IslamicFinance.de

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is trying to fill a gap in the absence of third-party guarantees, which has affected liquidity and hindered growth of Sharia-compliant financing. ICIEC head Oussama Kaisi said the group was engaging with central banks of several countries to find ways to increase liquidity for Islamic financing and allow more third-party guarantees. He added that by accessing the sukuk market companies can increase their investor base through stronger ratings, raise loan tenors and decrease borrowing costs. The value of sukuk issuance in 2018 was $115 billion (Dh422.33bn) and the market looks set for a similar amount this year. According to Standard & Poor’s, the UAE may sell $8bn worth of sukuk this year, slightly lower than $9.1bn recorded at the end of 2018, with private-sector corporations dominating the issuances.

The planned merger of Malaysian Industrial Development Finance (MIDF) and Al Rajhi Banking and Investment Corp (Al Rajhi Malaysia) is now uncertain as the shareholders have missed the June 27 deadline. The shareholders of the two companies have sent a request to Bank Negara Malaysia (BNM) seeking more time to further negotiate the merger plan. In March 2019, BNM had already granted three months’ additional time for the proposed merger. Al Rajhi Bank is likely to stay on as a shareholder in the proposed merged entity while PNB would remain its largest shareholder. After the completion of this merger process, MIDF is expected to become an Islamic bank. The merger plan, if it succeeds, would lead to a financial services entity with a combined asset value of MYR 14.09 billion.

Sharjah Islamic Bank (SIB) raised $500 million in its debut Additional Tier 1 (AT1) sukuk at the lowest price of 5%. Accordingly, the bank’s AT1 Sukuk yield is the lowest in the region, down from 5.25% in 2015. The lender has received orders of $4.8 billion or 9.5x oversubscription from many investors, as well as nearly 209 individual orders from Asia, GCC, and Europe. SIB has appointed Citi, HSBC, and Standard Chartered Bank as joint global coordinators. It also hired Joint Structuring Agents along with Abu Dhabi Islamic Bank, Bank ABC, Citi, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, and Standard Chartered Bank as the joint lead managers and joint bookrunners. The sukuk is a Non Call 6 years Perpetual Instrument which will reset to 6 years Treasuries in 2025.

According to Nobel laureate Muhammad Yunus, social enterprises run by women and young people can fix the world's most pressing problems. Bangladesh's Yunus won the Nobel prize in 2006 jointly with Grameen Bank, the microfinance organisation he founded. Nicknamed "banker to the poor", Yunus started his movement 40 years ago with loans worth just $27 to women in Chittagong, Bangladesh. Grameen Bank has since delivered millions of tiny loans to poor people who do not have access to mainstream banking. Some countries in Asia, including Thailand, Vietnam and the Philippines have passed legislation or revised laws to support social business ventures. But what's more important is adapting educational institutions and the financial system to encourage entrepreneurship and social business, Yunus said.

The Museum for Islamic Art in Jerusalem, with a mission of promoting interfaith dialogue, has opened a "past and present" jewelry exhibit. According to its curator, Idit Sharon, the museum serves as a multicultural bridge between the different streams of Israeli society. The newly opened exhibition is a prime example of this, presenting amulets made by Jewish designers living in the Arab world. Collector William Gross noted that in their form and craftsmanship, the folk art of Jews and Muslims was strikingly similar. According to Sharon, the fact that Jews and Muslims used shared symbols in their work exists until today.

Prominent Islamic Finance activists have been trying to create recognition and make an impact in the implementation of Islamic Finance in India since decades. Recent years have seen quite a few setbacks in the Islamic Finance initiatives, with many financial initiatives being eventually discovered as Ponzi schemes. Some of these prominent schemes include Heera Gold, Ambiant Marketing, and now the latest is called I Monetary Advisory (IMA). Investigations revealed that IMA did not even have a Shariah board to begin with, and often used non-Shariah compliant statements in its marketing resources. Despite claiming to be a Shariah-compliant investment avenue, IMA had promised a fixed minimum return. A country with a sizeable Muslim population like India demands a central Shariah-Compliance Certification platform that keeps a strict control over Islamic Finance activities.

Investigation authorities are probing complaints that a Bengaluru-based company, which promised to route investors’ savings into halal investments, cheated them of 2000 crore. India does not recognise Islamic banking, but there are investment options for those who do not want to violate religious laws while investing their savings. Researcher Shafeeq Rahman says that Muslims have an unmet need for Shariah-compliant investments. Because they are more likely to run their own businesses, Muslims have more need for credit and go to groups that offer halal financial services. The problem is that these institutions use the claim of Shariah investments to lure depositors, but these groups are not regulated by government agencies.

The International Finance Corporation (IFC) is offering technical advisory services to Gulf African Bank to help it lend more to small and women-owned enterprises. The advisory will cost $368,016 (Sh37 million) and is the latest such undertaking with local banks. Other banks that have signed similar deals include Co-op Bank and Equity Bank. IFC says the project will focus on competency assessment, opportunity sizing and product programme development for SME banking. The institution defines SMEs using various measures including firms having between 10 and 300 employees or annual sales of Sh10 million to Sh1.5 billion. The loan size per borrower usually ranges from Sh1 million to Sh200 million.

The College of Islamic Studies at Hamad Bin Khalifa University (HBKU) has announced a Call for Papers for its International Conference on Islamic Finance and Circular Economy. The conference is jointly organised with the Qatar Financial Centre (QFC) Authority and will take place from December 3-5 in Doha. During the three-day conference, attendees will examine the emergence of a circular economic paradigm in recent years, exploring the means, processes and incentives to learn from nature and to minimise waste. Scholars are invited to submit their papers on topics such as: Circular Economy: An Islamic Perspective; Circular Economy: Concepts, Models - Challenges and Opportunities; Circular Economy and Islamic Finance; Circular Economy: Urban Innovative Actions and Design; and Transition to Circular Economy: Case Studies. Both Arabic and English manuscripts will be accepted.

A new report on the prospects for fintech in the Middle East and Africa has affirmed the importance of the Gulf Cooperation Council (GCC) region. According to Standard & Poor's, the GCC's most advanced centres are Dubai and Bahrain. "The Future Of Banking: Fintech's Prospects in the Middle East and Africa" report identified five factors necessary to propel fintech adoption: human capital, regulation, financial capital, physical infrastructure and demand, either from established financial institutions or end users. It said North and Sub-Saharan Africa still lagged behind the GCC, where banking penetration stands at just under 80%.

The Association of Islamic Banking and Financial Institutions Malaysia (Aibim) has ensured that its member banks will continue to provide access for Islamic finance banking products. Aibim’s president Datuk Adissadikin Ali assured that customers who are eligible will not be deprived from access to financing. He added that customers should also recognise the need to make sound decisions based on their own affordability and in line with their financial conditions. Last year, Islamic banks approved a total of RM37.7 billion, representing 36.7% from the total financing for the purchase of residential properties. They also approved RM12.4 billion of personal financing and supported RM1 billion funding for the small and medium enterprises (SMEs).

Pakistani fintech startup Tez Financial Services has been selected as one of the winners of 2019’s Inclusive Fintech 50. Tez was the only Pakistani startup to have qualified for the competition. Inclusive Fintech 50 is a competition to help early-stage fintech companies attract capital to benefit the world’s three billion financially underprivileged people. Tez Financial Services is the first fully digital Non-Bank Microfinance Company focused on serving the unbanked and underbanked in Pakistan. The founders of Tez were leading forces in the creation of Tameer Bank, Easypaisa, and CheckIn Solutions.

La filiale marocaine du sud-africain Sanlam vient de créer une nouvelle filiale, du nom de Sanlam Takaful, dédiée à l’assurance participative. Le projet de loi introduisant le Takaful dans le Code marocain des assurances a déjà franchi, en février, l’étape de l’adoption à la chambre des représentants. Faute de disponibilité de l’assurance Takaful au Maroc, les clients des banques participatives ayant bénéficié de financements islamiques sont aujourd’hui exposés à un danger sérieux, en cas de décès ou d’invalidité. En guise de solution, les banques ont trouvé le moyen de combler cette lacune en obligeant leurs clients à s’engager à souscrire à une assurance Takaful dès que celle-ci sera autorisée à la commercialisation. Les acteurs de l’écosystème participatif tablent sur un démarrage de cette activité au cours du troisième trimestre 2019.

Bank Muamalat Malaysia aims to grow its revenue from Islamic pawnbroking (Ar-Rahnu) by up to RM50million. The bank's second pawnbroking campaign was launched on June 20 and will run for 10 months until March next year. Bank Muamalat consumer banking division head Zury Rahimee Zainal Abiden said the bank aims to tap the interest of up to 50,000 people in comparison to only 27,000 during the previous campaign period. Throughout this campaign, Bank Muamalat is offering a one kilogramme gold wafer as the main prize, 100 gramme gold wafer for the second prize and 50 gramme gold wafer for the third prize. Bank Muamalat is also offering a prize of a gold wafer on a monthly basis for more than 200 selected customers throughout this campaign period. From the first campaign the bank recorded up to RM26.9million of revenue from the gold business with an average of 2,700 new accounts every months. Bank Muamalat has more than 1.2 million customers and this segment of the business contributed 8% to the group earnings.

Experts from the private and public sectors are meeting today in Lagos to discuss the progress of Islamic finance in Nigeria. The inaugural edition of the IFN Nigeria Forum "Harnessing the Islamic Finance Sector for Infrastructure Development and Economic Growth" takes place on June 18th. The IFN Nigeria Forum 2019 features a mix of panel sessions, onstage interviews and interactive sessions on a number of themes in Islamic finance, including Corporate Financing and Capital Raising in Nigeria. Speakers include Director-General, Debt Management Office of Nigeria, Ms Patience Oniha; Acting Director-General, National Pension Commission, Hajia Aisha Dahir-Umar; Divisional Head, Trading Business, NSE, Mr Jude Chiemeka; Managing Director, Lotus Capital, Hajara Adeola; Partner, Udo Udoma & Belo Osagie, Adeola Sunmola, and Head, Debt Capital Markets, FBNQuest Merchant Bank, Oluseun Olatidoye.

According to S&P Global Ratings, the sukuk market enjoyed a strong start to the year but it may not last. S&P Global Ratings Head of Islamic Finance, Mohamed Damak said high levels of liquidity in Indonesia, Turkey's efforts to tap all available financing sources, and the return of Qatari and Saudi Arabian issuers to the market have boosted issuance of sukuk 17.6% in the first five months of 2019. S&P expects the total Sukuk issuance will average $105 billion-$115 billion this year, assuming the Brent oil price stabilizes at $55 per barrel. This follows a mild performance in 2018 when issuance dropped to $114.8 billion, a 5% decline compared with 2017; US dollar Sukuk alone fell by 15% year on year. Tightening liquidity conditions, high geopolitical risks in the Middle East, and challenges inherent to sukuk issuance will likely dampen sukuk market performance in 2019.

United Arab Emirates’ Sharjah Islamic Bank has hired banks to arrange investor meetings ahead of an issuance of U.S. dollar-denominated sukuk. Citi, HSBC and Standard Chartered have been hired to coordinate the deal, and they are bookrunners along with Abu Dhabi Islamic Bank, Bank ABC, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, and KFH Capital. The planned sukuk deal will boost the bank’s Tier 1 core capital.

Dubai-based real estate developer The First Group plans to issue $135 million in sukuk. The developer has appointed investment bank Shuaa Capital to arrange the planned transaction. The First Group specialises in hotel investments. It has completed 11 projects in the UAE to date and has seven hospitality developments under construction. This issuance is one of few debt issues in the pipeline in the Gulf region after business slowed sharply during the holy month of Ramadan, which ended last week.

Dundee’s Al-Maktoum College of Higher Education is collaborating with the University of Dundee to offer qualifications in MSc Islamic Finance, MSc Islamic Banking and Finance and MSc Islamic Banking, Finance and International Business. Dr Salah Alhammadi, assistant professor in Islamic economics at Al-Maktoum College, said Islamic finance has been adopted in Muslim majority countries as well as non-Muslim countries. The London Stock Exchange recently claimed that the UK is leading western countries in Islamic Finance. Designed for students who have completed an undergraduate degree and are now looking to specialise, the programmes are suitable for those with a background in finance and business but also anyone new to the subject.

Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum issued a new insolvency law for companies operating in the Dubai International Financial Centre (DIFC). The new law has been issued following the collapse of Dubai-based private equity firm Abraaj. The firm had a row with some investors over the use of money in a $1 billion healthcare fund. The new law introduces a "new debtor in possession bankruptcy regime" for debtors that have filed for bankruptcy but still hold assets. Abraaj, its founder Arif Naqvi and a former executive are being investigated by the U.S. Securities and Exchange Commission on U.S. charges that they defrauded investors.