Americas

Impact Investing and Equity Pledges: The New Landscape of Corporate Responsibility

The movement to reimagine the social purpose of business is accelerating at lightning speed, spinning off a renaissance of entrepreneurship that’s exhilarating to behold. This wave of corporate creativity for good is transforming the relationship that businesses have with their communities and the possibilities for real change. A new generation of businesses is filling the leadership vacuum by building philanthropy directly into their founding missions. For this innovative breed of companies, giving back is not optional or half-hearted; creating sustainable and measurable impact is as core to their definition of success as a high return to their shareholders.

Suriname's Trust Bank plans conversion to Islamic banking

Suriname's Trust Bank will convert its operations to become a full-fledged Islamic bank, after it signed an agreement with the private sector arm of the Islamic Development Bank to advise on the transition. Trust Bank would become the first full-fledged Islamic bank in South America. The lender, which decided on the transition in June, is implementing a strategy focused on small- and medium-sized businesses and adopting Islamic finance principles would support this aim, Chief Executive Maureen Badjoeri said. Suriname is the only country from the Western hemisphere to be a member of the IDB group. It has received financing from the IDB worth a combined $149 million for 18 projects.

Canada ready to become the Islamic Finance hub of North America

Thomson Reuters and the Toronto Financial Services Alliance (TFSA) have unveiled a major study, the Canada Islamic Finance Outlook 2016, during the World Islamic Banking Conference (WIBC) held in Bahrain. Canada is looking to position itself as the regional hub for Islamic finance in North America. Its main competitor in the region, the United States, is a much larger market overall, but Canada has a proportionately larger Muslim population. This advantage is coupled with an arguably more favourable federal regulatory regime and an outward looking orientation that is potentially more favourable and conducive to the growth of Islamic finance.

QInvest and Carnegie Mellon Qatar sign MoU

QInvest and Carnegie Mellon University in Qatar (CMU-Q), a branch of Carnegie Mellon University in Pennsylvania, USA, signed a Memorandum of Understanding (MoU) to cooperate and coordinate in the fields of research and education.
The MOU will offer QInvest the opportunity to use CMU-Q’s educational programs, research and strategic studies, as well as those from select schools at Carnegie Mellon’s US campus. QInvest in return will provide CMU-Q’s new graduates and students in their final year the opportunity to spend one month working at QInvest under the bank’s QTALENT initiative.

Value of global Islamic finance assets projected to reach $3.2 tn by 2020

Global Islamic finance assets had an estimated value of $1.8 trillion in 2014 and are expected to almost double by 2020 to reach $3.2 trillion, according to the ICD Thomson Reuters Islamic Finance Development Indicator.

The projections come ahead of the 2015 World Islamic Banking Conference (WIBC 2015), which will be hosted by Thomson Reuters, the world's leading provider of intelligent information for businesses and professionals, and The Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group.

Islamic insurance products come to market

The US and Canada are expected to follow London's lead with the development of Islamic insurance products. Not just because of the burgeoning market for Shariah-compliant financial products worldwide but also because of increasing demand for old-fashioned transparency.

So says James Bagshawe, a member of the executive committee of the recently established Islamic Insurance Association of London (IIAL) and COO of UK-based Cobalt Underwriting.

Earlier this month, the London Market pointed to the growth of commercial Shariah-compliant products as an important example of the innovation required by London to maintain its position as a global insurance hub. At the inaugural conference of the IIAL in Dubai, chief executive of the International Underwriting Association (IUA), Dave Matcham, said that Islamic financial activity in London is developing a growing maturity and said the IUA and IIAL are cooperating to support the trade in Islamic insurance, promoting standards and transparency.

Aberdeen Eyes Offshore Islamic Fund in Q1 of 2016

Aberdeen Asset Management plans to launch a new Islamic compliant fund to invest in overseas assets in the first quarter of next year, president director Sigit Pratama Wiryadi said on Thursday.
Aberdeen, a local unit of the Scottish fund manager of the same name, will be among the first funds in Indonesia to take advantage of recently loosened Financial Services Authority (OJK) rules allowing local fund managers to include foreign assets in portfolios. An OJK regulation issued last week announced managers are now permitted to invest between 51 and 100 % of shariah mutual fund products in overseas securities — from bonds, to stocks and currency.
Bharat Joshi, investment director at Aberdeen, said the fund manager would look for assets in Asia Pacific, the United States and Europe to include in the new fund. Aberdeen currently manages around Rp 2 trillion ($147 million) of the country's equities and bonds. The fund has previously said it is looking to increase assets fivefold over the next five years.

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Securities Regulation: USA-SEC Adopts Rules to Permit Crowdfunding

Dear Readers,

The US Securities Exchange Commission has issued recently press release regarding equity crowd funding and its regulation:

"Washington D.C., Oct. 30, 2015 —
The Securities and Exchange Commission today adopted final rules to permit companies to offer and sell securities through crowdfunding. The Commission also voted to propose amendments to existing Securities Act rules to facilitate intrastate and regional securities offerings. The new rules and proposed amendments are designed to assist smaller companies with capital formation and provide investors with additional protections."

http://www.sec.gov/news/pressrelease/2015-249.html

Equity funding is discriminated threefold in finanical markets despite most people assume that a market economy would leave choices to market participants. The three key problems are: 1) Risk weighting of equity finance a multiple higher than debt finance, thus making it unattractive for banks to provide equity finance and consequently destabilizing economies with excess debt. 2) Tax deductibility of interest expense. 3) Entry barriers to the securities markets to raise equity.

Suriname to host economic-financial meeting of Islamic bloc

From November 16 -15, Suriname will host a meeting of central banks and monetary authorities of the Organisation of Islamic Cooperation (OIC) member countries. This will be one of the first meetings of the OIC that Paramaribo will host to enhance its economic standing and raise its global profile. The meeting will bring together economic and financial officials from OIC member states under the theme: "Structural and financial policies to cope with international and domestic economic challenges in the OIC member countries." The first day of the meeting will be dedicated to the experts’ group workshop. On the second day, the meeting of governors will take place.

Walkers Cayman Islands: Cayman SPVs In Sukuk Structures - Islamic Finance News

While a number of mechanisms can be employed to structure a Sukuk transaction from a Shariah perspective, a Sukuk structure typically involves the acquisition of assets from the entity seeking to raise financing (the originator) by a limited recourse, bankruptcy-remote, SPV established in a tax neutral off shore jurisdiction. The Cayman Islands are, unquestionably, the off shore jurisdiction of choice for SPVs on Sukuk structures originating in the Middle East. The prevalence of Cayman SPVs in Sukuk structures stems from a number of factors: Trust regime in the Cayman Islands, Absence of tax, Ease, speed and cost of incorporation, Sophisticated off shore center for financial services, Reliable legal system, Use of Arabic names.

White House turns to crowdfunding campaign for Syrian refugee crisis

The Obama administration has launched its first-ever crowdfunding campaign this week to raise money for Syria’s growing refugee crisis, in a bid to draw the American public into supplementing the U.N. refugee agency’s strained budget. The initiative is also a first of its kind for Silicon Valley crowdfunding platform Kickstarter. As of Wednesday, the second full day of the campaign, donors had raised over $800,000 for the U.N. refugee agency (UNHCR) — enough to cover immediate necessities and a place to sleep for 3,000 people in need, the campaign page says. However, the UNHCR has only received $1.8 billion of the $4.5 billion it has requested from foreign governments for Syrian refugees in 2015.

What Happens If We Redistribute Bill Gates Wealth to the Poor?

The Robin Hood Index chart shows the effect of confiscating all of the wealth of each country’s wealthiest individual and redistributing it to the poorest 15 percent of the nation’s population. Consider what happens if we took all of the wealth ($80 billion) of Microsoft co-founder Bill Gates and redistributed it to the poor. According to an analysis by Bloomberg News, the poorest 15 percent of Americans would get a one-time payment of $1,736 each. By adding the next billionaires on the list, that payment increases to $20,000. While a one-time payment of $20,000 might be nice for a few weeks or months, it solves precisely none of the long-term problems facing the poorest Americans.

Kickstarter is now a Public Benefit Corporation

Kickstarter announced the company’s reincorporation as a public benefit corporation, meaning that the crowdfunding company is now legally obligated to make a positive impact on society. The company has legally changed its name from Kickstarter Inc. to Kickstarter PBC and is now required to submit an annual public benefit statement detailing its work for public good. The first of these statements will be issued in February 2017. The crowdfunding company still serves as a for-profit, while doubling down on its social mission of supporting creative endeavors. Time will tell what this move will mean for the company’s financial projections.

Fitch Affirms JANY Sukuk Company Limited's Senior Debt at 'A'

Fitch Ratings has affirmed the rating of The Goldman Sachs Group Inc.'s (GS) JANY Sukuk Company Limited (JANY) guaranteed trust certificate issuance programme at 'A'. The certificate programme's rating is equalized with GS's Issuer Default Rating (IDR) of 'A'. GSs ratings continue to be supported by its investment banking franchise, solid liquidity position, better-than-average capital position, and strong risk management. The ratings are constrained by GS's focus on capital market activities and relatively higher wholesale funding. The rating of the programme will be influenced by changes in GS's long-term IDR.

Azzad Asset Management Participates in U.S.-Saudi Investment Forum

A delegation from Azzad Asset Management joined representatives from the Saudi Arabian and U.S. business communities in Washington, D.C., for a conference designed to foster trade ties between the two nations. Azzad has investments in Saudi Arabia through its international fixed-income fund. The U.S.-Saudi Investment Forum, organized by the Saudi Arabian General Investment Authority in conjunction with the Council of Saudi Chambers and the U.S.-Saudi Business Council, served as an opportunity for executives and officials to explore investments in energy, transportation, health, education, and financial services. Signing ceremonies between U.S. and Saudi businesses were a feature of the event.

Yale University Announces Gift to Establish Center for Islamic Law and Civilization at Yale Law School

Yale University President Peter Salovey and Yale Law School Dean Robert C. Post have announced a $10 million gift to create the Abdallah S. Kamel Center for the Study of Islamic Law and Civilization at Yale Law School. This gift is from Abdallah S. Kamel, chief executive of the Dallah Albaraka Group, LLC, a banking and real estate enterprise based in Saudi Arabia. The center will bring prominent scholars of Islam to the Yale campus for public lectures, seminar discussions, visiting fellowships, and visiting professorships, attracting students from the Law School and other schools at the university to its lectures and other opportunities for collaboration.

Shariah Compliant, Globally Diversified

Islamic financial institutions have $2 trillion in assets under management, and this is likely to grow to $3 trillion in the next three to five years. The Shariah-compliant Azzad Wise Capital Fund offers an investment opportunity not only to Muslim investors but to anyone looking to invest in an alternative, non-correlated fixed-income fund with less volatility. The Fund currently has almost $100 million in assets under management. It pursues long-term income and capital preservation by investing primarily in Islamic Bonds and interest-free bank deposits and notes issued primarily by overseas banks in developing countries. A small portion of the Fund’s assets may be invested in dividend-yielding stocks.

Warba Bank invests in US residential real estate

Warba Bank is one of the initial investors in a US-focused real estate strategy managed by the Wafra Investment Advisory Group, Inc. Warba Bank has announced that the has acquired the commercial office building “The Nathaniel” in New York. Warba Bank’s co-investors include German insurance companies and pension funds. “The Nathaniel” is the first transaction by the fund. The building was completed in September 2014 and is a Class A+ nine story building consisting of 85 residential units with luxurious amenities and 18,000 square feet of retail space. It is fully occupied and located in upmarket area of East Village Manhattan, New York.

Azzad Welcomes Pope's Encyclical on the Environment, Social Justice

US-based Azzad Asset Management has welcomed Pope Francis' encyclical calling for swift worldwide action to combat climate change, protect the environment, and move toward economic equality. In the encyclical released 'Laudato Si' the pope issues an urgent invitation to people of all faiths to reduce their consumption of resources and make changes in their daily lives in order to safeguard the earth for future generations. He calls for sweeping government and economic reforms to counter environmental destruction and economic injustice. Azzad added its voice to that of the Interfaith Center on Corporate Responsibility (ICCR) which welcomed the pope's statement. Azzad joined ICCR earlier this year, becoming the first Muslim member of the shareholder coalition.

Islamic Finance in Canada is in the Calm Before the Storm

Demand for Islamic Finance in Canada at the retail level s increasing. Awareness is strongly rising and demand is following suite. So far, Islamic finance clients and interested potential clients are Muslims. As per Statistics Canada, the Muslim community is rapidly growing in Canada, the majority of Canadian Muslims being in the province of Ontario. So naturally, that's where the institutions are concentrating their marketing efforts with a few expanding to reach all the way to the province of British Columbia. The most popular product is hands-down real estate, be it residential or commercial.The technical knowledge of Islamic finance is, for the most part, basic. Islamic finance in Canada is in the calm before the storm.

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