IslamicFinance.de

As healthcare insurance in the US has skyrocketed, despite passage of President Obama’s Affordable Care Act in 2010, many Americans are turning to a new/old solution: mutualized self-help. Many Christian groups in the US are forming their own unregulated insurance pools to pay the medical bills of their members. This trend raises some fascinating questions about state/corporate bureaucracies vs. social commons. Religious faith is a big part of these expense-sharing plans. The plans themselves often reflect religious moral judgments: no medical payments for injuries caused by driving drunk, for example, or for sexually transmitted diseases contracted via an extramarital affair. Such conditions make these expense-sharing plans unacceptable to most secular consumers.

The main obstacle encountered by most social impact enterprises is a credit crunch. LivinGift wishes to solve this problem, by offering zero-interest loans to social impact enterprises through crowdfunding. The Israeli-based platform is now open for applications for all forms of organizations: non-profit organizations, NGOs, for-profit companies and cooperatives. The platform will be launched this upcoming April, in both English and Hebrew. Social impact enterprises will have to show double impact strategy: social or environmental impact, alongside a sustainable and profitable economic model and a fixed income.

In order to foster the growth of Islamic mutual fund industry, the Securities and Exchange Commission of Pakistan (SECP) has revised the investment parameters for Shariah Compliant open end collective investment schemes. The Commission allowed the Islamic mutual funds to include the Government of Pakistan Ijarah Sukuk not exceeding 90 days remaining maturity in cash and near cash instruments requirement. Shariah Compliant open end collective investments schemes has not seen the issuance of short term Islamic Government papers like T-Bills, therefore, Government Ijarah Sukuk having remaining maturity of 90 days or less is the only viable and available avenue for investment in cash and near cash equivalent.

The Securities Commission Malaysia (SC) plans to launch the Islamic Fund and Wealth Management Blueprint by July to strengthen Malaysia’s competitive position in the global Islamic financial sector. SC chairman Datuk Seri Ranjit Ajit Singh said the SC was in the final stages of formulating the blueprint, which would be launched by the first half of the year and the action plan rolled out over five years. First announced by Prime Minister Datuk Seri Najib Razak at Invest Malaysia in April last year, the action plan aims to chart the medium- and long-term strategic direction for the industry as well as map out strategies to strengthen the country’s Islamic capital market.

Today, crowdfunding is a part of the financial services segment known as financial technology (fintech). And it is seeing exponential growth in investments. There are four types of crowdfunding — debt, equity, rewards and donations. There are also new variants and concepts such as Islamic crowdfunding, which is the use of shariah-compliant crowdfunding platforms. Higher bank interest rates for property development have seen the emergence of real estate crowdfunding. And as interest rates continue to rise, developers will need to look beyond traditional financing for their projects, according to a Crowd101.com article entitled “Crowdfunding 2016 predictions: The next real estate boom?”

Qatar International Islamic Bank is in the advanced stages of preparing to conduct a Tier 1 sukuk issue worth 1 billion riyals ($275 million), it said in a statement on Thursday. The bank said the capital-boosting issue would follow the bank receiving all regulatory approvals. It didn't elaborate.

Dubai Islamic Bank is embarking on a roadshow for a senior dollar sukuk, and looks likely to be the first bank from the Gulf Cooperation Council to enter the public bond markets this year. Bank ABC, DIB, Emirates Islamic Bank, HSBC, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank have arranged fixed income investor meetings to take place in London on March 21. DIB, rated Baa1/—/A, will print the Reg S note under its $2.5bn sukuk programme.

The Islamic Financial Services Board (IFSB) is organising a Seminar on Islamic Finance with the theme, "The Real Economy and the Financial Sector" on 24 May 2016 in Madrid, Spain, supported by the Banco de Espana and in collaboration with the IE Business School, Spain. This Seminar is part of the IFSB European Forum series, held in prominent financial centres in Europe. The one-day 'Seminar on Islamic Finance' is designed to encourage broad interaction among the delegates to explore the potential re-alignment of economic policy frameworks in a manner that strengthens the linkages between the real economy and the financial sector.

Holborn Assets as part of its strategic growth plan to diversify and move into new markets has developed and launched its own bespoke shariah wealth and financial planning service. Increasing demand from its advisers and clientsprompted Holborn to undertake research on Takaful (Islamic Life Assurance) providers in the UAE market. This exercise culminated in Holborn signing terms with Salama Islamic Arab Insurance Co. Salama is the largest Takaful and Retakaful provider in the world, dominating the UAE market in terms of size.

Management theorist Michael Porter says business is entering a new, third stage in its relationship with society. First, there was philanthropy: Companies made money doing bad things, but then gave some of their earnings to good causes. Second, there was corporate responsibility (or minimizing harm): Companies tried to do fewer bad things. And now companies are working (or should work) on actual solutions: products and services that serve social problems. There are huge unmet needs in the world today. The question now is how to get capitalism to operate at its best because capitalism is fundamentally the best way to meet needs. If you can meet needs at a profit, you can scale, he said.

Saudi Arabia's banking sector is to feel the brunt of cheap oil and the resulting government spending cuts, according to a new report by Moody's. The credit rating agency has downgraded the banking industry from stable to negative as GDP growth is predicted to slow to just 1.5 per cent in 2016, more than half of the previous year. As a result, the agency has predicted loan growth to slow down to between 3 per cent and 5 per cent for 2016, down from from 8 per cent in 2015 and 12 per cent the year before. Asset risk is also expected to rise as a result of the deteriorating operating environment. Meanwhile, capital buffers are likely to remain solid with the sector's average tangible common equity (TCE) ratio remaining broadly stable.

Alinma Jeddah Economic City Fund has secured shari'a compliant financing of up to SAR 3.6 Billion from Alinma Bank on December 10 2015. Formulating the financial model of the project with Alinma Bank was finalized based on a financing strategy that fulfills the project's needs in accordance with the first business plan covering the first phase of the project which is expected to take five years. The objective of the financing is to provide funding to build and develop the infrastructure for phase one of Jeddah Economic City project and to continue the construction of Jeddah Tower.

The government’s joint effort with banking institutions to promote financial inclusion across the archipelago is facing a major hurdle as most people from low-income households are reluctant to let individual agents take care of their savings under the government-endorsed branchless banking program, a recent study has revealed. The Financial Services Authority’s (OJK) branchless banking program, locally known as Laku Pandai, offers banking and financial services to all Indonesian citizens through the help of other parties, including individual and institutional agents, whose work is supported by cellphones and other IT facilities.

Axiata Group Bhd’s 10-year US$500mil Sukuk received strong response with a final book of over US$900mil orders. The telco company said this was a bid-to-cover ratio of over 1.8 times, and a final yield of 4.357%. The bookbuilding exercise commenced with an initial price guidance of US Treasuries (“UST”) + 2.60% area. Demand for the Sukuk issuance led to a final price guidance of UST + 2.45% area ± 0.05% at Asian close/London mid with books in excess of US$1.4bil. The Sukuk would be issued by its Malaysian-incorporated special purpose vehicle, Axiata SPV2 Bhd. Proceeds of the Sukuk Issuance will be utilised to fund the proposed acquisition of Ncell Pvt. Ltd.

His Excellency Khaled Mohamed Al-Aboodi, CEO of The Islamic Corporation for the Development of Private Sector (ICD) is in India to explore possibilities of expanding the Group activities and interests in India. H.E. Khaled Al-Aboodi’s will explore the possibilities of setting up Interest Free Banking in India, long term solution of accommodating Indian pilgrims, pilgrim education on rituals of Hajj and an initiative of Medical Mobile Units for use in Rural India on behalf of IDB Group. The ICD has decided to launch a US $ 1 billion fund for financing the construction and is in continuous discussion with the Consulate General of India in Jeddah who has been provided with a draft MOU for co-operation.

A consortium of Bahrain-based lenders Venture Capital Bank (VC Bank) and Seera Investment Bank has acquired a major real estate portfolio consisting of two multifamily residential assets in Atlanta (US) comprising 866 units. This marks the consortium’s first investment in the US multifamily sector and has been in co-operation with a local partner that has experience in the management and operation of multifamily residential assets. Atlanta remains a hot favourite among global investors, thanks to the large number of Fortune 500 companies that are headquartered there. It is also the fourth biggest city with headquartered Fortune 500 companies after New York City, Houston, and Dallas.

On 2 March 2016, the Luxembourg Court of Appeal has denied an appeal filed by Dr. Adil Elias, Faisal Islamic Bank of Egypt and a handful of other creditors of BCCI against a judgment previously rendered by the Luxembourg Commercial Court, which had refused to reopen the liquidation proceedings of Bank of Credit and Commerce International S.A. (“BCCI S.A.”) and BCCI Holdings (Luxembourg) S.A. (“BCCI Holdings”). Back in July 1991, the Luxembourg, English and Cayman Islands regulators undertook a joint action to close down the operations of the BCCI banking group, and in all three jurisdictions, joint liquidators were appointed to deal with one of the largest bankruptcies of a banking institution ever.

GFH Capital has agreed to acquire a market leading bread and sweets producer in the Kingdom of Saudi Arabia (KSA) for a transaction value of US$50 million. The Company was established in 1984 and is a leading industrial scale producer of bread and sweets, employing 300 staff and supplying to over 3,000 clients across the Kingdom through its distribution network. The Company has reported strong, consistent growth year after year with revenues increasing at a CAGR of 11% between 2010 and 2014. The company is expected to maintain this level of growth over the investment period. GFH’s strategy is focused on investing in cash yielding opportunities in defensive sectors that have sound growth potential.

Financing needs for the GCC countries are estimated at USD 151.3 billion this year, according to M.R. Raghu, Head of Research at Markaz and Managing Director of Marmore MENA Intelligence. These funding requirements are expected to come from reserves (52%), USD 57.7 bn from domestic and international bond issuances (38%) and the rest through loans (10%). Overall, GCC governments are expected to raise between USD 285-390 billion cumulatively through 2020 through local and international bonds. Raghu said low oil prices have altered the fiscal landscape of GCC countries as the prized fiscal surplus registered in erstwhile years has flipped into large scale deficits to the tune of USD 160 bn in 2015 and 2016 respectively.

Bahrain-based Ithmaar Bank has announced that its retail banking subsidiary in Pakistan, Faysal Bank Limited, has registered a record profit for 2015. Faysal Bank registered a profit, after tax, of US$ 41mn (PKR 4.2bn) during 2015, a 70 percent increase over the profit reported for 2014. During the year, the bank's operating income increased by 95 percent, growing from US$ 35mn (PKR 3.5bn) in 2014 to US$ 67mn (PKR 6.9bn) in 2015. Total assets increased by 11 percent to US$ 4bn (PKR 430bn) as of 31 December 2015, compared to US$ 3.7bn (PKR 388bn) as at 31 December 2014. Faysal Bank also announced a cash dividend of PKR 1 per share (10 percent of share par value) for 2015.