IslamicFinance.de

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. Sukuk listed on Dubai’s two exchanges, Nasdaq Dubai and Dubai Financial Market, rose to $36.7 billion last month from $7bn in 2013. Nasdaq Dubai accounts for the vast majority. Until 2013, issuers from the Gulf usually chose European exchanges to list sukuk; that has begun changing.

Warning that the global sukuk market is heading toward a correction in 2015, Standard & Poor’s Rating Services (S&P) has halved its forecast for global sukuk issuance in 2015 as major issuer Bank Negara Malaysia (BNM) switches to other instruments to finance the government’s spending. The global ratings agency said it was revising its forecast for total sukuk issuance in 2015 to about $50 billion to $60 billion from $100 billion to $115 billion, assuming there will be no issuance from BNM in 2015. In a statement, S&P said the move by BNM to stop issuance leaves the door open to issuers such as the International Islamic Liquidity Management Corp (IILM) and the Islamic Development Bank (IDB) to step up their issuance and provide the industry with liquidity, thereby contributing to the development of an Islamic yield curve.

Abdullah Ahmad Al Ghurair, whose eponymous business group has interests including banking, food, construction and real estate, has unveiled the Abdullah Al Ghurair Education Foundation, a philanthropic institution dedicated to the advancement of young men and women in the UAE and the Arab World. A legally registered entity, the Foundation owns one third of the assets of the Abdullah Ahmad Al Ghurair group of companies, including all revenues and profits. The Foundation will award grants based on a competitive process. It will promote academic subjects that address the needs of the local and global economy and the priorities of nation building. Grants for higher education will be made through a clear and transparent process and awarded based on merit to Emirati and Arab youth in need of financial assistance.

The Bank of Zambia (BoZ) says it is working out modalities to roll out Islamic banking in the country after the central bank launched Islamic finance guidelines in 2013 to ensure strict adherence and compliance with the rules and principles of Sharia. BoZ governor Denny Kalyalya said the central bank is still doing some work on the Islamic banking. He noted that Islamic finance is a new way of doing business and a lot more needs to be done.
The BoZ has embarked on a process of developing a regulatory framework to facilitate the introduction of Islamic finance. The framework was reviewed by the Islamic Financial Services Board, which is the standard setting body in matters of Islamic finance.

Gulf Finance House (GFH) is planning to make an acquisition this year and sell a unit in an initial public offering. The expected moves are part of efforts to reshape GFH, which was hit hard by the 2008-2009 global financial crisis. Currently the Bahrain-based Islamic investment bank has four units: investment banking, commercial banking, real estate and industry. GFH’s first quarter net profit rose 140 per cent to US$6 million from $2.5m a year earlier. GFH, which is talking to one firm in Bahrain and two in Dubai, is banking on closing this year with at least one leveraged acquisition valued at about $200m. The firm is seeking to finance the acquisition through 30 to 40 per cent equity and the remainder in debt.

La banque Emiratie, ‘Abu Dhabi Islamic Bank’ s’apprêterait à entrer au marché bancaire marocain, par des investissements programmés pour l’année 2016. Selon le PDG du groupe, Tirad Al Sheikh Mahmoud, Abu Dhabi Islamic Bank serait à la recherche d’opération de rachat de banques au royaume sachant que le banking islamique y est en lancement. Tirad Al Sheikh Mahmoud a exprimé le même intérêt de son établissement, pour des investissements similaires en Malaisie, en Indonésie ou en Jordanie. Au Maroc, en Novembre 2014, la chambre des représentants a adopté une nouvelle loi sur la finance islamique, autorisant la création au Maroc, de banques ou filiales islamiques et autorisant l’émission des Sukuks.

Bahrain-based Ibdar Bank has appointed Mr. Ahmed Al-Rayes as Chief Investment Officer (CIO) of the Bank. Effective 9 June 2015, Mr. Al-Rayes is responsible for leading the investment and wealth management teams and for establishing and implementing investment strategies to expand the Bank's investments horizon. This includes both broadening Ibdar's client base, strengthening existing relationships with key clients and partners and building relationships with international institutions globally. Mr. Al-Rayes holds a Bachelor of Science degree in Mechanical Engineering from the University of Bahrain and an MBA from the University of Strathclyde in Glasgow, Scotland. He has also completed a number of executive and Islamic training programmes in the region and internationally.

The UK should capitalise on the growing Takaful insurance market, or other countries will steal London's lead, said experts at an IUA briefing on Islamic insurance held at Lloyd's on Tuesday. The UK government wants London to become the western hub for Islamic finance, particularly commercial insurance, said Susan Dingwall, head of Islamic insurance and partner at Norton Rose Fulbright. The government's focus on commercial lines of insurance is big break from the past, said Dingwall, speaking at a briefing hosted by the International Underwriting Association (IUA) in London this morning.

Exacerbated by the pursuit for higher profits, capital preservation and food security, the oil rich region has over the years witnessed increasing demand for agricultural investments. Saudi's Sidra Capital hit the news when they opened up the largest Islamic structured trade finance fund in the world. It specifically invests in agricultural commodities, energy and metals. SEDCO Capital also positioned agriculture in their portfolio by recently launching a Shariah compliant Agribusiness Fund for which they have already raised $35 million and are targeting to close at $150 million. They have also in the past invested in UK-based Insight investment's Global Farmland Fund and AGF Latin America Fund.

A number of African countries have opted to issue sukuk, or Islamic bonds, as an alternative to raise funds for projects. Last year, South Africa became the first non-Muslim country in Sub-Saharan Africa to issue a sovereign sukuk. Valued at $500 million, it was readily taken up by Middle East investors. Gambia is a frequent issuer of local currency sukuk, while Senegal raised more than $200 million in a local currency Islamic bond last year to fund a number of infrastructure and energy projects. Deeper markets and a Middle-Eastern investor base more familiar with Africa should help to advance sub-Saharan Africa sukuk issuance in the nearer term.

The government uses effective approach and adopts efficient and integrated structure to develop Malaysia as an international Islamic financial centre, said Deputy Finance Minister, Datuk Chua Tee Yong. He said the approach was due to the strong cooperation among various ministries, agencies, private sector and other stakeholders via the Malaysia International Islamic Financial Committee (MIFC) committee chaired by Bank Negara Malaysia governor. Asyraf Wajdi wanted to know whether the Finance Ministry has plans to develop the Islamic financial system in Malaysia by establishing ‘local centres’ as in Qatar, Bahrain, UK and Singapore. Chua said the plan and strategic issues would be discussed by MIFC exco to facilitate the administration and smooth implementation of the MIFC initiative.

Islamic finance has reached only 38 million out of two billion million Muslims (Ernst & Young) in 40 years, and it’s more about the bankable and those with collateral. In taking a step back and looking at the landscape, there was a light-bulb moment few years ago that something was missing in action (MIA). The original vision of the founders of Islamic banking was about financial inclusion of the non-bankable. So, the question becomes, what has Islamic banking and finance done for the poor versus the bankable, and what has it done for young entrepreneurs? The vision of Zilzar is about being a benefit-driven corporation, and not a for-profit only or non-profit only.

Several banks and financial institutions in the UAE are building provisions as a precautionary measure in anticipation of possible bad debts they may face in the future, the chief executive officer of Abu Dhabi Islamic Bank said. Tirad Al Mahmoud also said that since not all borrowers they deal with are registered with the UAE’s Etihad Credit Bureau, their data is unknown. At present, ADIB’s rejection rate for loan applications it receives is between nine to 10 per cent, which may drop or rise once the Etihad Credit Bureau’s report on an individual or corporate covers the financial data on all the customers of all banks and financial institutions operating in the country.

Abu Dhabi Islamic Bank PJSC is considering entering markets in South East Asia and Africa to tap demand in countries with a large Muslim population. The bank has “looked closely” at Indonesia and Malaysia as well as Algeria, Morocco and Jordan, Chief Executive Officer Tirad Mahmoud stated. The bank may consider an acquisition next year as part of the plan, he said. ADIB in 2014 acquired the retail banking business of Barclays Plc in the U.A.E. for 650 million dirhams ($177 million). The bank was also 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. ADIB expects lending to grow by four percent to six percent this year, Mahmoud added.

Md Mustafa Khair has recently been promoted as the deputy managing director of First Security Islami Bank. Prior to the promotion, Khair has been serving the bank as senior executive vice president, the bank said in a statement. He started his banking career at Bangladesh Shilpa Rin Sangstha, which is now known as Bangladesh Development Bank. He also worked with IFIC Bank and Dutch-Bangla Bank before joining First Security Islami Bank in 2006, according to the statement.

RAM Rating Services has reaffirmed the A2/Stable/P1 financial institution ratings of Bank Muamalat Malaysia Bhd. The ratings agency had on Monday also reaffirmed the bank’s A3/Stable rating of its RM400mil Islamic subordinated Sukuk programme (2011/2026). The one-notch difference between the bank’s long-term financial institution rating and that of its subordinated Sukuk reflects the subordination of the debt facility to the bank’s unsecured obligations, it said. RAM Ratings said the bank’s asset-quality indicators had weakened during the period under review. Its gross impaired-financing (GIF) ratio had increased to 3.0% as at end-December 2014 (end-March 2014: 2.7%), with the largest upticks in home and personal financing.

Indonesian regulators are promoting new sharia-compliant financial tools and considering easing foreign ownership limits for domestic Islamic banks, seeking to make the sector more appealing to foreign lenders. This year the financial regulator, Otoritas Jasa Keuangan (OJK), launched a five-year strategy that aims to triple the sector's market share to 15 percent by 2023. Attracting foreign capital is part of those plans; the OJK is considering easing foreign ownership ceilings for Islamic banks, now at 40 percent. Meanwhile, companies can raise cash in foreign currencies more easily with Islamic instruments, after the country's national sharia board approved sharia-compliant currency hedging tools in April.

Central Bank of Nigeria (CBN) has advised stakeholders in the financial services sector to adopt sustainable practices to strike a balance between economic development and the protection of the ecosystem. Speaking at a workshop on sustainable finance, CBN Governor, Mr. Godwin Emefiele, represented by his special adviser on sustainable banking, Dr. A'isha Usman Mahmood, tasked the stakeholders to include environmental protection in addition to maximising profit and returns on investments. The apex bank hinged its advice on the positive nexus between environmental, social management and improved economic performance, which it said were being keyed into by financial institutions worldwide.

HSBC Amanah Malaysia Bhd has launched its Islamic Socially Responsible Unit Trusts, the first of its kind in the Islamic banking landscape in Malaysia. The company said the unit trusts are tailored for customers who want to invest and at the same time make a difference in the communities they live and work in. A portion of profits earned from the Socially Responsible Unit Trust proposition will be channelled to the Teach For Malaysia foundation. A contribution of RM10 will be made for every customer placement below RM50,000 into selected funds of the unit trusts and will double to RM20 for placement above or equal to RM50,000. Chief Executive Officer Rafe Haneef said the unit trusts may provide a good return on investment for customers while extending the benefit to children who suffer from education inequity in Malaysia.

Some UAE and Gulf travellers are drawing up plans for short visits to Greece this summer, to pick up choice real estate assets on the cheap. Valuations on Greek realty are down to “10 cents to the dollar” from their 2007 peaks. Gulf investors can tick any number of reasons for picking up a Greek real estate deal now, and they need not be high risk-addicts to head that way. There are some choice valuations being offered up for prime assets as cash-strapped Greek developers/investors seek exits. Hospitality related properties figure prominently, as uncertainty shrouds its tourism industry. Barring a few exceptions, asset prices inevitably recover, although the time taken to recover may vary widely.