IslamicFinance.de

European banks are showing eagerness to resume activities in Iran now that the sanctions are being lifted against the Islamic Republic, according to Ali Divandari, director of Iran’s Monetary and Banking Research Institute (MBRI). Divandari made the remarks in a press conference on Tuesday to expound on programs and objectives of “The 2nd Business and Banking Forum Iran Europe” which will be held in Tehran from March 5 to 7. The forum is to strengthen ties between Iranian and European banks and also boost cooperation between Iranian banks and foreign investors, Divandari stated. Divandari further stated that the forum will host about 60 foreign participants mainly from Germany.

Generous government salaries and free healthcare, funded by vast natural gas reserves in a country with only about 300,000 citizens, do not always translate into healthy bank balances for ordinary Qataris. Instead, they can come under intense social pressure to live way beyond their means, spending lavishly on everything from the latest smart phones and designer fashions to family weddings. Now their problems are deepening as diving global energy prices mean even the Qatari welfare state is becoming less generous. Many are borrowing enormous sums from local banks to finance lifestyles they cannot afford, according to a study by Qatar University.

For sale: One bank with 114 branches in war-torn country; defrauded out of almost all its money; occasional target of terrorists. Ready to bid? That’s what Ashraf Ghani, president of Afghanistan, is hoping. He’s seeking a buyer for Kabul Bank, once the country’s largest. The government took it over in 2010 after its owners were accused of embezzling $825 million. The privatization is a test for Ghani, who wants to show the foreign donors who provide most of his budget that he’s committed to fighting corruption. Mohammad Aqa Kohistani, director general of Afghanistan’s Treasury Department, said he has received four expressions of interest since starting the sales process in October, including three from foreign firms. He wouldn’t identify them.

The Middle East and Northern African (Mena) sovereigns are expected to borrow an equivalent of $134bn from long-term commercial sources in 2016. This compares with borrowing of $143bn in 2015, which was more than double the $68bn that the region is expected to be borrowed in that year, Standard and Poor's "Mena Sovereign Debt Report 2016" noted. However, the ratings agency noted that its updated estimate for 2015 includes an additional $30bn in borrowing by Iraq. It has included Iraq in the survey for the first time, having assigned it sovereign credit ratings in September 2015. All in all, it is estimated that GCC countries' borrowing at $40bn in 2015 rather than the $5bn S&P projected in March 2015.

Hosted by Bank Negara Malaysia, organised by the RFI Foundation and co-organised by Middle East Global Advisors, the Responsible Finance Summit will take place on 30-31 March at Sasana Kijang, a center for knowledge and learning excellence established by Bank Negara Malaysia. The Summit has announced the support of SEDCO Capital, the Saudi firm that manages assets across a diversified spectrum of investments in real estate, equities and other businesses with a total AUM of $3.9 billion. The Summit will host a discussion between leaders in the Islamic finance and responsible investment to identify how to fully realise the emerging market responsible finance opportunity.

Islamic Business and Finance Development Fund and REDmoney Group are jointly organizing IFN CIS & Russia Forum on 15th of March 2016 in Moscow. Islamic finance should become one of the strongest driving forces toward effective development of an international market that unites more than 182 million people of the Eurasian Economic Union. Participation in the Forum has already been confirmed by representatives of the largest Russian and international financial institutions.

http://www.ifncisrussiaforum.com

Malayan Banking Bhd (Maybank) provided more Islamic loans than non-Shariah compliant financing in Malaysia for the first time in 2015 and the business was also more profitable. Maybank Islamic Bhd contributed 51 per cent of loans by the nation's biggest lender, up from 44 per cent in 2014, and a share 10 to 20 percentage points higher is possible, chief executive officer Muzaffar Hisham said. The unit achieved an average 16 per cent return on equity in the last four years, compared with 14 per cent for its parent. Maybank Islamic's total financing rose 21 per cent to RM131.1 billion (S$44.2 billion) last year. Growth will probably moderate to less than 10 per cent in 2016.

Jeddah-based Islamic Development Bank has set final price guidance for a dollar-denominated sukuk issue of five years duration, which it plans to sell later on Thursday. Guidance has been set at 50 basis points over midswaps. Islamic Development Bank on Wednesday opened books and set initial price thoughts in the range of mid-to-high 50s bps. The benchmark-sized offering has received orders worth $1.4 billion from investors so far, of which $190 million came from the joint lead arrangers. The sukuk offering is being arranged by Boubyan Bank, CIMB, Emirates NBD Capital, Gulf International Bank, JP Morgan, Natixis and Standard Chartered.

TMSF fund says Bank Asya will either be sold or merged within this period, or liquidated if that not possible.

Turkey's Bank Asya will not be returned to its original shareholders after being seized by the government last year, the deposit insurance fund that now owns the bank said, adding that it would pursue liquidation if a buyer is not found within three months. Within the framework of the existing legal situation, the return of the bank to its (shareholders) is not possible, the Deposit Insurance Fund (TMSF) said on Tuesday, adding that it had given the bank a three-month deadline from Feb. 29 to find a buyer or be merged. If this is not possible, its liquidation will come on to the agenda, the TMSF said.

The region's thriving asset management sector saw a further addition towards the end of last year with the launch of Abu Dhabi Global Market (ADGM). The new financial centre is likely to mark a bold step for the emirate's plans to attract new firms and develop the local asset management sector. As the UAE's richest emirate, Abu Dhabi is already home to a large number of wealthy investors and a thriving financial services community. Despite the close proximity of northern neighbour Dubai's highly successful DIFC, industry participants have welcomed the addition of the ADGM to the region. Abu Dhabi is home to the region's largest sovereign wealth fund (SWF) in the Abu Dhabi Investment Authority, and a number of other multi-billion dollar funds also call the emirate home.

The progress rate of the second phase of the social housing project "Omar Al Mukhtar" in Sidi Hassine Sijoumi (capital western suburbs) is now 65% and the project will be completed by late August 2016. The handover of keys is expected before the end of 2016, noted the Minister of Public Works, Housing and Spatial Planning Mohamed Salah Arfaoui, at a visit Tuesday to the site of the project along with Qatari Prime Minister and Minister of the Interior Sheikh Abdullah bin Nasser bin Khalifa Al Thani. The project with an estimated cost of nearly 54 million dinars financed by Qatar through a donation (40%) and a free-interest loan (60%) will help build 810 social residential units.

The First Investor (TFI), the investment banking arm of Qatar’s Barwa Bank, is looking for investments in Turkey, in sectors ranging from real estate to food, its acting chief executive Yousef Al Obaidan said. TFI has not specified a budget for Turkey, although its existing holdings in the Gulf region average around $100-$150 million per investment, Al Obaidan said. Individual investments in Turkey could exceed that, he said. The bank, which is also involved in private equity and asset management, is particularly interested in Turkey’s real estate, healthcare, education and food and beverage industries, Al Obaidan said. TFI is already active in Turkey, where Kiler, a REIT, mandated it in December for the sale of the Istanbul Sapphire shopping center and residence.

Indonesia's central bank has issued a regulation that allows the use of Islamic foreign exchange hedging tools by banks. The regulation, backed by rulings by Indonesia's National Sharia Board, specified that both Islamic and conventional banks can now offer deferred sale of foreign exchange under a muwa'adah scheme, or under a promise from both sides of a transaction. Such a transaction has to have an underlying real need, which could be export and import payments, Islamic bonds transaction in foreign currencies or hajj payments, among others. It will not be tradable and will have to be fully settled upon maturity or cancellation. The new rules will help Islamic banking and sharia-compliant customers to mitigate market risks.

Growing demand for asset-based investments in times of fiscal insecurity in major economies in the world and the fact that still only a small portion of the estimated $11.5tn worth of wealth owned by Muslim individuals, institutions and governments is managed by Islamic financial institutions has turned the attention of investors towards Islamic wealth management. According to Malaysia-based International Shariah Research Academy for Islamic Finance (ISRA), there is a lot of potential to tap for Islamic wealth managers: As of the fourth quarter of 2015, total global Islamic assets under management were "just" $58bn and the number of Islamic funds worldwide stood at a meagre 1,053. This compares to $56.4tn of wealth owned by all high-net worth individuals globally combined and to more than 9,200 investment funds in the US alone.

There is strong demand for Indonesia's sharia-compliant government retail bonds (in Indonesian: Sukuk Negara Ritel, abbreviated Sukri). Since the launch of series SR-008 on Friday (19/02), a number of sales agents have run out of quota. These financial institutions now request additional quota from the government. The three year SR-008 series carries a fixed coupon of 8.3 percent per year and is tradable on the secondary market. The government of Indonesia targets to collect up to IDR 30 trillion (approx. USD $2.2 billion) in funds from the issuance. Sukri bonds are only available to Indonesian citizens.

There are nearly 500,000 high net worth individuals (HNWIs) in the GCC alone; these clients hold roughly $1.7 trillion of assets. A large majority of them are Muslims. If you look at the larger banks, be it in Switzerland, or in other established jurisdictions, it is mainly in the conventional banking space that wealth management solutions are offered to clients. The low oil prices have had an impact on liquidity and the cost of funds. As the demand for Islamic wealth management solutions is primarily from the GCC region and the sentiments in the region are weak due to the low oil prices, investors could take the wait and watch approach.

The Islamic lending arm of Turkey’s state-run Ziraat Bank has applied to sell 1.5 billion lira ($501.9 million) worth of Islamic bonds, according to Turkey’s Capital Markets Board (SPK). The sale would be the first by a state-run Islamic bank, and follows a wider government push to develop the sector in the world’s eighth most populous Muslim nation. No tenor or details of underlying assets were given for the deal, which will be sold to qualified investors. Islamic lender Kuveyt Türk also applied for 1.85 billion lira worth of sukuk. Ziraat Participation Bank started operations in May 2015, with 675 million lira in paid-up capital and plans to have 170 branches and 2,200 staff by the end of 2018.

Sukuk is already this year proving the format of choice for issuers in the Middle East. And no wonder — Islamic notes have a captive and asset-starved investor base, which tends to ensure strong secondary performance. It is an ideal product for times of stress such as those brought about by plummeting oil prices. Andy Cairns, head of origination and distribution at National Bank of Abu Dhabi explained that Islamic accounts are buy and hold so there is less secondary liquidity in Sukuk than in conventional bonds. Consequently it is a product that frequently underperforms in strong markets but outperforms in tougher times. Sukuk offers issuers access to an underserved pool of Islamic investors.

Hong Kong’s possible third Islamic global bond in three years brings it closer to Indonesia and Malaysia in terms of sovereign sukuk presence, a boost to the market that coincides with China’s Silk Road revival. The finance center has already raised $2 billion from sales in 2014 and 2015, which attracted $6.7 billion in total orders, while Indonesia plans to tap investors for the sixth year running and Malaysia is returning for its seventh offering. Hong Kong, which is losing its role as a gateway to China as Shanghai’s financial market opens, is keen to become the launchpad for the global ambitions of Chinese companies.