Qatar Islamic Insurance Company ( QIIC ) Chairman Sheikh Abdulla bin Thani Al Thani has said that his firm would pursue its strategic plans for the Years 2013-2015 to ensure its continued growth. The company recorded good results in 2012 by generating a premium of QR206m and aggregate net profit of QR74m. The shareholders' profit reached QR58m, constituting earnings per share of QR3.5. The general assembly on Sunday approved the company's nine-point agenda, including its financial statements for the year 2012 and election of two people in the current QIIC Board of Directors.
The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has described China as a major contributor to the de-industrialisation as well as underdevelopment of Africa. He warned that with the growing interest of China in the continent, Africa was opening itself up to a new form of imperialism. Sanusi explained that China is no longer a fellow underdeveloped economy but an economic giant capable of the same forms of exploitation as the West. Trade between China and Africa was worth more than $200 billion in 2012. There has also been strong growth partly as a result of Asian demand for African resources.
The UK government launched on Monday the first Islamic finance task-force to help to cement London's status as the western hub for Islamic finance. It will support development of the UK's Islamic finance sector, increasing inward investment and strengthening the economy. The Task Force will include major industry figures to ensure that the UK's offer is promoted at home and abroad by both the public and private sector. The Islamic finance Task Force will be co-chaired by Financial Secretary to the Treasury, Greg Clark and Baroness Warsi, Senior Minister of State at the Foreign and Commonwealth Office.
In order to achieve achieve economic outcomes which are similar to the economic outcomes achieved by conventional finance, transactions that are undertaken in Islamic finance typically require more component steps. These additional transactions are at risk of being subject to transfer taxes or to taxes on income or gains. The tax treatment of four common Islamic finance structures, commodity murabaha, sukuk, salaam and istisna in eight MENA region countries: Egypt, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Turkey and in the Qatar Financial Centre were reviewed in this report.
The European Central Bank and the Malaysia-based Islamic Financial Services Board (IFSB) are conducting a joint study on policies affecting Islamic finance in Europe. European scholars and regulators are going to examine a broad set of policy and regulatory issues in relation to Islamic finance in Europe. An expected release date was not given. The study will be complemented on April 9 by the IFSB's annual forum, which will be hosted by the Bank of Italy in Rome.
Albaraka Turk mandated four banks to secure a $200 million subordinated loan from international sukuk markets. Albaraka Turk is the Turkish subsidiary of Bahraini lender Al Baraka Bank.
Abu Dhabi Islamic Bank (ADIB) has signed an agreement to provide financing facilities for AED 500 million to Dubai Airport Freezone (DAFZA). The financing will be used to expand DAFZA's key offices buildings, business centre and food court which are due to be completed in 2015. The agreement was signed at DAFZA's headquarters by Dr. Mohammed Al Zarooni, Director General of DAFZA and Tirad- Al Mahmoud, CEO of ADIB. The project is in line with HH Sheikh Mohammed Bin Rashed Al Maktoum's initiative to make Dubai the Global Capital of Islamic economy.
The Egyptian government has signed a $250m leasing agreement with the Islamic Development Bank (IDB) to purchase equipment for a power plant to generate electricity in South Helwan. The deal will be finalised after presidential approval. The Minister of Planning Ashraf ElAraby signed the agreement in mid-January with the IDB president Ahmed Mohamed Ali. The project aims to meet the growing demand for energy in Egypt.
A company is sharia-compliant if it conducts its business according to sharia stipulations, and accommodates Islamic principles and disciplines in its business structures, setups, and operations. There are several stipulations, that a business should comply with in order to follow shariah principles. These include full disclosure and honesty with customers, quality customer service and finding ways to serve social, developmental or environmental causes conducive to your direct business lines. Prohibited activities for sharia-compliant companies are among others borrowing and lending with interest, investment in alcohol, gambling, weapons and pork as well as activities that harm the environment.
Ernst & Young signed a working agreement with Accounting and Auditing Organization for Islamic Financial Institutions ( AAOIFI ) to assist in Sharia certification of Core Banking Systems (CBS) used by Islamic banks. On the back of this mandate, Ernst & Young is launching its new Advisory Solution, CBS Sharia Assessment, to assist international and regional technology firms. The certification programme will assess CBS services to ensure that they conform to the approved global Sharia and accounting standards.
Islamic banks say their small scale and a lack of risk-management products makes it harder for them to compete. The average return on equity at Shariah-compliant lenders was 11.6 percent in 2011, compared with 15.3 percent at their non-Islamic counterparts. Moreover, Shariah banks had an average $17 billion of assets in 2011, less than the $65 billion for non-Islamic lenders, resulting in operating costs as a proportion of holdings that were 50 percent higher. This is due to the fact that most Islamic banks have very basic risk infrastructure and most of these institutions operate in domestic markets which are highly competitive. Therefore, growth is becoming more challenging to achieve.
According to Bahrain central bank executive director Khalid Hamad Abdul Rahman Hamad, making Islamic Financial Services Board (IFSB) standard mandatory is essential to take Islamic finance to the next level which is internationalisation. Until now, the articles of association of IFSB is voluntary and does not require the member countries to adopt. With the standard being mandatory, situations or regulatory arbitrage can be avoided. Moreover, Khalid Hamad noted that growth for a certain industry would require proper regulations, good standards in accounting, practice, prudential and skilled resources. He added that Islamic finance must invest in syariah-compliant instruments that create value for the society.
The Turkish Economy Minister Zafer Ça?lyan signed a memorandum of understanding (MoU) with the members of the Islamic Development Bank (IDB) on March 2 during a recent visit to Saudi Arabia. Through the MoU, he is aiming to form new trade and investment ties with the Islamic world. It includes the detection of fields of cooperation between the countries to encourage bilateral trade and investments. Moreover, Ça?layan called for Turkish contractors to take a share from Saudi Arabian infrastructure investments in order to reach $1 trillion in 20 years.
Noor Investment Group and Awqaf and Minors Affairs Foundation (AMAF) have signed a memorandum of understanding (MOU) to establish 'Noor Awqaf LLC' in the UAE. Noor Awqaf will complement the work of AMAF in offering enabling financial services to Awqaf entities around the world. The MoU was signed by Ahmed Kalim, Deputy Group CEO, of Noor Investment Group and Tayeb Abdel Rahman Al Rayes, Secretary General of AMAF.
Noor Awqaf has been set up as an independent limited liability company, with an initial issued and paid up share capital of Dhs10m. Noor Awqaf is 60% owned by Noor Investment Group and 40% by AMAF.
Safa Investment Services received this week its official certification for Shari'a compliance from Shariyah Review Bureau. It makes Safa Investment Services the first Islamic global asset management business in the world. Safa permits customers to benefit from global asset diversification of their managed accounts, but with a complete respect for the principles of Islamic law. This includes not only selecting securities that meet global regulatory standards, but also the process to manage accounts and the contracts under which they are managed.
Differences seen in interpretation of syariah compliance among various Islamic finance markets are disappearing as there has been inter-market convergence of respective interpretations on a global scale moving forward. According to the chief executive officer of Standard Chartered Saadiq Bhd (Saadiq) Wasim Saifi, convergence between Middle East interpretation of syariah compliance and the interpretation seen in Islamic finance institutions in Malaysia is happening. Many transactions are being structured using Islamic structures which have strong Middle Eastern acceptability. Furthermore, convergence is also happening regarding the syariah-compliant filters announced by the Securities Commission for equities.
The International Organization of Securities Commissions (IOSCO) has published today the Report on Investor Education Initiatives Relating to Investment Services. This report was written to provide IOSCO members and the public with an overview of the different approaches that supervisory authorities and self-regulatory organizations take to educate retail investors on issues relevant to financial products that are distributed by intermediaries. It sets out the results of a fact-finding survey of members of the IOSCO Committee on Market Intermediaries. These findings show a wide range of approaches, though they also indicate that supervisory authorities share common approaches and face some common obstacles to determining the most effective educational measures.
The Kenya Reinsurance Corporation is planning to venture in sharia-compliant business and confirmed that it will start ReTakaful insurance in the country and the areas where it already has a presence in West Africa and the Middle East markets. According to the firm’s managing director, Mr Jadiah Mwarania, the development is part of Kenya Re’s 2013-2017 core strategic areas that touche on market expansion and development of products. The firm elected a sharia-based supervisory board last year to advise the firm on acceptable aspects of the ReTakaful.
The Investment Corporation of Dubai (ICD) is in talks with banks to launch its first Islamic bond, in order to diversify its funding sources. The deal will reportedly be completed this year. A source at ICD said the fund had no plans for a sukuk, but is turning to the Islamic bond market because of potential legislation capping lending by local banks to government related entities. Separately, ICD is also talking to bankers over a US$2bn loan due to mature in August, with refinancing the likely option.
The markets for Islamic banking, insurance and sukuk bonds have all seen solid growth in recent years, but the sharia-compliant fund industry remains tiny. According to Hasan Al Jabri, chief executive of Saudi Arabia’s Sedco Capital, the growth of sharia-compliant investment has been stunted by a reputation for a lack of diversity, poor performance and high fees. Since May 2012, Sedco Capital has been building what is believed to be the largest sharia-compliant fund platform in Luxembourg. Its five vehicles hold $900m of assets. Sedco is currently launching two more vehicles. Mr Al Jabri emphasized that their investments are responsible, help creating value for the economy and jobs.