IslamicFinance.de

Qatari firm Barwa Real Estate Company, has raised $175m through an Islamic loan from International Bank of Qatar to refinance its existing debt. The sharia-compliant loan will last for seven years from the date that the company draws down on the facility. In an effort to refinance its current debt obligations, Barwa Real Estate intends to increase the lifespan of the maturities on the best available terms, as part of its five-year business plan running between 2016 and 2020. As Qatar’s largest listed developer, Barwa Real Estate reported more than doubling its fourth quarter net profit in March this year, as well as an improved dividend payout for the full year. Barwa Real estate is listed on the Qatar Stock Exchange.

Kuwait-based International Turnkey Systems (ITS) appears to be for sale, with its parent, Kuwait Finance House (KFH), deciding it is no longer strategic. There have been number of discussions with main rival in the Islamic core banking systems sector, Path Solutions.

The State Bank of Pakistan has given a Rs20-billion concessionary loan, including Rs5 billion at an incredibly low rate of 0.01%, to BankIslami to meet capital requirements following the amalgamation of KASB Bank into it. It has highlighted transparency issues pertaining to the BankIslami and KASB Bank amalgamation, as the central bank did not extend the facility through competitive bidding.In protest against the move, a minority shareholder of KASB Bank has lodged a complaint with the National Accountability Bureau (NAB). The complainant, Shaheena Wajid Mirza, requested the anti-corruption watchdog to investigate the SBP governor and other officials of the central bank and Ministry of Finance for alleged corrupt practices and misuse of authority.

Finance can be highly disruptive and destructive, but it can also be an immeasurably powerful tool for good, according to Bertrand Badre, Managing Director and World Bank Group CFO. Flow of capital into emerging markets and developing economies for infrastructure increases the availability of basic services, resulting in increased access to water, electricity and sanitation, more hospitals, schools and roads and stimulation of entrepreneurship, trade and prosperity. Many countries are investing in financial inclusion strategies. Religion permeates almost every facet of development and faith organizations play an instrumental role in combatting poverty as service providers, change agents and advocates. Partnering with faith-based groups will allow us to combine technical approaches with the motivating power of hope.

The Thomson Reuters Global Sukuk Index is at 118.07262 points, up from 117.85307 at the end of last month and 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 116.83897 against 116.56666 at end-June and 113.69014 at end-2014. Some sukuk in the pipeline are: Shareholders of Oman's Renaissance Services approved in early July plans for the company to buy back mandatory convertible bonds and finance that by issuing up to $200 million of perpetual bonds, either conventional or sukuk. Saudi Arabia-based Arab Petroleum Investments Corp could issue its first sukuk later this year as part of its recently-established $3 billion sukuk programme. Malaysia's Sarawak Energy plans to issue 1 billion ringgit ($264 million) of sukuk.

Faisal Islamic Bank of Egypt (FAIT) has achieved profits volume of 387.1 million Egyptian pounds (US$49.4 million) within the first half of 2015 versus EGP 351.48 million in the same period of 2014 marking 10% increase. The bank's revenues has been increased to 2.15 billion Egyptian pounds in six months opposed to 1.81 billion within the first half of 2014 registering 19% increase. The volume of bank's total assets also has been boosted to EGP 53.2 billion at the end of June 2015 compared to EGP 49.05 billion at the end of 2014 with 8.5% increase. The business volume of Faisal Islamic Bank of Egypt has recorded EGP 53.2 billion. Moreover, the number of accounts managed by the bank has been increased from 1.083 million at the end of June 2014 to 1.086 million at the end of June 2015.

A special task force comprising the Attorney-General's Chambers, police, anti-corruption authorities and Bank Negara is now probing the claim made by The Wall Street Journal (WSJ) on July 2. WSJ has posted documents on the money flow into Najib's accounts on the Internet to support its report. WSJ's report centres on some US$700 million (RM2.67 billion) funnelled into two of Najib's accounts at AmBank in Kuala Lumpur. The money was transferred in five separate deposits from two originating points. According to WSJ, the largest portion of the money – US$681 million – was transferred to Najib's accounts in March 2013, ahead of the May general election (GE13). Najib has denied taking funds for personal gain.

Dubai has achieved the 1st goal of its strategy aimed at making the emirate the global capital of Islamic economy, the UAE’s VP and PM and Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum has said. His remarks came after a report showed that Dubai has overtaken other financial centres for listing Islamic bonds on its exchanges. Sukuk listed on Dubai’s 2 exchanges, Nasdaq Dubai and Dubai Financial Market, rose to $36.7-B (Dhs 134.38bn) in Y 2015, according to a study by Nasdaq Dubai. According to a report the global Islamic economy has a potential value of $6.7 -T and is bigger than most of the economies in the world except China and the United States. The report estimates that Muslim consumers’ global expenditure on the media, food, and lifestyle sectors such as cosmetics and tourism is forecast to touch $2.47-T by Y 2018.

The Securities and Exchange Commission of Pakistan (SECP) is in the process of preparing shari'ah compliance regulations for the Islamic capital market. The SECP has chalked out a comprehensive plan for the development of the Islamic capital market in the country. Under the future plan, the SECP will introduce new products for Islamic capital market. The commission would also create awareness on the Islamic capital market. Besides, the SECP is planning to introduce shari'ah audit mechanism. The commission would also adopt new accounting standards on Islamic finance issued by Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The SECP will launch webpage of Islamic finance department for education, promotion and development of Islamic finance.

The combined pre-tax profit of the Islamic banking industry surged to Rs4.8 billion in the first quarter of 2015, which depicts 48% growth on a year-on-year basis. The rise in the profitability of the Islamic banking industry in January-March was mainly on the back of earnings growth of 95% recorded by Islamic banking divisions (IBDs) of conventional banks. In contrast, the combined profitability of Islamic banks increased 17.6% in January-March on an annual basis. Assets of the Islamic banking industry grew by 28.2% in January-March on an annual basis to Rs1.3 trillion. Similarly, its deposits stood at Rs1.1 trillion at the end of March after recording a growth of 28.7% over the preceding 12 months.

Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) obtained an Islamic Financial Business endorsement to operate an Islamic Window from the Dubai Financial Services Agency on 8 July, 2015. This approval has enabled its Dubai Branch to offer both conventional and Islamic financial services to customers. BTMU commenced its Islamic finance services in 2008 through its Malaysian subsidiary. Since then, the Bank has accumulated various skill sets and expertise regarding Islamic finance services such as deposits and loans. BTMU opened its Dubai Representative Office (now Dubai Branch) in 2007. It will be the Bank’s central hub of Islamic finance services in Europe, Middle East and Africa region.

Struggling to elevate the standard of living among orphans, the Takaful Welfare Society for Orphan Care in Madinah has announced a new project to build residential units for orphans in the holy city. According to the Takaful program, 195 residential units will be built for families of orphans in Madinah and its villages over a period of three years and 300 houses will be repaired. With the cost of around SR40 million, it is estimated that one unit will cost around SR180,000 for construction and SR20,000 for repairs. Besides, the society announced the Madinah Al Munawwara Award for Social Responsibility under the auspices of Prince Faisal bin Salman to support best projects for orphans.

Dubai has overtaken other financial centres in listing Islamic bonds on its exchanges, and is mounting a global drive to attract more listings while developing new channels to trade sukuk, Hamed Ahmed Ali, the chief executive of Nasdaq Dubai said. The exchange is working on ways to sell sukuk directly to retail investors, expanding the primary market beyond institutional buyers, and designing a sharia-compliant repurchase agreement, he said. Until 2013, issuers from the Gulf usually chose European exchanges to list sukuk; that has begun changing. Unlike Europe, Dubai has a stable of local state-linked firms which can be encouraged to issue sukuk and list them locally. Also, Dubai is at the heart of a Muslim region, which both supplies sukuk and provides investor demand, Ali said.

Abu Dhabi Islamic Bank PJSC is planning expansion in Africa markets to tap demand in countries with a large Muslim population. In Africa, the bank has looked closely at Algeria and Morocco, Chief Executive Officer Tirad Mahmoud said. The bank may consider an acquisition next year as part of the plan, he added. The bank also applied for licenses in Algeria and Libya and is considering Tunisia and Morocco. The bank was among lenders that bid to buy the retail banking assets of Citigroup Inc. in Egypt this year, losing out to Commercial International Bank Egypt SAE last month. Mahmoud believes the banking industry is on the cusp of a historic transformation that will see a convergence between conventional and ethical banking.

The General Council for Islamic Banks and Financial Institutions (CIBAFI), the global umbrella of Islamic financial institutions, and the World Bank have signed a memorandum of understanding (MoU). The MoU will help foster the development of Islamic finance globally and expand its use as an effective tool for financing development worldwide, including in non-Muslim countries. The MoU serves as the foundation for future cooperation in the areas of knowledge generation and dissemination; distilling and sharing lessons of experience; encouraging research and promoting awareness; and enhancing capacity in the Islamic financial services industry.

The Malaysian Attorney-General's Chambers (AGC) on July 9 said that six bank accounts, ordered frozen on Monday as part of a 1Malaysia Development Berhad (1MDB) probe, were not linked to the prime minister, as his accounts with AmBank Islamic had already been closed by then. The task force is investigating allegations in a report by The Wall Street Journal (WSJ) that up to US$700 million from state-owned fund 1MDB had been transferred to Mr Najib for personal use. Mr Najib refuted the accusations in a statement on Wednesday, reiterating he had never obtained funds from 1MDB for his personal gain. The AGC also detailed items seized in a raid of the 1MDB office in Kuala Lumpur on Wednesday, including minutes of meetings of the 1MDB Board of Directors.

The strong demand for Islamic debt papers by foreigners appears to be reaching a plateau. According to analysts, the demand for Islamic bond papers from foreign investors in the last one year has pushed up prices and subsequently the yields have come down. Standard & Poor’s (S&P) Ratings Services foresees the global sukuk market heading towards a correction in 2015 after Bank Negara stopped issuing the bond earlier this year. Bank Negara’s move leaves the door open to issuers such as the International Islamic Liquidity Management Corp and the Islamic Development Bank to step up their issuance and provide the industry with liquidity, thereby contributing to the development of an Islamic yield curve.

Indonesian financial authorities are considering to ease foreign ownership limits for local Islamic banks and to promote new sharia-compliant financial tools in an effort to make the Islamic finance industry more attractive to foreign investors and the Indonesian population. The current low market share of Islamic banking in Indonesia in combination with the recent high growth pace and government support implies that there is plenty of room for further growth of the Islamic banking industry in Indonesia. In this context, Indonesia’s Financial Services Authority (OJK) developed and launched a five-year roadmap earlier this year, which aims to triple the market share of Islamic banks to 15 percent by 2023. The OJK also announced that it considers to ease ceilings on foreign ownership for Islamic banks.

State-owned Islamic Bank of Thailand, branded as IBank, has become the target of domestic and foreign investors, including from the Middle East, according to its chairman Chaiwat Uthaiwan. In an effort to rehabilitate its business, the country’s State Enterprise Policy Office agreed to allow local or foreign private investors to acquire more than 50% of stakes in the bank. According to IBank’s chairman, several Asian financial houses including some from the Middle East were interested to take over a larger stake. But this could happen only next year because the bank has to separate its good and bad assets first before it could think about a stake sale, he added. At present, IBank tries to restructure $1.7bn of bad loans out of a total loan amount of close to $3bn. Net loss in 2014 was around $300mn.

CIMB Group chairman Datuk Seri Nazir Razak has ordered an internal inquiry on a senior executive of its Islamic banking unit who yesterday accused US-based Wall Street Journal (WSJ) of being duped by doctored documents in its explosive money trail exposé on 1Malaysia Development Berhad (1MDB). Nazir disclosed the action in a late night post on his Instagram account, after news portal Malaysiakini reported CIMB Islamic Bank chief executive officer Badlisyah Abdul Ghani for his erroneous analysis on WSJ in his closed-circuit Facebook page. Badlisyah has admitted to making an error in his analysis of the WSJ documents, which the daily purports were based on an ongoing government investigation on 1MDB, adding that he has also corrected his initial Facebook post.