship and societal value creation. However, the two strategies are often viewed as distinctly separate approaches by investors. According to the president of asset management firm Saturna, Shahariah Shaharudin, bringing together the two investing methodologies can do much to invigorate the Islamic asset management industry. As both ESG and shariah-compliant funds are considered defensive asset classes, they performed relatively well during the recent market downturn triggered by the Covid-19 pandemic.

Bitcoin Association sponsors Islamic Fintech Week 2020

Bitcoin Association has joined the inaugural Islamic Fintech Week 2020 as a sponsor and ecosystem partner. The three-day event will bring together stakeholders, regulators and innovators to chart the future of financial technology in the Islamic world. This year’s IFW2020 will be hosted in Malaysia from September 7-10. It will feature a themed series of panel debates, roundtable sessions and masterclasses. Topics on the agenda for the virtual event will include the role of Shariah in Islamic fintech, how Malaysia can become a global finance hub, fintech’s role in the recovery from the COVID-19 pandemic and the social impact of Muslim women in finance. Digital currencies and blockchain will also feature heavily in the event, with various guests set to address how they can be integrated into the Islamic finance industry.

#UAE's first ETF tracking Sharia-compliant index lists on UAE markets

The UAE's first exchange traded fund tracking a Sharia-compliant index began trading on the Abu Dhabi Securities Exchange and the Dubai Financial Market. Bourses in the the region are ramping up efforts to diversify their product offerings to attract more foreign direct investment. Chimera Capital listed its Chimera S&P UAE Shariah ETF, which is designed to replicate the S&P UAE Domestic Shariah Liquid 35/20 Capped Index. The Chimera S&P UAE Shariah ETF is structured and built by S&P and monitored by a Shariah board that meets regularly to review and re-balance the index quarterly. Currently the index has ten securities across the two UAE markets. The fund has a total market capitalisation of Dh234 billion and assets under management of Dh934,839.

State urged to expand sharia compliance loans to Muslims

As coronavirus pandemic continues to disrupt businesses in Kenya, the Muslim community has been urged to take advantage of financial institutions offering low bank charges to jump-start their businesses. Islamic finance expert Khalfan Abdallah has urged the government to rethink how to accommodate Muslims in various financial support programmes such as Youth and Women Fund. Mr. Abdallah said the government should borrow a leaf from Momentum Credit Micro Finance which has started offering Sharia compliance loans to Muslims using logbooks as collateral. The official said to bail out Muslims during these hard times, such affordable credit facilities which are sharia compliance are required.

Kenanga Cap Islamic partners Bay for digitised factoring solution

Kenanga Capital Islamic (KCI) has collaborated with a financing company Bay Group Holdings to enhance digitisation in the local factoring market. The collaboration will introduce a maiden local solution to the local factoring market through merging private and public sectors under a platform to tap into an underserved market, which is expected to grow fivefold from its current RM20 billion value. The partnership with Bay is expected to advance KCI’s position in the factoring market, reduce its overall operational costs as well as improve its efficiencies. Registered and regulated by the Securities Commission of Malaysia in 2016, Bay provides innovative digital solutions through its supply chain management platform and Bay P2P financing platform.

#Malaysia launches #Sukuk Prihatin, maiden digital Islamic bond

The Malaysian government has launched the RM500 million Sukuk Prihatin which aims to raise funds from the public and corporates who wish to help contribute towards the Covid-19 Fund. Prime Minister Tan Sri Muhyiddin Yassin said the fund would be used to modernise telecommunications network in the rural area to help students get access to education through digital channels. It is also to provide further assistance to the micro, small and medium enterprises, as well as the healthcare sector's research on infectious diseases. The minimum subscription for the first investment is RM500 with an interest of 2% per annum for a tenure of two years. After the tenure ends, subscribers or investors can opt to fully donate the interest to Covid-19 Fund and will be given a tax relief depending on the size of the donation.

Moody's and IFN team up on global Islamic finance expertise

Moody's Investors Service (Moody's) and Islamic Finance news (IFN) have announced their collaboration to provide insights and analysis for Islamic finance worldwide. IFN readers will gain access to Moody's exclusive content covering Islamic finance, ranging from sukuk issuance trends in Gulf Cooperation Council (GCC) countries to the latest trends in Islamic banking. Moody's is a global integrated risk assessment firm that empowers organizations to make better decisions. IFN is the leading Islamic finance news and solutions provider in the world, housing the largest pool of Islamic finance-related articles and coverage.

Gassner's picture

55%-83% of Retail Investors in CFDs loosing money as disclosed by the financial providers

Dear Reader,

Following up on my earlier post on CFD and wether those are halal and why not: http://www.islamicfinance.de/?q=node/9330 here a follow up with some disclosed data. The regulators asking CFD provider to disclose how many retail investor loose money. The exact rules and definitions you find here:

https://www.esma.europa.eu/sites/default/files/library/2018-esma35-43-13...

In a quick web search for "of retail investor accounts lose money when trading CFDs" that number is between 55.2% and 83%:

https://www.cmcmarkets.com/en/learn-cfd-trading/what-are-cfds

55.2% of retail investor accounts lose money when trading CFDs with Blackwell Global Investments (UK) Limited.

https://blackwellglobal.com/choosing-right-leverage-cfd-trading/

83% of retail investor accounts lose money when trading CFDs with this provider.

https://libertex.com/blog/what-contract-difference-cfd

79% of retail investor accounts lose money when trading CFDs with this provider.

https://www.xtb.com/en/learn-to-trade/what-is-cfd-trading

APIB aims to cooperate with domestic financial institutions to promote Islamic finance industry

Asia Pacific Investment Bank (APIB) aims to cooperate with domestic financial institutions to promote the internationalisation of the Islamic finance industry. APIB CEO Chris Wang is confident that APIB could be the bridge that connects Malaysia and China. In light of the US-China trade war and the Covid-19 pandemic, the government is facing a critical challenge in leveraging the country’s position. Wang said APIB could help the government achieve the goal by making the country’s Islamic finance industry more dynamic. APIB is an offshore Islamic investment bank, established in January 2015 with the approval of the Labuan Financial Services Authority, headquartered in Labuan and its main operating office based in Kuala Lumpur, with representative offices in Shanghai and Nanjing, China.

DIB Tier 1 Sukuk (3) Ltd. -- Moody's announces completion of a periodic review of ratings of Dubai Islamic Bank PJSC

Moody's Investors Service (Moody's) has completed a periodic review of the ratings of Dubai Islamic Bank (DIB).
Dubai Islamic Bank's A3 long-term Issuer ratings are derived from the bank's ba2 standalone baseline credit assessment and a five notch systemic support uplift based on Moody's view of a very high likelihood of government support from United Arab Emirates (rated Aa2), in case of need. DIB's ba2 BCA reflects the bank's solid profitability, deposit-funded balance sheet, and healthy liquidity reserves. These strengths are moderated by Moody's expectation of downside pressure on the bank's solvency in the 12-18 months on the back of lower oil prices, reduced investor confidence and the coronavirus-induced disruption.

Bitcoin Affiliation joins Islamic Fintech Week (IFW2020) as ecosystem accomplice and sponsor

Islamic Fintech Week 2020 organizers revealed Bitcoin Affiliation as its ecosystem accomplice and sponsor. IFW2020 is hosted with the theme “Envisioning Islamic FinTechFuture” and is ready to be a platform for international stakeholders, regulators, tech startups and the Islamic finance fraternity. Bitcoin Affiliation is the Switzerland-based international trade group that works to advance enterprise on the Bitcoin SV blockchain. The week will be a sequence of discussions, roundtable classes, debates and hopes to showcase a brand new expertise for on-line attendees to deal with native and international challenges and uplift humanity.

#Indonesia’s #sukuk issuance to rise to $27b to finance COVID-19 battle: Moody’s

Credit rating agency Moody’s Investors Service expects Indonesia’s sukuk issuance to increase to US$27 billion this year from $16 billion last year. Lead analyst Thaddeus Best said on Tuesday that he expected Indonesia’s sukuk issuance to increase by about 68.75% as the government unveiled a Rp 695.2 trillion (US$47.3 billion) stimulus package to fight the pandemic. To help fund the package, the government is planning to raise Rp 900.4 trillion in the second half of this year to cover for a widening budget deficit of 6.34% of gross domestic product (GDP) this year. The option-adjusted spread of Indonesia’s US dollar-denominated government sukuk had fallen to almost 150 basis points (bps) as of July compared to its highest spread of 400 bps in March.

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