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Sombank takes Islamic banking to the cloud with Temenos

Somalia's Sombank selected the Temenos Islamic Banking solution in the cloud to accelerate its digital transformation and create innovative products to increase access to financial services in Somalia. Sombank will implement the full front-to-back Temenos Islamic Banking platform, which combines the capabilities of Temenos Infinity and Temenos Transact. Temenos’ cloud-native technology will allow Sombank to create innovative digital products and offer lower cost services. Currently, Sombank serves customers via branch and online network and representative offices throughout Somalia. The bank will use the Temenos Infinity digital front office to create a unified customer experience for all financial and non-financial services across all channels.

Corporate #sukuk to grow slow in 2020

According to Malaysian Rating Corp (MARC) chief ratings officer Rajan Paramesran, domestic corporate sukuk are in a better position than during the global financial crisis or the Asian financial crisis. Going into the current crisis, corporate sukuk had relatively stable cashflow metrics. He added that government-supported transport projects, state-backed water infrastructure projects and solar power plant projects have recently been and will be key sources for sukuk issuances. Rajan said the catalyst for the growth in the Islamic debt market continues to be government incentive on susuk issuances such as tax reduction. Based on MARC’s data, corporate sukuk issuance by the end of July 2020 amounted to RM34.3 billion, which is the lowest to date over the last 10 years and dampened by the Covid-19 pandemic. In a separate report, Moody’s said Malaysian Islamic banks are expected to remain resilient amid the Covid-19 outbreak, underpinned by heavy concentration on retail financing.

International Islamic Liquidity Management Corporation issues $1.06bn #sukuk

The Malaysia-based International Islamic Liquidity Management Corporation (IILM) successfully conducted an auction for a total issuance of $1.06bn short-term A-1 rated Sukuk in three series. The three series have been priced by the market as follows: USD400m of 1-month tenor at 0.33%; USD460m of 3-month tenor at 0.45%; and USD 200m of 7-month tenor at 0,58%, respectively. The tender resulted in significant demand from Middle Eastern, Asian and African investors, with an orderbook that closed in excess of USD1.72bn. ILM is an international organisation established by various central banks to develop and issue short-term Shari’ah-compliant financial instruments. The current members of the IILM Governing Board are the central banks and monetary agencies of Indonesia, Qatar, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Turkey, the UAE, as well as the multilateral Islamic Corporation for the Development of the Private Sector.

Source: 

https://www.thepeninsulaqatar.com/article/12/08/2020/International-Islamic-Liquidity-Management-Corporation-issues-$1.06bn-sukuk

College of Islamic Studies at HBKU and Qatar FinTech Hub Sign MoU

The College of Islamic Studies (CIS) at Hamad Bin Khalifa University (HBKU) has signed a Memorandum of Understanding (MoU) with Qatar FinTech Hub (QFTH). Through the agreement, CIS and QFTH will engage and contribute actively to the development of the financial technology (FinTech) industry in Qatar. QFTH represents a range of stakeholders in the industry from early-stage firms to large financial services companies and relevant service providers, who stand to benefit from CIS' insights and research. The Fintech Hackathon, which was launched in June 2020, is one of the pioneering areas of collaboration between CIS and QFTH.

#Russia’s Sberbank structures Islamic finance deal to supply wheat to #Egypt

Russia’s Sberbank has structured its first trade finance deal with an Islamic bank to supply Russian wheat to Egypt. The deal with Saudi Arabia’s International Islamic Trade Finance Corporation (ITFC) was implemented through Sberbank’s subsidiary in Switzerland. Egypt’s state-run General Authority for Supply Commodities (GASC) acted as the buyer in the deal. The Russian bank said ITFC will enable it to significantly increase its share in Russian wheat exports to Egypt.

Uganda: Resolve Islamic Banking Delay, Finance Minister Directs Bou

Finance Minister Matia Kasaija has said that whereas Bank of Uganda still has challenges, it should work around the clock to quickly resolve the pending establishment of Islamic Banking. Mr Kasaija said that, as government, they had done their job to pass the law and it was now the work of the Central Bank to operationalise the Shari'a-based banking system. In 2016, government enacted the law that would introduced Islamic Banking, agent banking and bancassurance, among other products. However, whereas other products have already been established, implantation of Islamic Banking continues to be delayed.

CII helps launch Islamic Finance MBA

The Chartered Insurance Institute (CII) has teamed up with the Islamic Insurance Association of London on the launch of a new MBA in Islamic Finance. The two-year, part-time graduate degree will focus on commerce and management. Applicants will need at least two years of relevant work experience and a UK honours degree, or equivalent. Presented by the University of Bolton, the course will teach students on the unique issues associated with Islamic products, and help them identify risk elements and mitigation techniques.

Mideast family businesses should focus on succession planning, wealth transfer

The desire for wealth transition means that many family businesses may have to change their approach and look outside the family to increase that longevity rather than simply relying on the next generation inheriting the family business. It may be that the skill set or appetite of the next generation to take on the family business is simply not there. Furthermore, the inheritance laws governing the transfer of assets locally may vary from those applicable to assets located abroad. Wealth planning company Julius Baer expects to see an increase in the number of Dubai International Financial Centre (DIFC)/Abu Dhabi Global Market (ADGM) Foundations to support wealth and succession planning for clients in the UAE.

Islamic law principles applicable to the administration of trusts

Under English Law, a trustee who breaches his duties is exposed to a potential claim for breach of trust; breach of fiduciary duty; and/or negligence, and if he is a professional trustee, e.g. a bank , accountant, or solicitor, will have professional indemnity insurance cover. Unless an exemption clause is valid and exonerates the breach, or the court otherwise excuses the breach, the extent of their potential liability is unlimited, the court issue fees in the English court in a will, trust, and inheritance dispute, are relatively nominal. In exercising the general power of investment, the trustee is under a duty to have regard to the so-called ‘standard investment criteria’. These criteria also apply when the trustee reviews investments.

VP seeks greater digital literacy among Islamic economic actors

Vice President Ma'ruf Amin has appealed to Islamic economic and financial actors to hone their digital literacy skills to survive amid the changes arising from the COVID-19 pandemic. He gave a speach at the virtual opening of the 2020 Sharia Economic Festival and Indonesia Sharia Economic Festival (ISEF) in Jakarta. Amin affirmed that digitalization was conducted in the wake of the changes in the current life order, including shopping for basic necessities online or through social media with the use of the internet. Amin noted that in terms of products, health and hygiene aspects were of absolute importance and offered enormous opportunities for the halal product industry. Not only for sharia economic players, but this year's ISEF was also held virtually to adjust to the current conditions to thwart the transmission of COVID-19.

Doing Business The Shariah Way - Mufti Ebrahim Desai

Shariah adviser Mufti Ismail Ebrahim Desai noted that Islam was a religion of balanced justice and equity, and had no room for business dealings that could cause social imbalance, deprivation and injustice. He spoke at a recent Webinar organized by TAIF Digital Institute for Islamic Finance. On the side of basic concepts of Islamic finance and banking, he highlighted three basic categories such as equity base transaction, trading based transaction and lease-based transaction. He explained the concepts of Musharaka, Mudarabah, Murabaha, Istina, Takaful and Sukuk. He identified Mediation and Arbitration, Partnership-Equity/Debt, Employment-Hadeeth of sweat and documentation of contracts as part of the common pitfalls that relate to Shariah-compliant businesses.

Moody's - Decline in #sukuk issuance to be limited by GCC financing needs

Moody’s expects sukuk issuance to modestly decline by 5% this year to about $170 billion because of the coronavirus crisis. Despite the decline, 2020 will still see the second highest sukuk issuance total ever, following a 36% increase in 2019. Total issuance in the first six months of 2020 dropped to $77 billion, down 12% from the same period last year, as activity in Malaysia and Indonesia flagged. Issuance in southeast Asia dropped by 25%, while volumes in the Middle East rose 7%. Volumes are likely to rebound in the second half of 2020, as governments raise money to finance their responses to the coronavirus crisis.

Fitch Named Best Islamic Finance Rating Agency for Fourth Year

Fitch Ratings has been recognised as the Best Rating Agency for Islamic Finance for the fourth consecutive year by The Asset magazine. Fitch has a dedicated sukuk rating criteria and provides takaful-specific considerations within its global insurance rating criteria. It also provides specific consideration to environment, social and governance factors in its ESG scores in rating Islamic banks. Recent landmark deals in which Fitch participated include the first sovereign green sukuk, issued by Indonesia in 2018, and its follow-up issue in 2019 and 2020.

Mideast Islamic banks, investors urged to expand operations to #Philippine market

Islamic banks and investors from the Middle East have been urged to expand their operations into the Philippines which is currently seeing a growing halal industry. Speaking at the webinar ‘Islamic Finance as Vehicle to Economic Recovery’, Philippine Central Bank Managing Director Atty Arifa Ala highlighted the potential of the Islamic finance industry in her country. She also invited foreign Islamic banks and investors, especially from the Middle East to expand their operations in the Philippines. Ala highlighted the new law Republic Act No.11439 or ‘An Act Providing for the Regulation and Organization of Islamic Banks’. She reiterated that the new law was created as an expanded Islamic banking system that involves tax neutrality, stronger risk management, ethical financial stability, further establishment of Islamic banks and other Islamic financial activities.

Dubai Islamic Bank reports Dh2.1b first half 2020 net profit

The Dubai Islamic Bank (DIB) reported a net profit of Dh2.11 billion for the first half of 2020. Due a difficult quarter, DIB continues to demonstrate healthy profitability whilst ensuring prudence in growing the balance sheet.

Islamic Banks: Structural Advantage

Banks who are in the Gulf Cooperation Council (GCC) states, will have weaker earnings and profitability this year, due deterioration in nearly all their sources of income said Junaid Ansari, head of Research and Strategy at Kamco Invest, Kuwait. Conventional banks and the Islamic financial institutions will record weaker performance he said, but Islamic banks, due to their structure and focus, may cope better.

Collaboration Between Industry and Academia, Key To Developing Islamic Finance In Nigeria

Dr. Umar Oseni said that the collaboration between Islamic finance practitioners and academia will be vital to the development of Islamic Finance Law in Nigeria. Dr. Umar Oseni also said that western models dominate financial markets and that conventional banking has existed for over 200 years, while the Islamic finance reemerged towards the end of the last century with Tabung Hajji, West African Muslim Bank, and IsDB which was established in 1975 and this has brought improvement in the Islamic finance industry.

‘Economies must rely on equity, not debt,’ expert outlines globalization challenges during virtual session

The Western economies have relied on debt has got to stop says former Deputy Governor at the Bank of Canada. Governments and central banks have got to start following more symmetrical monetary and fiscal policies and that the world needs to look at debt reduction options and “needs a wholesale embrace of Islamic finance.”

How relief measures impact Islamic banking clients

Due the Covid-19 pandemic crisis all banks have introduced measures to help customers that are struggling. Islamic banking are offering now cirisi products and are more flexible to their costumers and their needs.

Tribune/Finance islamique : comment la #Guinée peut-elle saisir les opportunités de l’émission des Sukuk (emprunt obligataire islamique) ?

Plusieurs pays africains se lancent depuis quelques années dans cette finance d’éthique et prometteuse. Présentement, les différents gouvernements de l’espace UEMOA (Union économique et monétaire ouest-africaine) ont déjà élaboré un cadre règlementaire à travers la Banque centrale des États de l’Afrique de l’Ouest (BCEAO) pour réglementer l’émission des Sukuks souverains dans leur zone. Des États de l’UEMOA ont déjà émis des Sukuks à hauteur des centaines de milliards de francs CFA. Il est important que la Guinée emboite les pas à ses pays voisins pour prendre en compte la finance islamique dans son écosystème financier en adoptant ce modèle et l’harmonisant avec les modèles classiques dans le but de mener une politique de pluralismes dans l’attraction des investissements étrangers pour les secteurs privés et publics.

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