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#Saudi Regulator Urges Consolidation in Crowded #Insurance Sector

Saudi Arabia’s insurance industry needs more consolidation and foreign input to help create solid companies. According to Ahmed Alkholifey, governor of the Saudi Arabian Monetary Authority (SAMA), there are some small firms which are incapable of surviving in the market in their current condition. There are 33 insurance firms listed on the country’s stock exchange with a combined market value of $11.1 billion. The governor said two foreign firms would soon increase their stakes in Saudi insurance companies, but did not mention names. Banque Saudi Fransi sold an 18.5% stake in Allianz Saudi Fransi Cooperative Insurance to Allianz Europe BV. In June, Al-Ahlia Insurance started non-binding talks with Gulf Union on a proposed merger. An agreement is expected to be reached by the first half of 2018.

#Saudi Arabia considers issuing international #sukuk early next year- Maaal

Saudi Arabia plans to issue an international sukuk in the first quarter of 2018. Fahad Al-Saif, head of the debt management office, said the government would issue domestic sukuk in November and December. Saudi Arabia issued its debut international sukuk earlier this year, raising $9 billion.

ADIB launches second Advanced & Autonomous Car #Equities basket note following high demand

Abu Dhabi Islamic Bank (ADIB) launched a second 'Advanced & Autonomous Car' Equities Basket Note, following high investor demand for the first tranche. The Shariah-compliant note matures in one year and provides 100% capital protection. The product provides investors with exposure to a basket of five leading car manufacturers, including Daimler, SAP, Volkswagen, BMW and Tesla. The minimum investment for the note is US$30,000, with an option for early redemption after three months. In September 2017, the bank launched a similar equity basket note, which provided investors with exposure to a basket of nine companies operating across the car industry. On September 7, 2017, an ADIB Shariah-compliant diversified equity basket note capturing the performance of undervalued blue-chip yielded 5.45% upon its maturity.

DMCC and Dubai SME to develop Shariah compliant #trade finance #platform for SMEs

DMCC has signed a Memorandum of Understanding (MoU) with Dubai SME to create a web-based trade finance platform for SMEs. The platform will be Sharia-compliant and operate under the DMCC Authority regulatory framework. Present at the signing ceremony was Gautam Sashittal, CEO of DMCC and Abdul Baset Al Janahi, CEO of Dubai SME. Gautam Sashittal said this cooperation between DMCC and Dubai SME opens a new avenue for funding and financing SMEs. Al Janahi said the SME sector in the UAE has evolved remarkably during the past decade chiefly due to support from the government. He added that this MoU was among a series of partnerships created after identifying the gap that existed in the SME landscape in terms of mobilising resources. DMCC is using Alternative International Management Services (AIMS) to make the platform Sharia-compliant.

Issuance of P50-billion Marawi #bond proposed

The #Philippines House of Representatives has approved the government’s plan of tapping the bond market to finance the reconstruction of Marawi City. Ben P. Evardone said the Bureau of Treasury should pursue the issuance of a P50-billion 'Marawi Bond' considering the low interest rates prevailing in the market. By tapping the bond market to finance Marawi’s reconstruction, the lawmaker said this will free up a huge part of the regular budget for government’s other programs. According to Budget Secretary Benjamin E. Diokno, the government would allocate P15 billion to Marawi City in the next two years. He also added the tax settlement paid by Mighty Corp. and Philippine Airlines would be used to finance the rehabilitation of the war-torn city.

Mazoon #Sukuk receives Fitch rating

Fitch Ratings has assigned Mazoon Electricity Company's Sukuk an expected rating of 'BBB'. The expected rating is in line with Mazoon Electricity’s Issuer Default Rating (IDR) of 'BBB', which has a negative outlook. Mazoon Assets Company’s is the issuer of the certificates and trustee and is a closed joint stock company in accordance with the laws of the Sultanate. The trustee has been incorporated solely for the purpose of participating in the transactions contemplated by the transaction documents. Earlier, Moody’s Investors Service assigned a Baa2 rating to Mazoon’s Sukuk certificates. The outlook on all ratings is negative.

Emir Sanusi to launch #Takaful insurance Monday

The Emir of Kano, Muhammad Sanusi II, is expected to launch Kano branch of Jaiz Takaful Insurance on Monday 30th October, 2017. Jaiz Takaful's CEO Momodou Musa Joof said the company would tap Emir Sanusi’s royal blessing to improve on insurance penetration in Nigeria and Kano in particular. The ceremony which will partly feature parley between the top management officials of the Company and Kano business communities and associations, would have the Company’s Board Chairman, Dr. Umaru Abdul Mutalab as a special guest.

Islamic Development Bank to finance African #infrastructure projects

The Islamic Development Bank (IDB) has approved a multi-million-dollar package of financing to boost infrastructure investments in seven African nations. Burkina Faso, Cote d’Ivoire, Senegal, Mali, Guinea, Tunisia and Suriname will benefit from a share of the total $805 million deals for investments in energy, housing, agriculture and water supply. IDB president Dr Bandar Hajjar signed the agreements with the finance ministers of the beneficiary countries. Cote d'Ivoire will receive $265m for the Cocody Bay project and vocational training. Mali will receive $166m for the country’s Sirakoro power plant project and Burkina Faso will receive $104m for a power project. Guinea is to receive $16m for a rural water supply project and Tunisia will receive $80m for agricultural development. Senegal and Suriname will receive a total of $173 for housing projects.

#Malaysia's #Green Islamic #Sukuk funds green tech projects

Malaysia has the potential for green financing 130 potential projects comprising 111 renewable energy (RE) projects and 19 energy efficiency (EE) projects that are worth about RM1.9 billion and RM248 million. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said the country was on the right path to be the world leader in green investment. Maximus said Malaysia was leading the world in green investment through the introduction of Green Islamic SRI (Sustainable and Responsible Investment) Sukuk. This year Malaysia issued the Green Islamic SRI Sukuk amounting RM250 million for solar project to Tadau Energy and RM1 billion for Quantum Solar Park Malaysia. The recently launched Green Technology Master Plan 2017 (GTMP) is aimed to create a low carbon economy. Maximus also said Malaysia was committed to reducing its greenhouse gas emission intensity of its Gross Domestic Product by up to 45% by year 2030 in accordance with the Paris Agreement.

Iranian Banks, #Fintechs Shine in #Iran Transaction #Exhibition

Banks, fintechs, financial solution vendors and startups were present in full force at the Third Iran Transaction Exhibition (ITE). The exhibition was inaugurated by Mohammad Morad Bayat, chief executive of FABA, a government-owned center for promotion of electronic banking. He said that 56 startup companies have taken part in this year’s event and that fintechs are not banks' enemies, as the future will be one of cooperation between the two. The Iranian Parliament also had a representative in the exhibition, who said the government has assigned a whole chapter specifically to electronic banking. Various payment systems, banking solutions, real-estate financial services and insurance facilitators were showcased at the exhibition.

Guidance Residential CEO Talks #Fintech

The strategy of 'technology first' and the automation of everything is not how businesses usually start. The traditional barriers have been human and financial capital, as well as various regulatory barriers. Fintech starts with anyone’s business and applies a 'technology first' approach to that model. Islamic finance in the US has taken hold. There are several institutions offering Islamic financial products. They all have websites, a comprehensive online foundation and a robust social media presence. That used to be enough once you have overcome the traditional barriers to entry, but that is no longer the case. Experts predict that in the near future, no enterprise will succeed and flourish without the right fintech services in place. Guidance Residential, a leader in the US Islamic home financing market, was among the first to identify the trend and face that challenge.

SIBL wants to invest $2mllion in overseas private equity fund

#Bangladesh-based Social Islami Bank Limited (SIBL) plans to invest $2 million in a real estate-based private equity fund managed by the Islamic Development Bank (IDB). The bank plans to buy 200 shares of Awqaf Properties Investment Fund (APIF) for $10,000 each. A 2% stake in the fund will be enough to give SIBL a seat on the APIF board. SIBL claimed that participating in the APIF equity would benefit it in various ways. It would optimise the facilities delivered to Awqaf customers and enhance the returns to investors. According to SIBL managing director Shahid Hossain, SIBL will get 90% of net income per certificate apart from yearly dividend. The secretary of Financial Institutions Division, Eunusur Rahman, said they would place a proposal before the Cabinet committee on Economic Affairs to allow local companies invest abroad after discussions with the Finance Minister.

#Bangladesh’s Islamic finance market in need for proper regulation

Bangladesh has a burgeoning Islamic finance industry focused on the retail market, but there is no comprehensive legal framework for the sector. Bangladesh has 8 Islamic banks and 15 non-Islamic banks that offer Islamic-banking services through Islamic windows. Currently, the Islamic finance sector in the country is led by Islami Bank Bangladesh which manages around 90% of Islamic-banking assets and deposits. Takaful is also growing in popularity. Bangladesh currently has 11 companies for both the life and non-life takaful market at a combined asset base of close to $1bn and a market share of 17%. The central bank has been working for considerable time on an industry-wide regulation to expand beyond retail banking. At present there are no regulations for sukuk issuances even though there would be huge market for both sovereign and corporate sukuk. Other challenges than the absence of comprehensive regulations are a lack of service diversification and a lack of a skilled workforce.

#UAE Central Bank warns against #Bitcoin

The UAE Central Bank has warned against Bitcoin, terming it as unofficial and lacking sufficient supervision. According to Governor Mubarak Rashed Al Mansouri, it can be easily used in money laundering and in funding terror activities. Al Mansouri also said the central bank has completed the formation of a committee for developing Islamic Sharia-compliant products in order to support the Islamic finance sector. On the level of the UAE financial exposure to global capital markets, the governor said local markets have a slight exposure as the existing liquid assets now account for 17% of the banking sector's total assets. He added that UAE banks are robust enough to deal with risks as they have sufficient capital on account of the rising level of individual deposits.

Islamic Development Bank (IDB) celebrates listing $1.25 billion #Sukuk on Nasdaq Dubai

Dr. Zamir Iqbal, Chief Financial Officer of the Islamic Development Bank (IDB), rang the market-opening bell to mark the listing of a $1.25 billion Sukuk on Nasdaq Dubai. 53% of the five-year Sukuk issuance was acquired by investors in the EMEA region, while 47% went to investors based in Asia, with an annual return of 2.261%. The IDB is one of the largest Sukuk issuers on Nasdaq Dubai, with a current total of eight listings valued at $10.25 billion. The bell-ringing ceremony was attended by Hamed Ali, CEO of Nasdaq, as well as Azahari Bin Abd Kudus, Capital Markets Manager of the IDB. Dubai is a leading international centre for Sukuk activity, with Sukuk listings in the Emirate currently totalling $52.47 billion.

When money meets religion: Sharia compliant #pensions in the #UK

Pension schemes are increasingly attempting to understand their members' preferences. Exclusion policies over so-called sin stocks, such as alcohol and tobacco, is on the rise across the UK. The need for sharia-accommodating pensions is likely to grow. The UK’s Muslim population reached 2.8m in 2011, according to the last census. The biggest challenge associated with sharia compliance relates to its policies on investments, but sukuk can take the place of conventional debt instruments. Christine Hallett, CEO of Carey Pensions UK, which administers the Islamic Pension Trust, says sukuk is currently too expensive for the workplace DC default charge cap of 0.75%. The industry is faced with a circular problem. Lack of demand limits the range of mature markets sharia funds can invest in. Maria Nazarova-Doyle, head of JLT Employee Benefits, sees a current absence of demand for sharia pensions, but adds that sharia considerations are becoming more prominent.

#Saudi Arabia joins AAOIFI, bringing potential boost to finance sector

Saudi Arabia’s central bank has joined the Islamic financial regulator Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The move could increase cross-border financial deals in the region, as guidelines will apply to all financial institutions within Saudi Arabia. Both conventional and Islamic banks will now be subject to the same standards, potentially encouraging deals with other Muslim countries. AAOIFI Chairman Sheikh Ebrahim bin Khalifa Al Khalifa stated that the addition of the Saudi central bank would help foster closer collaboration with the kingdom. Saudi Arabia may now hold ambitions of becoming a global heavyweight in the Islamic finance sector. However, it will face intense competition from Malaysia, South Africa and the UK.

Dubai Economy launches Sharia-compliant #smart #programme

Dubai Economy in partnership with Dar Al Tawreeq has launched a Sharia-compliant smart programme to offer receivables finance to suppliers dealing with government entities in Dubai. Dubai Economy is the first government entity to offer such a financing option to suppliers. Faster payment will support businesses in growing sustainably and maintaining cash flows. Businesses working with government entities can use the smart software developed by Dar Al Tawreeq to ensure liquidity by obtaining financing on their invoices. The programme also provides easy access to on-demand working capital for businesses at no additional cost. The programme was launched by Khalid Al Kassim, Assistant Director General in Dubai Economy and Haitham Al Refaie, CEO of Tawreeq Holdings. The programme emphasises the principle of public-private partnership adopted by Dubai in its evolution into an Islamic Economy Capital.

Islamic Development Bank to Research Sharia-Compliant #Blockchain Products

The Islamic Development Bank (IDB) is using blockchain to develop new sharia-complaint financial products. The bank's Islamic Research and Training Institute has struck an agreement with two startups, Ateon and SettleMint, to perform technical feasibility studies. IDB said that it was interested in asset exchanges that can settle in near-instant time. According to the statement by SettleMint, blockchain smart contracts can help automate the contractual processes for Islamic institutions. At the same time, they can also alleviate the additional administrative and legal complexities as well as redundancies associated with Sharia-compliant financial products. SettleMint's CEO Matthew Van Niekerk said he was excited to contribute to this project, thus to the financial inclusion and development of the 57 member countries of the IDB.

#UK savers struggling to make money should consider Islamic banks

Islamic banks are becoming increasingly popular with non-Muslim savers due to their attractive rates and their ethical principles. In the UK, Islamic banks come under the same governance as high street branches and other private banks, offering the same statutory protections under the Financial Services Compensation Scheme (FSCS). This scheme means savers get their money back if a bank or building society goes bust, although there is a cap of £85,000 per lender. According to Robert Parker, founder of Holborn Assets, with Islamic finance profit schemes, after-tax return needs to be compared between schemes to judge potential before making decisions on return rates alone. Islamic banks offer competitive rates, although savers will have to be prepared to tie up their money for at least a year to access the best deals.

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