IslamicFinance.de

A group of nuns and other religiously-affiliated investors have lost faith in Wells Fargo and filed a shareholder resolution calling on the bank to report on a fake accounts scandal that led to a $190 million settlement. The bank employees opened as many as 2 million checking, savings and credit card accounts without the customers' permission in order to meet sales quotas. The San Francisco-based bank said it would provide more specifics on areas like its risk controls, but that did not happen. Wells Fargo's board has taken some steps since the settlement to address concerns, but the religious shareholders now say they need more changes. For instance another resolution filed by the Unitarian Universalist Association calls on Wells Fargo's board to study how to connect executive pay with ethical conduct.

Nasdaq Dubai and IdealRatings has announced the launch of benchmark indices that track the performance of global Sukuk, in order to provide investors with new data to make informed trading decisions. The data includes daily movements in price and total return, with monthly updates on yield and other key indicators. It tracks a universe of more than 1,800 Sukuk globally, with eligibility criteria including a minimum issue size of 100 million US dollars. The Global Sukuk Index covers all currencies and has five sub-indices. The sub-indices reflect distinct segments of the market, which are: investment grade issuances, issuances by sovereigns, issuances by corporates, issuances by financial institutions and GCC issuances. According to Hamed Ali, CEO of Nasdaq Dubai, the indices add a valuable new stream of information to investors’ existing trading tools.

Emirates Islamic (EI) plans to complete a Dh1.5 billion ($408 million) fund-raising from existing shareholders by early December. Chief executive Jamal Bin Ghalaita said EI was not expecting a pick up in the banking market until the second half of 2017 at the earliest, once an upswing in oil prices happens. EI announced plans for the rights issue on Thursday, saying it would increase its paid up share capital to Dh5.43 billion from Dh3.93 billion. EI, which has recorded falling net profits for the past three quarters, is due to report third-quarter results later this month. Bin Ghalaita said the outlook remained uncertain. He added that EI planned no further job losses after some cuts mainly within the department servicing small and medium-sized enterprises.

A worldwide Sharia standard for bullion trading is moving closer to realisation. An exposure draft has been brought out and placed before the wider public for possible feedback. It was the Accounting and Auditing Organisation for Islamic Financial Institutions that adopted the exposure draft. This was the result of preparatory work and extensive consultations. The General Secretariat was tasked with inviting the opinions of scholars and experts to probe the depth of the exposure draft and its inclusion of relevant technical aspects and issues faced by practitioners in the industry.

In #India Jammu and Kashmir Bank is willing to offer Islamic banking to its customers. Chairman Parvez Ahmad said there was great demand for Islamic Banking in the state, so the bank would examine the proposal after taking the Reserve Bank on board. As far as the JK Bank positioning is concerned, it has 63% share on the asset side, 62% share on the deposit side, out of 862 branches, 745 are in the state, out of 1030 ATMs, 950 in JK state, 90% of the population is dealing with JK Bank. Ahmad added that other banks were only offering products and services, JK Bank was more concerned about the development of JK state as a whole.

According to the findings of Emirates Islamic’s second Islamic Banking Index, there has been an increasing public acceptance and demand for Islamic banking in the UAE. Chief executive of Emirates Islamic, Jamal Bin Ghalaita, said 51% of banking consumers had at least one Islamic product, demonstrating that the efforts by Islamic banks to improve their customer outreach were paying off. As far as perception is concerned, Islamic banks’ trustworthiness rose 42% among Muslim consumers compared to 37% in 2015. Among the non-Muslim population, there was a sizable increase in the number of non-Muslim consumers willing to consider subscribing to an Islamic banking product. The survey also highlights the key challenges for Islamic banks. For a second consecutive year, Islamic banks lag behind conventional banks in technology, innovation and customer service.

#Bahrain's Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa has met with the new President of the Islamic Development Bank (IDB) Group, Dr. Bandar Hajjar. The meeting was held on the sidelines of the minister's participation in the annual meetings of the Boards of Governors of the IMF and the World Bank Group held in Washington. Ways to broaden the close cooperation between the two sides were discussed. The minister praised the IDB's distinguished standing, which plays a vital role in promoting the development movements in Arab and Islamic countries.

Sarajevo's stock exchange launched an Islamic index, a first for the Balkans region. Director of the Sarajevo stock exchange, Tarik Kurbegovic, said the SASX-BBI Index includes 25 Bosnian firms which respect Islamic teaching and was set up in cooperation with Bosnia Bank International (BBI), founded by Gulf countries. BBI director Amer Bukvic said that with this index investment in Bosnia by Gulf countries would grow in a significant way during the next three to five years. In the last few years, Gulf businessmen have invested significantly in tourist and residential real estate in Sarajevo and the surrounding region. The goal of the Islamic index is to direct new investment towards the sectors of agriculture, tourism, metallurgic industry and energy.

A recent UNICEF survey indicates that Somalia is off-track in achieving Millenium Development Goals for Water, Hygiene and Sanitation, a challenge facing Somaliland as well. To off-set the developmental challenges, Somaliland ought to implement sound financial systems. International Development Agencies note that if Somaliland is to have full confidence in Islamic Banking, then it needs to standardise, deregulate and diversify the economy. That would attract more investment from multi-lateral agencies, such as the World Bank, Islamic and African Development Banks (AfDB) and the United Nations. New technologies, such as mobile banking, can enhance the hard to reach areas and further attract potential customers. DBI and Dara Salaam banks are both investing in the latest technology for improving the economy.

According to Moody’s Investor Services, there is stable flow of sovereign sukuk issuance this year, which is set to touch US$28 billion (US$1 = RM4.15) in Southeast Asia. Among the Southeast Asia countries, Malaysia and Indonesia continue to regularly issue long-term sovereign sukuk while Gulf countries favour conventional debt structure to finance their deficit. Moody’s Vice President Gabriel Torres said the governments of Cote d’Ivoire, Senegal and Sharjah returned to the sovereign sukuk market in 2016, but issuance volumes are primarily supported by more regular issuers, such as Indonesia, Malaysia and Turkey. Sub-Saharan African sovereign sukuk issuance is likely to remain active as governments set up regulatory frameworks for a retail Islamic banking sector and test market appetite.

In #Indonesia the Financial Service Authority (OJK) is seeking to boost Islamic financial products growth through better access to the financial service industry. According to OJK Commissioner Council member Firdaus Djaelani, better access to financial products will ease service delivery, lead to the affordable price, as well as to other benefits. The market share of Islamic finance in Indonesia is still low at 5.3%. However, Firdaus is optimistic that Islamic finance industry has a huge potential. He believes that people need to participate in enhancing market share of Islamic finance industry, including through engagement in the Islamic Economic Society (MES). The better understanding of Islamic financial products will open up access to financial institutions. Better access for the people and SMEs will also provide a sense of security in financial investment.

In #Malaysia APM Automotive Holdings has proposed to establish an Islamic commercial papers (ICP) programme and Islamic medium term notes (IMTN), with a combined nominal value of up to RM1.5 billion. In a bourse filing APM said the ICP and IMTN programmes will have a tenure of seven years and 20 years respectively, from the date of first issue. The proceeds from the issuance of the sukuk murabahah shall be utilised by the company for general corporate purposes and to refinance future financing of APM and its subsidiaries. APM assured that the utilisation of the proceeds of the sukuk murabahah programmes would be at all times for syariah-compliant purposes.

NB: Figure was amended from RM 3 bn to RM 1.5 bn following correction in original source.

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) plans to finalize several new standards by the end of the year. Bahrain-based AAOIFI has published a draft sharia standard for gold-based products with a one month consultation period ending on Nov. 9. AAOIFI's sharia board also discussed work on a new sharia standard covering credit cards, while a final draft of a sharia standard covering liability of investment managers would be issued during its next meeting. Standards for murabaha, sukuk and ijara are also underway with a working group expected to finalize them by the end of the year. A revision of the existing standard on sukuk will cover issues including the asset-backed and asset-based nature of sukuk, capital boosting instruments, beneficial ownership and non-viability clauses.

Vice President and Prime Minister of the #UAE, Sheikh Mohammed bin Rashid Al Maktoum said that the Islamic Economic system offers a real opportunity for economic, commercial and financial growth. He added that the Islamic Economic system has been tested by various international financial institutions and the UAE has started reaping the benefits of this system. Crown Prince of Dubai Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said Dubai is set to launch ambitious projects as part of a plan to transform the city into the capital of the Islamic Economy by 2021. Sheikh Hamdan made these remarks ahead of the start of the third Global Islamic Economy Summit in Dubai. He expressed his hope that the Summit would also discuss how Islamic Economy instruments can stimulate the development of the private and public sectors.

As part of its strategy to facilitate private sector investment, the Islamic Corporation for the Development of the Private Sector (ICD), has acquired Capitas Group International and has changed its name to Catalyst Group. The existing Catalyst Group management team is extending market interventions in real estate development and advisory services. Khalid Al Aboodi, CEO of ICD stated that the acquisition of Catalyst Group was strategically important as it will act as a facilitator for business. CEO of Catalyst Group, Nazih Al Naser added that the group was looking forward to improving access to capital for small-to-medium enterprises.

In May Google announced it would ban all payday loan advertisements through its AdWords service. But months after the policy was implemented, brokers have easily sidestepped the company’s rules, leaving consumers still vulnerable to high-cost debt traps that can ruin their financial lives. These brokers are not payday lenders but what are known as 'lead generators.' They take consumers’ personal information, run a credit history, and then sell the file to payday lenders, based on what kind of loan they can afford. Although Google said they want to protect users from deceptive or harmful financial products, several advertisements are still displayed at the top of a search, from companies like GOInstallmentLoans.com, WeLend2U and QuickLoanTree.

The UK Peer to Peer Finance Association (P2PFA) has released a commissioned study on the economics of the peer to peer lending market in the UK. The study focused specifically on the eight-member platforms of the P2PFA which collectively comprise over 75% of the UK market. Reinder van Dijk, Partner at Oxera consulting, called peer to peer lending a 'real innovation' bringing benefits to both borrowers and investors. According to the report, P2P lending has created additional competition and choice in the market for loans and investment. P2P lending provides new options for retail investors, opening up access to risk-and-return from an asset class of consumer and business loans with net returns of between 4% & 8%. P2P lending does not create systemic risk, P2PFA member platforms provide a level of transparency which empowers investors.

The Islamic fund on microfinance may be soon created in Azerbaijan. Recently, a mission of the Islamic Corporation for the Development of the Private Sector (ICD), which included the ICD Senior Regional Manager of for CIS and Europe countries Samir Taghiyev and the Microfinance Advisor at the ICD Bassem Khanfar, visited Baku. Azerbaijan has become one of the two countries, where the ICD starts negotiations with participants of the microfinance market. The second country is Kazakhstan. Earlier, during the 8th Micro-finance Conference in Baku, Executive Director of Azerbaijan Micro-finance Association (AMFA) Zhale Hajiyeva said that businessmen of post-Soviet countries also showed interest in the market. Currently, loan portfolio of Azerbaijan’s microfinance organizations amounted to $485.16 million, according to AMFA.

The Affin Bank Group hopes that its new new strategic alliance with the Islamic Corporation for the Development of the Private Sector (ICD) will catapult both institutions to a new level. Affin Bank and ICD have signed a memorandum of understanding (MoU) where they agreed on strategic collaboration especially within the Asian region. The cooperation reflects ICD’s ambition to expand its geographic footprint and exert its influence within the Asian region. In the process, both parties will offer technical and advisory support particularly on product development and Shariah concepts. Mohammed Alammari, acting CEO of ICD, and Kamarul Ariffin Mohd Jamil, CEO of Affin Bank, signed the MoU. Mohammed Alammari expressed his strong support for the partnership.

Muslim NGOs in India will be able to make use of Islamic Development Bank’s Awqaf Properties Investment Fund (APIF) to develop their endowments and generate funds for their various community development projects. According to Zafar Javeed, IDB’s national convener for India, APIF is in the process of identifying viable endowment projects. Javeed commended IDB group for financing about 300 educational and health-related projects across India over the past three decades. He said that the IDB was a big blessing for the Muslim community in India and there were many projects in the pipeline awaiting IDB aid. Referring to ongoing efforts to introduce interest-free banking in India, Javeed said former RBI governor Reghuram Rajan had hinted at introducing the system to achieve inclusive development.