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Malaysia's Tenaga Nasional Bhd is seeking to raise as much as 10 billion ringgit ($2.7 billion) in an Islamic bond issue to develop a power plant project it is planning to take over from debt-laden state fund 1MDB. The planned purchase of 1MDB's 70 percent stake in 3B, a greenfield 2,000 MW coal-fired plant project, will take the pressure off 1MDB to find the funds to develop the project and help it focus on paring down debt of more than $11 billion - a burden that has weighed on Malaysia's currency and its credit rating. It also fits well with Tenaga's own energy supply needs, although some analysts are worried that the company may end up overpaying if the government pushes for 1MDB to gain the best deal it can.

Moody's Investors Service says the outlook on Indonesia's (Baa3 stable) banking system remains stable, reflecting an expectation that the country's banks will withstand a challenging operating environment owing to their strong buffers. Nonperforming loans will likely rise, given slowing economic growth, nonetheless, the banks are well-positioned to withstand any deterioration in asset quality and will maintain strong capital levels. Moody's conclusions were contained in its just-released "Banking System Outlook: Indonesia", which expresses Moody's view of how bank creditworthiness will evolve in this system over the next 12-18 months. The report looks at the banking system in the five categories of operating environment; asset quality and capital; funding and liquidity; profitability and efficiency; and system support.

Saudi Arabia's National Commercial Bank (NCB) has announced the sale of a capital-boosting Islamic bond, raising 1 billion riyals ($267 million) through a sukuk which will enhance its core capital. The kingdom's largest bank said on Monday the privately-placed sukuk, which would boost its Tier 1 capital, was Basel III-compliant and had a perpetual tenor, although the bank would have the right to call the sukuk on a predefined date. However, it did not disclose the call date in the bourse filing announcing the transaction. JP Morgan and NCB Capital, the investment banking arm of NCB, were the deal's arrangers. NCB joins a string of Saudi Arabian banks that have sought to replenish their capital reserves in the last couple of years, by issuing capital-boosting bonds and bonus shares.

Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) is getting closer to reaching its target of turning into a full-fledged shariah development finance institution (DFI) with its Islamic financing portfolio now standing at 86.5 per cent amounting to RM4.31 billion. The target is to achieve 90 per cent Islamic financing portfolio by December 2015. When SME Bank was set up in October 2005, the Islamic financing portfolio was only 15 per cent. Group managing director, Datuk Mohd Radzif Mohd Yunus, said convincing customers to switch to Islamic financing was not a major challenge. SME Bank, through its unit, Centre for Entrepreneur Research and Development Sdn Bhd, and Islamic Banking and Finance Institute of Malaysia, developed and conducted the Chartered Islamic Development Banker programme.

A bitcoin startup based in the US is now helping Muslims get loans without breaking Islamic law. Matthew J. Martin, who converted to Islam five years ago while he was working fintech world, set up Blossom Finance which partners with microfinance institutions to make “investments” in small businesses then takes a 20 percent cut of the profits in order to still make money. In particular, Martin chose to use bitcoin since it doesn’t incur high transactions costs. Apart from that, the digital currency also features transparency, as the transactions are recorded in a public ledger called blockchain. Blossom is based in Indonesia, where there is a strong demand for financing that is compliant with Islamic law. The company has gotten its first investment from BMT Nusantara Condet, which help 10 to 20 micro businesses within Indonesia to expand.

Sukuk issuance plunged in the first five months of this year after Malaysia’s central bank stopped issuing short-term Islamic bonds, data from Standard and Poor’s showed. Issuance fell to US$33.7 billion in the year to May 31, down from $50.5bn in the same period of last year, according the rating agency’s figures. Bank Negara Malaysia (BNM) was responsible for about $10bn of sukuk issuance last year, mostly in short-term sukuk with tenors of three months. Overall sukuk issuance excluding BNM was down 5.1 per cent against the previous year’s figure of $35.5bn. Demand for sukuk from investors outside the Islamic world has been significant, but a shortage of supply characterises an industry segment in which highly-rated sovereign issuances are sought after and many times oversubscribed. The collapse in the price of oil could further harm sukuk issuance.

Kuwait’s Investment Dar said on Sunday that a Kuwaiti court had rejected the company’s appeal against a ruling to lift protection it had against legal action by creditors. The company, which holds a stake in luxury carmaker Aston Martin, will be reviewing available options with its advisers over the next few days and would announce the result of these conversations in the coming period, it said in a statement. Investment Dar was one of the first to reorganise under Kuwait’s Financial Stability Law. A court ruling in July last year ruled that legal protection from creditors would be lifted, although it was temporarily reinstated in October to allow Investment Dar to appeal. However, a hearing by the Kuwaiti Court of Cassation on June 17 rejected the appeal, the statement said. The court’s decision was final, Investment Dar added.

The International Finance Corp (IFC), the World Bank's lender to the private sector, has started work on a return to the market for Islamic bonds, with plans to issue sharia-compliant debt after summer in the Gulf region. Details such as currency, tenor and size were not yet available. The IFC, which aims to spur private investment in developing countries, last sold a $100 million five-year sukuk in 2009, listing it on the Dubai and Bahrain bourses. Its first sukuk came in 2004 in Malaysia, a 500 million Malaysian ringgit ($134 million) three-year deal. In December, the International Finance Facility for Immunisation Co (IFFIm), for which the World Bank acts as treasury manager, issued a $500 million debut sukuk.

Saudi Binladin Group, one of the kingdom's largest construction firms, has priced an Islamic bond with a 364-day tenor worth 1 billion riyals ($267 million). The transaction, arranged by the investment banking arm of Gulf International Bank and BNP Paribas' Saudi unit, was priced with a profit rate of 2.5 percent. The funds from the issue will reportedly be used to finance costs related to its work at the King Abdulaziz International Airport in Jeddah. Binladin is the main contractor for the project, which aims to increase the airport's capacity to handle 80 million passengers annually by 2035. The terms of the sukuk are the same as those on the company's last Islamic bond offer in July 2013, which was arranged by the same banks.

Silatech, a Qatar-based social enterprise aiming to increase employment and entrepreneurship among youth in the Middle East and North Africa, recently announced the development of Narwi, a nonprofit crowdfunding platform that will support microentrepreneurs via Islamic charitable giving. The platform is scheduled to be launched in late June 2015. Through Narwi, donors will be able to establish an endowment called a “Narwi Waqf” to fund microentrepreneurs with donations as small as USD 25. Projects featured by Narwi are sourced solely from lenders in Egypt, Iraq, Jordan, Lebanon, Palestine, Somalia and Yemen that are compliant with Shariah.

The Thomson Reuters Global Sukuk Index is at 117.95463 points, down from 118.42537 at the end of last month but up from 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 116.76818 against 117.32893 at end-May and 113.69014 at end-2014. The sukuk in the pipeline include: Malaysian mobile phone operator Maxis Bhd will raise up to 5 billion ringgit ($1.33 billion) through sukuk to refinance debt and fund capital requirements. Brunei's central bank is preparing to issue long-term sukuk. The Malaysia unit of Toyota Motor Corp plans to set up a 2.5 billion ringgit programme to raise funds via both conventional and Islamic bonds. Malaysian SapuraKencana Petroleum plans to raise up to 7 billion ringgit with a multi-currency sukuk programme.

The chief executive of Kuwait's The Securities House, Ayman Boodai, said he was stepping down from his position at the sharia-compliant investment firm and would be replaced by Fahed Boodai, the current chairman of U.K.-based Islamic lender Gatehouse Bank. Legal steps to allow the change have begun, with a new board of directors needed to be elected before a new chief executive can be nominated. The Securities House is one of two big shareholders in Gatehouse Bank, with the other being Kuwait Investment Authority, the country's sovereign wealth fund. Separately, Ayman Boodai said Gatehouse Bank plans to open a number of branches or representative offices in Gulf countries without offering details.

The sustained effort to enhance the regulatory and legislative framework to support Islamic financial transactions will continue to place Malaysia as the biggest player in the global Islamic banking industry, says CIMB Islamic Bank Bhd. Chief Executive Officer Badlisyah Abdul Ghani said despite the growing competition from other markets, such as Indonesia and Saudi Arabia, Malaysia's better and firm framework would be a value added. Nevertheless, Badlisyah said due to the aggresive external environment, Malaysia should always come out with compelling, commercially driven products, to clearly distinguish itself from competitors. Badlisyah was a speaker at a panel discussion on "The Future of Islamic Banking: Where Do We Go From Here?"

Some countries have realised this opportunity regarding Islamic finance and are preparing for the golden age. More ports are being built in the Middle East to handle increase transshipment and trade, including Halal trade. According to the Global Islamic Economy 2014-2015 report by Thomson Reuters and Dinar Standard, the Islamic clothing and footwear industry alone will increase 82 per cent to $484 billion (Dh1.7 trillion) by 2019 from 2013. The big constraint is the lack of institutions educating the Muslim populace on how to deliver for such services and develop such industries. This lack of talent pipeline will impact the ability of product innovation, organic expansion and at the very base level providing of services to an expanded populace. The industry needs to come together to set up various international qualification boards to tackle this issue.

The Islamic Corporation for the Development of the Private Sector (ICD) secured a 13-month US$300 million Islamic Murabaha financing facility (the "Facility") from Dubai Islamic Bank PJSC , First Gulf Bank PJSC , Mizuho Bank (Malaysia) Berhad and Mizuho Bank Nederland N.V. in early June 2015. Dubai Islamic Bank acted as the sole Coordinator of the Facility, in addition to being the Mandated Lead Arranger along with First Gulf Bank, Mizuho Bank Malaysia and Mizuho Bank Nederland. The Facility, the largest to-date for ICD, is part of ICD 's US$1.2 billion global resource mobilization program for 1436H (2015). The proceeds of the Facility was deployed for use of ICD 's ordinary operations.

The response to the new Wills and Probate Registry at Dubai International Financial Centre (DIFC) was very positive, according to Mark Beer, the CEO and Registrar at the DIFC Courts. He said appointments to register wills are now fully booked until mid July. Non-Muslims with properties and investments in Dubai, regardless of whether they have a residency permit or not, began registering their wills at the DIFC on May 4, when the DIFC launched its new Wills and Probate Registry. The registry allow them for the first time in the region to register a will in English under internationally recognised law, which allows them to transfer their assets as they wish upon their death. The new rule also allows parents to appoint a guardian for their children in case of their death.

Globally, the Middle East and Africa (MEA) region has the largest share of private wealth booked offshore, thanks to the political and economic tensions in the region, according to the Global Wealth Report 2015 by BCG. The report showed that while the MEA region held 31 per cent wealth offshore, Latin America and Eastern Europe have 28 per cent and 19 per cent respectively. While economic and political instability is a key factor in driving assets offshore, shortage of onshore asset classes and management skills are driving demand for offshore domiciles. In 2014, Caribbean and Panama remained the preferred destinations for wealth originating from North America. For Middle East and Africa region, Switzerland was the top destination attracting 37 per cent of offshore assets booked from the region followed by UK 22 per cent and Dubai 12 per cent.

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.

Malaysia’s Islamic insurers are seeking to double policy holders in five years by investing more in digital technologies to attract a younger audience, according to Ahmad Rizlan Azman, chairman of the Malaysian Takaful Association. Takaful operators should also step up educational campaigns to boost customers to 8.4 million by 2020 from about 4 million now, he said. Attracting more professionals is another prerequisite to achieving Malaysia’s targets, Ahmad Rizlan added. Syarikat Takaful’s Mohammad Hassan said the nation’s Islamic insurers have to push for innovative new ideas to keep their growth momentum going. The company is considering an acquisition in the next two years to increase its customer base, he said.

The long anticipated UAE Federal Commercial Companies Law no. 2 of 2015 (the “New Companies Law”) was issued on 25 March 2015 and will be in force by 1 July 2015 to replace the existing UAE Federal Commercial Companies Law no. 8 of 1984 (the “Former Companies Law”). The New Companies Law implements a number of important changes to the existing positions under the Former Companies Law, and in some cases, clarifies a number of issues that existed under the Former Companies Law. Article 31 of the New Companies Law confirms the existing position that only a Private Joint Stock Company or a Public Joint Stock Company may issue bonds and sukuk.