Zawya

Launching AAOIFI in 850 Days #report and Shari'ah #standards e-learning platform

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has launched a comprehensive report on "AAOIFI in 850 Days". The report provides concise details, including infographs, illustrations, and statistical figures, covering AAOIFI's developments in activities over the period from September 2014 to end of December 2016. Dr. Hamed Merah, AAOIFI's Secretary General, said that AAOIFI embarks on efforts to enhance transparency as key to effective communication. Meanwhile, AAOIFI's statute was amended, and a set of 7 by-laws, policies and procedures, charters were developed. These include launching of AAOFI's Shari'ah standards translation projects (for Russian, French, and Urdu languages), and publication of AAOIFI's standards in paper and digital formats including a mobile app for smart phones. The section on strategic relationships cover AAOIFI's ties with stakeholders, specifically development of ties with institutional members. The report highlighted AAOIFI's keenness to further solidify its relationship with central banks and regulatory and supervisory authorities.

#Sukuk issuance in core Islamic markets set to pick up pace in 2017

The share of sukuk issuance in core markets such as the Gulf Cooperation Council (GCC) region, Malaysia, Indonesia, Turkey and Pakistan are expected to keep up their market share in 2017. New sukuk issuance from the core markets rose to $40 billion (Dh147 billion) in 2016 from about $32 billion a year earlier. This represented 28.5% of total bond and sukuk issuance in these markets in 2016, down marginally from 29% in 2015. Malaysian companies continue to be the most active corporate issuers. Several other key markets have introduced or updated sukuk laws in the past few years, including Saudi Arabia, Oman and Kuwait, which should gradually boost issuance. According to Faisal Hasan, Head of Investment Research at Kamco, the outlook for sukuk issuance in 2017 remains positive as GCC economies are expected to return to issuing sukuks to fund their deficits. Analysts say GCC corporates that tap capital markets are more likely to issue sukuk or a mixture of both, rather than only bonds to attract a wider local and regional investor base.

Global #sukuk issuance likely to hit $65bn this year: S&P

According to S&P's latest report, the global sukuk market is expected to remain fairly quiet in 2017, with total issuance reaching around $60bn -$65bn. The relatively subdued sukuk market anticipated for this year is mainly due to reasons related to complexity of sukuk issuance. S&P Global Ratings’ Global Head of Islamic Finance Dr Mohamed Damak said returning issuers, new entrants, and regulatory developments can stimulate issuance activity, but more likely in the medium term. S&P anticipates some GCC countries might take the Islamic finance route alongside a conventional one. Bahrain will most likely remain a prominent player after issuing $3.2bn of sukuk in 2016. Other GCC members will probably tap the market in 2017. The buyers of sukuk are not only in the GCC or Malaysia, but come from a broad range of investors, including conventional financiers in developed markets. More importantly, there is reportedly a large gap between sukuk issuance and demand.

#GCC #debt issuance likely to swell in 2017 as governments and corporates seek funding

Debt issuance from the GCC is expected to surge in 2017 with sovereign issuers leading while conventional bonds outstripping sukuk both in terms of amounts raised and number of issues. The key drivers to bond issuances in the GCC during 2016, which more than doubled to $66.5 billion (Dh244.5 billion), was primarily the sovereign bond issuances by Saudi Arabia, UAE and Qatar. Saudi Arabia’s first international bond issuance valued at $17.5 billion in October last year was the biggest recorded emerging market bond. Saudi Arabia has indicated further bond issuances in the near term and the Kingdom has a target debt-to-GDP ratio of 30% by 2020 as compared to 13.2% for 2016. Banking sector contribution to bond issuance witnessed a steep decline from 22% in 2015 to 15% in 2016, although the size of the total offering increased by 36% $11.7 billion.

IDB #Infrastructure #Fund II takes equity stake in Utico

ASMA Capital owned by the Islamic Development Bank (IDB), Saudi Arabia’s Public Investment Fund (PIF) and Public Pension Agency (PPA), Ministry of Finance of Bahrain and Ministry of Finance of Brunei has signed a deal with Utico for a significant minority stake. The deal with Utico for a stake in its water business is done through Asma Capital managed IDB Infrastructure Fund II. The deal is valued overall at $ 147 million in equity and project finance and will be completed in the first quarter of 2017. Ernst & Young, Hatch USA, ILFS, GU Advisory UAE, Latham and Watkins, Trowers and Hamlins and Taylor Wessing are advisers to the deal. Utico is making significant investments in the UAE and expanding its infrastructure assets in water, power, transmission and distribution, storage, billing and collection. Richard Menezes, Utico’s Managing Director stated that its model of development has saved the governments billions of dirhams in capital expenditure and subsidies.

Islamic finance key to #GCC funding needs in the 'new oil order'

According to the chief economic adviser of the Qatar Financial Centre (QFC), Islamic finance will need to play a pivotal role in meeting the increasing demand for funds by the Gulf Cooperation Council (GCC). Dr Haitham al-Salama said oil prices are not likely to exceed $100 in the near future and are forecast to stay around the $55-$65 per barrel. Also, a spike in the shale oil production is expected, which will push the prices down. He added that this puts further emphasis on the economic diversification efforts of oil producing countries, particularly in the GCC. Qatar has already taken various measures to diversify the economy, which includes lowering the subsidies and cost optimisation apart from prioritising planned spending. Finance Minister HE Ali Sherif al-Emadi had recently said Qatar would be spending another QR46bn in 2017 to upgrade its infrastructure in the run up to 2022 FIFA World Cup.

#Bahran's Bank Alkhair sells its stake in #Pakistan's Burj Bank

Bahrain-based Bank Alkhair has obtained approval from the State Bank of Pakistan to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited (ABPL). This transaction follows the announcement on 5 September 2016 about the merger of Pakistan’s Burj Bank and ABPL, creating an institution with assets totaling more than $1.1 billion. Ayman Sejiny, Group CEO of Bank Alkhair said the bank was pleased to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited. Bank Alkhair has completed several landmark transactions since its inception, including the establishment of t’azur, a regional Takaful company and the acquisition of Bahrain Financing Company, the oldest foreign exchange and remittance houses in the GCC.

Islamic bank Al Baraka eyes $300 mln Tier 1 #sukuk issue in Q1 2017 -CEO

Al Baraka Banking Group is targeting the sale of capital-boosting sukuk worth $300 million in the first quarter of 2017. The announcement was made on the sidelines of an Islamic banking conference by the group's CEO Adnan Ahmed Yousef. He also added that the issue would enhance the bank's core Tier 1 capital. Al Baraka had a total capital adequacy ratio of 15.15 percent as of June 30, according to a regulatory disclosure on its website.

#Bahrain continues to stand out in Islamic finance development

According to the Thomson Reuters Islamic Finance Development Report 2016, Bahrain leads the GCC’s Islamic finance development for the fourth consecutive year. The report is jointly produced by Thomson Reuters and the Islamic Corporation for the Development of the Private Sector (ICD). Bahrain ranks first globally in terms of Governance due to its well established regulatory environment and governance mechanisms. The regulations cover Islamic financial institutions including Islamic asset management and Sukuk. Bahrain is among the top ten countries for the other indicators as well. For the Knowledge indicator, its Islamic finance ecosystem is supported by 17 providers offering Islamic finance related education including universities and institutions. Meanwhile, its Islamic financial institutions continue to contribute socially, with US$ 18.5 million charity, zakat and Qardh al Hasan funds disbursed in 2015.

Islamic banking to boost financial #inclusion in #Morocco

The Moroccan government granted state-owned Crédit Agricole of Morocco (CAM) approval to open a subsidiary of the Islamic Development Bank (IDB). In addition to IDB, three foreign banks are looking to launch subsidiaries with domestic partners after Moroccan officials encouraged partnerships rather than fully owned subsidiaries. Morocco could see additional Islamic products introduced into the domestic market if new regulations are passed. Morocco will also see the introduction of mobile-to-mobile payments next year, which is expected to extend banking coverage, as well as reduce the number of cash transactions. New regulations will allow non-bank entities and individuals to open accounts to expand e-payments to transactions such as retail, utility and mobile phone payments.

AAOIFI Shari'ah Board Adopts New Shari'ah #Standards on (Gold) and (Liability of Investment Manager)

The Shari’ah Board of AAOIFI held its annual meeting from 17 to 19 November 2016 in the Kingdom of Bahrain. The meeting was concluded with issuance of a number of resolutions as well as the adoption of two new Shari'ah standards. The new standard on the Liability of Investment Manager defines the concepts of transgression and negligence and breach of contractual stipulations on the part of the investment manager. The standard also sets out the Shari'ah rulings pertaining to investment manager's liability or volunteering to bear liability. AAOIFI has also approved a new standard on Gold and it Trading Controls. The standard will be officially launched at a press conference whose date will be announced shortly. It will also be published together with other standards in the new edition of AAOIFI's standards.

#Shares in Abu Dhabi banks suspended after merger speculation

Trading of shares in Abu Dhabi Commercial Bank, Union National Bank and Abu Dhabi Islamic Bank were suspended on Sunday. The shares jumped last week because of renewed speculation that the Abu Dhabi government might engineer a merger between ADCB and UNB, and another between ADIB and Al Hilal Bank. Both moves would be part of an efficiency drive. There was no immediate official statement from the banks, but banking industry sources said the banks were expected to send statements denying that they had plans to merge.

Groundbreaking Eskan bank REIT public offering opens today

The initial public offering of the Eskan Bank Realty Income Trust (REIT) has opened today. The BD 14.4 million offering represents 72.9% of the Trust’s total size of BD 19.8 million, and has a target of 6.5% in net distributable income payable semi-annually. This Sharia-compliant offering is reserved for Bahraini and GCC nationals and is open to individual and institutional applicants. Securities & Investment Company (SICO) is the mandated lead manager, while Bahrain Islamic Bank (BisB) has been appointed as the receiving bank. According to Eskan Bank's General Manager Dr. Khalid Abdulla, the REIT enables investors to share in a diversified portfolio of properties, namely Segaya Plaza and Danaat Al Madina, offering diversification within the real estate sector. The properties currently have an occupancy rate of over 85%, and the Trust intends to increase its Sharia-compliant property portfolio.

Gulf Islamic Investments raises US.$145 million for Silicon Valley Technology Company Apttus

Gulf Islamic Investments (GII), a UAE based Islamic financial services company, announced the closing of US.$145 million fund raising for Apttus, a Silicon valley based software company. The funds will be used to complete the Quote-to-Cash customer process and the Procure-to-Pay supplier process. This is the fourth company out of Silicon Valley for which GII has raised funds for in the last 2 years, bringing the total amount raised to $350 million. GII further confirms a continuing partnership with Apttus to lend strong support to the company’s business development and market penetration in the GCC region. According to GII Founding Partner, Mohammed Alhassan, Apttus provides a golden opportunity at the level of business model and also in terms of achieving satisfying returns.

#Sukuk issuance to drive growth in Islamic finance

According to Standard Chartered Saadiq, much of the growth in Islamic finance is expected to come from capital markets business relating to sukuk. Ahsan Ali, Global Head of Islamic Origination, said that sukuk was a mainstream component of capital markets in core Islamic finance markets such as Malaysia and the UAE. There is a healthy pipeline of issuance across the world and more issuers are expected to come to the market over the next year. Although a significant share of capital market issuance have been dominated by conventional bond issuance and loan syndications, Ali expects GCC issuers to issue sukuks along with conventional bonds. In the future a pickup in issuance from Bank Negara Malaysia, coupled with the deficit financing needs of the GCC members is expected to boost issuance.

#Djibouti sees Islamic finance sector expanding, aims for #sukuk

Djibouti plans to work on a framework to allow the use of sukuk to fund infrastructure projects. Djibouti is a relative newcomer to Islamic finance, having introduced sector-specific legislation in 2011. Central bank governor Ahmed Osman said the government has established a national sharia board to help oversee the sector, appointing five members to the independent body. The government is in discussions with the Saudi-based Islamic Development Bank to help establish a framework to issue sukuk for either the government or state-owned enterprises. The central bank is also in discussions with two lenders seeking to open Islamic windows. Currently three of Djibouti's 10 banks are Islamic: Saba Islamic Bank, Salaam African Bank and East Africa Bank.

Islamic bank Al Baraka Banking Group to expand network in #Pakistan

Bahrain-based Al Baraka Banking Group plans to expand its network in Pakistan following its merger with Burj Bank. CEO Adnan Ahmad Youssef said the Group's strategy in the Pakistani market was built on expansion in all Pakistani cities. Burj Bank’s 74 branches will be added to those of Al Baraka Bank (Pakistan) to form a network of 224 branches. Al Baraka Bank (Pakistan) aims to increase the number to 300 branches in the next four years. The merger is expected to take effect from the last quarter of this year, and the Bahraini bank will be the major shareholder in the merged institution. Al Baraka Banking Group is also setting up in Morocco after the North African nation introduced legislation allowing Islamic banks into the domestic market. With this entry the Group completes its network in almost all Arab Maghreb countries.

President of #Kazakhstan commends cooperation with IsDB Group

The President of Kazakhstan, Nursultan Nazarbayev met with the President of the Islamic Development Bank (IsDB), Dr. Bandar Hajjar, on an official visit to the Kingdom of Saudi Arabia. President Nazarbayev praised the cooperation between IsDB and his country and congratulated Dr. Hajjar on his recent assumption of duties as the new IsDB Group President. President Nazarbayev plans to launch the program 100 Steps, which is designed to introduce structural and economic reforms to Kazakhstan. The program also envisages the launching of Astana International Financial Center as a center of excellence for financial services at regional and global level. President Nazarbayev called on IsDB to provide technical support in the fields of development and Islamic finance. Dr. Hajjar assured that the IsDB Group would provide the required technical assistance to support President Nazarbayev’s initiatives.

#Malaysia eyes #sukuk ties with #Qatar

Malaysian Minister of International Trade and Industry, Mustapa Mohamed underscores the importance of promoting its sukuk market to Qatar. Mohamed suggests to promote Malaysia’s sukuk industry and to invite the Qatar Financial Centre (QFC) and Qatar-based Islamic banks to Malaysia and explore avenues for partnerships. The minister was in Qatar yesterday for a brief visit and met with major Malaysian companies and witnessed the signing of an MoU between Masskar Hypermarket and Infinity Channel. The minister said that there are several Malaysian companies in Qatar that would want to do more business in the fields of construction, services, consultancy, IT, and engineering. Malaysian ambassador Ahmad Jazri Mohamed Johar added that the minister’s visit also aims to enhance bilateral relations between Qatar and Malaysia, whose trade volume stood at around $1bn in 2015.

AAOIFI Welcomes #Saudi CMA as Institutional Member at an Official Signing Ceremony in Riyadh

The Saudi Capital Market Authority (CMA) has been recently accepted as an institutional member of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The official signing ceremony was held at the CMA’s headquarters in Riyadh on 13 October 2016. The membership agreement was signed by Mohammad Bin Abdulla Al Jadaan, Chairman of CMA, and Hamed Hassan Merah, Secretary General of AAOIFI. Al Jadaan said the CMA was pleased to forge such a professional relationship with AAOFI, as their cooperation had always been successful. They had several joint activities and events, including a major international conference at al-Madinah al-Munawwarah and several training programs on essentials of Islamic finance and economics.

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