IslamicFinance.de

The Islamic Corporation for the Development of the Private Sector and the Government of Cote d’Ivoire are co-hosting the Islamic Finance Forum on 17-18 September 2015. The event aims at stimulating development of the local and international market of Islamic finance in Africa and particularly in Côte d’Ivoire in line with government’s National Development Plan 2016-2020 and to explore cross border trades between international investors and African nations through opportunities made available through Islamic finance. This invitation-only event is designed for the benefit of local and international market players to explore the development opportunities in Islamic finance both in the Cote d’Ivoire, locally and regionally.

The credit crunch in the US and Europe, coupled with the ongoing Eurozone crisis, has resulted in more companies turning to the increasingly liquid sukuk market. Besides, countries in the Gulf Cooperation Council (GCC) are set to host world events in 2020 which is fuelling investment in infrastructure. Despite the plummeting oil price, GCC countries — such as the United Arab Emirates and Saudi Arabia — enjoyed strong economic growth in 2014, which led to an increase in the liquidity of local and regional banks. This considerable liquidity has enabled regional financial institutions to become important investors in the growing sukuk market. Global sukuk issuances will be driven by relatively limited levels of supply coupled with the continued level of liquidity within the overall Islamic investor base, in particular from Islamic banks.

Jaiz Bank Plc, has declared a profit of N157.7 million for the financial year ended December 2014. By this, the bank has broken even after three years of operations as the first and only fully fledged non-interest bank in Nigeria. Chairman of the bank, Dr Umaru Abdul Mutallab said the profit was a feat considering that there was no platform yet for the bank to make income from its treasury management activities due to the absence of Sharia complaint liquidity instruments in the market. He therefore called for a national Sukuk bond, that would give them a wider range of investment opportunities. Shareholders of the bank called on the management to work seriously towards recapitalising it to fast-track its expansion to other parts of the country.

Takaful regulation across the GCC remains fragmented between specialist takaful regimes, general insurance regimes that are also applicable to takaful insurers and regimes which have little or no specific recognition of takaful. Despite this, the GCC takaful market remains one of the most important and fast growing in the world. The relatively recent introduction of specialist takaful regimes means we are still very much in the developmental stage of regulatory oversight. The recent introduction of the new Financial Regulations in the UAE and the potential establishment of a Shari’a Oversight Committee represents steps firmly in the direction of closer and more robust regulatory scrutiny of takaful in the UAE. We are yet to see if other GCC States will follow.

Malaysia's efforts to create a market for ethical Islamic bonds are the latest in a series of government-led initiatives to develop Islamic finance, but further expansion will require a greater buy-in from a sometimes reluctant private sector. In May, sovereign wealth fund Khazanah Nasional launched the country's first sustainable and responsible investment (SRI) sukuk, nearly two years after the format was first announced by the government. Last year, $74.9 billion worth of sukuk were issued out of Malaysia but only $13.5 billion came from corporate issuers. There is little sign of this changing soon.

What’s so fascinating about the microfinance craze is that it persists in the face of one unfortunate fact: microfinance doesn’t work. As David Roodman from the Center for Global Development put it in his recent book, the best estimate of the average impact of microcredit on the poverty of clients is zero. A comprehensive DFID-funded review of extant data comes to the same conclusion: no clear evidence yet exists that microfinance programmes have positive impacts. In fact, it turns out that microfinance usually ends up making poverty worse. The reasons for this are fairly simple. Most microfinance loans are used to fund consumption – to help people buy the basic necessities they need to survive.

Microfinance is a well-developed strategy to alleviate poverty around the world, Islamic Development Bank (IDB) President Ahmad Mohamed Ali said Monday. Speaking at the forum of "Exploring Innovative Solutions for Affordable Islamic Microfinance on the sidelines of the 40th Annual meeting IDB, Ali emphasized that microfinance is a rapidly growing market. Ali said that a number of challenges confront efforts for microfinance by Islamic banks today. These include the need for coordinating policy and direction, weakness in regulatory and supervisory environments, lack of awareness and education about Islamic finance, and a severe shortage of qualified and trained human capital.

The recent decline in oil prices has sparked expectations that Saudi Arabia may issue domestic sovereign debt this year for the first time since 2007. Much of this debt would probably be long term and would be bought by the country’s banks. Sovereign debt issuance would create another benefit for potential corporate issuers by helping create a pricing benchmark. Another factor that is likely to spur Saudi sukuk issuance in the medium term is the Capital Market Authority’s plan to reform the corporate debt market, including measures to make regulatory approval of debt products easier. The main factor likely to slow or limit sukuk growth is higher initial costs compared to other forms of borrowing.

President Recep Tayyip Erdogan’s plans to grow Islamic banking in Turkey may be facing an uncertain future. The ruling AK Party - formerly led by Erdogan - failed to win enough seats at the general election to form a single-party government. The result was a blow to the power of the man who has driven the industry in Turkey. The vote raises the possibility of a minority administration, a coalition government or another election in the $800 billion economy. Stocks, bonds and the lira plunged the day after the vote. Turkey’s cabinet appointed Mehmet Ali Akben to head the Banking Regulation and Supervision Agency in May. Akben is known to be strongly supportive of the government’s participation banking agenda. Still, political uncertainty could drag on.

Bahrain-based Islamic investment firm Arcapita said on Wednesday it had sold its real estate portfolio of retirement communities across the United States to NorthStar Healthcare Income Trust for $640 million. The portfolio includes 16 facilities and 4,000 residential units for continuing senior care. Net operating income from the portfolio grew by 41 percent between 2010 and 2014, despite a slump in the U.S. housing market following the 2008 financial crisis. Abdulmalik said the firm has given $3 billion in exit proceeds to its investors in the last two years but did not give a breakdown of profits for its real estate portfolio exit. In November, Arcapita completed a $100 million fundraising, a little over a year after emerging from Chapter 11 bankruptcy driven by debt repayment difficulties.

Securities and Exchange Commission of Pakistan (SECP) has approved a four-member sharia advisory board to oversee Islamic financial products in the country, as the regulator looks to address credibility concerns. The board, which comprises three religious scholars and a technical member, would advise SECP on a range of issues including the operation, auditing and reporting of Islamic mutual funds, pensions and insurance operators. Besides, in February, the SECP published long-awaited rules for the issuance of sukuk as part of efforts to strengthen governance and broaden their appeal to investors. Oman's central bank set up a sharia supervisory board last October, with Bahrain and the United Arab Emirates also developing a similar country-level approach to the industry.

The five-year strategy from Indonesia’s financial services authority, Otoritas Jasa Keuangan (OJK), charts an extensive agenda ranging from reducing fees on sharia-compliant products to developing education and training programmes. Authorities want Indonesia’s Islamic banks to hold at least 15 percent of the market by 2023, an ambitious target considering the sector’s growth is stalling. Part of the problem lies with low financial literacy among the public, with Islamic finance further behind, according to a nationwide survey commissioned by the OJK. The roadmap would expand on education and promotion activities, while developing rules and industry certification for religious experts that endorse Islamic financial products.

Dar Al Takaful has been recently granted the approval by Dubai Health Authority to provide medical insurance coverage to the category with salaries below AED.4000, the service is offered to the SMEs and sponsors. Saleh Al Hashmi, the Managing Director of Dar Al Takaful expressed his pleasure with the selection of Dar Al Takaful by Dubai Health Authority to provide this service and said that this confirmed the strong partnership between the government and the private sector and assure. This cooperation comes in line with Dubai Strategic Plan 2015 aims at securing the wellbeing of Dubai citizens and residents. He added that the new service is part of the firm's strategy that aims to provide the best medical care with competitive rates and without imposing extra fees on the insurance policy.

Since 2010, the GCC market has doubled its total private wealth from $1.1 trillion to $2.2 trillion for an overall compound annual growth rate (CAGR) of 17.5 per cent, making it an even more lucrative market for local and global private bankers, according to a study by management consultancy Strategy&. Most of the region’s private wealth resides in Saudi Arabia (44 per cent), but the UAE has made notable gains with its share of the GCC’s private wealth increasing from 24 per cent to 30 per cent from 2009 to 2013. Together, Saudi Arabia and the UAE control 74 per cent of the region’s private wealth, up from 71 per cent in 2009. The study reveals that geopolitical events also intensified the migration of new wealth to the region.

Microfinance is a well-developed strategy to alleviate poverty around the world, Islamic Development Bank (IDB) President Ahmad Mohamed Ali said Monday. Speaking at the forum of "Exploring Innovative Solutions for Affordable Islamic Microfinance on the sidelines of the 40th Annual meeting IDB, Ali emphasized that microfinance is a rapidly growing market. Ali said that a number of challenges confront efforts for microfinance by Islamic banks today. These include the need for coordinating policy and direction, weakness in regulatory and supervisory environments, lack of awareness and education about Islamic finance, and a severe shortage of qualified and trained human capital.

The first Rs 22.237 billion Islamic rental property fund of the subcontinent was launched at Karachi Stock Exchange (KSE) Monday. The two-day book building process for the country's first Rental Real Estate Investment Trust (REIT), Dolmen City REIT (DCR), was initiated by Sindh Finance Minister Murad Ali Shah here at KSE trading hall. The initial public offering (IPO) envisages a total of 555.92 million units, 75 percent or 416.94 million shares would be offered to institutions and high net worth individuals (HNWIs) through book building on June 8-9. The balance 138.98 million or 25 percent units would go to retail subscribers on June 12.

Saudi Arabia's Al Othaim Real Estate and Investment Co, owner of five shopping malls in the kingdom, has revived plans to issue a debut local currency Islamic bond, probably after the summer. The firm has picked the investment banking arms of Banque Saudi Fransi, Gulf International Bank and National Commercial Bank as lead arrangers for the riyal-denominated bond. Timing is now centred on issuing after the summer, as activity in the Saudi capital markets slows down for the holy month of Ramadan, expected to start later this month, and then the long summer break away from the desert heat. After a slow start to the year, sukuk issuance in the riyal-denominated market has picked up in recent weeks.

The government of Mozambique plans to access funding from the Islamic Development Bank (IDB) to finance various investment projects of small and medium-sized enterprises, the Deputy Minister of Industry and Trade, Osmar Mitha said. Mithá said the IDB reacted positively to this request from Mozambique, but said the country still faces some obstacles, notably the introduction of some legal improvements. The IDB has applied at least US$300 million in various sectors in Mozambique since 1995, the year the country joined the financial group. Currently, there are 22 ongoing projects valued at more than US$160 million in sectors such as agriculture, education, health and water supply.

Bank Negara said it would finalise operating standards for all major Islamic finance contracts by the end of this year, creating the first comprehensive set of practical guidance for the industry. The set of 11 standards will complement existing sharia guidelines issued by Bank Negara, as the regulator aims to address inconsistencies in the use of Islamic contracts. Malaysia’s current sharia standards are enforceable and have been in place for years, but they are technical rather than practical and still open to interpretation, Mohamad Akram Laldin, deputy chairman of the sharia advisory council of Bank Negara said. The new standards could help regulators in other countries that are seeking day-to-day guidance for their own markets, said Laldin.

The management of BankIslami has appointed Shahid Ali Khan as the new CEO of KASB Securities, the subsidiary of KASB Bank. Khan replaces outgoing CEO, Irfan Nadeem Sayeed. The management, which had earlier pledged not to force officials of KASB Bank to quit, is now placing its officials on key positions in sheer contradiction of the claim it made at the time of merger of KASB Bank with BankIslami. In the emergent meeting of the board of directors recently, BankIslami management appointed new leadership for KASB Bank’s subsidiary, including new CEO and a board of director, M Nasurur Rahman, in the place of Tahir Iqbal.