IslamicFinance.de

Al Rajhi Bank Malaysia (ARBM), a wholly owned subsidiary of Saudi Arabia's Al Rajhi Bank, has received approval from Bank Negara Malaysia for the appointment of Steve Chen Thien Yin as its new Chief Executive Officer (CEO). As CEO, Steve Chen is responsible for the overall operations of ARBM’s business. He brings along with him more than 25 years of professional experience in Retail, Corporate and Investment banking in growth markets of Malaysia, Singapore, Vietnam, Cambodia and Laos. Prior to joining ARBM, he was the Chief Operating Officer (COO) for Corporate and Structured Finance at Malaysia’s Hong Leong Bank Berhad.

Islamic finance could contribute to meeting some of the sustainable development goals adopted by the UN General Assembly under its 2030 agenda, said Standard & Poor's Ratings Services in its report "Islamic Finance Could Aid Modestly In Achieving Sustainable Development Goals." Agreed on in September 2015, the UN General Assembly set 17 sustainable development goals (SDGs) and 169 measurable targets centred on five pillars: people, planet, prosperity, peace, and partnership. Islamic finance could play a role--a modest one at least--in meeting some of the SDGs, particularly those that are in line with the core principles of Islamic finance, according to S&P.

The Sharia-compliant banking industry is in dire need for highly skilled and talented human capital because the sector is growing faster than educational institutes can provide professionals. Experts say emerging markets would require at least 50,000 Islamic finance professionals in the next few years to keep the sector moving. Producing Islamic finance specialists presents challenges, though. Islamic banking, in principle, is of higher complexity than its conventional counterpart, and the expertise where Islamic finance talent is needed includes Sharia-compliant financial engineers and product developers who structure innovative financial solutions tailored for both Muslim and non-Muslim markets.

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.

Mauritania is turning to Islamic finance to modernise its banking sector, trying to raise the number of people with accounts from its meagre levels today and in turn increase liquidity so banks can lend more to companies. Many of the Islamic republic’s citizens are uncomfortable with western banking, opting for informal banking collectives or just “keeping money under the bed”, says one local banking executive. Dieng Adama Boubou, director of banking supervision at the Mauritanian central bank, says that the goal was to increase the number of people with bank accounts from 10 per cent today to 25 per cent by 2018, partly by promoting Islamic banking.

Iran’s government plans to shift part of its borrowing from local corporate investors to the capital markets, a move that could stimulate trading in debt securities and help the economy recover from years of economic sanctions. The government is laying plans to offer a range of debt instruments in the markets, where they could be bought by institutional and individual investors, rather than placing debt directly with banks and Corps.
At present, Iran’s banking sector provides around 95% of all financing, with only a tiny portion sourced from the debt capital markets. Several efforts are under way, like the approval to use ijara sukuk..

Aimed at raising awareness of and promoting Islamic finance in the country, Bank Alfalah has organised the launch of a book titled ‘Shariah Minds in Islamic Finance’ by the scholar Dr Mohammadd Daud Bakar. The book presents insights into the life of an international scholar, discusses stakeholders’ expectations and defines the ultimate role scholars should play in shaping the industry’s future. Dr Bakar currently serves as Chairman of the Shariah Advisory Council at the Central Bank of Malaysia, the Securities Commission of Malaysia, Labuan Financial Services Authority and the International Islamic Liquidity Management Corporation (IILM). He is also a Shariah board member of various financial institutions.

A report in one of the dailies suggesting that Islamic banking contributed to the collapse of Chase Bank is based on unfounded information. The facts as emphasised by Central Bank of Kenya Governor Patrick Njoroge are clear; that the underlying reason for the closure of the bank was under-reported insider lending by the directors and irresponsible use of social media, which accelerated the massive liquidity problems. Chase Bank is not the first bank to collapse and several others, which had no dealing with Islamic banking, have gone under. It is therefore insensitive to blame the collapse of Chase Bank on the Islamic banking system, which has proved to be an alternative and viable finance system.

The 11th annual World Takaful Conference concluded its two-day proceedings, following the launch of an intelligence report by the forum’s conveners, Middle East Global Advisors. "The Finance Forward World Takaful Report: Connecting the Dots, Forging the Future" was launched as part of WTC’s commitment to supporting the Takaful industry. The Report provides a way forward to addressing various challenges ranging from price wars and pricing regulation, to closing the gap of human capital, and includes contributions from UK & Netherlands-based boutique consultancy, Takaful Outsource. The 12th annual edition of WTC will take place in April 2017.

Honda Atlas Cars (Pakistan) Limited and BankIslami Pakistan Limited have joined hands to offer their customers with valuable Honda products coupled with Shariah compliant Auto financing solutions. Yasser Abbas, Section Auto Ijarah BankIslami and Nadeem Azam, General Manager Sales & Marketing Honda signed the agreement. Maqsood Rehmani Vice President, M. Afzal Senior Manager Sales & Marketing and Shahzad Wahla Deputy Manager Sales & Marketing from HACPL and Syed Jibran Ali Unit Head Auto Ijarah, Hafiz Shabir HSM Central Region and Rizwan Haider TL Retail Central from BankIslami were also present on the occasion.

Western media should apologise for misleading the Malaysian public after a US$681 million deposit was found to be a “genuine donation”, Mr Najib’s press secretary said on Friday, April 15. Saudi Foreign Minister Adel Al-Jubier had earlier confirmed that the millions found in PM Najib’s bank account was a donation originating from Saudi Arabia. In a statement, Tengku Sariffuddin accused former Prime Minister Mahathir Mohamad of carrying out a smear campaign against Mr Najib which is being motivated by "personal interest". Najib has been facing allegations of graft after reports claimed that the funds found in his personal bank account originated from troubled state fund 1Malaysia Development Berhad (1MDB).

The Securities Commission Malaysia’s (SC) Capital Market Masterplan 2 (CMP2) identifies the promotion of socially responsible financing and investment as a key thrust. It enables financial innovation to be harnessed to create market-based solutions and mobilises investments for projects that promote sustainable and inclusive development such as alternative energy sources or clean technology. Among the products identified in CMP2 are green bonds, green funds as well asl longer-term opportunities for trading of environmental products such as carbon credits or weather derivatives. These products have led to many potential areas in green financing.

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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.

Shariah-compliant firm Mawarid Finance and Fullgoal Asset Management from Hong Kong will launch an Islamic fund later this year in order to tap opportunities in China. Michael Chow, Managing Director and Head of International Business at Fullgoal Asset Management (Hong Kong) Limited, said his company tied up with the Dubai-based firm, hence opening door for the investors here to capitalise on the business opportunities offered by the world’s second largest economy. Chow expects Mawarid to design Shariah-compliant products for the investors over the next couple of months and the two entities will launch an Islamic fund later this year.

The Jeddah-based Islamic Development Bank (IDB) has signed a SR200 million agreement with an Indian non-governmental organization (NGO) to provide medical care for poor rural people. The money is part of a SR1 billion donation which was given by a Saudi benefactor to be utilized for the benefit of poor people across the globe. The benefactor earmarked SR200 million for India, thereby funding 15 mobile health clinics, which the IDB will maintain for the first five years. The rest of the money is reserved for the deployment of 60 mobile clinics in Pakistan, Bangladesh, Afghanistan, Yemen, Kyrgyzstan and Uzbekistan.

Turkey's cabinet has approved Murat Cetinkaya as the next central bank head, giving some initial relief to investors who had feared a battle between Erdogan, who equates high interest rates with treason, and Prime Minister Ahmet Davutoglu's more orthodox economic team. Despite the initial relief in markets, the 40-year-old Cetinkaya remains something of an unknown quantity, lacking the experience of his predecessor, Erdem Basci, an engineer turned economics Ph.D. whose term as governor expires next week. The new Central bank governor must now convince investors that he can tame inflation while resisting political pressure to cut rates.

Oman’s market watchdog Capital Market Authority (CMA) has announced its new sukuk regulation, which includes stipulation on establishing a trustee structure and an LLC company as a special purpose vehicle for issuing sukuk. The regulation, which is effective from Wednesday, also allows structure of the sukuk subject to the approval of respective Sharia Supervisory Board issuer and the choice of the board is left to the issuer. The regulation made rating optional for the issuer and there is no restriction on the sukuk amount to be raised based on the company’s capital. The regulation will complement the existing bond regulatory framework.

Qatar has teamed up with American billionaire and co-founder of Microsoft Bill Gates to combat poverty. Representatives from the Qatar Development Fund pledged $50 million to the Lives and Livelihood Fund, a $2.5 billion fund established by Bill and Melinda Gates Foundation and the Islamic Development Bank, in an effort to provide financing for some of the world’s poorest Muslim countries through grants and shariah-compliant loans at below market rates. The fund’s projects will focus on four areas including infectious diseases control and eradication, primary healthcare, agriculture and food security, and basic infrastructure.

In a statement to Dubai Financial Market, it was reported that Ajman Bank’s AGM has approved and ratified a proposal from the board of directors to increase the bank’s capital base. Under the proposal, Ajman Bank’s authorized capital will become AED 2.1 billion and the paid up capital will increase from AED 1.05 billion to AED 1.55 billion.

The Islamic insurance penetration in Qatar far exceeded that in the Middle East, where lack of differentiation and associated pricing pressure, along with poor distribution networks, are key challenges for the takaful companies, though the region made the early moves to establish Islamic insurance, according to A M Best. The overall penetration figures for the Middle East mask underlying differences between various countries in the region with Bahrain and Qatar both enjoying good takaful penetration rates of 22% and 13%, respectively compared to the Middle Eastern average of 8% in 2014, A M Best said in a report ‘Takaful Life and Nonlife Issue Review’.