IslamicFinance.de

Last week, Britain mandated five banks to arrange a 200 million pound ($336 million) sukuk issue which could be issued in coming weeks, subject to market conditions. Britain's choice of HSBC, Qatar's Barwa Bank, Malaysia's CIMB, National Bank of Abu Dhabi and Standard Chartered as arrangers appeared designed to ensure easy distribution and tight pricing. But the choice was notable for excluding all of Britain's six full-fledged Islamic banks; none was included in the mandate. That could reduce the impact of the issue in developing expertise and depth in Britain's Islamic banking sector. It may also limit British banks' access to the issue.

Asset management firm Arabesque has received regulatory approval to start operations with its value-based investment strategies - the latest addition to Britain's Islamic finance sector. The London-headquartered firm now has in place a team of 18 staff, with additional offices in Frankfurt and New York, chief executive Omar Selim said. Moreover, Arabesque is backed by an advisory board of ethical industry professionals. The firm is backed by capital from its own management and has commitments from several institutional investors. Arabesque plans to establish funds in Luxembourg and will offer managed accounts as well.

The European Union's second highest court has annulled an EU asset freeze on Syria International Islamic Bank, dealing another blow to EU sanctions following legal victories last year by several Iranian companies. The EU imposed sanctions on SIIB in 2012, alleging that it had acted on behalf of two other banks, Commercial Bank of Syria (CBS) and Syrian Lebanese Commercial Bank (SLCB), that were both under EU sanctions. But the court said the bloc's governments had failed to provide evidence. The bank has also been sanctioned by the U.S. Treasury. The ruling is subject to appeal.

Abu Dhabi government-owned Al Hilal Bank may sell a benchmark-sized Tier 1 capital-boosting sukuk after announcing plans to meet fixed income investors, joining a raft of issuers from the United Arab Emirates taking advantage of benign markets. The unlisted Islamic lender has chosen itself as well as Citigroup , Emirates NBD, HSBC, National Bank of Abu Dhabi and Standard Chartered to arrange roadshows. A benchmark-sized, U.S. dollar-denominated sukuk offer with a perpetual lifespan may follow the investor meetings, subject to market conditions. Al Hilal will meet investors in the Middle East on June 15 before moving to Hong Kong on June 17, followed by Singapore on June 18. After a day in London on June 20, roadshows end in Switzerland on June 23.

Insurance broker Willis Group Holdings will offer sharia-compliant commercial real estate coverage in Britain for the first time. New York-listed Willis will offer the coverage through the Islamic insurance platform developed by London-based Cobalt Underwriting. The policy retains price neutrality, meaning premiums are equivalent to those in a conventional insurance policy. Cobalt's platform uses a syndication model to help spread risk across a panel of underwriters, allowing multiple insurers to pool their capacity while each can subscribe to their desired level of risk though individual Islamic windows. The risk is priced by a lead insurer and other firms must then subscribe under similar terms.

Turkey's Kuveyt Turk, owned by Kuwait Finance House, mandated banks for a sukuk issue. The bank has mandated KFH Investment as global coordinator and Citi, Emirates NBD Capital, HSBC, KFH Investment and Standard Chartered Bank as joint lead managers and joint bookrunners.

The Turkish Bank Asya’s board gave its management the go ahead to possibly sell the banks subsidiaries. This information was given Istanbul Stock Exchange and a rise of 5.4 percent in Asya share followed the news.

The Islamic Development Bank has launched a programme to loan $180 million to six African countries for the purpose of renewable energy projects. Islamic finance is growing in Africa and mainly used by governments that want to develop infrastructure projects on a large scale. Saudi Arabia-based IDB promotes economic development in 56 countries through Shariah-compliant loans and grants. Just about half of the bank's member countries are in Africa. The continent is home to hundreds of millions of Muslims.

Bangladesh Islamic finance industry is well developed but lacks sharia-compliant instruments such as sukuk. This is limiting further growth of the sector according to a report. Sukuk would be helpfull to diversify the funding sources and could make up for the limited scope of the Islamic money market in Bangladesh. Islamic banks that follow religious principles are now representing 18.9 percent of all Bangladeshi bank deposits.

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) said on Thursday secretary general Khaled Al Fakih had left the organisation to pursue other opportunities. Al Fakih, a Lebanese-born commercial banker, had been secretary general since February 2012. Deputy secretary general Khairul Nizam will take over his duties while AAOIFI looks for a new secretary general, the organisation said. Set up in 1990, AAOIFI has issued a total of 88 standards for Islamic finance. Its membership includes more than 200 institutions from 40 countries, including central banks and regulatory agencies.

A legal dispute between Pakistani insurance firms and regulators has been resolved after the country's five takaful firms had challenged the new takaful rules introduced in 2012. Under the agreement, insurers will have to allocate 50 million rupees ($506,100) in capital to their window operations, from no capitalisation requirement in the original rules. The takaful rules will be applicable after a three-month period and the regulator would also amend them to allow takaful firms to co-insure risks alongside conventional players, which the initial rules had forbidden. Takaful's share of the total insurance market is estimated at less than 3 percent. The regulator has now received five applications for takaful windows and expects as many as half of all conventional insurers to eventually apply for a licence.

Saudi Arabia's Dar Al Arkan Real Estate Development Co raised $400 million through an Islamic bond, with strong demand for the paper helping to reduce the cost at which it borrowed. The developer attracted a final order book of more than $1 billion for its five year sukuk. Final pricing came at a profit rate of 6.5 percent. This was tighter than the 6.75 percent earmarked earlier on Wednesday and well inside the high-6s percent given as initial pricing thoughts on Tuesday. Alkhair Capital, Deutsche Bank , Emirates NBD and Goldman Sachs were coordinators and bookrunners of the deal. Abu Dhabi-based Al Hilal Bank, as well as Qatari trio Al Rayan Investment, Barwa Bank and QInvest were also bookrunners.

Bahrain's central bank is finalising rules for the supervision of sharia-compliant advisory firms. The rules will help small Islamic finance institutions and fund managers to outsource the process of reviewing whether their activities are compliant with Islamic principles. This will enhance their operation and reduce the costs of such services. The central bank is also set to release a new regulatory framework for Islamic insurance, and is studying changes to rules for sharia-compliant financing arrangements which can be offered to accredited investors. In December, the central bank formally combined existing rules for issuing and listing financial securities, including sukuk, in an effort to make the process more efficient.

Dubai Islamic Bank is to purchase a 25 percent stake in Indonesian Islamic lender Bank Panin Syariah, it said in a statement on Monday, adding it could ultimately increase the holding up to 40 percent. No purchase price was given in the statement, which said the transaction was still subject to regulatory approval. Bank Panin Syariah, which was listed in Indonesia in January, is the Islamic subsidiary of Bank Pan Indonesia .

London-based European Islamic Investment Bank (EIIB.L) will propose a capital reduction plan next month to enhance returns for its shareholders, after the firm swung back into profit in the 2013 financial year. EIIB will seek shareholder approval for the plan, which could potentially take the shape of a share buyback or a tender offer, during its annual general meeting in June. The firm posted a pre-tax operating profit of 1.5 million pounds in 2013, compared to a 10.1 million pounds loss a year earlier. Under its 2012-2016 strategy, EIIB is restructuring its business by exiting higher-risk private equity investments, seeking more stable income streams such as asset management and advisory services under its EIIB-Rasmala brand.

Bahrain-based Gulf Finance House has appealed a decision by Kuwait's financial regulator to monitor its Kuwait-listed shares after the stock was traded in high volumes ahead of a company disclosure last year. In recent months, Kuwait's Capital Markets Authority (CMA) has been clamping down on what it sees as unusual market activity. Some executives and analysts have welcomed the move but others say the watchdog is being heavy-handed. Kuwait's regulator noticed GFH stock traded in high volumes in May 2013. The regulator notified GFH of its probe into the firm last September and said in April this year that it would monitor the stock for six months.

Etiqa Takaful Bhd, a unit of Malayan Banking, plans to issue 300 million ringgit ($92.2 million) in sukuk as early as this month, its chief executive Ahmad Rizlan Azman said. Last month, Etiqa Takaful set up its maiden sukuk programme, rated AA1 by RAM ratings, designed to qualify as Tier 2 capital in the company's balance sheet. The sukuk would be a one-off transaction classified as Etiqa's liabilities, carrying a 10-year tenor and a non-call provision in the first five years, said Azman. Etiqa would use a musharaka structure and the proceeds of the sukuk would be used for general business operations, working capital and other purposes. Maybank Investment Bank is the advisor for the sukuk.

The chief executive of Dubai Islamic Bank (DIB), Adnan Chilwan, said it was in talks to buy a 40 percent stake in an Indonesian Islamic lender to help diversify its revenues. DIB hopes to conclude a deal before the end of the year and that it will pay for the purchase using its own cash reserves. However, Chilwan declined to name the acquisition target, adding its parent was a listed company. Chilwan said in March that DIB planned to expand its operations into Indonesia, Kenya and other African countries. DIB's last acquisition came last year when it completed the takeover of Dubai-based mortgage lender Tamweel, having previously owned 58.2 percent of the firm before the buyout offer.

London-based RiverCrossing Capital Partners, a new Islamic investment firm, has launched its first product, a U.S. real estate fund, as part of a plan to offer non-traditional asset classes to institutional investors in the Gulf. The firm will develop asset-based funds with a non-cyclical nature, chairman Mohammed Abdulmalik said. RiverCrossing's first fund will have a target investment horizon of five years and focus on medical offices, self-storage facilities and senior and student housing in the United States, he added. RiverCrossing aims to raise $45 million in the first tranche of its Alternative Real Estate U.S. Fund this quarter, reaching a total of $125 million with a second tranche in the next 12 to 18 months.

Big Arab banks with money to spend are expanding across the Middle East in markets such as Egypt and Iraq, as they take advantage of a retreat from some areas by major international rivals. Since 2011, some global banks have downsized some of their businesses in the region to cut costs, help shore up capital and focus on their core markets, while competition from local banks has intensified. Meanwhile, UAE and Qatari banks have led the way in making some sizeable acquisitions and increasing their stakes in other lenders. In Egypt for example, Gulf banks are eyeing acquisitions because there is a lot of potential.