IslamicFinance.de

While the use of risk-sharing instruments for the funding of revenue-generating infrastructure projects is easy to understand, such instruments can also be used for the funding of non-revenue generating infrastructure. The principle of risk-sharing would require that the government's repayment of the obligation created be linked to some proxy or indicator of government revenue. Given today's conundrum with debt and the need to deleverage, GDP-linked securities are being revisited. Replacing the benchmark to LIBOR (London Interbank Offer Rate) with a benchmark to nominal GDP makes eminent sense, especially from a Shariah viewpoint.

Fitch Ratings expects Turkish banks to have continued resilience to economic shocks as they still retain reasonable capitalization and liquidity. According to Fitch Financial Institutions Director Lindsey Liddell the agency expects their performance to remain reasonable, however the banks will face some challenges given the slower growth environment and margin pressure from competition. There will be further asset quality pressures, particularly considering the sector's high level of foreign currency lending and the sharp devaluation of the local currency in 2015.

Sukuk linked to Consumer Price Index (CPI) rate will provide investors protection against rising inflation in Turkey. The short term sukuk, known as rental certificates in Turkey was issued with a maturity of 729 days. The issue was subscribed by means of a private placement at a profit rate of 3.39 % above the CPI rate.

The Islamic Financial Services Board (IFSB) has organised an IFSB Seminar on Islamic Capital Market themed Supporting Development through Sukuk: Prospects and Initiatives on 10 April 2016 in Cairo, Egypt. This Seminar was held as part of the IFSB Annual Meetings and Side Events 2016, hosted by the Central Bank of Egypt. Sherif S. Samy, Chairman of the Egyptian Financial Supervisory Authority, highlighted the importance of appropriate legal framework to support the issuance of Sukuk. He also emphasised the need for utilising Sukuk as a source of funding for social and infrastructure financing.

Governor of Ariana, Mehdi Zaoui announced the start of work on the construction of the Tunis Financial Harbour. Zaoui said they finished the dispute regarding the expropriation for public use under habitat. The Tunis Financial Harbour, considered as a mega project developed by the Gulf Finance House in the northern suburbs near Raoued, extends over 523 hectares with a total investment of USD 5 billion.

Islamic International Rating Agency (IIRA) has assigned investment grade, national scale ratings of BBB-(lb)/A3(lb) (Triple B Minus / A Three) to AlBaraka Bank Lebanon S.A.L (ABBL). Outlook on the assigned ratings is 'Stable'. The fiduciary score has been assessed in the range of '71-75', reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected. ABBL was incorporated in 1992 as the first Islamic bank operating in the Republic of Lebanon. ABBL has sought to diversify its financings outside Lebanon, thereby mitigating the effects of the slowdown in the Lebanese economy. Owing to the market dynamics and management caution, ABBL maintains a highly liquid asset profile.

The Daaboul Industrial Group (DIG) was established in Syria by Mohammed Daaboul in 1976. After almost 40 years the family patriarch is still the acting chairman of the family-owned group and is considered as one of Syria's living legends. By increasing the revenues with consistent growth rates of 20%-25% per annum until 2013, Mohammed created one of the largest aluminum producers in the Middle East. The constant growth was not sustainable without someone clearly defining actual roles and responsibilities and creating a rigid reporting culture within the family. A future goal for DIG is to add senior professionals in key positions to the group.

The value of sukuk being issued in the GCC has been falling, but there is still opportunity in the market, Zamir Iqbal, lead financial sector specialist at the World Bank said. The potential lies in the huge infrastructure financing, but a proper legal and tax environment for the structuring of the sukuk and the SPV laws must be established. There’s already excess liquidity in the market, and banks are looking for high-quality, highly-rated sukuk, Iqbal noted. The International Monetary Fund said in November that the GCC region was suffering from a lack of availability of Sharia'a compliant financial instruments, or tradable assets, leading to excess liquidity and to an uneven playing field for Islamic banks.

Gemeinschaftsbank für Leihen und Schenken (GLS), a German bank that focuses on investing in socially responsible and ecological projects, recently invested EUR 13 million (USD 14.5 million) in Sanad Fund for MSME, a Luxembourg-based public-private partnership that provides debt and equity financing in the Middle East and North Africa. As of March 2016, Sanad has raised total investor commitments of USD 186 million. As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a loan portfolio of EUR 1.7 billion (USD 2.1 billion) and 165,000 customers.

La dernière déclaration du gouverneur de la Banque centrale sur la création imminente des banques participatives rassure sur la marche des préparatifs, tout en marquant un report inattendu de l’échéance, que les opérateurs ainsi que le marché attendaient pour le 16 mars 2016, soit quatre mois après la date de dépôt des demandes d’agrément, conformément à l’article 34 de la loi 103-12. Bien sûr, le même article dispose que ledit délai ne court qu’après la réception de tous les documents et des réponses aux questions complémentaires de l’autorité monétaire, et le gouverneur a pris soin de rappeler que les entretiens étaient en cours.

UN study paper on the humanitarian financing gap.

Excerpt:
"The world today spends around US$ 25 billion to provide life-saving assistance to 125 million people devastated by wars and natural disasters. While this amount is twelve times greater than fifteen years ago, never before has generosity been so insufficient. Over the last years conflicts and natural disasters have led to fast-growing numbers of people in need and a funding gap for humanitarian action of an estimated US$ 15 billion. This is a lot of money, but not out of reach for a world producing US$ 78 trillion of annual GDP.

Qatar's Islamic lender QIIB achieved increase and growth in its various banking activities over the past year. The AGM approved the Board of Directors' proposal to distribute 40% cash dividends of the nominal value per share which is equivalent to QR4 per share. Besides, the bank is expecting approval from authorities in Morocco for its joint venture by the end of third quarter this year. The lender had signed a joint venture agreement with CIH Bank (Credit Immobilier et Hotelier), a Moroccan bank, for the establishment of a bank in Morocco in December last year. Under the agreement, QIIB will have 40% stake in the proposed bank.

World Bank Group President Jim Yong Kim, United Nations Secretary-General Ban Ki-moon and President of the Islamic Development Bank Group Dr. Mohamed Ali Al-Madani arrived in Lebanon today at the start of a joint visit to rally global support for the shared responsibility of promoting peace and development in the Middle East and North Africa (MENA) region. The three organizations are jointly supporting an initiative to raise additional financing needed to help countries in the region cope with the immediate consequences of conflict, while laying the foundations for recovery and reconstruction. Following the Lebanon visit, World Bank President Kim and Secretary General Ban will travel together to Jordan and Tunisia.

Insurer Tokio Marine Egypt General Takaful plans to increase its investments in the country by 56 percent in the financial year 2015/16 to 46.8 million Egyptian pounds (5.3 million), its managing director said. Satoshi Furuya further said that the group's investments had surged to 30 million pounds by the end of the financial year 2014/15. Tokio Marine Egypt General Takaful's investments are Shariah-compliant, notably in governmental bonds, treasury bills, in addition to deposits in investment accounts with Islamic banks, Furuya added. The company is part of Japan-based Tokio Marine Group.

The main obstacle encountered by most social impact enterprises is a credit crunch. LivinGift wishes to solve this problem, by offering zero-interest loans to social impact enterprises through crowdfunding. The Israeli-based platform is now open for applications for all forms of organizations: non-profit organizations, NGOs, for-profit companies and cooperatives. The platform will be launched this upcoming April, in both English and Hebrew. Social impact enterprises will have to show double impact strategy: social or environmental impact, alongside a sustainable and profitable economic model and a fixed income.

Année charnière pour CIH Bank qui compte étoffer davantage son périmètre de consolidation. 2016 marquera, entre autres, la naissance de la filiale dédiée aux OPCI (organismes de placement collectif immobilier). L’entité, créée conjointement avec la CDG, devra se concentrer sur la gestion de sociétés et de fonds investis directement ou indirectement dans l’immobilier locatif. L’entreprise devra attendre la promulgation de la loi 70-14, qui régit ce nouveau véhicule de placement ainsi que l’agrément du nouveau gendarme de la bourse. Entre temps, la banque se prépare pour le lancement de son autre filiale, dédiée à la finance participative

Resetting Priorities - Redefining Roles

Five years ago, the Global Donors Forum was convened in Dubai to take on a challenging task: to define the roadmap for Muslim giving into the next decade. As a growing network of philanthropists, grantmaking foundations and socially responsible corporations, the Forum lead a consultative dialogue among the thought leaders from which, it was hoped, a new social compact could emerge.

Half a decade on, with the world having changed dramatically as events in the Middle East would attest, the Global Donors Forum 2016, has a new set of issues to focus upon. Foremost among these is the need to rigorously analyse the past decade in order to ascertain how best to formulate strategies to counter emerging challenges. The GDF 2016 will, therefore, attempt to set new priorities as it looks to redefine the role of philanthropy, with a focus on the Muslim world in a radically changed global landscape.

The future of Islamic bonds in the Middle East and North Africa (Mena) seems "excellent" in the medium-to-long term, but lack of supply and right price is "stifling" demand and liquidity in the market, according to NBAD. Finding that oil prices will be a key determinant of sukuk returns in 2016, NBAD said the uncertainty over the likely trajectory in the US interest rates, the bear market in oil, and increasing fiscal concerns across the region all contributed to a bearish tone in the market, causing many issuers to remain on the sidelines. Although GCC sukuk investors remain natural buyers, they have tightened their credit quality criteria, and become much more price sensitive.

The Middle East and Northern African (Mena) sovereigns are expected to borrow an equivalent of $134bn from long-term commercial sources in 2016. This compares with borrowing of $143bn in 2015, which was more than double the $68bn that the region is expected to be borrowed in that year, Standard and Poor's "Mena Sovereign Debt Report 2016" noted. However, the ratings agency noted that its updated estimate for 2015 includes an additional $30bn in borrowing by Iraq. It has included Iraq in the survey for the first time, having assigned it sovereign credit ratings in September 2015. All in all, it is estimated that GCC countries' borrowing at $40bn in 2015 rather than the $5bn S&P projected in March 2015.

The progress rate of the second phase of the social housing project "Omar Al Mukhtar" in Sidi Hassine Sijoumi (capital western suburbs) is now 65% and the project will be completed by late August 2016. The handover of keys is expected before the end of 2016, noted the Minister of Public Works, Housing and Spatial Planning Mohamed Salah Arfaoui, at a visit Tuesday to the site of the project along with Qatari Prime Minister and Minister of the Interior Sheikh Abdullah bin Nasser bin Khalifa Al Thani. The project with an estimated cost of nearly 54 million dinars financed by Qatar through a donation (40%) and a free-interest loan (60%) will help build 810 social residential units.