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Sarawak Hidro, the state-owned developer of Malaysia’s biggest hydropower project, plans to offer 5.5 billion ringgit ($1.3 billion) of sukuk without a government guarantee. The electricity generator is weaning off government guarantees to ease the nation’s fiscal burden. Sarawak Hidro’s plant on Borneo island is part of Prime Minister Najib Razak’s $444 billion development plan to become a developed economy by 2020. Malaysia aims to cut its ratio of debt to gross domestic product to 45% by 2020, from 54.5% at the end of last year.

Bahrain’s Eskan Bank has enjoyed a very fruitful 2015. The bank recorded positive growth in its mortgage-loan portfolio and also made great strides in several of its social and affordable housing initiatives. Total net income grew by 8% during the year, while the bank’s capital-adequacy ratio continued to improve to 151.72%. Although the Ministry of Housing (MOH) is responsible for the allocation of social-housing financing to Bahraini citizens, Eskan Bank provides pivotal support through the processing of approved social-housing financing applications.

The Central Bank of Nigeria recently issued a national licence to Jaiz Bank. The bank commenced the first phase of its rollout with branches in Lagos, Port Harcourt, Ibadan and Ilorin and shortly will be present in all the states of the Federation. Jaiz Bank has recently concluded a Rights Issue, which raised its capital to N15 bn and the issue was oversubscribed by about 3%. According to Deputy Managing Director Mahe Abubakar the target is to raise the capital base of N25 bn before the end of the year. This will position the bank to compete efficiently in this highly competitive sub-sector of the economy. There are some people that misunderstand the concept of non-interest banking, but Jaiz Bank is open to all Nigerians, irrespective of their religions.

The 15th Annual General Meeting (AGM) and 12th Extraordinary General Meeting (EGM) of Shahjalal Islami Bank was held on the 26th of June 2016 in Dhaka. The meeting approved 13% cash dividend for the shareholders for the year 2015. The chairman of the bank, A. K. Azad said the entire index of the bank, including deposit, investment and profit are in a stable position even prevailing severe competition in the banking sector. The program was conducted by Md. Abul Bashar, VP and company secretary of the bank.

Dubai Islamic Bank (DIB) closed an approximately AED 3.2 bn ($860 mn) rights issue, thereby increasing the bank’s share capital to AED 4.9 bn from AED 3.9 bn as of March 2016. According to Moody's this capital increase is credit positive for DIB because it replenishes reserves and enhances loss-absorption. Moody’s estimates that DIB’s consolidated tangible common equity to risk-weighed-assets ratio will improve to around 12.3% from 9.8% as of March 2016. The new capital will also increase the bank’s reported Tier 1 capital ratio to 18.1% from 15.6%. The additional capital will support the bank’s solvency in the context of continued balance sheet expansion.

According to Standard & Poors recent government initiatives will spur momentum for Turkey’s fast-growing Islamic banking market. Islamic banks in the country have doubled their share of overall banking assets over the past decade to roughly 5% or $42.2 billion at year-end 2015. The annual volume of sukuk issuance in the country increased nearly 20-fold over the same period, growing from $100 million in 2010 to almost $2bn by year-end 2015. Credit analyst Mohamed Damak said Turkish Islamic banks’ market share is expected to double to more than 10% by year-end 2025.

Dar Assafaa se prépare à devenir ASSAFAA BANK, une banque participative qui exercera conformément aux dispositions de la nouvelle loi bancaire. Dans ce cadre, Dar Assafaa recrute des Directeurs d’Agences sur les villes de Tétouan, Rabat, Laâyoune, Dakhla, Tanger et Casablanca. Dar Assafaa est la première institution financière marocaine mettant à la disposition du public des formules de financement basées exclusivement sur les produits alternatifs.

Le Sénégal a lancé cette semaine son deuxième emprunt obligataire sous la forme de sukuk. L’opération consiste en la levée de 150 milliards de F CFA (228,6 millions d’euros), à travers l’émission de 15 millions de parts d’une valeur nominale de 10 000 F CFA, sur le marché financier de l’Union économique et monétaire ouest-africaine (UEMOA). La période de souscription de cette levée de fonds s’étend sur un mois (du 20 au 19 juillet). Elle offre une marge annuelle de profit de 6 % avec une maturité de 10 ans.

The controversial sale of the Kasb Bank to Bank Islami has been challenged before the Islamabad High Court. The petition was filed by Mohammad Khalid Randhawa, a shareholder of the Kasb bank, who claims that Kasb Bank was sold to the Bank Islami for only Rs1,000. He was praying before the court to declare the sale illegal. Judge Aamer Farooq made documents related to the inquiry of the deal as part of judicial record and adjourned the case.

In Book I of Plato’s Republic, Socrates discusses the morality of repaying debts. Cephalus, a businessman living in the commercial Piraeus district, states the typical ethic that it is fair and just to pay back what one has borrowed or received. Socrates replies that it would not be just to return weapons to a man who has turned into a lunatic. Because of the consequences, paying back the debt would be the wrong thing to do. At issue is not the micro-economic morality of paying a debt, but how this act affects society. The morality of paying back all debts is not necessarily justice. It should not be surprising that modern financial elites are fighting back against democratic moves. It has all happened before – and so have revolts by debtors and other exploited victims of such 'economism'.

Neelum Jhelum Hydropower Company (Pvt) Limited has entered into a financing agreement amounting to Rs 100 bn with a consortium of 16 banks led by National Bank of Pakistan for raising funds through one of the largest Shariah-compliant facility. The financing is based on Diminishing Musharika structured by NBP Aitemaad. The Sukuk is structured with a tenor of 10 years and is backed by the sovereign guarantee from Government of Pakistan.

NJHPC mandated National Bank of Pakistan to act as Mandated Lead Arranger for arrangement of up to Rs 100 billion through issuance of rated, secured and privately placed Sukuks to partially finance the construction of strategically important 969 MW hydel power project located in District Muzaffarabad, Azad Jammu & Kashmir. For this financing, a signing ceremony was held on Wednesday here and attended by President & CEO NBP Syed Iqbal Ashraf, Chairman Wapda Zafar Mahmood, member finance Wapda Anwaar ul Haq, CEO NJHPCL Lieutenant General Muhammad Zubair and other presidents and senior officials of all the 16 participating financial institutions.

Interview with director and head of Islamic Corporation for Development's India operations.
For the first time, the Jeddah-based Islamic Development Bank has forayed into a non-member country by announcing setting up of a non-banking financial company in India through its 100% subsidiary Islamic Corporation for the Development of the private sector. Based on the Islamic principle of not charging interest on loans, ICD will operate through a registered office in Mumbai, with prominent businessman from Gujarat, Zafar Sareshwala, heading its India operations as director. In an interview with Vinay Umarji, Sareshwala talks about how the NBFC will play a catalyst for small businesses by sharing their profits and losses instead of charging interest on finance extended.

What kind of entity is Islamic Development Bank setting up in India? How will it function?

Baker & McKenzie advised Mohammed I. Alsubeaei & Sons Investment Company a leading private equity investment company based in Saudi Arabia in a $219 mn dollar Murabaha facility to develop a luxury condominium development. MASIC provided the mezzanine financing for the development project, 45 Park Place, located in New York's TriBeCa neighborhood. The deal highlights the expansion of Islamic financing into the US real estate market.
MASIC partnered with other financial institutions and Soho Properties on the downtown condo project, which is scheduled for completion in 2018. Financiers for the project include Malayan Banking Berhad, London Branch; Intesa Sanpaolo S.p.A.; Warba Bank K.S.C.P.; and MASIC.
Baker & McKenzie partner Mona Dajani said, “This successful financing by MASIC is a milestone transaction in the United States using tiered Shari’ah-compliant facilities for commercial transactions. This transaction aptly demonstrates the increased activity in Islamic financings in the United States which has emerged over the past year.”
The Baker & McKenzie team, led by Ms. Dajani, included partner, Pat McDonald and associates Michael Reed, and Maher Haddad.

Malaysia’s Employees Provident Fund is allocating an initial fund size of 100 bn ringgit (US$24.64 bn) – equivalent to 14.67% of 681.71 bn ringgit in total AUM as at March 31, 2016 – to shariah investments, making the Shariah-compliant allocation the largest in the world thus far.
The move is in accordance with the EPF’s plan to roll out its shariah-compliant fund – also known as EPF-i – in January 2017. What sets the fund apart from its conventional counterpart is that the former is not exposed to banking and insurance stocks. Meanwhile, contributors are free to choose from among the two schemes.
Shahril Ridza Ridzuan, chief executive officer of EPF, says the fund has been investing in shariah-compliant assets for more than five years and about 45% of its existing total assets – worth 295 bn ringgit – already conform to Islamic principles.
In fact, prior to the launch of EPF-i, the EPF had assured investors that its investment considerations are in line with ESG practices, as it does not invest in businesses related to gambling, adult entertainment and alcohol.

Banque Misr, Egypt's second-largest state lender, has obtained a $105 mn murabaha financing facility from three United Arab Emirates banks, Chairman Mohamed Mahmoud Eletreby told Reuters Tuesday.
Egypt has been struggling since a 2011 uprising drove away tourists and foreign investors, putting pressure on foreign reserves which halved to $17.5 bn in May.
Eletreby said the facility was obtained from three of the largest UAE banks, but declined disclose their names. He said the facility will strengthen Banque Misr's foreign currency resources and will be paid back in two years.

As the referendum on whether to leave or remain in the European Union looms in the UK, voices are getting louder, particularly in the country’s financial industry that it would not necessarily be a good idea to vote for a Brexit. Since the weight of the UK in the global financial market is substantial – the financial sector of the City of London has a 20% share in the global market for trading foreign securities and a sizeable part of it depends on the UK’s access to the internal EU market – such a strong position would be certainly threatened.
This could have serious impact on the growing role of Islamic finance in Europe which is entrenched in the UK and from there makes its way into the continent. Since the 1990s, when the first mortgages in the UK were set up in line with Shariah law, the country has aggregated the most advanced experience in Shariah-compliant finance in the Western world. Corporate sukuk followed a decade later, and in 2014, the UK became the first country in the EU to issue some sovereign sukuk and listed them on the London stock exchange. From then on, Islamic finance steadily entered the rest of Europe.

Qatar Islamic Bank has announced that it will be the preferred financing partner of Jaidah Equipment under the terms of the strategic partnership QIB forged with the Qatar-based equipment dealer.
QIB general manager of Wholesale Banking, Tarek Fawzi, and Jaidah Equipment managing director, Ayman Ahmed, led the official signing before senior executives from both organisations at QIB’s corporate headquarters in Doha.
As part of the agreement, customers of Jaidah Equipment who would like to purchase new equipment are entitled to use the bank’s Fleet and Heavy Equipment Financing scheme, which was introduced last year as part of QIB’s Aamaly programme, a collection of products and services designed specifically for small and medium-sized enterprises.
Through its Aamaly programme, QIB aims to foster the growth of SMEs and help diversify the country’s economy in line with Qatar National Vision 2030.
“We are pleased to be partnering with Jaidah Equipment. This new relationship enhances the value of QIB’s Aamaly programme and makes it easier for SMEs to expand their businesses in the growing Qatar market,” Fawzi said.

A few weeks ago we saw the launch of a Sharia-compliant mobile phone-based loan service. The new service, called Trust Network Finance was rolled out by Allianz in Indonesia. TNF reflects the big opportunities in Indonesia for mobile money and for Sharia-compliant services.
Although roughly 60% of Indonesians have a mobile phone, only 3% of the population is reportedly aware of mobile money. Indonesia has the world’s largest Muslim population, and Sharia-compliant finance has grown over the past few decades in the country; however by the end of 2016 Islamic financial institutions in Indonesia are only expected to hold 5% of the nation’s total banking assets.
Of the country’s roughly 250 million citizens, 60% are unbanked. It’s estimated that there are 50 million MSMEs in Indonesia, which make up about 97% of the country’s enterprises.

Issuance of Sukuk is up all around the world, up on last year, due to current economic factors and the goodwill for the instrument among global investors
The good news on the Sukuk front is continuing. The proportion of Sukuk bond issuance hit a record in the first quarter of 2016 in the main markets for this form of finance, said Fitch Ratings. According to Fitch’s data, there is a clear upwards trend in use of Shari'ah-compliant borrowing as more countries create legal frameworks to support issuance and as issuers try to attract a broader investor base, including Islamic finance investors.
Total new Sukuk issuance in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was around $11.1 billion in the first quarter of 2016, with a maturity of 18 months. Issuance was up 22% from the fourth quarter of 2015 and 21% from a year earlier, while non-Sukuk bond issuance of $17.1 billion was down 23% quarter on quarter and 45% year on year. Sukuk represented 39.3% of total bond and Sukuk issuance in these countries during the quarter—the highest proportion in the past eight years.

Church and Business Leaders Respond to Pope Francis' Call to Make Wealth Work for the Poor
At the invitation of the Pontifical Council for Justice and Peace and Catholic Relief Services, impact investing experts and Catholic leaders from around the world will convene in Rome to explore how the Catholic Church and other faith-based institutions can harness the power of impact capital to attain and sustain their social mission.
These institutions, at an early stage in their social enterprise journey, will interact with and learn from successful social entrepreneurs, along with thought leaders from the sector. They will develop strategies, form partnerships and lay the foundation for catalyzing private investment to serve the poor and vulnerable. Celebrating the Extraordinary Year of Mercy established by Pope Francis, the conference is titled Making the Year of Mercy a Year of Impact for the Poor.
The conference begins on June 26, 2016 and is sponsored by Omidyar Network and the Mendoza College of Business at the University of Notre Dame. It ends on June 28.