IslamicFinance.de

Cash-rich Islamic lenders are looking to partner with Western businesses that comply with Islamic law, according to a report by The New York Times. The report said there aren't enough acceptable places for Islamic banks to pour their money in, leading American investment bankers to put deals together. Real estate is a popular investment under Shariah since an agreement can be made without requiring interest payments. However, as the banks expand, they are looking to make more diversified investments. One of investments being studied by Islamic banks is that of Continental Rail, a business that focuses on running freight trains up and down the East Coast. If the cars are found to be halal, then it will be one of the first in the US to be completed following Islamic law.

The Islamic Development Bank (IDB) is considering developing an Islamic Centre of Excellence at the Tun Razak Exchange in the greater Kuala Lumpur in three to five years. The centre of excellence will reportedly provide services in Islamic finance and banking-related transactions. The project will be developed in collaboration with the Malaysian government.

Essel Finance is planning a Shariah fund for foreign investors in real estate. The Shariah fund will have a corpus of $100 million (Rs 620 crore). The fund is looking to close the fund forge partnerships with Shariah funds by February-March. Amit Goenka, chief executive officer, Essel Financial Services said the Shariah partner would offer the fund on its behalf and once the company gets its licence for the offshore fund it was planning, it would bring the Shariah component under its fold. Essel's offshore vehicle may also get its investors to directly invest in real estate projects here and not route it through the fund. The offshore fund has planned a corpus of $200 million. Its domestic fund does debt deals and charges developers with coupon rates of 18 to 19 per cent.

In four North African countries -- Algeria, Egypt, Morocco, and Tunisia -- as well as in Yemen, no more than 3 per cent of adults say they currently use a Sharia-compliant banking service. These results come from a Gallup World Poll survey conducted in 2012 on the awareness, use, and preference for Islamic financial products. Across the five countries surveyed, about half (48 per cent) of adults report having heard of Islamic banks in their country. Moroccans are the most likely to choose the Sharia-compliant loan. Within each country, choices vary little among the poor and more affluent respondents. The data suggest that in the Middle East and North Africa, there is likely to be demand for both conventional and Islamic banking services.

There are big opportunities to promote Islamic finance in Tunisia which can be the global hub of Islamic finance for French speaking countries, said Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics (CIBE) in an international conference on “Finance and Enterprise” in Tunisia. Mughal said international financial crisis can be addressed in a better way through Islamic finance. Tunisia has a good recognition in Islamic financial industry having 2 full-fledged Islamic banks, takaful companies, universities with Islamic finance program, sukuk laws and some other similar institutions which indicate the best future of Islamic finance in Tunisia. However, Islamic microfinance is a missing component of Islamic finance in Tunisia.

GFH Capital, a fully-owned subsidiary of Bahrain-based Gulf Finance House, yesterday announced the acquisition of a prime central London residential property. Located in Kensington, the property is a Grade II listed building, overlooking the Queens Gate Gardens. GFH Capital expects above average capital appreciation to continue over the medium term. Demand for this type of property is reportedly coming from investors all over the world. However, the firm also sees value and upside potential in other real estate markets such as the US and expects to make additional investments in these markets as well.

Borealis and First Energy Bank of Bahrain have jointly bought 20.3 per cent stake in Bulgarian Neochim AD. For the acquisition, Borealis and First Energy Bank formed a joint venture in Bulgaria called Feboran AD. Neochim is a publicly listed company and operates one ammonia plant, two nitric acid plants and an ammonium nitrate plant in southern Bulgaria. Borealis executive vice-president for base chemical Markku Korvenranta said the company believed fertilisers offer attractive business opportunities with further potential for growth particularly in Central and Eastern Europe. First Energy Bank chief executive Mohamed Ghanem said that the investment extended the bank's investment portfolio both geographically into Europe and into a fast-growing market. Furthermore, it reinforced its strategy of participating in the energy sector.

The Board of Directors of Dubai Islamic Bank approved to increase the foreign ownership limit (FOL) from the current level of 15% to 25%. The decision was taken to address the huge demand for DIB shares by large foreign institutional investors. Although a highly liquid scrip on the exchange with approximately 60% free float, the foreign ownership cap was restricting the large global institutional investors keen to participate in the organisation’s success. With the MSCI upgrade taking effect next year, the decision to raise the cap has opened doors for numerous global investors to take advantage of their emerging market allocations and invest in one of the top picks on the exchange. With the Board approval for FOL increase in place, the bank will now proceed to follow the required regulatory process to formalise this decision in due course.

Islamic International Rating Agency ( IIRA ) has reaffirmed its Shari'a Quality Rating of AA (SQR) assigned to Jordan Islamic Bank ( JIB ). This rating indicates JIB 's conformance to very high standards of Shari'a compliance in all aspects of Shari'a quality analysis. The bank has traditionally been supervised by an eminent Shari'a Supervisory Board. Moreover, the bank's Board of Directors has an adequate representation of independent directors, while recommended Board committees are also in place. Transparency of financial reporting by the bank with regards to investment accounts and corporate governance disclosures are generally in line with the recommended best practices by IFSB. However, diversification of Islamic financing structures in the portfolio is recommended by Shari'a scholars.

Resolutions to oust Michael Toxvaerd and Mohammed Al Sarhan from European Islamic Investment Bank's board have failed. The resolutions to remove them from the board were both defeated by 421,334,039 votes to 13,225,000 in a poll at a general meeting. A resolution authorising the company to buyback shares which would be cancelled and not held in treasury was defeated by 381,011,459 votes to 53,847,580. At 9:47am, European Islamic Investment Bank PLC share price was 0p at 3.25p.

Jaiz Bank Plc Shareholders' Fund grew by 53 percent to N10.1 billion in 2012 from about N6.45 billion in the previous year, according to its 2012 financial statement. Also, its depositors’ funds stood at N3.29 billion while total investment in the period under review amounted to N1.96 billion. Gross earnings during the period stood at N79.560 million. However, the bank recorded an operating loss of N1.07 billion in 2012. Its total assets climbed to N14.1 billion, from N5 billion in January 2012. The bank's Chairman, Board of Directors, Alhaji Umaru Mutallab said that necessary steps had been taken to ensure the bank obtained a national license aiming to establish its presence in all states of the federation within the next five to six years. The strategies for realising the set targets will include aggressive deposit drive, investment in the real sector of the economy and also in agriculture.

The infrastructure projects to be launched in Asean and the Middle East and North Africa (Mena) regions will continue to put Malaysia as the champion in the sukuk market next year, according to CIMB Islamic Bank. Its Executive Director and Chief Executive Officer Badlisyah Abdul Ghani said the sukuk market will perform positively in 2014, with a projection of between US$42bil (US$1=RM3.25) and US$48bil of new issuances led by Malaysia and Saudi Arabia. CIMB Islamic has so far topped the lead manager league table after arranging RM9.70bil worth of sukuk issuance, garnering a 25.9% market share. Out of 20 countries worldwide, Malaysia was ranked third in terms of total Shariah-compliant assets at US$196.820mil, with 41 institutions offering Shariah services, representing 63.7% of the total population.

U.S.-based MetLife will buy 51% stake and 49% stake in AmLife Insurance Berhad (AmLife) and AmFamily Takaful Berhad (AmTakaful), respectively, from Malaysia’s AMMB Holdings. The remaining parts of the firms will be owned by AMMB. The deal, worth $249 million, will help MetLife to expande its reach into the Southeast Asia insurance markets. The proposed transaction follows recent announcements from New York-based MetLife of the formation of a joint venture with Bank for Investment and Development of Vietnam and opening of a representative office in Myanmar. The deal is subject to regulatory approval.

A study discusses four major defaults on sukuk that have happened since 2007. These case studies make clear that most problems can be traced back to clauses and structures that made the Sukuk more like conventional bonds. Furthermore, once default happened, most of the Sukuk discussed did not transfer the underlying assets to the Sukuk holders. So, in the event of default, due to limited recourse provisions, Sukuk holders often had no collateral to resort to. The case studies highlight the importance of the legal institutions of the country where the collateral is likely to be contested. The conclusion of the study is that Islamic Finance is not failing to deliver on its promises because Shariah compliance implies a clear allocation of property rights.

GFH Capital, a fully owned subsidiary of Bahrain based Gulf Finance House, has completed the acquisition of a prime central London residential property. Located in Kensington, the property is a Grade II listed building, overlooking the Queens Gate Gardens. This investment is in line with GFH Capital's strategy to identify attractive opportunities in developed markets like the UK, where it has already made considerable investments. Demand for this type of property is coming from investors all over the world. GFH Capital expects this dynamic to continue due to the favorable conditions of London. However, the firm also sees value and upside potential in other real estate markets such as the US and expects to make additional investments in these markets as well.

Turkish Islamic lender Bank Asya applied to the regulator, the Capital Markets Board, to issue sukuk worth up to $500 million, the bank said on Friday. The bank made the statement to the Istanbul stock exchange.

Recent reports show that people in Qatar are saving less than they did earlier, and nearly half of them feel they don’t have enough for the future. There are several saving options offered by different banks in Qatar. Ahli Bank offers cash prizes for its MyHassad Savings account holders with a certain minimum balance. Besides, the bank offers Time Deposit, an investment product with fixed maturity and a fixed interest rate. Barwa Bank's saving option is the Barwa Bank Fixed Deposit with minimum QAR 15,000. Commercial Bank of Qatar has several saving products, like In Time Deposits, Young Saver Account and the Laddering Deposit Account. Doha Bank, HSBC, Qatar Islamic Bank, Qatar National Bank and Standard Chartered Bank contribute to the wide range of saving options offered by banks in Qatar.

Bank of London and The Middle East (BLME) expects Islamic bond issuance to pick up in the Gulf next year as companies refinance maturing debt in a strong economic climate. Scheduled sukuk maturities in Gulf Arab countries next year are expected to trigger a flurry of fresh issues. Many of the new sukuk will be larger than the instruments they replaced. Because of rising economic confidence in the Gulf, tenors of newly issued sukuk will likely become longer, with some moving out towards seven years from the five-year tenors which have dominated in recent years. BLME's assets under management include a $65 million sukuk fund rated A by Moody's Investors Service. Its balance sheet grew to 1.04 billion pounds ($1.7 billion) at the end of last year.

In the two Jordan camps for Syrian refugees, the Norwegian Refugee Council (NRC) is running an education programme with the help of Unicef and supported by Jordan’s education ministry. The camp schools have a Jordanian curriculum. The teachers are both Jordanian and Syrian, drawing on qualified camp residents to teach in the classrooms. NRC also runs a Youth Training Centre. It provides students life skills and leadership training to ensure they acquire traits that can be useful, both in the camp and upon their return to Syria. As winter sets in, relief agencies are concerned with stepping up a winterisation programme. Heaters and blankets are needed while old tents are being replaced with new trailers. Also needed are food, non-food items and medical care.

Indonesia's central bank estimates growth of Islamic banking assets will slow next year due to rising pressure from trade deficits and a depreciation in the rupiah. The country's authorities now plan to introduce an array of policies to develop the sector, ranging from regulating foreign exchange markets, introducing Islamic repurchase agreements as well as education and promotion initiatives. The central bank said a tighter policy in finance-to-deposit ratio, similar to the loan-to-deposit (LDR) ratio used for conventional banks, and developing a sharia-compliant lender of last resort (LOLR) would be needed to support the stability of the financial system.