Zawya

The World Bank-IFSB High-Level Seminar on Islamic Finance Attracts Large and Enthusiastic Audience

More than 100 participants participated in the World Bank-Islamic Financial Services Board (IFSB) High-Level Seminar on Islamic Finance and the Sustainable Development Goals (SDGs) on October 6. The Seminar was highlighted by a keynote address by his Royal Highness Muhammadu Sanusi II, the Emir of Kano and former Governor of the Central Bank of Nigeria. The Emir stressed the potential of Islamic finance to mobilise much needed capital to achieve the SDGs. Ms. Arunma Oteh, the Vice President and Treasurer of the World Bank, similarly stressed the importance of Islamic finance as an agent for financial inclusion and for mobilising private investment in infrastructure. The panel discussion examined how countries are increasingly using Islamic finance to support developmental goals, and innovative sukuk structures supporting both physical and social infrastructure.

Nasdaq Dubai, IdealRatings launch benchmark indices to track performance of #Sukuk

Nasdaq Dubai and IdealRatings has announced the launch of benchmark indices that track the performance of global Sukuk, in order to provide investors with new data to make informed trading decisions. The data includes daily movements in price and total return, with monthly updates on yield and other key indicators. It tracks a universe of more than 1,800 Sukuk globally, with eligibility criteria including a minimum issue size of 100 million US dollars. The Global Sukuk Index covers all currencies and has five sub-indices. The sub-indices reflect distinct segments of the market, which are: investment grade issuances, issuances by sovereigns, issuances by corporates, issuances by financial institutions and GCC issuances. According to Hamed Ali, CEO of Nasdaq Dubai, the indices add a valuable new stream of information to investors’ existing trading tools.

Islamic finance: Affin Bank and ICD upbeat on partnership

The Affin Bank Group hopes that its new new strategic alliance with the Islamic Corporation for the Development of the Private Sector (ICD) will catapult both institutions to a new level. Affin Bank and ICD have signed a memorandum of understanding (MoU) where they agreed on strategic collaboration especially within the Asian region. The cooperation reflects ICD’s ambition to expand its geographic footprint and exert its influence within the Asian region. In the process, both parties will offer technical and advisory support particularly on product development and Shariah concepts. Mohammed Alammari, acting CEO of ICD, and Kamarul Ariffin Mohd Jamil, CEO of Affin Bank, signed the MoU. Mohammed Alammari expressed his strong support for the partnership.

Islamic banking consumers prefer not to choose between Islamic and conventional products

A recent study on Islamic microfinance by the Consultative Group to Assist the Poor (CGAP), Yale University and Tameweelcom found less price sensitivity by some consumers and a lot of focus on simplicity in product offerings and Shariah compliance. Consumers of financial products are in general price sensitive and as costs increase, demand goes down. It turned out that about 30% of Muslims always prefer a Shariah-compliant product with little price sensitivity. When given the option to choose between Islamic and conventional banking products, consumers are less likely to make a choice than if presented with only one of the products. The authors attribute this finding to the 'paradox of choice'. If a conventional bank thinks they can maintain market share by starting an Islamic window to offer Islamic products alongside conventional products, they may end up turning off consumers.

Al Rajhi Capital raises $155mln for European Real Estate Fund

Al Rajhi Capital has announced the closing of a private placement subscription for the Al Rajhi European Real Estate Fund after raising SR581 million ($155 million) in equity. The five-year closed-ended fund will invest in income generating properties, such as warehouses occupied by solid tenants with long-term leases. The main geographic focus of the fund will be Western Europe. Gaurav Shah, CEO of Al Rajhi Capital, said that this fund marked the commencement of the global expansion of the company's real estate investment platform. Al Rajhi Capital has managed over $1 billion in transactions across the logistics and community retail space and recently successfully exited a $360 million fund focused on investing in KSA and UAE logistics.

Creditors of #Kuwait's Investment Dar team up to consider $2.7 bln debt plan

Creditors of Kuwait's debt-laden Investment Dar are forming a team to restructure 813 million dinars ($2.7 billion) in debt. Saudi Arabia's Al Rajhi Bank, the Islamic investment company's largest creditor, is taking charge of forming the committee, which will be responsible for representing the roughly 70 to 80 creditors in negotiations with Investment Dar. Any deal remains complicated by a rise in the number of legal cases against Investment Dar. Another complication is that Investment Dar has been in legal dispute with Commercial Bank of Kuwait over part of its nearly 20% stake in Kuwait's Boubyan Bank, which is one of the assets it aims to hand over to creditors.

Islamic banking assets, deposits post larger growth in #Oman

Amid challenging economic conditions, the Islamic banking sector in Oman achieved significant growth since its start in 2012. The total assets of Islamic banks and windows combined, amounted to RO 2.7 billion as at the end of July 2016 which constituted about 8.5% of the total banking system assets. According to Khalid Howladar, Global Head of Islamic Finance at Moody’s, the growth has been a result of the Omani government’s strategy that has allowed conventional banks to offer Islamic services. Howladar addted that the growth is driven by strong retail demand and proactive government legislation. Across the GCC the Islamic banking sectors have been experiencing growth in their respective market shares with the lone exception of Kuwait.

Fitch Rates #Bahrain's Upcoming USD #Sukuk and Bonds 'BB+(EXP)'

Fitch Ratings has assigned Bahrain's proposed US dollar-denominated sovereign global sukuk trust certificates, to be issued by CBB International Sukuk Company 5 (CBB5), an expected 'BB+(EXP)' rating. Fitch has also assigned Bahrain's proposed US dollar-denominated bonds an expected 'BB+(EXP)' rating. The expected ratings are in line with Bahrain's Long-Term Foreign Currency Issuer Default Rating (IDR), which was downgraded to 'BB+' with a Stable Outlook in June 2016. Certain aspects of the sukuk transaction will be governed by English law while others will be governed by laws of Bahrain. Fitch's rating on the certificates reflects the agency's belief that the Bahraini government would stand behind its obligations.

A Comparative Study between Islamic Banks and Conventional Banks in Gulf Countries by Kingdom University Associate Professor Dr. Abdelrhman Meero Meets Success

The relationship between capital structure and performance in Gulf Countries Banks, came under the spotlight in a comparative study between Islamic Banks and Conventional Banks. The study was conducted by Associate Professor in Finance and Banking at Kingdom University Dr. Abdelrhman Meero. According to Professor Meero, it is imperative to conduct continuous studies and research in this field, especially as new trends and regulations are periodically introduced by governing authorities in this sector. Results of the study show that there is a similarity of capital structure of Islamic banks and Conventional banks in Gulf Countries. The similarity of capital structure could be the result of the regulation system of the Gulf Countries, which controls the two types of banks by the same capital adequacy regulations.

Kuwait Finance House strengthens its #Malaysia operations and supports local Halal industry

Kuwait Finance House-Malaysia (KFH-Malaysia) is taking steps towards expanding its operations in Sarawak on top of the two existing branches at present. CEO David Power reinstated KFH's commitment to grow and expand after paying a courtesy call on Chief Minister Datuk Patinggi Tan Sri Adenan Satem. He added that there were 15 branches throughout Malaysia since its establishment in 2006, two of them in Sarawak. He noted they were evaluating the performance of the two existing branches first and consider to set up another branch. KFH Malaysia is looking forward to stronger business ties in the state in the long term to provide Islamic financial services and products to the people of Sarawak.

Leasing leader SKL invests in Islamic Finance for strategic growth

#Kazakhstan based SK Leasing (SKL) announced that it has engaged Shariyah Review Bureau (SRB) to help the company achieve Shari'a Compliance in its business activities. Managing director Duman Nurbayev said SKL is going to be the first leasing company in Kazakhstan to be fully converted into Sharia compliant activities. Also, they are planning to be the first company in the CIS region which will provide a wide range of Islamic Financial products and services. SKL finances projects in the real economy sector for renovation, modernization and expansion of fixed assets. SKL has 3 domestic offices and approximately 240 clients. Its regional network includes representations in Almaty, Astana and Atyrau.

#GCC banks to stay under pressure until 2017 on commodity gloom: S&P Global

According to S&P Global Ratings, banks in the Gulf Cooperation Council countries will remain under pressure for the remainder of 2016 and 2017. The operating environments in these emerging markets are suffering from the effects of low commodity prices and weakening local currencies outside the GCC. S&P thinks that not only will banks' loan growth decline, but profitability will also drop. On a positive note, S&P thinks that the deterioration will be largely controlled and that banks have the capacity to absorb the negative impacts thanks to their strong asset quality, good profitability, and strong capitalisation.

Prospects remain robust for Islamic finance

According to Moody’s, the growth prospects for the Islamic finance sector are still strong despite new sukuk issuance remaining subdued this year. Moody’s global head of Islamic finance Khalid Howladar said growth in the Islamic banking sector continues to broadly outpace that of conventional banks in most systems in which Islamic banks have been established. The sector also has potential for further growth, especially in countries in which the penetration of Islamic banking assets remains relatively low, at between 5%-10% of Islamic financing assets. New sukuk issuance volumes in 2016 are expected to remain flat, at around US$70bil. Growth in the Takaful sector is also slowing, but the rating agency expects it to remain at double digit levels into 2017 and for gross contributions to reach US$20bil by next year.

Al Mal launches Takharoj: A ground-breaking #investment product in the region

Launched by Al Mal Investment Company (KPSC), Takharoj is the region's first web-based application that connects minority investors in Unlisted Securities to offer them big investment privileges. A variety of functions are covered, such as management, representation, policy-making and selling shares. Commenting on the launch of Takharoj, Abdul Wahab Al Mutawa, CEO of Al Mal Investment said Takharoj's objective is to group like-minded minority shareholders to negotiate optimal outcomes. Clients only need to upload their basic investment information on the web-portal so that Takharoj can act on their behalf and in their best interest.

Africa holds huge growth potential

According to Standard & Poor’s Africa’s extensive infrastructure development needs to create a fertile environment for the growth of sukuk issuance over the next decade. S&P analyst Samira Mensah said African sukuk could provide diversification benefits for Islamic investors as well as additional financing opportunities. So far the African market comprises only $2 billion (Dh7.35 billion) of sukuk from a handful of issuers. By contrast, 17 Sub-Saharan African (SSA) governments issued $46 billion of conventional debt in 2015 alone. Despite sukuk’s appeal, analysts expect that only a few African countries will tap the sukuk market over the next 12 months. There is a general lack of clear legal regimes and in many cases the complexity of structuring sukuk could deter issuance. Multilateral institutions could be the key to unlock the full potential of Africa's sukuk market.

Merger of Al Baraka Bank #Pakistan with Burj Bank Under the Name Al Baraka Pakistan with Total Assets in Excess of US$ 1.1 billion

Al Baraka Bank (Pakistan) Ltd (ABPL) and Burj Bank Ltd (BBL) will soon merge into a single Islamic Bank in Pakistan under the name Al Baraka Bank (Pakistan) Ltd. Al Baraka Islamic Bank-Bahrain will remain major shareholder subsequent to this merger. All 74 BBL branches will be converted into ABPL branches and the combined network of the merged entity will become 224 branches in over 100 cities across Pakistan. The total asset base of ABPL will cross US$ 1.1 billion. Adnan Ahmed Yousif, Chairman of ABPL said the amalgamated entity would be in a position to offer varied financial products and services.

#Saudi Arabia-based asset manager with responsible #investment approach to Islamic finance joins RFI Foundation

SEDCO Capital has joined the RFI Foundation as an industry member. SEDCO brings a strong commitment to responsible finance as a Shari'ah compliant investment manager. SEDCO Capital offers services in asset management, including asset allocation, real estate, private equity, public equity, liquidity instruments, agriculture, timber, and commodities that conform to Shari'ah. According to CEO Blake Goud, the activities of the RFI Foundation will support greater convergence between Islamic and traditional responsible finance in the coming years.

Faisal Islamic Bank's mortgage portfolio hits $112k for middle-income housing units

#Egypt-based Faisal Islamic Bank's portfolio of mortgage finances pursuant to the central bank's initiative has reached around two million Egyptian pounds ($112,598). Faisal Bank is applying the Islamic financing structure Murabaha in providing mortgage finances as pursuant to the central bank's initiative. Through the new initiative, the central bank would lend Egypt's working banks 20 billion pounds for 20 years to be lent to people of low-income and average-income at 7 and 8% interest in order to buy housing units in new urban communities.

#Sukuk pipeline - Issue plans around the world

Following are major Islamic bond issues in the global pipeline. Pakistan plans an international issue of sukuk and is asking banks for expressions of interest in managing the sale. Sharjah Islamic Bank said it would begin investor meetings on Aug. 29 for a potential benchmark U.S. dollar-denominated sukuk issue. Ahli United Bank Kuwait has obtained approval from Kuwait's central bank to issue capital-boosting sukuk worth up to $200 million. Ivory Coast plans to complete a sale of 150 billion CFA francs ($263 million) worth of seven-year sukuk on Aug. 31.

Al Baraka Bank earmarks $112.6 mln for energy, Suez Canal projects in 2016

Al Baraka Bank Egypt is planning to pump one billion Egyptian pounds ($112.6 million) into vital energy projects with economic feasibility. Chairman Ashraf El-Ghamrawy said the money will go for energy businesses in addition to projects in the high-profile Suez Canal development axis. Al Baraka Bank Egypt reported a first half net profit worth 255.390 million pounds, up from 140.291 million pounds in the first half of 2015. Deposits surged to 29.578 billion pounds by the end of June 2016, compared to 25.351 billion pounds by the end of December 2015.

Syndicate content