IslamicFinance.de

Noor Takaful, the Islamic insurance arm of Noor Investment Group, announced on Tuesday that the company’s CEO Parvaiz Seddiqi has stepped down from his role. Seddiqi is the founder member of Noor Takaful. The company also announced that Andrew Greenwood has been named acting CEO. Noor Takaful offers general and family Islamic products to cater to individual and corporate customer segments.

Bahrain's central bank will release a new regulatory framework for takaful this quarter. Bahrain already has takaful-specific rules but the regulatory refom could help it grab a larger chunk of the sector. The new rules, developed after two years of consultations with the industry, cover the operations and solvency of takaful firms. They are expected to increase takaful firms' ability to distribute surpluses to policy holders and dividends to shareholders. In addition, the new rules require financial reporting by takaful firms annually rather than once every three years, restrict the use of performance fees, and introduce the concept of earmarked assets. In December, the central bank formally combined existing rules for issuing and listing financial securities, including sukuk, in an effort to make the process more efficient.

The central bank of Pakistan is stepping up its push to develop Islamic banking, encouraging lenders to expand their operations in the world's second most populous Muslim nation. As of September, Islamic banks held 926 billion rupees ($8.8 billion) of assets or 9.5 percent of the total, up from 8.1 percent a year earlier. The central bank aims to double the industry's branch network and reach a 15 percent share of the banking system in the next five years. To achieve that, the central bank named a new deputy governor to focus on Islamic banking and enlisted renowned scholar Muhammad Taqi Usmani to its sharia board. Moreover, the central bank's media campaign is expected to intensify in coming months and such educational efforts could attract previously unbanked clients to the sector.

Turkish Islamic lender Bank Asya said it had weathered mass deposit withdrawals, which the media said were orchestrated by government supporters as part of a backlash against a corruption scandal blamed on an influential cleric. Turkish media say state-owned companies and institutional depositors loyal to Prime Minister Tayyip Erdogan have withdrawn 4 billion lira ($1.79 billion), some 20 percent of the bank's total deposits, over the last month to try to sink the lender. The bank is reportedly not at risk because new deposits worth more than half that amount were placed in the bank by ordinary citizens. The government has declined to comment.

The Islamic Bank of Britain (IBB) has announced the launch of the UK’s first Islamic ISA. The account offers UK consumers an alternative and tax-free way to save. ISAs allow consumers to hold cash, shares and unit trusts free of tax on dividends, interest and capital gains. The UK Islamic finance sector is expected to see rapid growth this year and be worth $2 trillion (£1.2 trillion) by the end of 2014. The popularity of Islamic investment is growing outside of the Muslim community. The IBB estimates that over the last year, around 87% of applications for fixed term deposit accounts were from non-Muslim customers.

Bank Muamalat Malaysia expects financing for small and medium enterprises (SMEs) to contribute between 15% and 20% of its total financial portfolio for 2014. CEO Mohd Redza Shah Abdul Wahid said this will represent up to RM1.2 billion of its loans. He said the bank’s loan growth for the consumer segment was 18%, however, it was reduced to 12% this year. This is due to the bank's consumer segment softening after Bank Negara Malaysia’s (BNM) measures especially on home financing and personal financing. Besides, Bank Muamalat signed a MoU with Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry (KLSICCI) and Kuala Lumpur Malay Chamber of Commerce (KLMCC). It will help the institution to increase its customer base for SME financing.

The first ever Islamic re-insurance is expected to be launched this year as the Kenya Reinsurance Corporation ventures into Sharia-compliant business. The Capital Markets Authority says in its new 10-year master plan that Kenya Re has the potential to provide a regional platform for this product since it has presence in West Africa and Middle East markets. The master plan has also proposed for the creation of a regulatory framework for Islamic capital markets focusing on corporate governance, disclosures, a policyholder compensation fund and responsible pricing. The CMA has in addition proposed the development of a separate policy, legislative and regulatory framework for Islamic products and services covering Islamic financial institutions, financial regulators, Islamic groups and the Ministry of Finance. This policy will run parallel to the conventional Act.

Department of Law public lecture
Date: Wednesday 12 February 2014
Time: 6.30-8pm
Venue: New Theatre, East Building
Speaker: Farmida Bi

Organised in conjunction with the Harvard Islamic Finance Project, Farmida Bi talks on Islamic finance in the Western world.

Farmida Bi is partner and European head of Islamic Finance, Norton Rose Fulbright LLP.

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For many years we see in the media experts believing in inflation and even hyper inflation. However, in the same time we face proponents warning against deflation. So far we all noticed.

Only a about a week ago I read an article by Myret Zaki clarifying that unfortunately inflation and deflation co-exists.

Myret Zaki's thesis is that we face inflation on financial markets, and deflation in the real economy (in French):

http://www.bilan.ch/myret-zaki/redaction-bilan/inflation-et-deflation-co...

In my view there is a general major shift in the price matrix and I still try to figure the magnitude and implications thereof. It is a bit irritating as at University we learned about neutrality of money:

http://en.wikipedia.org/wiki/Neutrality_of_money

This means any extra supply will increase prices equally, 5 % more money, all prices going up 5 %. Pretty plausible at first hand. However, it seems it does not work in reality any more (or never did).

PT Bank Muamalat Indonesia, the second-largest sharia lender in the country, secured a loan commitment of $90 million from a commercial bank in Malaysia and an international financial institution based in Washington, reported Bisnis Indonesia. The loan has a tenure of 5-7 years and will be used for new financing in 2014 that is expected to reach 41.7 trillion rupiah ($3.43 billion), said Finance Director Hendiarto.

Saudia's investment banking and asset management firm Anfaal Capital has announced the outsourcing of the Shari'a Supervisory function to Shariyah Review Bureau (SRB). As the new Shari'a Advisor, SRB will oversee and supervise the firms Shari'a Compliance needs from Product structuring to Fatwa issuing, and from stock screening to periodical Shari'a Audits. By having a team of shariah scholars and experts, SRB has the ability to deliver speedy solutions to the business while maintaining the level of Shariah standards. This in turn is expected to contribute to Anfaal's business growth and to meet the needs of the firm's stakeholders.

Persian Gulf government spending will help drive what may be a record year for Islamic bond sales, Fitch Ratings said, echoing HSBC Holdings Plc (HSBA) forecasts. Sales will probably match the 2012 high, the rating company said. Economic growth in the oil-rich Gulf Cooperation Council countries and possible debut Islamic debt sales from the U.K. and Hong Kong will help the long-term outlook for sukuk sales, Fitch said. Qatar’s plans for the 2022 soccer world cup, Dubai’s preparations for the Expo world fair in 2020, and Saudi Arabia and Abu Dhabi’s spending commitments should boost issuance, according to the rating company.

The International Islamic Liquidity Management expanded its sukuk issuance programme today by auctioning US$860 million (RM2.85 billion) of three-month Islamic bonds at a yield of 0.55635 per cent. The issue brings the total amount of the IILM’s outstanding sukuk to US$1.35 billion. Its programme, launched last year, envisages issuance increasing eventually to as much as US$2 billion. The newest issue was sold to nine primary dealers from Asia, the Middle East and Europe. Since the programme’s launch, primary dealers have held on to the IILM instruments after auctions and there has been little if any secondary market trade in them.

Abu Dhabi Equity Partners (ADEP) has successfully initiated Brazil's first Shari’ah-compliant livestock finance programme of $25 million, to fund fattening of 70,000 cattle heads - the metric tonne equivalent of entire U.A.E.'s annual import of beef. ADEP's Brazilian Shari’ah livestock transaction allows a select group of Brazil's "Top 40" cattle feedlot operators to increase their capacity utilization. The financing was structured as a combination of Wakala and Murabaha agreements enabling investors to buy and take title from Rancher, of liquidly traded cattle, insured and stored physically in separate feedlots inspected and supervised by a global monitoring company. Shari’ah-compliant funding of the growing multi-billion US Dollar Halal food industry is a natural yet untapped market segment.

Malaysia’s Islamic bond yield rose at its first sale of the debt in 2014 as the Federal Reserve’s stimulus cuts push up global borrowing costs. The April 2019 notes, a reissue of sukuk originally sold in October, yielded 3.953 percent, compared with 3.91 percent in the secondary market. The rate on the existing securities has since climbed to 3.97 percent, the highest level since Jan. 6. While yields climbed, today’s 3.5 billion ringgit ($1.1 billion) offering still attracted orders of 1.96 times, the highest ratio since September. Malaysia plans to hold 28 bond sales this year, including 12 for Shariah-compliant securities and 16 for non-Islamic notes.

The combined wealth of the world's richest 85 people is now equivalent to that owned by half of the world's population according to a new report from Oxfam titled "Working for the Few". The global aid and development organization detailed the extent of global economic inequality created by the rapidly increasing wealth of the richest. According to the report, 210 people have become billionaires in the past year, joining a select group of 1,426 individuals with a combined net worth of $5.4 trillion. This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Oxfam is calling on the global political and business leaders attending the World Economic Forum in Davos to take steps to turn around the rapidly exacerbating inequality.

The Islamic Development Bank Group (IDB) announced its intention to invest into four new EXPO-2017-oriented projects in Kazakhstan in 2014 through the Islamic Corporation for the Development of the Private Sector (ICD). ICD, Baiterek Holding and LGK Holdings signed a memorandum to create the Central Asian Fund of Renewable Energy with the initial capital of $50 million. Moreover, ICD is going to cooperate with the Investment Fund of Kazakhstan in the development of float-glass production in southern Kazakhstan, a project worth$200 million. Besides, ICD will provide $10 million for procurement of manufacturing lines and raw materials during the first year of a new Aluminum Extrusion Plant's operations. ICD has also achieved an agreement with OLZHA Holding to cooperate in the construction of a grain terminal and elevator western Kazakhstan. The construction is expected to begin this summer.

Iran's Bank Mellat seeks to file a claim of at least 500 million pounds (USD 820 million) in compensation against the British government for loss of business caused by illegal sanctions on Tehran over its nuclear energy program. It is the first time that an Iranian lawsuit over sanctions has reached the stage of claiming compensation. On June 19, 2013, Britain’s Supreme Court overturned a ruling against Bank Mellat over its alleged links to Tehran's nuclear energy program. The European Union General Court decided in January to quash sanctions imposed against Bank Mellat in July 2010.

Dar Al Takaful has announced today that it has opened a new managed investment account with Daman Investments.
According to Mr. Saleh Al Hashmi, Managing Director of Dar Al Takaful, Daman Investments is one of the most venerable companies in the MENA Investment Arena and this is the start of a mutually beneficial business relationship. Mr. Shehab Gargash, Managing Director of Daman Investments, said that Dar Al Takaful is a respected Islamic Insurance company and opening this new managed account demonstrates their confidence in his firm's abilities to manage money in the UAE economy. Dar Al Takaful’s account will be managed under a Shari’ah compliant investment mandate.

A recent Gallup survey reported that Islamic banking remains unpopular in Egypt, with only 3% of adults using Islamic banking services and only 49% who have heard of Islamic banking in the country. The poll also found that 45% of all respondents preferred a more expensive loan from an Islamic bank to a cheaper loan from a conventional bank. Identifying the reasons for this lack of demand will require extensive research. However, there is no reason why Islamic banking could not increase in the future if its demand increased, given that the only barrier to its use is the lack of its popularity. The survey was conducted in 2012 through face-to-face interviews with 1,000 adults aged above 15 years in Egypt, Tunisia, Algeria, Morocco, and Yemen.