IslamicFinance.de

The 13th Islamic Financial Stability Forum (IFSF) was successfully organised by the Islamic Financial Services Board (IFSB) on 12 April 2016 and was held in Cairo, Egypt on 10-12 April 2016, hosted by the Central Bank of Egypt. The theme of Forum was Consumer Protection in Islamic Finance, and the main presentation was by Professor Volker Nienhaus, the Former President of Marburg University. He stated that while most of the issues in consumer protection cover both conventional and Islamic segments of the financial system, there are some risks pertinent to Islamic finance sector, such as Shariah non-compliance risk.

Development expert David Simms and Wharton University professor Tyler Wry discuss issues of microfinance and share insights on where the field is heading. Microfinance is a powerful tool that can transform communities by lifting the poorest individuals out of poverty. According to Simms the industry understands the power of microfinance and the ability to do that rural outreach, to drive costs down and to get training out is based on technology. The future is around the role of technology and banking coming together.

Meeting the United Nations’ Sustainable Development Goals will require additional investments of $2.5 trillion a year in things like health care and education for the world’s poorest people, according to UNCTAD, a UN agency. The term blended finance appeared referring to a strong mixture of public, private and charitable money, a way to make the limited pool of money available for worthy causes go further. The idea of using public funds to attract private money is a venerable one. For it to change development finance fundamentally it will have to become easier to scale up.

According to Fitch Ratings the total new Sukuk issuance (with a maturity of more than 18 months) in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was around US$11.1 billion (RM42.9 billion) in the first quarter of 2016. Fitch said that Sukuk issuance was up 22% from Q4’15 and 21% from a year earlier, while non-Sukuk bond issuance of US$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.

The Malaysian government, via special purpose entity Malaysia Sukuk Global Bhd, has successfully priced the 10-year and 30-year benchmark sukuk papers at 3.18 and 4.08 per cent. The new sukuk format uses non-physical assets to underpin the agency-based transaction wakala, instead of the traditional use of physical assets. Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said Malaysia has strengthened its position as a top investment destination.

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.

Fitch Ratings has affirmed Qatar National Bank's Long-Term Issuer Default Ratings (IDR) at 'AA-'. The agency has also affirmed the IDRs of The Commercial Bank, Doha Bank, Qatar Islamic Bank, Al Khalij Commercial Bank, Qatar International Islamic Bank and Ahli Bank and International Bank of Qatar at 'A+'. The Outlooks on all the Long-Term IDRs are Stable. Fitch has also upgraded International Bank of Qatar's Viability Rating, which is driven by its growth strategy, focusing almost exclusively on Qatar.

The Singaporean ex-BSI private banker Yeo Jiawei has been charged with receiving benefits from criminal conduct. He was charged on April 16 for receiving S$200,000 in his Bank of China account in 2013. While the charge sheet made no mention of 1Malaysia Development Bhd (1MDB), Bloomberg reported earlier on Friday that Mr Yeo was charged with money laundering following investigations into 1MDB's money flows.

The call to set up a Royal Commission on Banking has set in motion the debate on ethics in banking and finance, and the possible remedies to overcome the problem of unethical conduct. It is accepted that the problem is systemic, and yet the remedy suggested is at the individual level - for example the Banking + Finance Oath. The latest Panama Papers scandal dwarfs the past scandals yet again. As long as the money banks can make out of the deals is in excess of the fine they pay, such scandals will continue.

Hundreds of readers have written to The National to share their financial woes, following a series of articles in the Money section about worrying levels of personal debt in the UAE. The reason why UAE residents are building up such alarming liabilities is the lack of knowledge about the sky-high credit card interest rates in the country. According to a recent Compareit4me.com survey, about two-thirds of credit card holders are unaware of their card’s interest rate.

Two billion people worldwide still lack access to formal and regulated financial services. In 2015, the World Bank Group with private and public sector partners committed to promoting financial inclusion and achieving Universal Financial Access by 2020. According to the Pakistan Microfinance Network
the estimated potential market size for microfinance is 20.5 million in Pakistan, yet the current Microfinance outreach is close to 3.7 million active borrowers, showing there is a long way to go.

Long-term sukuk issuance rose by 21 per cent year-on-year in the first quarter, as Gulf states with worsening fiscal balances tapped international bond markets. According to Fitch the GCC states – along with Mal­aysia, Indonesia, Turkey, Singapore and Pakistan – issued US$11.1 billion of sukuk in the first three months of the year. These countries issued 39.3 per cent of their debt as sukuk – the highest ratio of sukuk to conventional debt in eight years.

According to a deal lead Malaysia has launched a US$1.5bn dual-tranche sukuk. The transaction is split between a US$1bn 10-year tranche that has a profit rate of 135bp over Treasuries and a US$500m 30-year tranche at 145bp over Treasuries. Guidance of 150bp area over Treasuries and 165bp area over was released earlier on Wednesday. The transaction is conducted by CIMB, HSBC, JP Morgan and Maybank.

The Federation of Malaysia returned to the international bond markets on Wednesday with a $1.5 billion wakala sukuk. However, this success is overshadowed by 1MDB's $11 billion debt after one of its guarantors failed to make a $50 million interest payment on a $1.75 billion note that matures in 2022. It has now entered a grace period, which ends on April 25.

Dubai-based property developer Limitless is set to complete a drawn-out debt restructuring after the final dissenting creditor sold its share of the company's 4.45 billion dirhams ($1.2 billion) debt. New York-based Stonehill Capital Management sold its debt in the state-controlled company, worth around $15 million at face value, to Dubai Islamic Bank, an existing creditor and one of the members of the creditor committee. They declined to say at what price the debt was bought.

CEO Shahril Ridza Ridzuan announced that the Employees Provident Fund aims to open the Shariah-compliant plan in January 2017 and is targeting an initial size of as much as 100 billion ringgit ($26 billion). There’s strong demand and 1.5 million of its 6.7 million members should switch in the first year. EPF has a minimum guaranteed annual payout of 2.5 percent. The Islamic fund won’t have a minimum dividend as they can’t be guaranteed under Koranic rules.

Paris is wooing potential Qatari investors to be the part of a huge infrastructure development project, 'Greater Paris', to which the government of France has already committed €50bn. Chiara Corazzara, Managing Director of the Greater Paris Investment Agency said the state-sponsored investment in infrastructures is designed to trigger €80bn private investment and the response that they get from Qatari investors is really encouraging.

Fitch Ratings has downgraded the Long Term Issuer Default Ratings (LT IDRs) of seven Saudi Arabian banks. The affected banks are Al Rajhi Bank (ARB), National Commercial Bank (NCB), Riyad Bank (RB), SAMBA Financial Group (SAMBA), Saudi British Bank (SABB), Banque Saudi Fransi (BSF) and Arab National Bank (ANB). At the same time Fitch has revised the Outlooks on Saudi Hollandi Bank (SHB), Saudi Investment Bank (SAIB), Alinma Bank (Alinma) and Bank Aljazira (BAJ) to Negative from Stable, while affirming their ratings.

Syarikat Takaful Malaysia Bhd (STM)’s first financial quarter ended March 31, 2016 (1QFY16) net profit was in line with their expectations, accounting for 24% of the full-year forecast. The positive takeaway from the 1QFY16 results was a swift expansion of 14.4% year-on-year (y-o-y) in gross earned contributions (GEC) to RM426.8 million. This emanated primarily from its family takaful unit, which chalked up a growth of 21.8% y-o-y in its 1QFY16 GEC (mainly from mortgage-related products).

Dr Jamil El Jaroudi, chief executive officer of Bank Nizwa, expects Islamic finance to grow above 15-20 per cent of the total banking sector activities in Oman. Speaking about the bank's growth, he said, breakeven was reached in December after three years of operation. Over the next few months, a mobile branch will travel around the Sultanate offering a host of products, services and also make the people aware on the benefits of Islamic banking. According to bank officials mobile branch will help customers to open new accounts, activate debit cards, receive account balances and mini statements, deposit cash and cheques.