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Call for Good Practices on Islamic Finance and Impact Investing Activities

Click here to apply http://bit.ly/2tN5RAZ

Purpose of this call is to invite private and public sector to share their good practices on
•Islamic finance funded impact investments and dedicated vehicles
•impact investment vehicles in the OIC region
•Islamic social finance vehicles

for the mapping study that is being carried out under the Global Islamic Finance and Impact Investing Platform (GIFIIP). The selected cases will be analysed by the research team managed by IICPSD and IRTI. Subsequently the good practices, information on vehicles and further findings will be published as part of the study.

Investment Focus

Over One Fifth of Student Borrowers Used Loans to Gamble on #Cryptocurrencies

According to a study by The Student Loan Report, over one-fifth of current university students with student loan debt indicated that they used their student loan money to invest in digital currency such as bitcoin. While school administrators may look down upon the practice of using borrowed funds for non-school expenses, Student Loan Report indicates that there are currently no rules against it. College students are able to use loans for "living expenses", a flexible category that covers a wide range of potential necessities. This sort of thing does not help the image of student borrowers, although it does strengthen the case for regulating cryptocurrencies far more strictly.

Jaiz Bank, others secure $50m for #SMEs financing

Jaiz Bank, Wema Bank and SunTrust Bank signed a Memorandum of Understanding (MoU) and secured $50 million from the Islamic Corporation for the Development of the Private Sector (ICD) for lending to SMEs. Under the terms of the MOU, SunTrust bank will get a financing of $10 million for lending purposes, Jaiz bank $20 million and Wema bank $20 million. Jaiz bank Managing Director Hassan Usman expressed his optimism about disbursement of the fund and said the bank has been supporting SMEs since it was created five years ago. According to Segun Oloketuyi, the Managing Director of Wema Bank, the funds will help bolster the Bank’s vision of building a sustainable retail sector by supporting micro, small and medium scale enterprises.

CBK-IFSB #Conference on Islamic Finance themed "Islamic Finance: A Universal Value Proposition"

The Central Bank of Kuwait (CBK) and the Islamic Financial Services Board (IFSB) are organizing a conference on Islamic Finance on the 2nd of May 2018. The conference will be held in the State of Kuwait in conjunction with the IFSB Annual Meetings 2018, hosted by the CBK. The CBK-IFSB Islamic finance conference is expected to attract senior-level participation from among the global and financial industry stakeholders and thought leaders. Discussions will revolve around the role Islamic finance can play in government strategies to build a diversified and sustainable economy. The IFSB Annual Meetings 2018 will be held in Kuwait from 1–3 May 2018. Alongside the conference, CBK is also hosting the IFSB Public Lecture, Members and Industry Engagement Session, the IFSB’s General Assembly and Council Meetings during the 3 days.

Spreading Islamic Banking in #Uganda, One Sermon at a Time

Ugandan investors are set to start a fully fledged Islamic institute called Midsoc Bank. Its promoter, Haruna Sebaggala, says it may start operations in six months, depending on licensing and funds. Midsoc Bank aims to target the unbanked population of the country, including both Muslims and non-Muslims. Currently, only 40% of 19 million potential customers have bank accounts. About 14% of Uganda’s 41.5 million population are Muslim. The nation’s largest banks such as Stanbic Bank Uganda and Standard Chartered Bank Uganda haven’t committed to Islamic banking. So far only Tropical Bank has confirmed it will offer Islamic products. Tropical Bank plans to initially run a dedicated department before establishing a subsidiary.

QIIB to raise up to $500m via #sukuk; plans roadshows

QIIB plans to raise between $300m-$500m via Sukuk this year. CEO Dr Abdul Basit Ahmed Al Sheibi said the bank got shareholders' approval and will hold roadshows in selected Asian and European markets next month. QIIB’s $2bn Trust Certificate Issuance programme has already been approved by the the UK Financial Conduct Authority and is being admitted to the official list of the FCA and the London Stock Exchange. The Programme has been assigned a provisional rating of A2 by Moody’s Investors Service Cyprus.

Source: 

https://www.thepeninsulaqatar.com/article/27/03/2018/QIIB-to-raise-up-to-$500m-via-sukuk-plans-roadshows

The race to become the world’s leading leading Islamic fintech hub

According to Pew Research, the demand for Islamic financial technology is set to grow siginificantly, as the global Muslim population is expected to explode from less than two billion in 2015 to almost three billion by 2060. Malaysia, the UK and Indonesia are leading the race, ranking first, second and third respectively by number of Islamic fintech startups. However, fierce competition from Middle Eastern countries threatens their supremacy. In January, Bahraini banks created a consortium aiming to create fifteen fintech providers in five years. Last year, the Dubai International Finance Centre (DIFC) launched an accelerator called FinTech Hive. The UK has recently launched the crowdfunded property investment platform Yielders adding to established players including InsureHalal and Ethos Asset Facilitation Platform.

It's cool to be kind: family offices and impact investing

The Global Family Office Report 2017 (GFOR) shows that more than a quarter of family offices (28%) report being engaged in impact investing, and two-fifths plan to increase their allocations in 2018. This investment method is now being practised across nearly every asset class, with 63% partaking in direct private investment, 57% in private equity funds, and 38% in venture capital. According to the GFOR, some family offices have trouble understanding how to source and implement impact investments. Environmental and social analytics providers can help by providing data-driven analysis for a practical measurement of impact. The rising influence of socially-conscious millennials in wealthy families means impact investing is only set to skyrocket. Family offices should get ready to be swept into the mainstream.

#UAE's Dana Gas plans cash dividend despite $700 mln #sukuk dispute

Dana Gas plans to pay a dividend for 2017 despite its legal dispute with investors demanding that the company settles $700 million of sukuk bonds. International funds and local investors want Dana to direct its resources towards repaying that debt. Dana last year halted payments on its sukuk, saying the bond had become unlawful in the United Arab Emirates because of changes in Islamic finance. Dana has been in talks for months with creditors to restructure its sukuk. One of the proposals envisaged Dana redeeming 10% with cash and rolling over 90% under new terms. However, creditors want the company to redeem a higher proportion of the sukuk.

Turkiye Finans gets regulatory nod for $450 mln #sukuk

Turkish Islamic lender Turkiye Finans has been granted regulatory approval to raise $450 million via dollar-denominated sukuk. It previously issued dollar-denominated sukuk in 2013, a $500 million five-year deal that matures in May. The bank has been a frequent issuer of sukuk in the domestic market and has also tapped investors in Malaysia through ringgit-denominated deals.

#Malaysia central bank to launch revised #takaful operational framework

Bank Negara Malaysia (BNM) plans to revise its takaful operational framework. Governor Tan Sri Muhammad Ibrahim said the revised framework would be published for consultation before the middle of the year. He said it would strengthen the governance of takaful operators, including how takaful funds are managed, to further safeguard the interest of takaful participants. On the objective of 25% family takaful penetration by 2020, he said it was ambitious, but achievable. Muhammad noted that the industry was lagging in terms of migration to e-payments. He added that another area that is wide open for innovation was the integration of takaful with elements of waqf, sadaqah and zakat.

Financial Inclusion Strategy For Marginalized Zimbabwean Muslims: Islamic Finance

In 2016 The Reserve Bank of Zimbabwe (RBZ) introduced the Financial Inclusion Strategy to increase the banking population from 30% at the time it was implemented to at least 90% by 2020. The action targets groups such as Micro, Small and Medium-sized Enterprises (MSMEs), women, youth, rural population and the small-scale agricultural sector. While the strategy seems overarching, it forgot to include Muslims. RBZ should initiate the introduction of Islamic Finance through setting up an Islamic financial institution and through "Islamic windows" at conventional banks. Also, banks as a whole could set up an Islamic Bank that models ZimSwitch’s structure, in which all the banks have a stake.

Republic of #Indonesia’s $3 Billion Sovereign #Green #Sukuk Offering

Indonesia issued a 5-year US$1.25 billion green Wakala Sukuk as the first issuance under its recently established Green Bond and Green Sukuk Framework. Norton Rose Fulbright has advised Abu Dhabi Islamic Bank, Citigroup, CIMB, Dubai Islamic Bank and HSBC, acting as joint lead managers and joint bookrunners. The Republic intends to use the proceeds exclusively to finance green projects, including renewable energy, sustainable transport, waste management, climate-related projects and green buildings. Alongside the 5-year green Sukuk, Norton Rose Fulbright also acted for the joint lead managers and joint bookrunners in the Republic’s 10-year US$1.75 billion Wakala Sukuk issuance.

Corrected: Arkan Bank could tap investors for $200mln through Nasdaq Dubai listing

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $200 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

World's largest single country Islamic ETF launched on QSE

#Qatar launched the world's largest single country Islamic exchange traded fund (ETF). Al Rayan Qatar ETF (QATR), sponsored by Masraf Al Rayan, is planning to create more units to meet the increasing demand. The QATR is listed on the Qatar Stock Exchange and seeks to track the performance of the QE Al Rayan Islamic Index to provide investors diversified exposure to Qatari equities. The open-ended fund, with initial assets of $120mn, is three times larger than any other ETF in Qatar and Gulf region and has pegged total expense ratio at 0.5% of net asset value, which is considered to be the lowest for any single country ETF in the region. According to Al Rayan's chief investment officer Haithem Katerji, QATR is perfect for investors seeking diversified exposure to Shariah-compliant Qatari stocks with the simplicity and efficiency of buying just one share.

Newly empowered #Saudi women to help drive growth at Al Rajhi Bank

Saudi Arabia's Al Rajhi Bank has opened 133 female-only branches and a car showroom for women to help them access car loans. Women have been allowed to attend mixed sporting events and will be able to drive from June. Al Rajhi Bank is a major provider of vehicle loans and has operated car showrooms since 2008. They were only for men until the bank opened its first women-only one late last year. Al Rajhi CEO Steve Bertamini said families usually have a large automobile already, so the cars for women tend to be smaller vehicles for commuting. He added that the bank would provide extended hours for women within existing car showrooms and increase the number of female bank branches in 2018. Women's increased economic activity will help the bank's loan growth outperform the 4% expected for the sector in 2018.

#Saudi tycoon auctions off 900 vehicles to clear debt

Thousands of people attended the first day of an auction of vehicles owned by indebted Saudi Arabian tycoon Maan al-Sanea. Officials say the sale will go towards repaying about 18 billion riyals (US$4.8 billion) owed to creditors. The businessman was detained by authorities last year for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on payments. The first phase of the auction was launched this week, with around 900 vehicles including lorries, buses, diggers, forklift trucks and golf carts. Later stages of the process will include property, as well as machinery, ceramics and furniture. Prospective buyers were mainly businessmen from local construction companies and other contractors. Money raised from the first phase of the auction will go towards repaying creditors. Priority for the repayment will first go to repaying unpaid workers, vendors and other companies owed money will be given next priority, with banks at a later stage.

Islamic trade finance has much more potential

The main precondition for Islamic trade finance to increase its presence in Islamic finance is a closer co-operation between banks and businesses. Experts say Islamic trade finance needs to be developed with instruments that allow better control of risks related to trade partners or countries. The Bahrain-based International Islamic Financial Market (IIFM) started a cooperation with the Washington-based Bankers Association for Finance and Trade to create an industry standard, a so-called master risk participation agreement. This standard is expected to create transparent market practices and contribute to an increase of the trade finance business on a Shariah-compliant basis. Bank Negara Malaysia is also pushing for Islamic trade financing to support 10% of the country’s total trade up to 2020. The bank is currently consulting initiatives which could include blockchain-based trade finance solutions, e-commerce and providing trade credit takaful to mitigate trade risks.

Bank Rakyat to continue Islamic Banker Programme for the second edition

Bank Rakyat has recently launched its second edition of the Islamic Banker Programme which aims to produce future leaders for the banking industry. The programme recently received recognition from the 26th World HRD Congress 2018 by winning three top awards: Innovation in Recruitment, Best Apprenticeship and Usage of Digital Media in Recruitment. Throughout the training period, each trainee will be assigned to a mentor from the senior management team. Initially, each trainee will go through a two-month training program before they undergo job rotation across the key business units within the Bank for 10 months. Then, they will be placed in a particular sector based on their respective strengths and interests for a year. At the end, their performance will be assessed before being offered permanent placement at Bank Rakyat. At the end of the two year internship, participants will also be awarded with the Chartered Professional in Islamic Finance (CPIF) certificate from the Chartered Institute of Islamic Finance Professionals (CIIF).

Arkan Bank could tap investors for $100mln through Nasdaq listing

Dubai Investments announced the establishment of a new Islamic bank called Arkan Bank. It will be the first home-grown, wholesale Islamic Bank operating from Dubai International Financal Centre. It will have an initial paid-up capital of $100 million and another $100 million will be raised after 12 months of its establishment through listing on Nasdaq. CEO Khalid Bin Kalban said Dubai Investments will initially hold a 25% in the bank and would aim to retain a stake of that size. He added that Arkan Bank's core business lines would be corporate banking, asset management and awqaf, investment banking and treasury. Arkan Bank initially plans to focus on the GCC region and subsequently build scale to become the top-tier Islamic wholesale bank in the region.

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