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The 2015 outlook for GCC banks is stable, but it is negative for those in the rest of the MENA region, says Moody's Investors Service. The stable outlook for GCC banks is driven by strong operating conditions coupled with expansionary fiscal policies and continued infrastructure spending, which remain supportive of credit growth. However, declining oil prices if prolonged at these levels will reduce fiscal surpluses, affect economic confidence and moderate growth expectations. The negative outlook for the rest of the MENA region reflects more subdued credit growth and unsettled domestic environments, which translate into high credit risks. In addition the high exposure to low-rated government securities links non-GCC banks' credit profiles to their respective sovereigns.

The Thomson Reuters Sukuk Perceptions and Forecast 2015 survey of 44 lead arrangers and 106 investors reveals most expect a boost in Sukuk issuance in 2015 of between $150 billion and $174.9 billion. Total global outstanding Sukuk issuance stands at $241 billion, with around $110 billion Sukuk issued in 2014. Global outstanding Sukuk issuance is expected to grow to $907 billion by 2020. The recovery from last year’s low has been driven by more jurisdictions issuing Sukuk. Financial institutions continue to dominate all corporate issuances. Supply growth into 2015 will be driven by financing needs for infrastructure projects especially in the GCC and the wider Middle East region.

Moody's Investors Service has assigned a provisional (P) Caa1 senior unsecured rating to the proposed US dollar Trust Certificates to be issued by The Second Pakistan International Sukuk Company Limited, a special purpose vehicle established in Pakistan, by the Islamic Republic of Pakistan. Moody's Caa1 government bond rating and stable outlook on Pakistan reflects the country's large but moderating fiscal deficits as well as its stabilizing external liquidity position. It also factors in high susceptibility to event risk, both on the political front and in terms of economic vulnerabilities that could arise. The (P)Caa1 rating assigned to the trust certificates is at the same level as Pakistan's Caa1 issuer ratings.

The Islamic Financial Services Board (IFSB) has issued its Second Working Paper on the Evaluation of Core Principles Relevant to Islamic Finance Regulation. The Working Paper is issued in parallel to the Exposure Draft (ED-17) of the Standard on Core Principles for Islamic Finance Regulation (Banking Segment), and provides the background and wider context for the Standard that is under preparation by an IFSB Working Group. The Working Paper (WP) assesses in full the Core Principles issued by the Basel Committee for Banking Supervision (BCBS), the International Organization for Securities Commissions (IOSCO), as well as those issued by the International Association of Insurance Supervisors (IAIS).

The Sukuk market does not look like it will replicate the volume of issuance that was seen in 2012. However, there has been a healthy flow of new deals that come to market this year, particularly from debut issuers, according to a new comment released by BLME. 2014 not has been a landmark year for the Sukuk markets due mainly to the new entrants to the market, particularly the issues from outside of the GCC region and Malaysia. The UK, Luxembourg, Hong Kong and South Africa issue provided much needed diversification to the market, the comment noted. Besides, the sukuk market benefited from a shortfall in Sukuk supply and a large demand specifically for US$ denominated issuances in addition to the relatively strong fundamentals in the GCC.

UAE-based Aafaq has carried out its first transaction on the NASDAQ Dubai Murabaha Platform, which provides Islamic financing services to individual and institutional customers. Officially launched in April 2014 by NASDAQ Dubai jointly with Emirates Islamic, the platform has completed a total of more than AED 21 billion of transactions. The platform makes use of Shari’ah-compliant Certificates that have been developed for the underlying assets of the financing transactions. Islamic banks, Islamic windows of conventional banks, and Islamic finance companies and their clients can make use of the platform through trading Certificates.

AAOIFI was invited to and took part as a member of the External Advisory Group of the International Monetary Fund (IMF). Over the course of 8- 14 October 2014 in Washington and New York AAOIFI held a number of successful top-level meetings with relevant departments from the IMF and World Bank, the International Federation of Accountants and with senior representatives of central banks, monetary authorities, and financial institutions. AAOIFI represents shari’a scholars industry-wide on its boards, hailing from more than 14 nationalities and across various schools of thought. In addition, AAOIFI has more than 24 years of experience, during which the institution has issued 88 standards so far.

The transaction documents for the financing of the power project were signed over three days of meetings and included a ceremony in Rabat attended by Abdelilah Benkirane, prime minister of Morocco. Part of the financing was provided via a structured Islamic tranche from the Islamic Development Bank and it was not possible to use the more traditional procurement/forward lease structure typically seen in Islamic project financings. The Islamic tranche represents the first multi tranche cross border Islamic financing into Morocco and the first international Islamic project financing structured in this manner. Clifford Chance was delighted and proud to help create a new and innovative structure in Islamic project financing.

Kuwait Financial Centre ‘Markaz’, in its recent research report GCC Bonds & Sukuk Market Survey, reports aggregate primary issuance of bonds and sukuk in the GCC totaled $56.71 billion in H1 2014, a 24.71 per cent increase from the total amount raised in H1 2013. June was the most active month in terms of both the amount raised and the number of issuances. A total of $15.55 billion was raised during the month through 44 issues. The GCC bond and Sukuk market in H1 2014 was dominated by the US Dollar denominated issuances: a total of $14.06 billion was raised, representing 57.2 per cent of the total amount.

Corporate and infrastructure Sukuk issuance is likely to rise over the next few years, despite the dip in issues over the past eight months compared to the same period of 2013, says Standard & Poor's Ratings Services in its new report 'Why Corporate And Infrastructure Sukuk Issuance Is Declining, Despite Healthy Prospects'. S&P attributes the decline in corporate and infrastructure Sukuk in large part to cheap and ample bank liquidity, which has made issuers less reliant on the capital markets. The overall small pool of Sukuk issuers, and seasonal factors have also played a role. Nevertheless, corporate and infrastructure Sukuk issuance is expected to increase again over the next few years as companies' refinancing needs grow and entities establish themselves as Sukuk issuers.

RAM Ratings sees great potential in Green Sukuk, in tandem with the increased interest in both Shari’ah-compliant and ethical investment. The use of Islamic instruments to raise capital for sustainable development projects will set a new precedent; Green Sukuk is anticipated to become key to the financing of low-carbon and renewable-energy economies. As the phrase implies, Green Sukuk involves certifying the environmental credentials of the project to be funded as well as its compliance with Shari’ah principles. Nonetheless, a sustainable Green Sukuk market is not without its challenges; one of these is to assure investors that the utilisation of Sukuk proceeds is for projects with economic value while simultaneously meeting accepted and credible green standard

Takaud, the Bahrain-based specialist savings and pensions provider for the MENA region, has announced the appointment of an experienced sales management team, which will be based in Bahrain. The new appointments include Loay Ragheb as Chief Distribution Officer and Jason Reeves and Nabil Karameh both as Senior Managers responsible for regional distribution. Eric Van Biesen, Acting Chief Executive Officer TAKAUD, said, that the new appointments underpin the company's focus on expanding direct and third party distribution channels (banks, financial intermediaries, professional consultants), in order to support the on-going rollout of innovative savings and pension solutions for both Retail and Corporate clients across the region.

Islamic Development Bank (IDB) has approved $987 million in funds for supporting economic and social development projects and programmes in its member countries, in addition to grants for Muslim communities in non-member countries. The funds approved by the IDB's Board of Executive Directors at a recent meeting include $176 million for Oman, $100 million for Uzbekistan, $179.3 million for Cameroon, $26.7 million for Lebanon, $20 million for Yemen and $10 million for Uganda. Egypt alone received $198 million for the development of develop Assiut Oil Refinery and $226,8 for the development of Sharm El Sheikh International Airport, from IDB's latest funds.

Moody's Investors Service, has today affirmed the Ba1 insurance financial strength rating (IFSR) of National Takaful Insurance Company K.S.C., based in Kuwait. The rating outlook was changed to stable from positive following the decline in the shareholders' and policyholders' (consolidated) equity in 2013. Moody's Ba1 rating reflects National Takaful's good position, with a top-three market share in the domestic Takaful market. The rating affirmation also reflects the recent improvement in underwriting profitability. This has restricted further deterioration in the policyholders' fund. However the change in outlook to stable from positive reflects the decline in consolidated equity.

For the second consecutive year, the Islamic Corporation for the Development of the Private Sector (ICD) presents findings from the Islamic Finance Development Indicator (IFDI), developed in collaboration with Thomson Reuters. The IFDI measures five key components that combine to depict the bigger picture of the state of Islamic finance in 92 countries: quantitative development, governance, social responsibility, knowledge and awareness. The number of Islamic finance conferences (>100 participants) worldwide surged by 41 per cent to 107 in 2013 from 76 in 2012, with 36 countries hosting conferences compared to 25 in 2012. Islamic finance in the UAE is most newsworthy, with Malaysia and rest of the GCC also make headlines. UK topped European coverage.

Emirates District Cooling LLC (Emicool) has signed a $245 million 12-year facility with Dubai Islamic Bank (DIB) which will largely refinance its existing debt and also fund the company’s expansion plans. The refinancing agreement was signed by Mr. Abdulaziz Bin Yagub Al Serkal, Chairman of Emicool, and Dr. Adnan Chilwan, CEO of Dubai Islamic Bank, recently in the presence of Mr. Adib Moubadder, CEO of Emicool, and DIB executives. Mr. Moubadder said that there is a huge potential for growth in the district cooling industry, and as one of the major players, Emicool is looking at investing in infrastructure, which will assist to offer quality products to capture a significant share of the market.

Capital Intelligence (CI) has announced that it has affirmed the Financial Strength Rating (FSR) of Kuwait Finance House (KFH) of 'BBB+'. The rating is supported by KFH's dominance of the Islamic banking sector in Kuwait, as well as its large overall market share in both deposits and loans, and by the significantly improved equity base following the June 2013 rights issue. The rating is constrained by a less than satisfactory asset quality in terms of headline non-performing facility ratio and reserve coverage, and by poor profitability at the net level. Looking ahead, the growing international component of both revenues and balance sheet is likely to eventually become a supporting factor.

The Commission Bancaire of the Bank of Algeria decided on July 3, 2014 to put Al Salam Bank Algeria under temporary administration, due to differences between certain shareholders of Al Salam Bank Algeria, who were also the founders of the Bank.

On 9 July 2014, the Luxembourg Parliament approved draft law 6631 on a sale and buy-back transaction of real estate assets necessary to issue an Islamic finance bond. By obtaining parliamentary approval, the Ministry of Finance has now paved the way to the issuance of the Sukuk transaction, marking a milestone in the development of Islamic finance in the Grand-Duchy of Luxembourg. This approval in Parliament underlines the political will to diversify and develop alternative markets within the financial services industry, according to a statement of the Luxembourg Ministry of Finance.

Ithmaar Bank has issued an investor report on its Shamil Bosphorus Modaraba (SBM), indicating the fund will not achieve its investment objectives and stating that there is also a low probability that investors will have their entire capital returned. The Bank will be contacting investors to discuss the investor report and to explain available options. The SBM is a $90 million investment fund opened in November 2007 and provided equity for the acquisition, development and sale of a diversified pool of assets that included land, property and development sites in Turkey. During 2013, the Bank attempted to negotiate an exit from Turkey with its Turkish partners and more recently it has been conducting enquiries through its appointed advisers and consultants.