IslamicFinance.de

Malaysia's Royal Award for Islamic Finance commences the third global search to honour an exceptional individual in the field of Islamic finance, with the opening of nominations. An independent seven member international jury will select the deserving individual. The selection criteria encompass both qualitative and quantitative aspects, including financial innovation and pioneering work, exceptional leadership, adoption and acknowledgement within the industry, and inspiration and influence towards future progress and development of Islamic finance. The closing date for nomination is 31 January 2014, and interested persons and parties can submit their nomination online via the website award.mifc.com or via email RAIFSecretariat@seccom.com.my.

London has long been the default centre for international firms to issue sharia-compliant bonds, but it faces a mounting challenge from Dubai and Kuala Lumpur. The final result of the three cities' rivalry may not be known for years, but thousands of jobs and large amounts of direct investment in companies and real estate are likely to depend on the outcome. The most high-profile - and most cut-throat - area of competition between the three centres is arranging sukuk. Other areas of competition include Islamic insurance, known as takaful, and asset management. London has led in attracting sukuk issues by big international companies because of the massive size of its conventional financial markets and its globally respected legal system. However, its position looks weakest among the three centres from a long-term perspective because it is not located within a natural pool of sukuk issuers and European customers will remain a limited group.

UDA Holdings will work with Bank Muamalat to develop 40.47ha of wakaf land with a gross development value of RM1 billion. The land, ready for development, is spread throughout the country and owned by the respective state Islamic Religious Councils. Bank Muamalat will provide the end financing for UDA to develop the land. The implementation of development projects on the wakaf land will be based on the concept of Ijarah or leasing. To realise the development of wakaf land, UDA acting as the developer, will underwrite the development costs, while also being responsible for marketing the projects.

The Dubai government plans to establish a centre that will develop standards for corporate governance based on Islamic values, guiding companies in both financial and non-financial activities. The centre is to be opened in the second quarter of next year. The standards will not be compulsory for firms but the centre will issue sharia-compliance certificates to companies and banks meeting them. The standards will cover issues such as corporate transparency and disclosure. However, certificates will not be issued for individual products.

The Malaysian government has announced plans to transform the country’s capital Kuala Lumpur into a major financial centre in a bid to raise its profile and spark greater international trade and investment. The proposed new financial district, covering 70 acres and featuring 11 new buildings with 25 or more floors, is known as the Tun Razak Exchange (TRX). In order to achieve the goal of becoming a financial superpower, TRX must turn to a more niche approach and build on the country’s established strength in the rapidly growing Islamic financial marketplace. Malaysia must leverage its status as an established Islamic finance hub. And it must address the challenges associated with the supply of high quality human capital.

Qatar is a major player on the growing global Islamic finance stage which is estimated to be worth, at present, around $1.9 trillion. Qatar’s Islamic banking sector is set to flourish over the next three or four years. Islamic banks currently represent one-quarter of Qatar’s banking system in terms of assets, up from 13% in 2006, and it is expected that they will continue to gain market share. Moreover, infrastructure spending in the run-up to the FIFA 2022 World Cup is expected to spur lending for roads, stadiums and hotels. Qatar’s economy is expected to grow 5.2% next year, the fastest in the GCC. Islamic finance will certainly be one of the many topics discussed at the 9th World Islamic Economic Forum which will be held on 29 – 31 October 2013 at the ExCel London.

The Islamic Development Bank (IDB) has launched The Assistance For Trade in the Arab States (AFTIAS) aimed at boosting trade and economy as well as creating jobs in the Arab countries. Dr. Waleed Al-Wohaib, CEO of the International Islamic Trade Finance Corporation (ITFC) and Chairman of Board of the initiative, said the ITFC would work side-by-side with international organizations that would implement the initiative to guarantee its success. The initiative consists of five UN agencies: the UN Development Program (UNDP), the UN Conference of Trade And Development (UNCTAD), the UN Industrial Development Organization (UNIDO), the International Labor Organization (ILO), and the International Trade Center. It also include the Arab League, the Gulf Cooperation Council (GCC), the Agadir Technical Unit and the Arab Maghreb Union, in addition to seven donor parties.

Members of Saudi Arabia's wealthy Baeshen family, who control one of the Middle East's leading tea purveyors, AMS Baeshen & Co., are suing the reorganized Bahraini private equity and investment firm Arcapita Bank for the return of millions of dollars they'd earmarked for the bank's aborted stock sale. Lawyers for the Baeshens, the family behind the Rabea Tea brand, are seeking the return of some $3.5 million deposited at the bank in connection with the Bahraini bank's abandoned rights offering.

Djibouti is promoting Islamic finance to increase banking penetration in the tiny African nation and help fund upgrades to the country's infrastructure. Since most people are still not customers of banks, Djibouti sees sharia-compliant finance as a way to pull itself out of poverty and to assemble capital for investment. Central bank governor Ahmed Osman said banking penetration had risen from 10 percent of the population six years ago to 17 or 18 percent now, but that conventional banks were not attractive to many people for religious reasons. The spread of Islamic banking will also help authorities move more business activity from the informal economy to the formal sector.

The 2nd Annual Islamic Banking Summit Africa (IBSA 2013), which opened today in Djibouti, saw more than 350 leaders in the international Islamic banking and finance industry engage in discussions that focused on capturing the growth opportunity for Islamic finance and Takaful in Africa. The inaugural session of the two day event assessed the progress and development of Islamic finance in Africa and discussed required key government and regulatory initiatives. The keynote plenary session discussed key strategies for capacity building and how to best position Islamic finance as a catalyst for a new wave of economic development in Africa. The Power Debate session discussed key initiatives to strengthen Islamic finance’s links to the real economy in Africa and connect Africa to the broader world of Islamic finance.

Police have named two more suspects in an alleged Bank Syariah Mandiri scam implicating three bank officials, bringing the total number of suspects to six. The two latest suspects are Hen Hen Gunawan and doctor Rizky Adiansyah. Gunawan allegedly used the identity cards of his 26 employees to embezzle up to Rp 12.4 billion ($1.1 million) from the bank through its loan scheme. Rizky, meanwhile, allegedly borrowed ID cards of some of his neighbors to siphon Rp 12.2 billion from the bank. These two new suspects were ‘instructed’ by an accounting officer of the Bogor branch of BSM, John Lopulisa. John was earlier arrested, along with the head of BSM‘s primary branch in Bogor, M. Agustinus Masrie, the head of a smaller Bogor branch, Haerulli Hermawan, and Iyan Permana. The fraud is believed to have cost the bank Rp 59 billion.

Lately, for the Middle East & North Africa region, a long list of big-name institutions and investors have been recommending that investing in MENA's technology sector may be the way to address their unemployment and infrastructural problems -- even the political unrest. Meanwhile, a variety of NGOs are establishing themselves in the MENA region, or regrouping, to better fix the infrastructural problems they see -- and maybe the unemployment. Technology and philanthropy may operate better within a social enterprise model that rewards talent -- achieving "social good" together. On Thursday, November 7, Al-Mubadarah (The Arab Empowerment Initiative) will host the first summit on philanthropy and technology in Washington, D.C.: MENA + SocialGood.

Abu Dhabi Islamic Bank (ADIB) has launched new capital-protected silver notes to allow customers to invest in a metal that analysts believe may soon see a price rebound. The Shari’a-compliant notes, which mature in two years, provide 100 percent capital protection at maturity to minimize risk. The notes are currently open for subscription with a minimum amount of US$30,000. This latest offering is part of ADIB’s wealth management approach to provide customers a diversified suite of investment solutions. ADIB’s structured notes have been well received by investors, particularly three capital-protected gold notes and two capital-protected oil notes that matured at the beginning of this year.

Kuwait Finance House has signed a memorandum of understanding to finance $115 million for Bahrain-based Foulath Holding Company for five years. Shaheen Al-Ghanem, International Banks General Manager, KFH said the deal was part of KFH’s efforst to expand in foreign markets. Foulath is owned by GIC and Qatar steel Company in addition to the National Industries Group, Gulf Cables and Kuwait Foundry Company. Foulath owns factories in Bahrain, Saudi Arabia and its businesses cover various countries in the Middle East.

Prime Minister David Cameron of the United Kingdom has announced that the U.K. will become the first non-Muslim country to issue a Sukuk, with a £200 million issue planned for early 2014. Cameron also announced plans for a new Islamic index on the London Stock Exchange. These initiatives are all part of a grand plan by the U.K. government to turn London into a global capital of Islamic finance. At the same time, the World Bank Global Islamic Finance Center in Istanbul is the result of the collaboration between the Turkish government, Turkish private-sector entities and the Bank Group, aiming to create a “center of excellence” for the development of Islamic finance. However, there is a need to strengthen its legal foundations and develop robust regulatory and supervisory frameworks globally.

David Cameron, the British prime minister, announced plans to issue sovereign sukuk as early as next year at the ninth annual World Islamic Economic Forum in London on October 29th. The convention marks the first time the event has been held outside the Muslim world. That is a testament to the rising global clout of Islamic finance. The Gulf states have been at the forefront of the boom, other countries like Turkey are emulating the Gulf model. However, the prospects in the wider Middle East, e.g. Egypt and Lybia, are less clear. Despite Islamic finance’s being the toast of the town in the City of London this week, the struggle to make it work in the heart of the Muslim world continues.

Faith-based mutual funds typically screen out stocks of companies that violate the tenets of a given religion or religious denomination. In looking at faith-based funds, be aware that the stock-picking methods vary widely from fund to fund. And potential investors should avoid making assumptions about a fund’s screens or its stance on a moral issue based solely on its expressed religious affiliation. Faith-based funds will use positive and negative screens to focus their investment power on enterprises they deem worthwhile and financially sound. However, for the most part, the screens that faith-based funds use have a minimal impact on the overall stock choices available to them, and are therefore no excuse for poor fund performance over time.

Asia needs to invest about $8 trillion in overall national infrastructure, the use of cross-border financing and investment through Islamic finance will help to widen the investor base and lower the cost of financing for well-structured investments, the Asian Development Bank said. In recent years, Islamic finance has been enjoying growth rates of 20 per cent a year, most of which comes from Asia. Increased activity is expected in Thailand, China, Bangladesh and India as well as more traditional market such as Malaysia, Indonesia and Pakistan. The conference on Islamic Finance for Asia, opening in Manila on Monday, aims to create greater awareness on the potentials and opportunities brought about by Islamic finance to the region.

The Anti-Corruption Commission (ACC) of Bangladesh has filed 12 cases against 53 officials of five banks and the Bismillah Group for their alleged involvement in the embezzlement of funded loans worth over Tk9.9bn. The list of the accused included 13 people from Bismillah Group, 12 Janata Bank officials, eight Prime Bank officials, seven Premier Bank officials, five Jamuna Bank officials and eight Shahjalal Islami Bank officials. According to the probe report, Bismillah Group, in association with the bank officials, embezzled the money through loans against trust receipts using names of fake foreign buyers. They secured cash incentives against fake export documents, taking advantage of inland bills purchases and overpricing non-existing export items. The inquiry also found that the group laundered money abroad.

Malaysia's Malayan Banking (Maybank) has launched an Islamic asset management unit to cater to growing investor appetite for sharia-compliant investment products. Maybank asset management will leverage the Maybank group's network of business lines, which range from consumer banking to Islamic insurance, as well as its geographical presence across Asia. It aims to launch Asian-themed investment funds using a bottom-up investment strategy, with products to be marketed primarily in Malaysia and Indonesia. Maybank acquired Indonesian asset management firm PT GMT Aset Management, and it will also explore opportunities in the Middle East through Maybank Investment Bank's stake in Saudi Arabia's Anfaal Capital, according to Nor Azamin Salleh, chief executive of Maybank asset management.