IslamicFinance.de

The second International Investment Summit held in Istanbul between April 29-30 gathered international investment funds and investors from Qatar, Saudi Arabia, Kuwait and the United Arab Emirates, in total managing about 1.5 trillion dollars of Gulf investment funds. Turkey’s Science, Industry and Technology Minister Fikri I??k stated that Turkey is making huge efforts to facilitate foreign investments over the last decade, both for encouraging them to make joint ventures with the domestic firms and also investing jointly in third countries. Last year, Turkey has attracted about six billion U.S. dollars of foreign direct investment, while the country aims to reach 80 billion U.S. dollars annually.

Tumbling oil prices may have dented Gulf investors’ surplus reserves, but their appetite for high-yield overseas-based assets remains robust, says Korosh Farazad, Chairman and CEO of Boutique Investment Bank Farazad Investments Inc. (FII). Middle East investors, particularly those from the Gulf countries such as UAE, Kuwait and Qatar, are attracted to trophy assets that could yield a minimum of 8% return on their investments, he says. These assets are typically located in Europe, Turkey and North America, where a transparent legal system, relatively stable political and security environment, and strong macroeconomic fundamentals have proven to be appealing to overseas investors.

More savers than ever are turning to Islamic accounts in Great Britain. Tim Sinclair is head of marketing and retail sales at Al Rayan Bank, formerly known as the Islamic Bank of Britain. He says that business has taken off in the past 18 months. A large part of this growth was driven by non-Muslims. Mohammad Khan, head of Islamic finance at PwC, thinks that ethical concerns are one driver of interest in sharia-compliant products, but not the main reason. The competitiveness of the Shariah products is also an important incentive. For example, six of Al Rayan’s savings products are currently listed in the Moneyfacts “best buy” tables.

Sara Jawadi, a Muslim woman who unsuccessfully lobbied New Zealand's big banks for interest-free mortgages, is turning her attention to other financial institutions. Jawadi said she had approached Kiwibank, ANZ, BNZ and Westpac but she was either met with no response or was told to send an email. The next step was to approach private investors and finance companies in the hope of a better response, she said. Jawadi and other Kiwi Muslims in similar situations could be in luck as New Zealand's first Islam-friendly KiwiSaver provider plans to offer interest-free mortgages to Muslims. Amanah Ethical launched the country's first Sharia-compliant KiwiSaver earlier this year.

President of the Nasrul-Lahi-L-Fatih Society of Nigeria (NASFAT), Abdulahi Yomi Bolarinwa, speaks on how uneducated many Nigerians are on Islamic banking, resulting in uninformed comments on the financial practice. About his expectations from the incoming administration, he said the incoming government should work hard to improve the economy. The government should retool whatever Nigeria has in the power supply, work on its oil industry and explore other sources of income so that the country does not depend on one product - oil. NASFAT recently celebrated its 20th anniversary. The organisation teaches Nigerians to respect other religions and live in peace.

Fatima Qasimi has been appointed as the Chief Executive Officer of Aseel Islamic Finance. Ms. Fatima joins Aseel Islamic Finance with almost 20 years of experience in consumer, corporate and Islamic banking. She joined the FGB group in 2008 as Head of Corporate Banking. She has a Bachelor’s degree in Business Administration from Strayer University, Washington, USA and an MBA in Financial Management from South Eastern University, London, UK. In her new position as CEO of Aseel, Fatima’s focus is on developing two business models for the company to cater to the Islamic financing needs of UAE consumers and corporates, particularly SME and mid-market businesses.

The Arabia CSR Network (ACSRN) trains organisations from all sectors, public and private, to use the GRI framework, a set of guidelines on sustainability reporting. The training course, which took place on April 28-30, taught participants how to create sustainability reports using the Global Reporting Initiative’s (GRI) recently launched G4 framework. The framework enables them to compile well-balanced, accurate and reliable reports that help them better assess the impact of their operations on the environment, said Habiba Al Marashi, Founder, President and CEO, Arabia CSR Network.

Four weaknesses in the financial system explain Indonesia’s capitulation to the crisis in 1998: the undercapitalisation of the banking system, a substandard regulation and supervision, the lack of inter-bank competition and the availability of cheap credit from state-owned banks with low risk which provided no incentive for the corporate sector to raise funds in the capital and bond markets. Between 1997 and 2013, the Indonesian government adopted a number of policies to rebuild and modernise Indonesia’s financial sector. It is through these policies that the Indonesian government has effectively reduced risks and moved the Indonesia financial sector from a state of collapse towards a modern financial system.

Professor Shehu Usman Rano Aliyu, Director of the International Institute of Islamic Banking and Finance at Bayero University, Nigeria stated Islamic banking and finance is the best option for tackling challenges faced by the Nigerian economy. Meanwhile, Usman Hassan, CEO of Jaiz Bank, urged the Nigerian government to take a closer look at sovereign sukuk issuances to fund infrastructure projects. He stated that sukuk were very apt for Nigeria, as there are no failed projects and the financier (investor) will not allow abuse. He urged to government to look at the structure of sukuk to see how it can be of benefit to the economy as a source of FDI from a new diverse investor base.

The Thomson Reuters Global Sukuk Index is at 118.42809 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 117.39660 against 117.54139 at end-April and 113.69014 at end-2014. Sukuk in the pipeline include: Egypt hopes to issue ijara-structured sukuk, the country's first sovereign sukuk issue, at the beginning of the 2015/2016 fiscal year starting in July. Malaysia's CIMB Group Holdings plans to establish a new 6 billion ringgit ($1.69 billion) conventional and Islamic bond programme. Senegalese President Macky Sall said in early April that he had asked the Islamic Development Bank to help his country conduct a second sovereign sukuk issue. He gave no details.

Every fourth person on the planet is Muslim. However, the vast majority of them happen to be among the poorest in the world. However, there is a growing middle class in the Muslim world, including Pakistan, of which the upper sub-segment called the ‘mass affluent’ may potentially be relevant to wealth creation and subsequently to the business of wealth management. Muslim high-net-worth individuals (HNWI) hold an estimated $3.35 trillion, which is less than 30% of the total Islamic wealth. The remaining 70% is held by Muslim businesses, Islamic financial institutions, the mass affluent, and by the governments in the OIC block.

Johor Corp (JCorp), a Malaysian state-owned firm, plans to list an Islamic real estate investment trust (Reit) holding MR900m ($253.22m) in assets by the third quarter of this year.

Fitch Ratings expects Islamic finance to grow rapidly with more sukuk issuance. Issuance for new sovereigns may be seen from Jordan, Tunisia and even Egypt this year. Fitch Ratings said in a new report that the total new sukuk from GCC+7 issuers rose 13 per cent year-on-year in the first quarter. Total sukuk and bond issuance in the first quarter were up 47 per cent from the fourth quarter when volumes were exceptionally weak, due to falling oil prices and rising geopolitical tension. In the first quarter, the total sukuk issuance volume rated by Fitch grew 3.5 per cent to US$45.1 billion.

A number of Saudi insurance firms have been loss-making for years because of severe competition in the market, where large companies with capital of some SR1 billion ($267 million) dominate small firms capitalized at around SR200-SR400 million, which find it hard to compete. That's why Saudi Arabian Monetary Agency (SAMA) would welcome mergers among local insurance companies as long as they were positive for all parties, said Governor Fahad Al-Mubarak. He said SAMA was working hard with the managements of insurance firms to study their internal situations and develop restructuring plans so they could return to profitability.

Bahrain’s central bank said on Thursday it had placed two Iran-linked companies, Future Bank and Iran Insurance Co, into administration to protect the rights of depositors and policyholders. In a brief statement, the central bank did not elaborate on why it took the action or give any information about the two companies. Future Bank, based in Manama, is a commercial bank which was founded in 2004 as a joint venture between two Iranian banks - Bank Saderat and Bank Melli - and Bahrain’s Ahli United Bank. Iran Insurance Co is the Bahrain branch of an Iranian government-owned insurer. It was not immediately known whether the action against the two companies in Bahrain was related to international sanctions against Iranian institutions.

"Islamic Finance for Constructive Global Trade and Investment" is the main theme of the VII International economic summit of Russia and member countries of the Organisation of Islamic Cooperation (OIC) – KazanSummit 2015, which will be held on June 15-16th in the third capital city of Russia – Kazan. The observer status of OIC that the Russian Federation received in 2005 provides the base for the improving interrelations between Russia and OIC member countries. Hence KazanSummit is the main platform for developing relations between Russian regions and OIC member countries that takes an economic cooperation to the international scene.

The opportunity presented by Islamic insurance products could help offset the London market's declining share of premium in developing markets according to Max Taylor, chairman of the Islamic Insurance Association of London. Taylor spoke at the IIAL's launch on 30 April at an event at Mansion House attended by Lord Mayor Alan Yarrow.

Bill Gross, well known fixed income fund manager twittered (https://twitter.com/januscapital/status/590519759797530624) and moved markets with his idea to sell German sovereign bonds short (selling without having them) to buy them back later cheaper. He called it "The Short of a lifetime"; the only issue would be the "timing"...

Interest rates will be once raising again but will short seller stay solvent long enough to benefit? The German economy is doing fine, but other EURO zone countries do not perform as well and need low interest rates for a prolonged period of time. Japan has so far not convincingly ended their easy money policy.

About 180 companies are considering Islamic bond sales in 2016 after a decade of international sanctions, according to Hossein Saeedi, a senior financial analyst at the corporate finance division of Tehran-based Amin Investment Bank. The companies have already started planning to design specific financial instruments to attract foreign investors to come to the Iranian market, Saeedi said. If the sanctions are lifted, they are looking for aggressive sukuk financing. Iran is home to the world’s biggest Islamic banking industry but market instability and currency fluctuation have been among the impediments to growth.

The Gulf Bond and Sukuk Association (GBSA), the trade association representing the Arabian Gulf fixed income market, moderated a panel at the World Green Energy Summit in Dubai titled 'The Race for Green Finance/Green Funds and Bonds.' The session connected senior figures from government institutions with global energy players and highlighted the need for financial innovation in green energy funding. Panelists included Abdul Nasser Abbas, Senior Director of Treasury at Dubai Electricity and Water Authority (DEWA), Annette Eberhard, CEO of Denmark's Export Credit Fund, Sean Kidney, CEO of Climate Bonds, Jarett Carson, Managing Director of EnerTech Capital, and Ben Cotton, Partner at Earth Capital Partners.