IslamicFinance.de

A low-income housing policy will be introduced in Dubai, to provide housing units for individuals earning low income and renovate some old areas in the emirate. The Crown Prince of Dubai HH Sheikh Hamdan bin Mohammad bin Rashid Al Maktoum approved the policy. It will classify low-income people into Emiratis and non-Emiratis, including expats and workers, in strategic sectors in Dubai. The policy will also include families’ income levels, place of residence, and public benefits and will compare them with requirements and the extent of challenges families are facing. Sheikh Hamdan approved two main programmes. The first one aims to cooperate with real estate developers in order to provide housing units for low-income families while the second aims to refurbish some old areas in Dubai.

Saudi Arabia hired Citigroup, JPMorgan Chase and HSBC as global coordinators on its international Islamic bond sale. The kingdom also picked Deutsche Bank and BNP Paribas among others as lead managers for the sale. The sukuk could come as soon as this month. Saudi secretary-general of the Finance Committee, Mohammad Al Tuwaijri, announced in December the kingdom's plans to raise between $10 billion and $15 billion from international bond markets in 2017 and sell about 70 billion riyals locally. The world’s biggest oil exporter is considering international and domestic debt issues to help finance its budget deficit.

The Kenyan capital markets regulatory authority and the Nairobi Securities Exchange today visited the Qatar Stock Exchange (QSE) and signed a memorandum of understanding (MOU) for cooperation between the two exchanges. The two sides will share information and technical assistance in respect of processes and procedures relating to listing, trading, depository operations, clearing and settlement. Mr. Samuel Kimani, Chairman of the Nairobi Stock Exchange, said that his is a young exchange looking for further development and cooperation opportunities. Rashid bin Ali Al-Mansoori, CEO of Qatar Stock Exchange, expressed his happiness and hope that the MOU will help enhance the economic cooperation between the two countries.

Towards the end of this month Bank Muscat is expected to raise OMR23-30 million, which is the first tranche of Meethaq’s OMR100 million-sukuk programme. Meethaq is Bank Muscat’s pioneer Islamic banking window in Oman. The bank has already received an initial approval from stock market regulator Capital Market Authority (CMA). Bank Muscat's Deputy CEO Sulaiman Al Harthy said the sukuk programme starts with a small amount, maybe OMR25-30 million to test the market and see the market appetite. Al Harthy also noted that this year, Islamic financial institutions are expected to grow at a similar rate as seen last year. Meethaq Islamic financing receivables rose to OMR855 million by end-December 2016, compared to OMR635 million in the same period in 2015.

Noor Bank CEO Hussain Al Qemzi has ruled out possibilities of any possible mergers in the UAE’s Islamic banks. The last merger is between First Gulf Bank and National Bank of Abu Dhabi, expected to complete by end of first quarter 2017. The merged entity is likely to create one of the largest banks in the Middle East and Africa, with assets of $175 billion (AED642bn). Al Qemzi said Islamic banks need innovation to integrate and position themselves to offer value and a better choice for Muslim and non-Muslim customers in order to grow. The CEO said a shortage of Sharia scholars was also impeding growth of the Islamic finance industry with many institutions in the country sharing advisors.

Metito is the largest privately held water treatment company in the Middle East. Metito’s African operations account for nearly about a third of its revenues and the current backlog is around $300 million. Metito approached Islamic banks in early 2014 to tap on their resources to support the Group’s growth. As of today, a major of the long-term financing that the group has received in GCC region is comprised mostly of Shari'ah-compliant financing tools. The total size of Islamic financing facilities currently in use stand at around $150 million and the share is expected to increase over the next 12 months. The Group has so far availed three types of Islamic finance financing tools, Musharakah, Ijarah and Murabahah. CFO Wafic Ghanem said Metito has not yet considered tapping into Sukuk issuance for its African business given the infancy of Sukuk market in the continent.

Corrigenda: Wafic Ghanem has been reported being Group CEO before.

On Feb. 26 the Iranian government got the parliament approval to sell a total of 10 trillion rials ($308 million) worth of excess properties owned by its ministries. The raised money is expected to help shore up the troubled Post Bank of Iran and the Cooperative Development Bank. According to economic newspaper Donya-e Eqtesad, toxic assets account for 40-45% of total banking assets in the country. Nearly 15% of these assets consist of immovable assets such as land and buildings. The rest consists of nonperforming loans and government debt. The sale of at least 33% of the surplus assets could have taken place in the fiscal year running to March 20, but banks eventually decided to find a legal way to postpone the sale process. Real estate expert Farhad Beizaei accused banks of wasting time so that they can sell properties at higher prices next year.

The United Arab Emirates' Sharjah Islamic Bank (SIB) plans to issue convertible sukuk equivalent to 10% of the lender's capital. Funds raised through the debt sale will be used by Islamic endowments selected by the government of the emirate of Sharjah. The bank also authorised a capital increase to 2.67 billion dirhams ($726 million) from 2.43 billion dirhams.

According to Bangladesh Bank's former deputy governor Khondkar Ibrahim Khaled, Islami Bank Bangladesh speaks about Islamic banking, but it does not act in that way. In his view, the private bank is not following Islamic banking rules of keeping customers as partners of profit or loss. He also alleges that remittances are dropping due to 'dishonest' mobile banking abroad. The statements were made at a seminar in Dhaka where several professors of Bangladesh Institute of Bank Management (BIBM) were present. Khaled said that remittances were dropping because money is being sent through illegal channels in the name of bKash. He advised the Bangladesh Bank to open a new wing to research mobile banking in order to stop transactions outside banking channels. In a research paper published at the seminar, it was said that a large section of the customers of Bangladesh's banks did not have clear ideas about the sector.

In this interview HRH Prince Khaled bin Alwaleed bin Talal reveals the full story behind his investment firm’s jump into the Shari’ah space. He founded KBW Investments four years ago and launched in mid-January his newest company, ARADA, in partnership with Basma Group. KBW’s first movement in the Shari’ah-compliant investment space is called Crestmount Capital. Prince Khaled found the fairness of Islamic finance most appealing, the extensive work in preparation of launching Crestmount Capital with Amanie Advisors has been really educational. The projects that Crestmount Fund will invest in will be delivered by PietyTHP Developments, which is a joint venture between Piety and the property arm of Lembaga Tabung Haji of Malaysia. Crestmount Fund I, a Shari’ah-compliant real estate private equity fund, is structured as a Cayman Islands entity. It will fund five identified under-development residential projects in Sydney, Australia, through Shari'ah-compliant commodity Murabahah agreements.

Jaiz Bank is now a public quoted company listed on the Nigerian Stock Exchange. To commemorate the listing, Jaiz Bank’s Executive Management, led by Chairman Dr Umaru Abdul Mutallab, were honoured with a closing gong ceremony to officially close trading on the bourse for the day. Hassan Usman, Jaiz Bank's CEO noted that the listing of the bank’s shares was a fulfillment of an earlier promise made at inception of the Bank. He added that the listing would elicit public confidence that Non-Interest Banking provides alternative model that contributes to the socio-economic development of the country. Oscar Onyema, CEO of the Nigerian Stock Exchange, said this listing would promote liquidity for the bank, enhance its value and increase its transparency.

Amid Brexit-fuelled uncertainty, London is trying to do its best to stay afloat as one of the most important hubs for Islamic finance in the Western world. There are now five fully-fledged Islamic banks, one Shariah-compliant hedge fund manager and one dedicated takaful provider in the UK. Also, there are over 20 banks providing Islamic financial services in “banking windows,” more than in any other European country. They benefit from the depth and liquidity of London’s capital markets, the large pool of expertise offered by specialists. Furthermore, the London Stock Exchange is a key global venue for the issuance of sukuk.
Experts say that one of the biggest drawbacks of Brexit for the entire UK banking industry will be the loss of “passporting” privileges that allow UK banks to access the single EU market without restrictions. Another issue is legal uncertainty for existing Islamic banks over to what extent current banking and financial regulations – which have largely been influenced by EU law – will change.

BankIslami Pakistan and fintech startup CompareOn Pakistan have signed a strategic alliance that will further enhance BankIslami’s reach. CompareOn Pakistan provides the online comparison platform Karlocompare.com.pk, which delivers product information and enables customers to apply without the need of visiting or calling BankIslami branches. The agreement was signed by Sumair Farooqui, CEO of CompareOn Pakistan and Yasser Abbas, Head of Islami Auto Finance. Speaking on the occasion, Sumair Farooqui said CompareOn Pakistan intends to serve the growing customer base of Auto Financing Industry and contribute to enhancing awareness around BankIslami’s products.

Oman’s Capital Market Authority (CMA) has given provisional approval for two new sukuk issuances of an aggregate size of RO 300 million (around $780 million). CMA President Abdullah bin Salim al Salmi said the proposed issuances underscore the potential and appetite for sharia-compliant finance and investment in the Sultanate. He noted that as of end-June 2016, the value of the sharia-compliant capital market jumped to RO 3.91 billion ($10.16 billion), comprising sharia-compliant shares, investments and sukuk, versus RO 3.24 billion ($8.42 billion) a year earlier, representing an increase of 21.14%. Significant growth has also been witnessed in the Takaful market with premiums reaching RO 41.99 million as of end-2016, up from RO 38.77 million a year earlier, representing an increase of 9.2%.

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued a draft standard on murabaha to update guidance on the most common financing tool used by Islamic banks. AAOIFI is conducting a wide review of its standards to encourage convergence of industry practices and increase consumer appeal. The proposed standard would supercede two earlier ones on murabaha. It would also cover new areas such as the accounting treatment on the liability side of a murabaha transaction. AAOIFI is seeking industry feedback on the draft until the end of March, aiming to make the final version effective from January 2019.

The General Council for Islamic Banks and Financial Institutions (CIBAFI) and the Islamic Research and Training Institute (IRTI) are jointly organising the yearly meeting of the Directors of Operations and Investments of Islamic Financial Institutions (IFIs). The theme this year will be "Bringing Islamic Investment of IFIs to the Next Frontier" and is held between March 22-23 in Manama. Experts in Islamic Investments will gather to discuss the disruptive agendas of the Islamic investments and look into topics of Strategies in the Infrastructure and Project Finance; Private Banking Capabilities of IFIs; Direct Equity Investment of IFIs; Sustainability Criteria in Islamic Investment Framework among other significant topics.

Bank Al-Maghrib and the Islamic Financial Services Board (IFSB) co-organized a regional workshop entitled "Facilitating Implementation of IFSB Standards" in Rabat. The workshop focused on 3 standards for participatory banking: IFSB-15 "Revised Capital Adequacy Standard" on Prudential Capital and Solvency Standards, IFSB-16 "Revised Guidance on Key Elements in the Supervisory Process" on Supervision Standards, and GN-6 "Quantitative Measures for Liquidity Risk Management" on prudential liquidity standards. This event is part of the measures taken by Bank Al-Maghrib to finalize the regulatory framework governing participatory banking activities in Morocco.

Bank Nizwa in partnership with Islamic Finance News (IFN) successfully concluded the second ‘Islamic Finance News Forum’. Sharing his expertise in the IFN Debate was Bank Nizwa’s new CEO, Khalid Al Kayed, who discussed the challenges of standardization and increased regulation. The CEO also took part in the closed-door IFN Oman Dialogue session to openly discuss the benefits and concerns facing the Islamic Finance market. Other sessions at the forum looked into the legal and regulatory framework of Islamic Finance, the development of sustainable and efficient Islamic capital markets, capital market activity and economic development, and innovation in Islamic Finance.

Abu Dhabi Islamic Bank (ADIB) has issued a statement clarifying that the story issued by Reuters about a US dollar Sukuk issuance in the next few months is incorrect. Reuters had recently reported that ADIB is planning to make a US dollar-denominated Sukuk issue in May this year. ADIB said that it has no immediate plans to issue any Sukuk and this has been clarified in an official statement to Reuters.

Abu Dhabi Islamic Bank (ADIB) is considering to make a U.S. dollar-denominated sukuk issue over the next few months. The Islamic lender would join a number of Gulf Cooperation Council banks raising debt internationally through both Islamic and conventional bonds to improve their liquidity. Bahrain-based Gulf International Bank was the first regional lender to raise debt internationally this year with a $500 million bond sale in January. It was followed by a $1 billion sukuk sale by Dubai Islamic Bank, a $500 million conventional bond by Ahli Bank Qatar and a $500 million bond by the United Arab Emirates’ Bank of Sharjah.