Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) holds on 4 May 2016 its International Conference, marking its 25th anniversary. Dr. Hamed Hassan Merah, Secretary General of AAOIFI said time is proper to revisit the 40 years history of the Islamic finance industry to evaluate its experience and contemplate the way forward.
The lifting of sanctions has not only enhanced Iran's economy but has also provided an opportunity for Shari'ah-compliant investment with diversification opportunities. Iran's Islamic banking assets are $482 billion, according to Dubai Government data from 2014. Islamic finance in Iran can benefit from the sheer volume of the post-sanction investments and such projects are reportedly high. This will in turn support the market growth and create growth opportunities for the banking system in Iran.
The regional banking sector has entered a new paradigm with margin compression, tightening liquidity, moderate asset and profit growth, limited capital market activity, greater focus on cost reduction and a widespread need for greater capital and funding. KPMG, which analysed the results of 56 leading listed commercial banks in the GCC, noted Qatar's listed banks remain relatively resilient and their long-term outlook remains positive. Omar Mahmood, Head of Financial Services for KPMG said Qatar experienced the second highest growth rate in the region thanks to an increase in corporate lending as a result of the infrastructure boom.
According to Kuwait Finance Centre Markaz the Middle East will see $58 billion in bond and Sukuk issuance in 2016 and $385 to $390 billion through 2020. The excess allocation towards real estate has been exasperated by the shortage of Shari'ah-compliant fixed income. The next few years may be challenging for the GCC and its Takaful companies if energy prices stay low because the low penetration rate of insurance and Takaful has led to an extremely competitive market. A pipeline of around $60 billion per year for the next five years will support banks and Takaful operators to manage their balance sheets and support growth.
Khalid Al Aboudi, Chief Executive Officer of Islamic Corporation for the Development of the Private Sector (ICD), rang the market-opening bell to celebrate the listing of a 300 million US dollar Sukuk on Nasdaq Dubai. The total nominal value of Sukuk currently listed in Dubai has now reached $42.61 billion, more than the value listed in any other centre. The Islamic Development Bank (IDB) Group has seven other Sukuk currently outstanding on Nasdaq Dubai that have listed since 2014, with a total nominal value of $8.05 billion.
The 13th Islamic Financial Stability Forum (IFSF) was successfully organised by the Islamic Financial Services Board (IFSB) on 12 April 2016 and was held in Cairo, Egypt on 10-12 April 2016, hosted by the Central Bank of Egypt. The theme of Forum was Consumer Protection in Islamic Finance, and the main presentation was by Professor Volker Nienhaus, the Former President of Marburg University. He stated that while most of the issues in consumer protection cover both conventional and Islamic segments of the financial system, there are some risks pertinent to Islamic finance sector, such as Shariah non-compliance risk.
Paris is wooing potential Qatari investors to be the part of a huge infrastructure development project, 'Greater Paris', to which the government of France has already committed €50bn. Chiara Corazzara, Managing Director of the Greater Paris Investment Agency said the state-sponsored investment in infrastructures is designed to trigger €80bn private investment and the response that they get from Qatari investors is really encouraging.
Dr Jamil El Jaroudi, chief executive officer of Bank Nizwa, expects Islamic finance to grow above 15-20 per cent of the total banking sector activities in Oman. Speaking about the bank's growth, he said, breakeven was reached in December after three years of operation. Over the next few months, a mobile branch will travel around the Sultanate offering a host of products, services and also make the people aware on the benefits of Islamic banking. According to bank officials mobile branch will help customers to open new accounts, activate debit cards, receive account balances and mini statements, deposit cash and cheques.
Islamic International Rating Agency (IIRA) has assigned investment grade, national scale ratings of BBB-(lb)/A3(lb) (Triple B Minus / A Three) to AlBaraka Bank Lebanon S.A.L (ABBL). Outlook on the assigned ratings is 'Stable'. The fiduciary score has been assessed in the range of '71-75', reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected. ABBL was incorporated in 1992 as the first Islamic bank operating in the Republic of Lebanon. ABBL has sought to diversify its financings outside Lebanon, thereby mitigating the effects of the slowdown in the Lebanese economy. Owing to the market dynamics and management caution, ABBL maintains a highly liquid asset profile.
Professor Datuk Rifaat Ahmed Abdel Karim, PhD, PJN is an authority in the Islamic financial services industry (IFSI) both at the professional and academic levels. He has played a pioneering role in the development of Islamic finance, while his leadership in setting accounting, auditing, governance, Shariíah and regulatory standards has been instrumental in establishing the position of the IFSI in the mainstream of global financial services. He believes that some of the major internal barriers have emanated from a lack of a proper understanding of the specificities of Islamic finance. Many tend to interpret Islamic finance transactions either from their conventional knowledge or their perspective of understanding Islamic Fiqh.
The relations between Malaysia and Japan is characterized by a special nature, not seen in any other countries in this region. The relations are underpinned by a strong bond, forged for a long time by a policy called the Look East policy. This Look East policy has worked as a lynch-pin between the two nations. Under this Look East policy, young people in Malaysia have been studying in Japan and this policy has brought back benefits through the brains and hands of those young people to help the Malaysian economy to invigorate. As Malaysia in an Islamic nation, Malaysia can open a gateway for Japanese investors to the markets of the Islamic nations. Some of the Japanese financial institutions have already started to issue Sukuk bonds.
American Express said it had not witnessed a rise in credit card debt in the Gulf region, despite over a third of households reporting they had spent more than they planned last year and one in four in the United Arab Emirates (UAE) saying they had contributed less to their savings and pension. Despite the economic headwinds across the region, Amex's research titled 'Spending Habits in the GCC: A Research Report' shows little slowdown in the volume of spending, CEO Mazin Khoury said. Khoury told Zawya he had not seen any increase in levels of credit card debt and that he was not concerned about changes in repayment trends, despite rising consumer spending levels and a more challenging financial environment as a result of lower oil prices and slower economic growth.
The Saudi Capital Market Authority Board approved the Investment Accounts Instructions after publishing the Draft Instructions on the CMA's official website for 30 days, and reviewing the concerned and interested parties' comments and observations. The Investment Accounts Instructions comprise 17 articles regarding several aspects of investment accounts such as the mechanism on how to accept clients, availability of specific data to open an investment account and instructions of opening and operating the investment account. The Instructions also include the specifications to open investment accounts.
Gatehouse Bank plc has announced its entry into the residential property finance market. With a focus on greater London, Gatehouse will offer Shariah-compliant financing solutions for clients seeking to acquire or refinance residential properties. This new product was developed following strong client demand for residential property finance solutions. Gatehouse will offer clients bespoke property finance products, from simple single residential investment finance to more complex company structures including property portfolio and short lease finance. Abdulaziz AlDuweesh, Chief Investment Officer of Gatehouse sees significant opportunities to grow Gatehouse's presence in this market.
GFH Financial Group (GFH) has signed an agreement with Palace Revive Developments Limited worth £100 million to be a partner in the No. 1 Palace Street development in central London, a project being developed by Northacre. Under the agreement, GFH will become an anchor partner for more than 30% of the units in the development, which is located opposite Buckingham Palace. Located in Buckingham Gate, No. 1 Palace Street includes 271,051 square feet of space adjacent to Buckingham Palace in the area between St James's, Mayfair and Belgravia, the development of 72 luxury apartments, a restaurant and health centre. The development is expected to be completed in 2018.
Qatar's Islamic lender QIIB achieved increase and growth in its various banking activities over the past year. The AGM approved the Board of Directors' proposal to distribute 40% cash dividends of the nominal value per share which is equivalent to QR4 per share. Besides, the bank is expecting approval from authorities in Morocco for its joint venture by the end of third quarter this year. The lender had signed a joint venture agreement with CIH Bank (Credit Immobilier et Hotelier), a Moroccan bank, for the establishment of a bank in Morocco in December last year. Under the agreement, QIIB will have 40% stake in the proposed bank.
Kuwait Finance House (KFH) has received an offer from investors to buy its stake in affiliate Aref Investment Group, the country's biggest Islamic lender said in a bourse statement on Monday. Aref is a diversified investment firm which is 53 percent owned by KFH and has share capital of $400 million, according to information on the companies' websites. This offer is currently under study and no decision has been taken as yet, the statement said. KFH will disclose this offer in the event that they have reached and signed a preliminary agreement, and cannot currently determine any financial impact on its statements in the absence of an agreement as yet.
The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IDB) Group has signed an agreement with Al-Manhal, a provider of electronic scholarly publications, to host IRTI's Islamic finance publications in Al-Manhal electronic databases. The Memorandum of Understanding (MoU) provides for electronic versions of IRTI's publications--including books, reports, training manuals, and conference proceedings--to be made available to Al-Manhal subscribers that include universities, government agencies, corporations, and public libraries. IRTI Director General, Prof. Mohamed Azmi Omar, and Al-Manhal representative, Mr. Rany Al Baghdadi, jointly signed the MoU at the IDB Headquarters in Jeddah.
A global survey on the Knowledge, Attitude and Practices (KAP) of the Global Islamic Wealth Management Industry conducted by Edbiz Consulting revealed that the global Islamic wealth management industry is facing a trust deficit that is hampering the growth of the industry. 48% of the respondents said they have never used any Islamic wealth management products and services, citing lack of understanding, lack of trust and preference to manage own wealth as reasons for not subscribing. Dr Sofiza Azmi, Group CEO of HD-Edbiz Group of Companies highlighted that 40% of Islamic wealth is concentrated in non-Muslim countries.
Insurer Tokio Marine Egypt General Takaful plans to increase its investments in the country by 56 percent in the financial year 2015/16 to 46.8 million Egyptian pounds (5.3 million), its managing director said. Satoshi Furuya further said that the group's investments had surged to 30 million pounds by the end of the financial year 2014/15. Tokio Marine Egypt General Takaful's investments are Shariah-compliant, notably in governmental bonds, treasury bills, in addition to deposits in investment accounts with Islamic banks, Furuya added. The company is part of Japan-based Tokio Marine Group.