IslamicFinance.de

Demand for Malaysian Islamic real-estate investment trusts may withstand a sluggish property market as their steady rental income is popular with pension funds amid a shortage of Shariah-compliant assets. Johor Corp plans to list the RM900 million (S$333 million) Al-Salam REIT, Kamaruzzaman Abu Kassim, the company's president said. The prospectus will be registered by July and the trust expects to deliver returns of around 6.3 per cent in 2016, he said. Al-'Aqar Healthcare REIT, majority owned by Johor Corp, returned 11.7 sen a unit to shareholders. That worked out to a dividend yield of 8.4 per cent based on its year-end closing price.

The Islamic Financial Services Board (IFSB) and INCEIF - The Global University of Islamic Finance have renewed an agreement to facilitate international cooperation between the two organisations to provide relevant activities relating to capacity building and awareness promotion in Islamic finance. This mutual co-operation aims to strengthen the efforts in promoting an exchange of information, undertaking research, development, training and education in the Islamic financial services industry. Under the first MoU, signed in 2012, the IFSB and INCEIF held a series of six Executive Forums (EF). he next Executive Forum on Islamic Finance, themed Building Momentum for Islamic Liquidity Management will be held on 3 - 4 June 2015 in Kuala Lumpur, Malaysia.

The Association for Development of Islamic Finance (ADIF) announced the signing of memorandum on cooperation with Shariyah Review Bureau (SRB). ADIF solely supported by National Bank of Republic of Kazakhstan (NBRK), is responsible for promoting, enhancing and maintaining the Islamic financial sector and cooperation with investors from GCC and South East Asia. The agreement was signed at the 12th IFSB Summit which took place in Almaty, Kazakhstan. Speaking at the Summit, Chairman of the Presidium, Zaratkazy Nurpiisov said, given the magnitude of Muslim population, enormous oil reserves, rich minerals and metal explorations the country has considerable advantages for Islamic finance.

With a relative paucity of attractively priced assets available to long-term investors, European institutional investors are diverting their focus and resources to alternative assets, according to Mercer’s 2015 European Asset Allocation survey. The findings also show that the use of passive management of equity and bond holdings increased, suggesting that European investors increasingly prefer to seek returns from manager skill within alternative and unconstrained mandates, while harvesting cheap beta in core equity and bond portfolios. Mercer’s survey also found an increased focus on environmental, social, and governance (ESG) factors within the investment process amongst participating funds.

QIB-UK is providing opportunities for customers interested to invest in the London real estate market starting with providing access to properties, both residential and commercial ones. A team of real estate specialists will ensure that customers, being continuously supported by QIB Private Banking Relationship Managers stationed in Doha, are able to achieve optimal return on their investments. Recently, QIB added Knight Frank, a global property adviser company established in London back in 1896 to its partners. Customers can now visit QIB’s website to find specific property listings, along with information on locations and prices. They can then submit an online request form indicating properties of their interest to be contacted by the QIB-UK real estate team.

Dubai Islamic Bank (DIB) has picked six banks to arrange fixed income investor meetings from Thursday for a potential benchmark size, U.S. dollar-denominated senior sukuk issue, a document from lead arrangers showed. DIB has mandated First Gulf Bank, HSBC, Maybank, National Bank of Abu Dhabi, Standard Chartered Bank and itself to arrange the meetings in Asia and Europe. Meetings will be held in Kuala Lumpur on Thursday and Singapore on Friday before concluding in London on Tuesday, the document showed. The offer will be under DIB's $2.5 billion sukuk programme, subject to market conditions.

Malaysia's successful pricing of the US$1.5 billion (RM5.4 billion) global sukuk has strengthened the country's position as an international centre for Islamic finance, says Prime Minister Datuk Seri Najib Razak. Najib, who is also finance minister, said the 30-year tranche was the government's inaugural sukuk issuance, which is also the longest tenured sukuk. The issuance comprises US$1 billion of 10-year and US$500 million of 30-year benchmark Trust Certificates (Sukuk) for a total size of US$1.5 billion. Najib said the deal was oversubscribed, attracting an aggregate interest of US$9 billion from a combined investor base of more than 450 accounts.

Thomson Reuters published the findings of its Global Islamic Asset Management Outlook at the World Islamic Funds Conference in Bahrain. According to the study, Islamic funds are a US$60 billion industry forecasted to grow to at least US$77 billion by 2019, while the latent demand for Islamic funds is projected to grow to US$185 billion. There are substantial growth opportunities but the industry will struggle to reach its potential in the near- to mid-term to bridge the US$108 billion demand-supply gap. Outside of core markets Malaysia and Saudi Arabia, there are other growth pockets on the horizon for Islamic funds. Pakistan and Indonesia currently enjoy stable political climates; China is also opening up to Shariah-compliant funds.

Islamic mutual funds are growing again after a slump that lasted years, but the sector still falls short of meeting demand for sharia-compliant investment products, a study by Thomson Reuters and its subsidiary Lipper showed. Many firms pulled out of the sector around 2008 because of the global financial crisis and as sliding equity markets reduced investor interest. Islamic mutual funds globally now hold $53.2 billion of assets under management, recovering from a low of $25.7 billion in 2008, the study found. The total number of Islamic mutual funds reached 943 in 2014, up from 828 a year earlier. Further growth is expected, with the study projecting the funds will grow 8 percent annually to reach $76.7 billion by 2019.

Qatar Islamic Bank (QIB) expects to issue a Tier 1 capital-boosting bond between this quarter and the third quarter, the bank’s chief financial officer Gourang Hemani said. The Doha-listed lender in February received shareholder approval to issue up to 5 billion Qatari riyals (Dh5.04bn) to increase its Tier 1 or core capital in line with Basel III banking standards. The bond will have a perpetual tenor. It is going to be a private placement, most likely within Qatar. QIB’s net profit rose 19 per cent to 400 million riyals in the first quarter of this year, compared to a year earlier. Total income grew 13 per cent in the first quarter to 950m riyals, compared with the year-earlier period.

Nasdaq Dubai said on Monday Ajman Bank has begun transacting on the its Murabaha Platform, which facilitates the provision of streamlined Sharia-compliant financing services. Ajman Bank’s initial activity on the platform has enabled it to meet the needs of customers throughout the country, the bourse said in a statement. Since it was officially launched in April 2014, the Nasdaq Dubai Murabaha platform has completed a total of more than Dh46.5 billion of transactions and is playing a growing role in Dubai’s expansion as the global capital of the Islamic Economy.

A year after debuting an Islamic investment fund in Hong Kong, RHB Asset Management Sdn. plans two more as it seeks to develop awareness in the Chinese market. The first of the new funds, which will target Shariah-compliant stocks and bonds, is due to start this month and the second by the end of September, Ho Seng Yee, chief executive officer of the Kuala Lumpur-based company, said. The existing RHB-OSK Islamic Regional Balanced Fund, which invests in Islamic equities and fixed income, has 15.5 million ringgit ($4.3 million) of assets. While China presents significant opportunities for Islamic financial institutions, there are challenges including the need for changes to the tax laws.

Kuwait Finance House may auction some of its properties or offer them to be run by other operators, depending on market conditions, its chief executive Mazin Saad al-Nahedh without giving details. He also said KFH planned to cut tens of jobs as part of its restructuring plan, which would eliminate some positions. Some people would be moved to other subsidiaries. KFH said in early May that it was considering a possible sale of its Malaysian unit. That is the only unit earmarked for possible sale because it is outside the Middle East, Nahedh said. The bank is restructuring activities ahead of a planned divestment by its largest shareholder, the Kuwait Investment Authority. A timetable for the divestment has not been announced.

Pope Francis was sharply critical of the global arms industry in a speech at the Vatican this week, telling thousands of children in Rome that weapons manufacturers are money-hungry opponents of peace. Some people don’t want peace because they make more money from war, he said. The devil, he added, enters through the people's wallets. The arms industry, which had sales of at least $400 billion in 2013, is dominated by US and European firms, according to data from the Stockholm International Peace Research Institute, not to forget China’s mostly state-owned arms manufacturers. Pope Francis has spoken before against weapons and their impact on war, tweeting in 2013 that he condemned the use of chemical weapons.

Impact Investing has been experiencing quite an explosion of interest by asset owners, asset managers and service providers. Parallel with this there has been a dramatic increase in the number of “thought leaders” or “experts” on Impact Investing. There is however a lack of deep thought or reflection. Lester Brown and his team have done writings, research, efforts that are a great inspiration to many working in the financial, policy, and industry. Recently, a summary of developments regarding “Fuel Free” or Renewable Energy was published. It discusses the Seven Surprising Realities Behind The Great Transition to Renewable Energy.

The Thomson Reuters Global Sukuk Index is at 118.28847 points, down from 118.50812 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 117.13915 against 117.54139 at end-April and 113.69014 at end-2014. Sukuk in the pipeline include: The government of Hong Kong hired four banks for a possible offer of U.S. dollar Reg S-only sukuk. Oman plans to sell its first sovereign Islamic bond, an issue of 200 million rials ($520 million) of sukuk. Malaysia's Aeon Credit Service said in mid-May it planned to raise 1 billion ringgit ($276.6 million) via sukuk murabaha for working capital, repayment of debt and financing for customers.

Banks still have an appetite for project finance but are being more selective in lending as the project pipeline in the Arabian Gulf region stabilises. Project awards in the Gulf region this year are forecast to rise slightly to US$172.7 billion from $171.7bn last year. In the first quarter of this year $46.6bn worth of projects were awarded versus $53.7bn in the first quarter of last year – a figure skewed by the $15bn worth of contracts for Kuwait’s clean fuels refinery project last year. One reason banks are eager to finance good projects is the vast liquidity they amassed during the years of strong oil prices. Gulf governments have also pledged to continue spending on infrastructure, a sign that encourages banks to continue to lend.

Malaysia’s state-owned sovereign wealth fund is about to test appetite for the nation’s first socially responsible Islamic bonds and plans to issue such debt annually. Khazanah Nasional Bhd will start marketing as much as RM150 million (US$42 million) of the seven-year sukuk today, Chief Financial Officer Mohd Izani Ghani said. The offering will fund 20 schools in Malaysia, he said, adding that future sale options may include healthcare and affordable housing. The SRI sukuk will pay fixed, periodical profit rates throughout the bond’s term, with principal repayments linked to the individual school’s performance in terms of the quality of education provided, said Izani. Before maturity, the profit rate will be adjusted lower, he said. The “step-down yield” could be 100 basis points below the coupon rate.

There is no doubt that ordinary people in England—and in the rest of Europe—have become richer over the past hundred years, and quality of life has improved dramatically. But the humanitarian crisis didn’t just disappear into thin air—it was exported abroad. After the ravages of colonialism were over there was a time when things started getting better for poor countries during the 1960s and 1970s. Incomes grew quickly and the gap between rich countries and poor countries began to narrow. But these two decades of hope were brought to a crashing end in the 1980s. The World Bank and the IMF began to impose “structural adjustment programs” on developing countries as a basic condition for receiving international finance.

Blossom is a fintech company that offers Sharia complaint financial services to people in countries that are predominantly Islamic. The company merges bitcoin and traditional microfinance into a single package. Blossom offers microloans for the needy in Indonesia. What sets Blossom apart from most other players is the platform. Blossom platform uses bitcoin as a background to enable investors from across the world to fund those who are looking for micro-loans. Blossom ensures that the whole process is in accordance with Sharia’s Musharakah principle and the company doesn’t support businesses involving usury, gambling, pornography and other activities which are deemed unislamic.