IslamicFinance.de

The insurance sector across the GCC is expected to report growth in gross premiums on continued growth in infrastructure investment and favourable regulatory changes. S&P Global Ratings analyst Emir Mujkic said gross premiums will increase in 2017 by around 30% in Kuwait, and by up to 10% in the other three markets. GDP growth will range between 1.5% for Kuwait and about 3.5% for Qatar. The Saudi Arabian Monetary Authority (SAMA) is expected to support the efforts of the traffic police to ensure drivers of illegally uninsured vehicles to buy motor coverage. There are currently 2.5 million Saudi nationals working in the private sector that are not covered by their employers’ group medical schemes.During 2017, the authorities will seek to prompt private employers to provide medical cover for all their staff.

#Qatar’s QInvest has successfully launched its QInvest SQN Income Fund. It aims to pay out a net yield of 7% per annum on a monthly basis and has a targeted IRR of between 8-9%, with a tenure of 5 years. The Fund invests in the leasing and financing of business-essential, long-life, revenue producing equipment across developed markets. Industries include health care, manufacturing and agriculture. QInvest plans to launch another fund in the same series later this year. QInvest CEO Tamim Hamad Al Kawari said the new fund provides investors with concentrated portfolios with means of diversification and risk mitigation. It provides attractive returns and a regular income distribution, all within a relatively conservative investment profile.

Land prices in Makkah are higher than in downtown Tokyo or Paris, this ensures that five-star luxury hotel supply growth is the norm. Makkah is also at a macro inflection point since 25,000 three-/four-star rooms were demolished or reclassified by the Saudi authorities. The Saudi government intends to triple Umrah visas to 15 million by 2020 as per the kingdom's Vision 2030 policy. Makkah hotel investing is also attractive because the Makkah's religious tourism market is dominated by tour operators who pre-book rooms en masse and place a premium on new hotels. Makkah is unquestionably the world's most resilient, low-risk, price/demand inelastic, supply constrained, foreign capital inaccessible, secular growth hotel market.

The Islamic Corporation for the Development of the Private Sector (ICD) and TUV SUD signed a memorandum of understanding (MoU) to foster their joint operations in the countries of Central Asia. ICD's CEO Khaled Al-Aboodi and the managing director of TUV SUD Central Asia, Anar Ahmadov, signed the MoU on behalf of the two corporations in Astana, Kazakhstan. The aim of the MoU is to facilitate cooperation in promoting private sector participation and inform about business opportunities in countries of Central Asia. This partnership will enable the two institutions to work closely on market studies related to the transit and logistic sector in the common member countries.

Dubai Financial Market (DFM) said it has officially published the final version of its Standard on Hedging against Investment and Finance Risks. This standard is the newest addition to DFM’s Sharia-compliant standards, which include Standard on Stocks and Standard on Sukuk issued in 2007 and 2014. The key amendments and add-ons to the draft of the standard are adding two types of risks, property risk and reputational risk. The amendment also emphasises the admissibility of the penalty clause only in Istisna, supply contracts and labour-lease contracts, excluding the contracts that result in a monetary debt owed by the debtor. It also emphasises the admissibility of the third-party guarantee in contracts of partnerships, Mudaraba and agency in investment, provided no link is made between this guarantee and the contract of partnership or Mudaraba.

The increase in emerging market debt to more than $900 billion in outstandings according to the International Monetary Fund (IMF) heightens the importance of sovereign debt restructuring. This concern affects not only holders of sovereign debt but also investors in corporate, financial, and structured debt. Too Little, Too Late is a collection of 15 papers on current sovereign debt–restructuring challenges and alternative approaches to resolving them. For investment analysts, the book is a valuable source of systematic analysis, insights, and data on a complex problem. The authors maintain that the only durable solution will be a multinational framework that brings lenders and borrowers together by focusing on mutually beneficial incentives.

UEM Edgenta will issue Islamic commercial papers (ICP programme) and Islamic medium-term notes (IMTN) with a combined aggregate up to RM1bil in nominal value and a sub-limit of RM300mil.
UEM Edgenta said the proceeds raised from the sukuk programmes would be utilised for its syariah-compliant general corporate purposes. The ICP programme has been assigned a preliminary rating of MARC-1/S and the IMTN programme has been assigned a preliminary rating of AA-IS by Malaysian Rating Corp. The company added that it had lodged the required information and relevant documents relating to the proposed sukuk programmes to the Securities Commission.

EdAid has launched the first ever Sharia-compliant crowdfunding platform to finance Muslim students interest-free. QardHasan will help students raise up to £30,000 within 40 days, channelling funds from charitable trusts and potential employers. The UK-based impact investment firm looks to contribute to each crowdfunding campaign by doubling every £500 raised by a borrower through the platform. The firm's founder and chief executive Tom Woolf said the new platform aims to provide affordable and fair funding options to Muslims. Woolf said the project falls somewhere in between LinkedIn and Kickstarter, as it helps students build up a broader network for their academic and professional career.

On March 15 Abu Dhabi Islamic Bank appointed Khamis Buharoun as acting CEO. The appointment of acting CEO Khamis Buharoun is in context of CEO Tirad Marouf Al Mahmoud's medical leave.

Islamic finance is increasingly making inroads into the US in a variety of forms, but widely out of the radar of the broader public. In the recent past, there has been a rise in the number of Islamic financial service providers. There are now about three dozen official Islamic finance providers in the US. Among the top institutions offering Islamic financial services in the country in terms of asset size are Lariba American Finance House and the associated Bank of Whittier in Los Angeles, as well as University Islamic Financial in Michigan. In terms of skills training, Harvard University has an Harvard Islamic Finance Program and the Franco-American Alliance for Islamic Finance is organising Islamic finance seminars this summer. On the consumer side, Islamic finance in the US is mostly prevalent in the real estate market.

Islamic Bank of Thailand plans to set up an asset management team to handle its Bt48 billion in non-performing loans. The bank also plans to invite 35 financial firms to invest in the bank to restructure its business and boost its new loans, which stand at Bt30 billion. Chairman Chaiwat Utaiwan said Islamic Bank aimed to sell its 74.5% stake in the bank, the remaining stake is owned by Finance Ministry. According to its restructure plan, the bank needs new capital of Bt20 billion in order to adhere to Bank of Thailand standards. The bank has outstanding loan worth Bt95 billion.

According to Moody's Investors Service, the profitability of Islamic banks' in the Gulf cooperation Council (GCC) region will outpace that of their conventional peers for the second consecutive year in 2017. Islamic banks will maintain stronger margins in 2017, primarily as a result of their low funding costs, which reflect their reliance on stable current and savings account balances. Islamic banks also tend to have higher asset yields, given their focus on retail and the real estate related lending. Moody's expects that Islamic banks will retain a margin advantage of about 40 basis points over conventional banks in 2017. Moody's analyst Nitish Bhojnagarwala says conventional banks will continue to beat Islamic peers in terms of cost efficiency. Islamic banks are investing in branch network expansion, while conventional banks have already established their branch networks.

According to a new survey by the Chartered Alternative Investment Analyst (CAIA) Association, incorporation of environmental, social, governance and ethics principles into the investment process is growing in importance. More than three quarters (77%) of respondents to the survey agreed that responsible investing is more important than it was three years ago, while 78% anticipate it will be more important three years from now. When asked to rank the largest drivers of adoption of responsible investing and ESG approaches, respondents chose: Adoption of industry standards (71%); Pressure from institutional investors (67%); and Positive investment return outcomes (64%). A total of 647 CAIA members participated in the survey, which was conducted in January 2017.

The #Malaysian Securities Commission (SC) released its SC 2016 Annual Report. The report states that the Malaysian capital market remains resilient and sustainable, growing in an orderly trajectory, attracting sound investor interest. According to SC chairman Tan Sri Ranjit Ajit Singh, the outlook for the Malaysian capital market in 2017 is positive. The SC is in capacity-boosting mode armed with several initiatives. These include launching the new Malaysian Code of Corporate Governance, the approval of RM5.95 million by the nascent Capital Market Development Fund aimed at encouraging new entrants into the industry, and the establishment of an Institute for Capital Market Research in 2017. This complements the initiatives by the SC in 2015 and last year, including the introduction of the first Equity Crowdfunding Framework in the region and a peer-to-peer financing framework.

The Arab Regulators Conference, hosted by the Arab Monetary Fund, took place on 8-9 March in Abu Dhabi. The two-day conference was an opportunity for regulators to engage in an open dialogue on how to strengthen the development of corporate governance across the region. The conference was attended by over 160 delegates from 17 different countries from both the regulatory and the private sectors. Abdullatif Al Othman, Chairman of Saudi Arabian Industrial Investments (SAIIC) highlighted the importance of corporate governance. He urged attendees to adopt the highest international standards of corporate governance, to help move the region from frontier markets to emerging markets to developed markets. This year, board diversity and women’s role on the board were also widely discussed as were governance trends and best practices.

The Responsible Finance & Investment (RFI) Summit 2017 has announced a series of Executive Sessions organized by the RFI Foundation and INCEIF, the Global University of Islamic finance. These sessions will introduce participants from all backgrounds to the connection between Islamic Finance and Responsible Finance. INCEIF President Daud Vicary Abdullah said the alignment between the guiding principles of Islamic finance and the Sustainable Development Goals (SDGs) was significant. Daud added that these interactive Executive Sessions would provide a platform for people working in responsible finance who do not realize the alignment of responsible investment with Islamic finance.

The Central Bank of #Kenya (CBK) announced it was in final stages of licensing two banks, DIB Bank Kenya, which is owned by Dubai Islamic Bank, and Mayfair Bank which is owned by Kenyan investors. The two firms had received an "approval in principle" before the indefinite suspension of new banks. CBK suspended the licensing of new banks on November 17, 2015 saying it needed to strengthen oversight. The moratorium stalled entry of international banks into the country, where commercial banks have come under closer scrutiny from the regulator because of increasing bad debts. CBK governor Patrick Njoroge said the local banking sector has made huge improvements over the past year, adding that CBK’s supervision department has improved its monitoring capacity.

Bahrain's GFH Financial Group may merge with Dubai-based Shuaa Capital, GFH said in a statement. A web of ties between GFH and Shuaa began forming last year. In May, Abu Dhabi Financial Group (ADFG) and GFH said they were jointly setting up an Islamic bank called ADCorp with initial capital of $100 million. In November, ADFG bought a 48.36% stake in Shuaa, which has a market capitalisation of about $535 million. In December, Shuaa bought 14% of Bahrain's Khaleeji Commercial Bank for $25 million. GFH owns 47% of Khaleeji. On Sunday, Shuaa said it would acquire Integrated Capital and Integrated Securities, both controlled by ADFG. Integrated Capital owns 11.74% of GFH. ADFG officials did not respond to requests for comment about the possible merger.

ZPay, a payment application for foreign tourists in Iran, has won Bank Pasargad Iran’s award for best fintech innovation at the First Fintech Festival. ZPay enables foreigners to shop in Iran while keeping their money outside the country. Iran is doing much to improve its fintech standing. Earlier this month, it was reported that Iran had launched a FinTech Association to push for further development. And yet, while the capital Tehran is home to a growing number of local fintech startups, Iran still has a long way to go before it can be considered a fintech hub.

Dear Readers,

Currently we face several humanitarian crisis, the most afffected are the children. The large organisations need more funds. UNICEF organises the Cycling for Children challenge, which I will join.

Please support my effort and campaign by donating today online via:

https://www.unicef.ch/en/cycling-for-children/action/michael-gassner

My best wishes, and thanks on behalf of all the kids!

Michael Gassner