IslamicFinance.de

The market share of Indonesia’s Islamic banks has remained low at less than 5 percent in the past several years despite efforts to promote sharia financial services to the mostly Muslim Indonesian population. Indonesians are still reluctant to open accounts or carry out transactions through sharia-compliant banks as they are mostly still unaware of the advantages of Islamic banking services, Islamic finance expert Irfan Syauqi Beik said. Another factor that has caused the sharia banks’ stagnant low market share is their weak financing capacity, he said. Moreover, most of the existing Islamic banks are undercapitalized so that they are unable to expand their business rapidly.

Perak’s Sultan Nazrin Muizzuddin Shah told Islamic financial scholars and ulama to “think futuristically” in order to be current with contemporary developments. He said they can act as “institutional game-changers” in helping Islamic finance grow, but must leave their “ivory towers” and become more involved in the industry. Sultan Nazrin added that no industry was immune to “social evolution”, making it necessary for these scholars to make the effort to produce relevant financial products. He also said that it was important to inform the public more on the role of Shariah advisors in finance as their endorsement of an institution meant that it complied with the Islamic beliefs.

Dubai Islamic Bank (DIB) is expected to price a dollar-denominated sukuk of benchmark size as soon as Tuesday after releasing initial price thoughts for the offering, a document from lead arrangers showed. Pricing for the five-year sukuk has been earmarked to be in the area of 245 basis points over midswaps, according to the document. DIB chose seven banks to arrange meetings with fixed income investors in London on Monday, ahead of the possible sukuk issue, it was announced last week.

Bahrain Islamic Bank (BisB) has joined the Pearl Initiative, the Gulf business-led organization promoting a corporate culture of accountability and transparency as a key driver of competitiveness across the Region. As a partner of the Pearl Initiative, Bahrain Islamic Bank will encourage the implementation of corporate governance practices and gender diversity in leadership at workplaces throughout the region. Through its association, BisB will participate in dialogue forums and capability-building seminars, facilitate engagement with peers and work alongside Pearl Initiative to encourage social entrepreneurship across the Region.

There is a strong correlation between education and positive health and socioeconomic outcomes for women and girls, yet education is often one of the first things to be disrupted when conflicts break out. In areas where traditional educational models become unavailable or unfeasible, civic education courses that nurture cultures of peace, promote dialogue and non-violent conflict resolution, and build the cognitive and participatory skills of participants can help fill a critical gap. Education, in concentrating on helping students realize their self-actualization, has been shown to make it more likely that there will be a democratic outcome to these conflict situations.

The World Bank’s new poverty line of $1.90 a day is the most drastic adjustment yet in the global poverty threshold—raising the measure by 50% from $1.25. The new line seems high at first glance, but the reality is that it is not higher and rather understates the true extent of global poverty. The reason is that the poverty line has not been raised by 50%, but simply rebased on 2011 purchasing power parity (PPP). The PPP is used to account for changes in the poor’s living costs. The result: the new poverty line is roughly equivalent to the old one in real terms. In 2011, the percentage of people estimated to be living in extreme poverty around the world was 14.5% based on the old poverty line of $1.25 compared to 14.2% using the new line of $1.90 in 2011 PPP.

The Church of Scotland has joined forces with Islamic finance experts to draw up a “practical ethical financial solution” to help the poor while sticking to the principles of both faiths. The agreement, which was announced on Tuesday, marks an unusual attempt to promote cross-religious financial innovation. Backers say it is too early to say what “solution” the initiative could yield, but possibilities include the creation of a new financial institution with cross-faith legal articles. The Scottish initiative is supported by international Muslim clerics and experts including Lamido Sanusi, a former Nigerian central bank governor famed for cleaning up the banking sector and now one of the country’s highest Islamic authorities.

The Republic of Indonesia swept through its funding target for the first half of 2016 on Monday with an upsized $2.5 billion sukuk issue. As a result of the split- and 10-year deal, the sovereign has now raised 64% of the $9.35 billion it is targeting from international markets in 2016, or 2% more than the 62% it was hoping to raise by the end of June. The Baa3/BBB-/BB+ rated credit has been one of the chief beneficiaries of the market’s strong momentum following the Fed's decision to slow the pace of interest rate rises last week. As a result, the order book for the sovereign’s 144a offering closed around the $8.5 billion mark, encouraging it to upsize the transaction by $500 million and press down on the new issue premium.

Bank AlJazira achieved a new reward as the best Arabian donor in 2015 during the “Non-Governmental Giving Foundations in Arabian countries” conference held in Bahrain. The award was received by the Executive Director of the Community Service Programs Dr. Fahad Bin Ali Al-Olayan on behalf of the Chief Executive Officer Mr. Nabil Al-Hoshan. The award was presented by the “Regional Network for Social Responsibility” in collaboration with the United Nations Industrial Development Organization “UNIDO”; Bank AlJazira has been chosen for this award by the conference committee.

Shares in GFH Financial Group rose on Tuesday after the Islamic investment bank said it had agreed to sell a 10 percent stake in Bahraini cement producer Falcon Cement Co. GFH's Dubai-listed shares rose 2.3 percent. It has yet to trade in Bahrain. Other Dubai stocks made little headway. Rival developers Union Properties and Deyaar rose 1.2 and 1.6 percent respectively, but these are relative minnows compared with market bellwether Emaar Properties, which dropped 1.1 percent. Air Arabia fell 6.6 percent after the budget carrier went ex-dividend, helping drag Dubai's index 0.5 percent lower to 3,362 points. That trimmed the benchmark's gains since mid-January's two-year low to 28.2 percent.

The Partnership Banking Center, Russia's first financial institution established upon Islamic banking principles will start operations in March 2016 in Kazan. The new bank will function as a subsidiary of Tatagroprombank. The Partnership Banking Center will work with both individuals and companies, and will aim to channel Islamic investment into Russia. It will also sign an agreement with the Islamic Development Bank. The bank’s creation became possible thanks to a new law submitted to the State Duma in late January, under which the Russian banking system can comply with requirements of religious financial institutions.

In order to promote the SBP initiative for SME sector and for Agri Financing, a Memorandum of Understanding (MoU) was signed between Al Baraka Bank (Pakistan) Limited & Al-Ghazi Tractors Limited, for the facilitation of ‘Tractor Financing’ at Al Baraka House, Karachi. This MoU will allow the farmers and agriculturists to avail Shariah compliant financing options for rural financing including financing of tractors and other credit facilities, with quicker processing and flexible payment options. Al Baraka Bank (Pakistan) Limited (ABPL) is a part of Al Baraka Banking Group, Bahrain, and has a network of 150 branches spread over 94 cities & Towns across Pakistan.

The FBI has agreed to help Bangladesh investigate an audacious $81 million theft from the nation's foreign reserves, authorities said Sunday, days after the finance minister accused central bank officials of complicity in the heist. A FBI official in Dhaka met with representatives from Bangladesh's Criminal Investigation Department and offered to assist with the investigation into the spectacular cross-country theft. Hackers stole the money from the Bangladesh Bank's account with the Federal Reserve Bank of New York on February 5 and managed to transfer it electronically to accounts in the Philippines. Investigators say local hackers were likely involved in the theft.

Organisé régulièrement dans plusieurs pays, l’Islamic Banking Qualification Program IBQ ® se délocalise à Genève pour une session exceptionnelle les 13-14-15 juin 2016. L’IBQ est une certification internationale dédiée aux principes et pratiques bancaires islamiques. Cette formation en langue française vise à permettre aux professionnels de la finance de comprendre et/ou d’intégrer le secteur bancaire islamique. La formation est d’une durée de 25 heures structurées sous le mode de workshop interactif avec des présentations et études de cas précédées par des lectures.

Kuwait's Boubyan Bank aims to issue sukuk worth $250 million before the end of April, the lender's chief executive said on Monday. Adel Abdul Wahab al-Majed told reporters of the plan after the company's annual meeting. Boubyan Bank in January said it had received regulatory approval to issue a capital-boosting sukuk worth $250 million. Majed added that the sukuk would allow the bank to fulfill Basel III requirements and cover its capital needs until 2018.

Oil prices and regional tensions have taken their toll on the Islamic finance sector. Sharia-compliant funds suffered their worst sales in four years, falling more than 74 percent on 2014’s figures. But Magali Mouquet, executive director responsible for IR at Emirates REIT, says that as one of only three sharia-compliant real estate investment trusts (REITs) in the world, adhering to Islamic finance principles has brought only opportunities to the Dubai-based trust. Mouquet says other investors – those perhaps looking for an SRI angle rather than a focus on Islamic finance principles – are also interested in the trust, which offers ‘guaranteed transparency’.

GCC government officials confirmed that value-added tax (VAT) will be introduced as of January 1, 2018, a statement from EY said at the conclusion of the EY-hosted annual MENA Tax Conference in Dubai on March 16. The MENA tax conference featured a session on preparing for VAT in the GCC, providing status updates on the tax implementation and the actions that companies in the region need to take. The introduction of VAT will diversify government revenue sources and reduce reliance on oil revenues to finance government expenditures. The additional revenues collected are likely to fund programs for the development of job opportunities for nationals and improve education and healthcare in the GCC.

The idea of privatizing Saudi Aramco, the national hydrocarbons giant in Saudi Arabia, appears to have re-kindled the privatization fire in the Middle East. While the announcement of what could theoretically be the largest initial public offering (IPO) ever envisaged startled even seasoned market observers, its modalities and timeline remain unclear. Indeed, privatization was not on the agenda of regional governments until a few months ago, when the fiscal situation of some Gulf Cooperation Council (GCC) countries started to deteriorate due to falling oil prices. The last few years have witnessed a virtual halt in privatization activity across the Arab world due to bad experiences with previous experiments and the perception of corruption and insider dealings.

Saudi Arabia’s investment banking regulator is telling international banks to publicly disclose financial statements for the first time as the kingdom seeks to boost transparency. The Capital Markets Authority is requiring financial institutions it regulates to publish the information on their websites from April 1. The CMA has said firms must also disclose senior executives’ pay and significant risk factors. The only banks which need to disclose financial statements now are the 12 publicly traded domestic lenders regulated by the Saudi Arabian Monetary Authority. The disclosure will give insight into how much money banks are making amid a slowdown in economic growth, as well as the cost of employing top executives.

Islamic Corporation for the Development of the Private Sector (ICD) has chosen ten banks to arrange a series of meetings with fixed income investors ahead of a potential sale of sukuk, a document from lead arrangers showed. The unit of Islamic Development Bank will roadshow in Asia, Europe and the Middle East commencing on Mar. 23, with a dollar-denominated sukuk of benchmark size to be issued after the meetings, subject to market conditions. Bank ABC, Boubyan Bank, CIMB, Dubai Islamic Bank, Emirates NBD, First Gulf Bank, HSBC, Mizuho, Societe Generale and Standard Chartered are the chosen arrangers of the meetings and potential sukuk issue.