IslamicFinance.de

Ivory Coast offers inaugural CFA 150 billion Sukuk. The Sukuk is an amortising Sukuk al-Ijara and is targeted at local banks and institutional investors. It mirrors the Senegal Sukuk that Hogan Lovells advised on in 2014. Hogan Lovells' team was led by Global Head of Islamic Finance, Rahail Ali and Partner Imran Mufti. They were assisted by Partner Baptiste Gelpi, International Debt Capital Markets, Paris and Lina Bugaighis, Dubai. Hogan Lovells worked togehter with ICD for the issue. Imran Mufti commented that more sukuk from African issuers are expected in the near future. Zaky Sow, Sukuk Project Manager for ICD added that the Sukuk opens up a whole new stream of investment into the country.

Zain Jordan has signed a MoU with the Islamic International Arab Bank on supporting entrepreneurs and startups. Under the agreement, the Islamic International Arab Bank will provide support for Zain Jordan's Innovation Campus members in various areas of collaboration, in addition to exploring development opportunities in creativity and entrepreneurship. Zain Jordan CEO Ahmad Hanandeh said that Zain supports startups in facing challenges and equips them with the latest technological tools.

Looking to 2016 and beyond, innovation will continue to be critical for the ongoing development of the Islamic finance industry. For instance, efficiency can still be improved as Sharia-compliant institutions still lag behind their conventional counterparts, and are increasingly looking to embrace technological innovation in order to minimise operational costs as well as project a modern face of banking that would appeal to a younger generation of customers, which will be critical for ongoing growth. Another area of development is the Islamic asset management sector, as the range of services available remains quite limited and there is a general lack of quality products in this space.

Thousands of Muslims in Chicago use the Islamic finance system while also using traditional banks and conventional financing structures. Cynthia Shawamareh, Islamic law and finance lecturer at the University of Chicago, described how Muslims in the U.S. find it more challenging to follow faith-based financing. Some Muslims in the U.S. obey the Shariah-based financial system with different workarounds to process their economic operations under the purview of Islamic finance while still operating in mainstream American financial systems. The Devon Bank initiated a Shariah-based financing alternative for its Chicago customers in 2003, creating a system of residential mortgage and commercial leasing options that are Shariah-compliant.

Dr. Bronwyn King, an oncologist, persuaded 34 Australian superannuation funds to divest from tobacco manufacturers. Tobacco stands alone when compared to all other industries or products. Firstly, there is no safe level of exposure. When used as intended, tobacco will have contributed to the early death of two out of three smokers. Secondly, the scale of the negative impact of tobacco is profound, causing an estimated six million deaths per year globally. Thirdly, positive influence of the industry through professional engagement is futile. The eventual outcome from King's initiative Tobacco Free Portfolios is for the finance sector to have a tobacco free investment mandate.

A new International Finance Corporation (IFC)-supported report by Wamda Research Lab finds that although support for entrepreneurs and start-ups has grown substantially across the Middle East and North Africa, many challenges remain, hindering job creation and economic growth. In Exploring Conditions for Entrepreneurs in Egypt, Jordan, Lebanon, and UAE Wamda surveyed nearly 500 entrepreneurs from the four countries, which have seen the majority of entrepreneurship development initiatives in the region. The report looks at the main trends in entrepreneurship and the challenges entrepreneurs face in growing their businesses. Access to finance is one of the main challenges cited by entrepreneurs in the report.

On Oct. 30, 2015, Standard & Poor's Ratings Services lowered its unsolicited long- and short-term foreign- and local-currency sovereign credit ratings on the Kingdom of Saudi Arabia to 'A+/A-1' from 'AA-/A-1+'. The outlook remains negative. At the same time, S&P revised its transfer and convertibility (T&C) assessment on Saudi Arabia to 'AA-' from 'AA'. Standard & Poor's has converted its sovereign credit ratings on Saudi Arabia to "unsolicited" following Saudi Arabia's decision to terminate its rating agreement. A pronounced negative swing in Saudi Arabia's fiscal balance has prompted our downgrade. The kingdom has run fiscal surpluses over the 10 years to 2013 (averaging 13% of GDP).

The 18th Microcredit Summit, “Frontier Innovations in Financial Inclusion” will be held in Abu Dhabi, United Arab Emirates on March 15-17, 2016. The objective of the event is to provide a platform for participants to discuss financial inclusion policies, regulatory frameworks, resilience and empowerment solutions, microfinance products, and synergies with the aim of promoting social inclusion for all. The conference will address themes: (1) “National Financial Inclusion Strategies;” (2) “Pathways to Social & Financial Inclusion;” and (3) “Partnerships that Build Bridges to New Frontiers.” Additional information is available on the event website http://18microcreditsummit.org/.

Hogan Lovells has advised the Islamic Corporation for the Development of the Private Sector (ICD), as arranger, on the inaugural CFA150 Billion sukuk offering by the Government of Côte d'Ivoire. The sukuk is an amortising sukuk al-ijara and is targeted at local banks and institutional investors. It mirrors the successful Senegal sukuk that Hogan Lovells advised on in 2014. Hogan Lovells' team was led by Global Head of Islamic Finance, Rahail Ali and Partner Imran Mufti. They were assisted by Partner Baptiste Gelpi, International Debt Capital Markets, Paris and Lina Bugaighis, Dubai. Hogan Lovells is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses.

About RM1.6 million of the RM2.4 billion sukuk 1Malaysia Development Bhd (1MDB)? issued through Bandar Malaysia Sdn Bhd in 2014 remains unaccounted for, says PKR's Rafizi Ramli. The RM2.4 billion sukuk was issued to pay for the relocation of the army base on Bandar Malaysia land, said Rafizi. Yet the state investment arm announced that the consortium purchasing 60% equity in Bandar Malaysia Sdn Bhd may assume 60% of the remaining RM1.9 billion cost of relocation of the Pangkalan Udara Kuala Lumpur (PUKL) relocation?. The total relocation cost of PUKL had actually been RM2.7 billion, so only RM800 million of the sukuk had been used so far to pay for PUKL's relocation costs, said Rafizi.

Islamic services and products have seen significant growth over the recent years, said Dr. Abdulrahman Al Hamidy, Director-General and Chairman of the Board of Arab Monetary Fund (AMF). Al Hamidy said in his welcome address at the four-day Islamic Insuranceprogramme that since 2000, the Islamic finance industry has grown by up to 20 percent to US$2 trillion by the end of 2014. He noted that the delivery of Islamic insurance services offered a testament to the robust evolvement and expansion of the Sharia-compliant banking services and solutions. Twenty-four participants from 12 countries are attending the event, which is being jointly organised by the Abu Dhabi-based AMF and the World Bank.

Jordan’s Ministry of Finance has prepared a plan of estimated issuance of government bonds for the year 2016 which puts net domestic borrowing for the current year at some JOD 896 million. Separately, the MoF has also revealed plans to issue Sukuk worth JOD 150 million to provide finance for the National Electric Power Company. Secretary-General of the Finance Ministry, Ezeddin Kanakriyeh, said the Sukuk would be tendered in two equal separate issuances. This indicative plan will be updated periodically in accordance with the requirements and developments in the light of the cash flow management plan prepared by the Ministry, which takes into consideration the value of the expected cash revenues and expenses through the implementation of the 2016 budget.

Mohammed Amin wrote a chapter for the "International Wealth Management Report 2016" published by Edbiz Consulting Ltd. The chapter titled "Taxation Issues in Islamic Wealth Management" outlines some generic taxation issues that need to be taken into account in the provision of Islamic wealth management services, and provides specific illustrations of how they are dealt with in one jurisdiction with a relatively advanced system for taxing Islamic finance, the United Kingdom, to provide some pointers as to how other jurisdictions should treat those issues. However it does not attempt to survey the tax treatment in other jurisdictions.

Saudi Arabia is considering offering shares in the largest oil company in the world, Saudi Aramco, in an initial public offering (IPO) which may mean that assets of about 3.63 trillion US dollars will be accessible to citizens and investors. Saudi Aramco yesterday confirmed that it had been considering various options to provide the opportunity to a large segment of investors via an IPO in the finance market. The company said in a statement that it is studying two scenarios to present its shares for an IPO; the first is to sell an appropriate share of its assets directly, and the second is to offer a package of major projects for the IPO in several sectors, particularly the refining and chemicals sector. In addition to this, Aramco could sell about 5% of its assets which amounts to about 181.5 billion dollars in the stock market.

Al Baraka Banking Group (ABG) has announced that Islamic International Rating Agency (IIRA) has assigned national scale investment grade credit ratings of 'A- (SD)/A-2 (SD)' (A Minus/A Two) to Al Baraka Bank Sudan (ABBS or 'the bank'), its majority owned subsidiary in Sudan operating since 1984. Outlook on the assigned rating is 'Stable'. IIRA observed that ABBS maintains sizable liquid reserves, with solid liquidity and that asset quality indicators have improved and are better than the banking sector average. The bank achieved a general improvement in profitability, driven by consistent increase in gross revenue supported by low cost of deposit funding. The rating has taken into account the various economic and financial challenges faced by banks in Sudan.

Islamic International Rating Agency (IIRA) has assigned national scale credit ratings of 'A- (SD)/A-2 (SD)' (Single A Minus/A Two) to Al Baraka Bank Sudan (ABS). Outlook on the assigned rating is 'Stable'. Ratings derive strength from the bank's franchise and an overall conservative approach to business. Its retail presence in Sudan, is reflected in a cost effective deposit base. Ratings take into account the various economic and financial challenges faced by banks in Sudan. ABS derives strategic guidance from its parent's international experience and established banking processes and systems. The fiduciary score has been assessed in the range of '71-75', whereby rights of various stakeholders are adequately defined.

Jura Energy Corporation has announced that its wholly-owned subsidiary, Spud Energy Pty Limited ("SEPL"), has entered into a secured long term syndicated financing arrangement totalling Pakistan Rupees ("PKR") 750 million (US$7,153,500) effective December 18, 2015. The syndicate is comprised of Al Baraka Bank (Pakistan) Limited ("ABPL"), the lead arranger and JS Bank Limited ("JSBL"), a related party of Jura, with participation of PKR 500 million and PKR 250 million respectively. The Facility will carry a mark-up at the rate of 3-month Karachi Inter Bank Offered Rate ("KIBOR") (6.48% using the State Bank of Pakistan posted rate on December 29, 2015) plus 2.75%, maturing five years from the date of disbursement.

Islamic International Rating Agency (IIRA) has assigned national scale credit ratings of ‘A- (SD)/A-2 (SD)’ (Single A Minus/A Two) to Al Baraka Bank Sudan (ABS). Outlook on the assigned rating is ‘Stable’. Ratings derive strength from the bank’s franchise and an overall conservative approach to business. While impairment is high in absolute terms, overall asset quality indicators have improved on a timeline basis. The bank features general improvement in profitability, with revenues growing consistently. Capitalization levels remain notably higher than the minimum required and industry average. However, given risks in the general environment, reinforcement of capital as envisaged under the bank’s strategy would strengthen its risk profile and support future balance sheet growth.

The Saudi insurance sector will grow by up to 17 per cent a year over the next five years thanks to regulation enforcement and growth in motor insurance, the Dubai-based investment bank Arqaam Capital said yesterday. Arquaam expects the Saudi insurance sector to be the least affected by weaker oil prices, budget cuts and the tightening liquidity as the enforcement of existing regulations will propel motor and medical premiums growth at a rate of 15-25 per cent and 14-16 per cent respectively. According to an Alpen Capital report released last year, the Saudi central bank has issued several new regulations regarding underwriting practices, reserving, actuarial-backed pricing and solvency requirements in the past two years, to help grow the industry.

The emirate of Sharjah has picked six banks to arrange investor meetings starting next week ahead of a potential dollar-denominated sukuk issue, a document from lead arrangers showed on Wednesday. The sovereign has mandated Bank Of Sharjah, Barclays, Commerzbank, Dubai Islamic Bank, HSBC and Sharjah Islamic Bank to arrange the transaction. Investor meetings will be held starting Sunday in the Middle East, Asia and the United Kingdom and a deal will follow subject to market conditions, the document added.