IslamicFinance.de

JCR-VIS Credit Rating Company has reaffirmed the entity ratings of Burj Bank at ‘A/A-1’. Outlook on the ratings is ‘Stable’. Ratings take into account the financial profile of Islamic Corporation for Development of the Private sector (ICD), one of the major shareholders of the bank. The recent approval by shareholders to increase the bank's paid up capital (free of losses) to Rs. 6b is likely to create room for growth in core business activities, which is constrained by the high level of Capital Adequacy Ratio required to be maintained by the State Bank of Pakistan. With a CAR of 22.5% at end-Dec’12 and net NPLs in relation to tier-1 capital also within manageable limits, the bank continues to depict sound risk absorption capacity. Burj has set up 25 new branches during FY12 to increase the total outreach to 75 branches by year-end. A further 25 branches are planned to be set up during the ongoing year.

Over the past three years, the Hult Prize has taken on some of the planet's toughest challenges. These have included Education, Energy, Housing, and Water. For the 2013 Prize, President Clinton has personally selected the challenge: the Global Food Crisis.

A detailed case study, narrated by President Bill Clinton, will be released to all selected participants in early January to set the framework for this year's challenge. Competitors will then be asked to develop social enterprises that answer the President's Challenge.

The global food crisis can be approached through multiple lenses, such as: distribution, manufacturing, production, technology and many others. Each, represents an opportunity for innovation. Nearly 1 Billion people in the World are Hungry, that is over 1 out of every 4 children. Ironically, our global economy produces enough food each year to feed everyone, however more than one-third of the food generated for human consumption continues to be lost or wasted.

Ahmed Al-Gabali, Technical Advisor for Islamic bonds at the finance ministry. temporarily left his post at the Ministry of Finance due to his conviction that not enough political and economic support currently exists to push Egypt’s Islamic bonds law. This, he said, will cause returns on any Islamic bonds that are issued to be significantly less than previously estimated. He stated that the fate of Egypt’s Islamic bonds law changed after the events of 30 June and the ouster of former president Mohamed Morsi. He maintained, however, that Islamic bonds would remain a powerful finance tool in the future, since sukuk have existed in a number of countries that do not operate under an Islamist or a Brotherhood regime. Abdullah Al-Adali, chairman of the taxes division at Price Waterhouse Coopers, stated that he supported keeping the country’s Islamic bonds law as it was despite the removal of Morsi.

Pakistan-headquartered Bank of Khyber (BoK) plans to open branches in the Middle East, as part of an expansion drive to capture the fast growing investment opportunities and facilitate the expatriate Pakistanis belonging to Khyber Pakhtunkhwa and Federally Administered Tribal Areas (FATA). The lender would offer both Islamic and conventional banking services in the lucrative market of Middle East, according to the bank's acting managing director, Javed Hashmat. No further details were provided.

JPMorgan Chase & Co. is advising clients to buy Nakheel PJSC’s Islamic bonds as new projects boost the Dubai developer’s earnings, while government backing makes a default improbable. State-run Nakheel’s 4.27 billion dirhams ($1.2 billion) of sukuk yielded 9.88 percent at 12:30 p.m. in Dubai, down seven basis points this month, after surging 179 basis points in June. That’s more than twice the average gain in yields on corporate Islamic debt tracked by HSBC/Nasdaq Dubai indexes. JPMorgan listed Nakheel in a July 4 research note as its “top overweight recommendation” among Dubai real-estate debt. Nakheel will manage to pay or refinance as much as half of the $3 billion of debt due in 2016 as it generates at least $1 billion from new projects and land sales.

Emaan Islamic Banking, a division of Silkbank Limited, has been launched and is now available in 10 branches in 8 cities including Karachi, Lahore, Faisalabad and Islamabad. M. A. Mannan, Executive Director at Silkbank, said that currently, the Islamic Banking Division offers a complete suite of liability based products and services including Current Account, Savings Account, Term Deposit (01 Month to 05 Years), Online Banking, 24/7 Phone Banking, Internet Banking, Visa Debit Card, Utility Bills Payment Service and Corporate Banking solutions including Musharka, Murabaha, Diminishing Musharka and Import Murabaha. Silkbank plans to open more Emaan Islamic Banking branches throughout the country and offer more products, both in Retail and Consumer Banking in Pakistan.

Abu Dhabi University, the Zakat Fund and Abu Dhabi Islamic Bank have launched a Dh15 million Ramadan fund-raising campaign to support 300 needy students. Dr Nabil Ibrahim, Chancellor of Abu Dhabi University said that generosity is a life lesson that teaches the community that today's contributions impact tomorrow's innovators. Moreover, the Ramadan campaign gives donors the chance to 'shape the future', he added.

The International Finance Corporation (IFC) – the investment arm of the World Bank – has acquired 15 percent shareholding in Gulf African Bank, Kenya's Islamic bank, for $5 million (Sh425 million). In addition, a further $3 million (Sh255 million) trade guarantee has been opened for Gulf African Bank under IFC’s global trade finance programme. Gulf African Bank said it would use IFC’s financing to boost finance for retail and corporate customers and develop programmes for women entrepreneurs while also extending services to SMEs. In addition to the IFC partnership, the bank is undertaking a rights issue to increase its capital base by an additional Sh850 million.

Franklin Templeton Investments and ECM Libra Financial Group Bhd say they are favouring Malaysian corporate sukuk, which has outperformed as the Federal Reserve considers ending stimulus. Corporate sukuk benefits from a higher degree of scarcity than for government debt. Sales of Malaysian-currency Islamic bonds fell 63 per cent to RM19.9 billion in 2013 from the year-earlier period, worsening the lack of supply. Company bond offers in the Southeast Asian nation, including sukuk and non-Islamic notes, will total RM70 billion to RM85 billion in 2013. However, corporate bond market issuance is expected to remain relatively strong in the second half as the yield curve will likely steepen beyond 2013. Malaysian corporate sukuk are considered less volatile and they provide some yield pick-up over government bonds.

Issues like rating requirements, cost of issuance and complexity of documentation meant that capital raising through sukuk is predominantly by larger corporations and entities. This means that sukuk offer no opportunity for direct investments by retail investors. In order to facilitate greater direct retail participation in the corporate bonds and sukuk market, the Securities Commission Malaysia in 2012 developed the framework for retail bonds and sukuk as envisaged under the Capital Market Masterplan 2, enabling retail investors’ access to a wider range of investment products. However, there are several challenges. One area that requires considerable effort is investor education. Although the new approach may not achieve overnight success, it will help widening access to the capital market and ensuring that Islamic finance takes the path of inclusiveness.

Sharia-compliant mortgage lender Tamweel said on Monday its shareholders had approved the company's delisting from the Dubai stock exchange, paving the way for its acquisition by Dubai Islamic Bank. Dubai Islamic Bank said in January it planned to acquire all of Tamweel, in which it owned 58.2 per cent, through a share swap agreement which would see each Tamweel shareholder offered 10 DIB shares for every 18 Tamweel shares they held.

Amanie Advisors Australia Pte Ltd, which is part of the Malaysian Amanie Advisors Group, has proposed to raise multiple short-term sukuk to cover Australia’s manufacturing ecosystem as part of the strategy to win funds from the Gulf area. Amanie founder and group chairman Dr Mohd Daud Bakar said the structures used in Islamic finance transactions mirror very closely the types of funding that are currently in demand in Australia, particular with respect to real economic activity which include leasing, financing of mining activities and farming. Amanie's idea involves funding from the whole value chain of any business, for examples electricity production. This is a totally new way of approach in the Islamic finance industry, which seems to have been well accepted in Australia. The short-term sukuk will involve the banks in the value chain, reduce the dependency of farmers and producers from conventional or private funds though the risk is quite high but the third party acts as the underwriter.

Mr. Adel Al Asoumi, Chairman of Houra and Gudhaybeya Charity Fund thanked Khaleeji Commercial Bank for its contribution towards sponsoring a number of needy families in association with the Charity Fund. As part of its Zakat fund program, the Bank works closely with charity organizations in the country supporting needy families and helping out raise their standard of living. The Bank has contributed from its Zakat fund to support a number of families sponsored by Houra and Gudhaybeya Charity Fund to ensure the support goes directly to the needy families. The Charity Fund will facilitate the process of helping those selected families by providing the Bank with their names, details and identified needs.

The three Bahraini Islamic investment Banks Capivest, Elaf Bank and Capital Management House have agreed to merge in order to better compete in a fragmented market. The combination will create a bank with assets of $400 million which should be able to win larger projects while benefiting from a more diverse balance sheet. Kuwait Finance House advised the lenders on the merger. The deal must still be approved by Bahrain's central bank and the Ministry of Industry and Commerce.

The Islamic Development Bank (ISDB) will disburse a loan of PKR 14.6 billion (USD 146 million) with a 0.5 percent interest rate per year to the Punjab provincial government of Pakistan. The money will be used for a microfinance facility that will provide interest-free loans to small enterprises in the province, which is home to approximately 90 million people. The Punjab government plans to provide an additional grant of PKR 5 billion (USD 49.9 million) to support the facility. The project reportedly is modeled after the Akhuwat Scheme, it will offer loans of the same size, and like the Akhuwat Scheme, this new facility will not accept deposits. As of July 2013, Akhuwat reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 15.1 million, approximately 140,000 active borrowers and operations in 162 branches across Pakistan.

Abu Dhabi Islamic Bank (ADIB) has closed a Dhs1.32bn ($360m) Syndicated Islamic Facility for Abu Dhabi-based Gulf Marine Services (GMS), the largest provider of self-propelled self-elevating jackup barges in the world. ADIB acted as the Mandated Lead Arranger, Sole Underwriter, Sole Bookrunner, Investment and Security Agent for the facility. The deal was tailored by ADIB to meet GMS' financing needs, including re-financing existing facilities and providing finance for the acquisition of 2 additional vessels. The financing will also help GMS achieve its plan to further improve and expand its fleet. The facility evidenced strong demand from local and regional banks which resulted in it being 2 times oversubscribed by 10 local and regional banks.

The global remittance and foreign exchange brand UAE Exchange today announced a new partnership with the United Nations World Food Programme (WFP) as part of its Corporate Social Responsibility (CSR) program. To mark the beginning of this collaboration that coincides with the upcoming start of Ramadan, UAE Exchange held a launch ceremony and announced a donation in support of WFP’s school feeding program in Africa, which will help fund 100,000 school meals to poor students. The event was attended by senior officials from UAE Exchange and WFP along with special invitees and the media.

The lack of experienced staff and the recent explosive demand for Shariah-compliant products makes it especially hard for the Islamic finance industry to find new employees. The global phenomenon is that an estimated one million professionals are required to fill various positions in the Islamic finance institutions worldwide by 2020. Managers face the challenge of staff being poached on a regular basis. Companies should consider a much more open approach to talent management by facilitating long-term career development by facilitating internal mobility and moves between suppliers, customers and even the competitors. Moreover, the current shortage of trained and qualified manpower in the Islamic finance sector has led to an eventual spiralling of wages, which in the long term does not benefit the industry. Getting the right people in the right roles is central, so pinching has become common place to meet those ends.

Takaful insurance has struggled to find traction in the UK. Despite this, this year has seen several Shariah?compliant products launch in the UK. Faithsure and in May, XL Group began providing Shariah-compliant products for large corporates on a global basis. However, the lack of takaful players could be due to the industry’s youth and stiff competition in personal lines of insurance business according to analysts. Sheikh Bilal Khan, sharia scholar at law firm Linklaters, believes there is potential for Takaful products if they are branded and marketed correctly. But the lack of state regulation on sharia-compliant products creates a real lack of trust in the market, he adds. Yet perhaps the demand among Muslim?run SMEs is where the true potential lies. Faithsure's Asif Khan certainly seems to think so. He's confident that Muslim businesses would not only be aware of Takaful insurance but also actively opt for it.

Islamic insurance providers in the UAE are struggling to generate surpluses amid cut-throat competition and overcapacity, Standard & Poor's warned in its report. The takaful industry must compete directly with conventional insurance companies that benefit from established economies of scale, have longer service track records and have more established distribution mechanisms to the marketplace. According to the report, the sector is now overpopulated with insurers. Insurance companies therefore require considerable capital investment to become established. Insurance companies are the most represented on the UAE stock markets, with 23 of the almost 100 publicly listed companies coming from the sector, but they are also some of the least traded stocks.