IslamicFinance.de

The 13th World Social Forum (WSF) came to a close after discussing a range of political, social and cultural issues, notably the phenomenon of terrorism and its impacts on democracy. The attendees delivered a message of peace and solidarity from Tunisia's National Bardo Museum, the site of a recent deadly attack. The four-day gathering was held under the slogan of "Together to pursue the revolution of rights and dignity." It gathered representatives of over 5,000 national and multi-national NGOs, including worker, peasant and feminist movements, from 121 countries.

Tunisia's El Wifack Leasing plans to become the country's third full-fledged Islamic bank by August and will receive a capital injection from the Islamic Corporation for the Development of the Private Sector (ICD). The ICD will not only provide technical assistance, but also inject up to 30 percent of the bank's capital, helping it increase its authorized capital to at least 150 million dinars ($77 million), El Wifack's general manager Mohammed Mellousse said. It will start offering sharia-compliant deposits through eight branches and build a network of 60 branches within five years, aiming for a 1.5 percent share of Tunisia's total banking market, he added. Currently, there are two full-fledged Islamic banks in Tunisia, Zitouna Bank and the Tunisian arm of Bahrain's Al Baraka Banking Group.

For the second time after the 2013 edition, Tunisia has been chosen to host the World Social Forum. The forum will be held from March 24 to March 28 at the Farhat-Hached university campus in the capital Tunis. The organizational committee for the 2015 forum, under the head of Tunisia's social and economic rights forum, Abderrahmane Hedhili, said that civil society would be mobilized for the event as it was in 2013.

Tunisia was once one of Africa's most sophisticated and prolific bond issuers, selling bonds denominated in euros, dollars and yen, and later this year it is expected to issue its first Islamic government bond. International investors keen to capitalise on the country's recent presidential elections put in orders of more than $4bn for the $1bn bond, allowing the country to borrow at a lower than expected rate of 5.875 per cent over 10 years.

Tunisia will delay its planned issue of $500 million in Islamic bonds until the third quarter of the year to allow parliament time to rectify a law concerning the sale, Finance Minister Hakim Ben Hamouda said on Monday. Tunisia had initially said it would issue the Sukuk by the end of last year.

Amen Bank, Tunisia’s second-largest private sector bank, launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. In October, El Wifack Leasing said it had received central bank approval to become the country’s third full-fledged Islamic bank, with 150mn dinars ($80mn) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the Islamic finance industry which has been waiting for the government to issue a debut Islamic bond. Earlier this year the private sector arm of the Islamic Development Bank teamed up with Tunisia’s newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30mn fund to support local businesses.

Tunisia's Amen Bank launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. Moreover, El Wifack Leasing said it had received central bank approval to become the country's third full-fledged Islamic bank, with 150 million dinars ($80 million) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the industry which has been waiting for the government to issue a debut Islamic bond. Meanwhile, the Islamic Development Bank teamed up with Tunisia's newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30 million fund to support local businesses.

Bahrain-based Gulf Finance House has signed a joint venture with France's Alliance International Holding which is likely to kick-start the Tunis Bay project. Tunis Bay is part of the overall $3 billion Tunis Financial Harbour project. Alliance International Holding is a French consortium which specialises in the building of golf course projects and new community developments. It said it has signed a deal with the GFH-owned Tunis Bay Project Company which will see more than 800,000 sq m of land developed into a golf course with surrounding villas and apartments. Construction work by the joint venture will start next year as part of the first phase of the Tunis Bay development.

Owned by the Ben Yedder family, the Amen Bank is due to start raising subscriptions on Dec. 11 for two new Sharia-compliant property funds, UFGS Islamic Fund and CEA Islamic Fund. Amen Bank is starting out modestly for what is a first-ever move on its part. Each fund will have an initial value of 100,000 dinars.

Tunisia, where citizens started voting for a new parliament, plans to raise $500 million from the sale of sukuk by the end of November, according to Finance Minister Hakim Ben Hammouda. Consultations with Citigroup Inc., Natixis SA, Standard Chartered Plc and Qatar-based QInvest are ongoing, Hammouda said. Former Finance Minister Elyes Fakhfakh in July 2013 said the nation would raise as much as $700 million from the sale of Islamic bonds, the same month it approved a sukuk law. Tunisians cast ballots for a new parliament today, marking a milestone in the North African nation’s transition to democracy following the ouster of President Zine El Abidine Ben Ali more than three years ago. Results are expected Oct. 29, and presidential elections are scheduled for next month.

As the government and consumers adapt to troubled financial conditions, there is growing support for financial products and institutions in Tunisia that correspond to principles of traditional Islamic law. Tunisia’s government has even discussed plans to issue a sukuk, to raise $700 million this year. Proponents of Islamic finance say the industry is still underdeveloped in North Africa. There is significant potential for growth in the region, however, particularly in Tunisia. In June, Thomson Reuters released a report on the Islamic finance industry in the country called ”Cautiously Optimistic Tunisia.” The reports findings highlight the prospects as well as the challenges of Islamic finance in Tunisia.

Countries including Pakistan, Tunisia and South Africa are drawing up plans to issue government bonds that comply with Islamic law as they seek to take advantage of strong investor demand for emerging market sovereign debt. Tunisia is working with the Islamic Development Bank to issue a 1bn dinar ($580m) sukuk this year, while Jordan has instructed a committee to look into the possibility of issuing sukuk next year. Governments in South Africa and the Philippines also say they are considering raising money through the sale of Islamic debt.

The Tunisian government is studying the possibility to present cash collateral highways, for the issue of Islamic sukuk so as to mobilise funding from 180 to 300 MTD in 2014, according to Minister of Economy and Finance Hakim Ben Hammouda. The Minister underlined the difficulties on the level of issuing sukuk because of the obligation to present cash collateral. He specified during a hearing session devoted to the examination of the complementary finance law for 2014, that negotiation with the Islamic Development Bank reached an advanced stage.

The backing of AAA rated Islamic Development Bank is a boon to the debut sukuk Tunisia plans by July. The North African nation is planning to sell more than $100 million of Shariah-compliant bonds, Finance Minister Hakim Ben Hammouda said. That will help keep borrowing costs lower than they would be otherwise, said Mourad El Hattab at STB Bank. The guarantor will help keep the interest within the current range, El Hattab added. The IDB has provided Tunisia $3.6 billion in support. The yield on Tunisia’s 400 million-euro ($557 million) bonds maturing in 2020 fell three basis points to 4.42 percent at 11.59: a.m. on May 8 in Dubai, compared with a high for the year of 5.7 percent on Jan. 6.

The European Bank for Reconstruction and Development (EBRD) and the Islamic Corporation for the Development of the Private Sector (ICD) have signed a Memorandum of Understanding developing joint collaboration to support SMEs in Egypt, Jordan, Morocco and Tunisia. Under the terms of the memorandum, the EBRD and the ICD will aim to establish a $120 million investment fund, to develop and to financially support SMEs across the southern and eastern Mediterranean region (SEMED). Various financing products will be used such as equity and quasi-equity.The two institutions will contribute to the SME Fund, as well as exploring additional institutional investors and donor streams in order to provide further SME financing and technical assistance required in the region.

Caretaker President Moncef Marzouki this week received presidents and directors of Islamic banks of West Africa. The meeting discussed ways to strengthen the national economy, boost investment and find ways to finance small and medium enterprises in Tunisia (SMEs). The President of the Republic on Monday commended the signature of a strategic draft agreement between the Zitouna Bank and the Islamic Development Bank (IDB) to create a specialised joint institution in Islamic micro-finance that would allow both partners to expand to Africa. He insisted on the need to speed up legal reforms in the finance field to allow Tunisian banks to integrate in Africa and overcome challenges. The IDB will contribute to the Tunisian government's programmes to meet the challenges of employment, fight against poverty and regional development.

Bahrain's Gulf Finance House (GFH) will start building a $3bn financial park and real estate development north of Tunisia's capital, a project that had been suspended for five years. The project will be one of the largest private foreign investments in the North African state. GFH's project was scheduled to begin in 2009, but financial difficulties at the Islamic bank and Tunisia's 2011 uprising froze several large-scale projects. The $3bn project will start on 15 March, and an agreement has been signed with the Tunisian contracting companies to start practical implementation of the project in a few days, according to Lotfi Zar, the executive director of the project.

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.

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. He also said no Islamic financial institution was effected by the global financial crisis. He added that 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. Realizing the need of Islamic microfinance, he further said that Islamic microfinance is missing component of Islamic finance in Tunisia while socioeconomic development and poverty reduction can be done in better way through Islamic microfinance.

The Tunisian Islamic insurance company "El Amana Takaful," set up as part of a Tunisian-Saudi partnership project, came into service on Wednesday. This Islamic insurance company operates with paid-up capital of TND 10 million ($6.3 million). Saudi businessman Mr. Hassan Salem Al-Amari was appointed as the chairman, and Hussein Al-Daghri was named the deputy chairman. The company was licensed in April. Most of its shareholders are conventional insurers, including Comar, Astree, and Carte – each with 18% share – and Tunis Re, with a 6% stake.