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Fitch: Deposits in #Morocco Islamic Banks to Grow up to 10 %

According to Fitch Ratings, Islamic banking products in Morocco could expand their deposit bases by 5 to 10%. Fitch notes that the ability to grow the deposit base is positive for Morocco’s economic development because deposits represent about 70% of banking sector funding. The experts also noted that banking penetration is already high in Morocco, with 70% of adults holding a bank account. Therefore, participation banking is unlikely to take a significant market share from the well-established conventional banks. Growth rates in the Moroccan banking sector have been volatile in recent years, reflecting unsteady economic trends. Deposit growth has outstripped loan growth, but credit demand is set to accelerate. The ability to offer participation banking services could broaden the pool of potential depositors in the country, mitigating the competitive pressure.

#Nigeria plans $328mln debut #sukuk sales this month - DMO

Nigeria's Debt Management Office (DMO) announced the sale of its initial $328 million sovereign sukuk in the local market. The proceeds will be used to finance road projects in the country. The bond will be traded on the Nigerian Stock Exchange and also on the FMDQ over the counter platform. The sale will be managed by First Bank and Islamic wealth manager, Lotus Capital, and will aim for retail and institutional investors. Africa’s second largest economy intends to borrow about $10 billion from debt markets to fund a budget deficit aggravated by lower oil prices. It also targets concessionary sources to clear its funding needs and expects to issue N20 billion ($62million) green bond after raising a $1.5 billion Eurobond in the first quarter.

Mideast Debt: Islamic finance industry frets as Dana Gas deems its #sukuk invalid

The decision by Dana Gas to declare $700 million of its sukuk invalid has raised concern about the safety of sharia-compliant debt instruments in general. Dana Gas received advice that its sukuk were not compliant with the Islamic sharia code and had become unlawful in the United Arab Emirates. The firm said it would halt payments and proposed that creditors exchange the sukuk for new Islamic instruments. Dana has struggled to obtain payments from its production assets in Egypt and Iraq's Kurdistan. With a cash balance of just $298 million in March, it had been expected to have difficulty redeeming its sukuk in October. Mohammed Khnifer, a senior associate at the Islamic Development Bank, said this specific sharia compliance risk was unprecedented and this incident had startled the Islamic finance industry.

Maybank Islamic named Asia-Pacific's Islamic Bank of the Year 2017

Maybank Islamic was named the Islamic Bank of the Year 2017 in Asia-Pacific by The Banker. The bank also received recognition in the country awards category for Malaysia. The Banker noted that Tier 1 capital and total Shariah-compliant assets enjoyed notable growth, climbing by 12% and 16%, respectively. Maybank Islamic’s return on equity for the year was 15.4%, while its cost-to-income ratio was a respectable 36% and non-performing financing were just 0.8%. The bank’s steady growth pace in Singapore and Indonesia also contributed to its recognition as the best in Asia-Pacific. Maybank Islamic's CEO Datuk Mohamed Rafique Merican attributed the bank’s achievements to its employees and sound risk management practices. He said the bank intends to further enhance its global brand visibility, while also deepening its existing regional presence.

#Saudi Arabia's Sedco Capital launches #green #investment strategy

Saudi Arabia's Sedco Capital has launched an investment strategy combining environment-conscious and sharia-compliant principles. The move could help develop green investing in the Middle East and make Islamic finance appeal to a wider client base. Green finance is increasingly important for Islamic firms seeking to differentiate themselves from peers. Sedco said its new strategy, dubbed Prudent Ethical Investing, would focus on due diligence and transparency around investment structures, while integrating environmental, social and governance (ESG) criteria. The firm launched two ESG funds in 2012 and has published research which showed how a combined investment approach
can outperform conventional funds. According to its research, such a strategy can lead to investments with lower financial leverage and better cash conversion qualities, adding a prudential element to those portfolios.

As #debt piles up, the old take from the young — Satyajit Das

A significant proportion of recent economic growth has relied on borrowed money, which stands today at 325% of global gross domestic product. Debt allows society to accelerate consumption, but the bill for these commitments will soon become unsustainable, as demographic changes make it more difficult to meet. Degradation of the environment results in future costs, too: either rehabilitation expenses or irreversible changes that affect living standards. Rather than reducing high borrowing levels, policy makers use financial engineering, such as quantitative easing and ultra-low or negative interest rates. A 2010 study found that European states have mortgaged themselves beyond their capacity to easily repay. Another 2010 study from the International Monetary Fund found that in the US the lifetime tax burden was positive for all ages, with the largest benefit accruing to those over age 50. But the figure for future generations is negative, meaning they will have to meet the obligations of their elders.

US$50 million to Support Health Services to Poor Jordanians and Syrian #Refugees [EN/AR]

The World Bank Group has committed US$50 million to support the Government of Jordan in maintaining primary and secondary health services to poor uninsured Jordanians and Syrian refugees. The assistance approved today is part of a larger US$150 million project, which is financed by the Islamic Development Bank and the World Bank. The Jordan Emergency Health Project will help the Ministry of Health continue to provide critical health care to target populations. According to Aaka Pande, World Bank Senior Health Economist, the refugee influx has been associated with a reemergence of communicable diseases such as tuberculosis and measles. Moreover, the influx has led to increased waiting times and a shortage of health workers. In addition to its short-term objectives, the project aims to prepare a roadmap of ways to improve the efficiency of the health system in the medium to long term.

#Brunei's largest bank aims to raise up $500 mln in #Malaysian #listing -IFR

Bank Islam Brunei Darussalam aims to raise as much as $500 million in an initial public offering (IPO) and the bank will be listed on the Malaysian bourse. JPMorgan and Malayan Banking (Maybank) are set to be joint global coordinators for the initial public offering of $200 million-$500 million this year. The IPO is expected to raise around $300 million but the final amount will depend on the size of the greenshoe option. Brunei is one of the world's richest countries on a per capital basis. The country does not have a stock exchange although its central bank last year announced draft rules to form one.

ABAC backs development of Islamic Infra Investment

The #Philippine team of the APEC Business Advisory Council (ABAC) has expressed interest in developing the Islamic Infrastructure Investment Program (I3P), making it a priority for the country. ABAC Philippines said it would look into how the Philippines can tap into the available funds from the Islamic banks in the region. The advisory council has identified infrastructure investment, areas involving people and labor, and micro, small and medium enterprise development as key priority areas for the country. For people-to-people connectivity, ABAC Philippines agreed to continue advocating for labor mobility and working on the APEC Business Travel Card (ABTC). It will also work with the Department of Foreign Affairs on how to improve access to ABTC and to increase penetration of the travel card among Filipino business people.

Abu Dhabi builds a '#fintech bridge' to Asia

Abu Dhabi is taking ambitious steps to tap into financial technology. The Abu Dhabi Global Market (ADGM) signed a cooperation deal with the Monetary Authority of Singapore. The goal of the arrangement is to spur financial entrepreneurship through mutual exchanges of fintech know-how. Last November the ADGM launched the FinTech Regulatory Laboratory, or RegLab, to provide a platform for foreign players to innovate. So far five companies have been selected to participate. Richard Teng, CEO of the emirate's Financial Services Regulatory Authority, said there was a clear trend toward cultivating sectors besides oil and the cooperation with Singapore is designed to make fintech the driving force of economic diversification. In his view, Asian financial companies have a big market in the Middle East to develop and explore business in wealth management, remittances and other fields.

Maybank Islamic appoints Zainal Abidin as chairman

Maybank Islamic has announced the appointment of lawyer Zainal Abidin as its chairman. Zainal has been a director of Maybank Islamic since 2010 and previously served as chairman of Maybank Trustees. Prior to that, Zainal was a director of Malayan Banking (Maybank) from July 2009 to April 2014. Zainal, 63, is a practising corporate and commercial lawyer. As the founder and senior partner, Zainal established the firm Zainal Abidin in 1987.

TH confirms backing Badlisyah for Bank Islam, denies bad blood with board

Lembaga Tabung Haji (TH) has confirmed its support of deputy CEO Datuk Badlisyah Abdul Ghani to lead Bank Islam Malaysia following the retirement of the bank’s group managing director, Datuk Seri Zukri Samat. TH has a 52.5% stake in BIMB Holdings which wholly owns Bank Islam. Bank Islam’s board had already put forward its choice, Khairul Kamarudin, to Bank Negara and the decision now lies with the central bank. TH CEO Datuk Seri Johan Abdullah confirmed recommending Badlisyah to be appointed to lead Bank Islam. He added that the choice of leadership and succession is subject to nomination of the board of directors and approval by Bank Negara Malaysia. He said TH was never at odds with the board of directors.

ICD Extends $5 Million Line of Finance Facility to Arab Gambian Islamic Bank

The Islamic Corporation for the Development of the Private Sector (ICD) and Arab Gambian Islamic Bank (Agib) have entered into a Joint Strategic Collaboration to finance the private sector in The Gambia. The financing agreement for the amount of USD5 million was signed by the CEO of ICD, Khaled Al Aboodi and Muhammed Jah, Chairman of Agib Bank. The collaboration will focus on developing the private sector, supporting the local economy and promoting Islamic Banking in the country. CEO of Agib Bank, Nuha Marenah, assured ICD of Agib Bank’s resolve to contribute to the socio-economic development of The Gambia. He also said Agib Bank has the capacity, both in terms of technology and human resources to manage the line of financing to the total satisfaction of all stakeholders.

#Qatar has ninth-strongest Islamic finance industry

The state of Qatar lists rank nine this year on the annually published Islamic Finance Country Index. The index is part of the Global Islamic Finance Report 2017 and was compiled by London-based Islamic finance consultant firm Edbiz Consulting. Qatar’s ranking is testament to its solid Islamic finance industry which is built upon solely fully-fledged Islamic banks. The country with the world’s strongest Islamic finance industry remains Malaysia, followed by Iran, Saudi Arabia, UAE and Kuwait. This is the second year in a row that Malaysia has been in the top position, taking over from Iran in 2016. According to Edbiz CEO Sofiza Azmi, in the list of 48 countries, there are 14 that saw a decrease in their scores. Among the 13 countries that improved their ranking, Tunisia took the biggest leap. Other big gainers are Pakistan and Kazakhstan. The report concludes that the ranking suggests that countries with large Muslim populations are the future frontiers for growth in Islamic banking and finance.

Middle East and other sovereign #investors put major asset allocation decisions on hold

Invesco has released its fifth Invesco Global Sovereign Asset Management Study. The study was conducted amongst 97 individual sovereign investors and asked them to rate the importance of economic and geopolitical factors on their investment strategies. Middle East and other sovereign investors see low interest rates as the greatest tactical asset allocation factor. Brexit and the US election results are expected to grow in importance for future allocations, as the implications of political shifts on investment performance becomes clearer. Sovereign investors have ranked the US as the most attractive market. However, long term confidence is still restricted by concerns about growing protectionism limiting access for foreign sovereigns. The UK saw the biggest drop in attractiveness and Continental Europe's attractiveness has also fallen. However, Germany stands out from its European neighbours because of its perceived safe haven status. Despite target return gaps increasingly widening, geo-political uncertainty is causing sovereign investors to make fewer allocation changes than at any point in the last five years.

5 Foreign Banks Licensed by #Iran

The Central Bank of Iran has released the names of 40 registered banks and credit institutions active in the country, which include the names of five foreign banks. The only five foreign lenders licensed to operate in Iran are the Hamburg-based Iranian-European Bank, Standard Chartered, Iran-Venezuela Bi-National Bank, Islamic Cooperation Investment Bank and Future Bank. The Iranian-European Bank has a German license, but is owned by the Iranian state. Standard Chartered is a British multinational banking company headquartered in London. It operates a network of more than 1,200 branches across more than 70 countries. Iran-Venezuela Bank a joint venture between Banco Industrial de Venezuela and the Export Development Bank of Iran. However, Iran is planning to sell some of its shares in IVBB, as the two countries currently have no commercial relations. The Islamic Cooperation Investment Bank is an Iraqi private lender, which currently has 11 branches in Iran. Future Bank is a fully commercial lender approved by the Central Bank of Bahrain, its branch in Iran is located in the Kish Free Trade Zone.

BRIEF-Al Izz Islamic Bank expresses interest in #merger with United Finance

Alizz Islamic Bank has expressed interest in the possibility of strategic merger with United Finance subject to conducting due diligence. No legally binding commitment has been made and the transaction remains subject to approval by the regulators and other stakeholders.

Oman's $2bn international #sukuk oversubscribed more than three times

Oman's inaugural US2bn international sukuk issuance witnessed a strong investor interest with an orderbook of US6.9bn and over 300 participating accounts. Oman entered the international public sukuk markets via a US2bn seven year sukuk issuance on May 23. The current sukuk follows a US5bn multi-tranche bond priced earlier this year. According to a press release, the final order book represented an oversubscription of nearly three times. The issuance was coordinated by a lead manager group comprising of alizz islamic bank, Citi, Dubai Islamic Bank, Gulf International Bank, JP Morgan, HSBC and Standard Chartered Bank. With this issuance the sultanate has now met significant portion of the funding requirements tied to its anticipated budget deficit for 2017.

Sberbank of #Russia to expand capabilities in Islamic financial business

Sberbank received official certification for its Mudaraba Finance transaction from Shariyah Review Bureau (SRB). The bank also reaffirmed that it would remain fully committed to Sharia compliant financial activities for its customers. Sberbank, based in Moscow, currently has 16 thousand branches in all 83 constituent entities of the Russian Federation. It is the largest bank of Russia and the leading financial institution in the country. Yasser S. Dahlawi, CEO and Founder of SRB, noted that the Shariyah Review Bureau would continue to review and supervise Sberbank’s transaction and sharing best practices of the Sharia complaint marketplace.

MIDF Amanah to introduce new shariah #fund for high net worth investors

#Malaysian Industrial Development Finance (MIDF) Amanah will introduce a new Shariah Equity Wholesale Fund for high net worth investors with a target to raise RM100 million. The fund will have two special key features, the first being that the fund will have zero entry fee, which means no sales fee will be charged to investors. Secondly, the fund will pay zakat on behalf of its investors. MIDF Amanah Asset Management and Amanah International Finance have also transitioned into fully Shariah-compliant entities.
The equity portfolios under MIDF Amanah have seen an overall exceptional performance in the first quarter this year with gains ranging from 10% to a high of 15%. MIDF managing director Datuk Mohd Najib Abdullah said the conversion of the asset management arm into a Shariah-compliant entity will cater to the ever growing demand for Islamic finance products and services.

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