Zawya

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.

Al Baraka Banking Group Increase its Total Operating Income by 7% to US$ 538 million and Total Assets Reach US$ 25 billion in the First Half of 2016

The #Bahrain based Al Baraka Banking Group (ABG) announced that it achieved an increase in total operating income of 7% and net profits before tax and provisions by 4% during the first half of 2016. Total assets increased by 2%, total finance and investments by 4%, deposits by 1% while total equity increased by 2% as at the end of June 2016. Total operating income reached US$ 538 million in the first half of 2016 compared to US$ 502 million during the same period of 2015. Al Baraka's CEO Adnan Ahmed Yousif said the Group opened 24 new branches in the first half of 2016 to bring total branches to 611. He considers the entry of the Group to Morocco market a very important achievement, because it represents one of the main markets in the Arab Maghreb and Africa. Also, it means a higher diversification in assets and income sources for the Group.

Notes on a smaller island

There is little escape from the volatility that the Brexit vote has wreaked. Islamic banks' partiality for UK real estate could be particularly painful if property prices fall, as they are predicted to, by as much as 10%. Islamic banks' overreliance on the property sector is well documented, and Britain has long been a favourite destination for real estate investment. The biggest issue facing the UK financial services sector is whether institutions will retain their passporting rights. There is much at stake for Britain too. Islamic finance plays a significant role in infrastructure development in the UK, from The Shard to the Olympic Village. Over 6500 homes are currently being financed by a GBP 700 million investment by Gatehouse Bank. The UK cannot afford to lose this funding, especially when investment from Europe dries up.

QIIB completes issuance of QR1bn #Sukuk

QIIB announced the issuance of QR1bn Sukuk. The Sukuk aims at boosting the Bank's Tier 1 Capital to maintain a higher Capital Adequacy Ratio (CAR) complying with the Basel III norms. Last year QIIB shareholders had approved the Bank's proposal to raise up to QR3bn through Sukuk issuance.
A higher capital adequacy will not only help the Bank's risks absorption capacity but also expected to promote financial stability and efficiency of the Shairah compliant banking services provider.

Islamic finance expanding its footprint in #Oman

Recent regulations on sukuk are helping growth in Oman's Islamic banking sector, with sharia-compliant lenders gaining ground. Growth of Islamic banking is far outstripping that of the conventional banking segment with Islamic banking assets up more than 62% year-on-year (y-o-y) at the end of March. In contrast with the performance of the Islamic segment of the market, assets of conventional commercial banks rose by 9.1% y-o-y to the end of March to OR28.6bn ($74.3bn). The new regulations released by the Capital Market Authority (CMA) in April clarify requirements for issuing sukuk and provide a legal framework. According to Sheikh Abdullah bin Al Salmi, executive president of the CMA, the new regulations are expected to expand the range of investment instruments available in the sector.

Deloitte and IRTI launch new Islamic Finance insights series

Deloitte and the Islamic Research & Training Institute (IRTI) have launched a new whitepaper entitled "The catalysts for change: Strategic priorities in governance and regulation in Islamic Finance practice." It is the first publication of a series of whitepapers aiming to address industry issues and present practical analyses. According to Joe El Fadl, Partner at Deloitte Middle East, the primary goal of the series is to provide a forum through which best practice, knowledge and Islamic finance research can be shared with stakeholders. It also presents the progress in governance, regulatory compliance, risk, sustainable business models, financial reporting, transparency and leadership.

$500m #sukuk sold in private placement

The government of Oman sold a $500 million six-year sukuk in a private placement. The profit rate is set at 3.5%, the amount will have to be repaid in three equal instalments after four, five and six years. Oman's first Ijara format five-year sukuk worth RO 200 million ($520 million) was issued in October last year and received strong orders. The government which is facing a widening fiscal deficit has been adopting several measures tide over the falling revenue from lower oil prices. Recently, the government raised a $2.5 billion two-part bond and a $1 billion loan from banks. This was the first international bond issue in two decades by the Sultanate.

The IFSB, World Bank and Turkish Treasury Organise a Joint #Conference on Value Proposition of #Takaful Industry in Istanbul

The Islamic Financial Services Board (IFSB), The World Bank Group (WBG) and the Republic of Turkey have organised a joint conference focusing on the takaful sector. This conference, themed "Realising the Value Proposition of Takaful Industry for a Stable and Inclusive Financial System" was held in Istanbul on May 30-31, 2016. The Keynote Address was delivered by Ramazan Ulger, President of the Turkish Insurance Association and Ozgur Koc from the Association of Participation Insurance. Mr. Ulger highlighted that there are 60 insurance companies and one reinsurance company operating in Turkey. He suggested for the takaful industry to develop a wider range of products to address the needs of individuals. Ozgur Koc reiterated the country's vision to establish Istanbul as an Islamic financial centre.

#Turkey's Banking Regulation and #Supervision Agency BRSA" officially an Institutional Member of #AAOIFI

The important role of the Republic of Turkey in the global Islamic finance industry as well as its distinct standing both at the official and popular levels, the steady growth both of Islamic banks and financial institutions operating there, in addition to the parallel evolution of its regulatory and supervisory framework, the AAOIFI has been keen to strengthen professional and technical ties with this country. This was translated into an official visit by AAOIFI to a number of banking regulatory and supervisory bodies as well as a number of Islamic banks and financial institutions, professional entities and academic institutions.

#China Turns To Islamic Finance To Drive Economic Initiative

The Silk Road Economic Belt and Maritime Silk Road initiative, now known as One Belt One Road (OBOR), was designed in 2013 to develop economic cooperation between China and Eurasia. The Chinese government has now decided to speed up the operation of the Silk Road fund. Proposals to strengthen the cooperation of China-ASEAN Interbank Association have also been completed. Also a High Speed Rail project in China is considering using Islamic securities to raise a fund for almost 30 billion Chinese yuan (US$4.7billion). In addition, Hainan Airlines Group is planning to raise US$150 million for ship purchasing and to raise offshore Islamic securities.

IIFM and ISDA publish Islamic Foreign Exchange Forward Standards

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association (ISDA) today published two new standards for Islamic forward foreign exchange products for use in Islamic hedging transactions. The Islamic Foreign Exchange Forward (IFX Forward) is intended to help minimize the exposure of Islamic financial institutions to foreign exchange volatility. The new standard does not require the usage of the balance sheet for both counterparties in Foreign Exchange Forward hedging transactions.

#Sukuk market to witness better activity in #Oman

Several Omani private firms are keen to raise funds by way of sukuk after Mohammed Al Barwani Holding received approval for a OMR58 million-issue. The companies interested in issuing sukuk can avail tax concession if the special purpose vehicle for sukuk issue is registered in Oman and the issue is floated in the local market. Mohammed Al Barwani Holding's sukuk issue opened subscription on Monday either in Omani rial or dollar. So far, Oman witnessed only two sukuk issues that raised a total of OMR300 million, OMR50 million from real estate development firm Tilal Development Company and the other one a OMR250 million sovereign sukuk issue.

#Dubai's Emirates Islamic Bank launches $750 mln 5-yr #sukuk

Emirates Islamic Bank has launched the sale of $750 million in sukuk with five years duration. Pricing for the instrument has been set at 220 basis points over midswaps after attracting orders from investors worth more than $2.2 billion. The pricing is tighter than the 225 bps over the same benchmark indicated earlier in the day, and well inside initial guidance of the 240 bps area. The issuance was arranged by Standard Chartered, Al Hilal Bank, Bank ABC, Dubai Islamic Bank, HSBC, Maybank and Noor Bank.

Bahrain's GFH to list Khaleeji bank subsidiary in Dubai

GFH Financial Group plans to list its Bahraini subsidiary Khaleeji Commercial Bank in Dubai and acquire a financial services company to increase shareholder value. GFH's CEO Hisham al-Rayes said the company wants to regarded by investors as a financial holding company rather than an investment bank. The company aims to generate around 15% of its income over the next two years from real estate investments, which will be managed by a new Dubai-based operation called GFH Real Estate.

Islamic Development Bank invests $3.7 bln in #Egypt: official

The volume of Islamic Development Bank (IDB)'s investments in Egypt currently amounts to US$3.7 billion. The statement was made by Nazih Al-Nasser, director of asset management and advisory activities of the Islamic Corporation for the Development of the Private Sector (ICD). He made his remarks in Cairo on Tuesday during a conference organised by the Egyptian Banking Institute, designated to focus on the role of the small and medium-sized enterprises (SMEs).

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