IslamicFinance.de

Thomson Reuters and Islamic Corporation for the Development of the Private Sector (ICD) have released the key findings of the Islamic Finance Development Indicator (IFDI) Report 2015. The report examines the key statistics and trends across five indicators that are deemed to be significant for measuring the development of the US$1.8 trillion Islamic finance industry. These include Quantitative Development, Knowledge, Governance, Corporate Social Responsibility and Awareness. According to the report, Malaysia leads IFDI again while GCC countries continue to dominate the top of the rankings for a third year in a row.

Global Islamic banking assets are expected to reach $1 trillion by the end of the year as Sharia-compliant financing increases market share in emerging markets, according to the consultancy firm EY. Sharia-compliant assets of commercial banks in Qatar, Indonesia, Saudi Arabia, Malaysia, the UAE and Turkey are set to exceed $801 billion in 2015, representing 80 per cent of international banking assets. Islamic banking assets are continuing to grow at a rate of 16 per cent per year and by 2020, the global Islamic banking industry profit pool is expected to reach $30.3bn, EY said. Islamic finance is especially picking up in the corporate world, where demand for sukuk has been on the rise in the Middle East in recent years.

Thomson Reuters in partnership with Barwa bank released today the findings of its fourth consecutive Sukuk Perceptions and Forecast study. A buoyant 2014 had sukuk market players optimistic for another robust year but market uncertainty, especially with the drop in oil prices and the expected increase in global interest rates, have dampened activity in the market. The global sukuk market in 2015 welcomed significantly fewer new issuers compared to 2014. Total sukuk issued in the first 9 months of 2015 dropped a drastic 38.6% to $48.8 billion from $79.5 billion for the same period in 2014. The sukuk papers were a lso issued in 12 currencies in first nine months of 2015 compared to 16 over the same period in 2014.

According to a recent report by the London-listed asset management group European Islamic Investment Bank, as Dubai pushes ahead with plans to expand its offering in Shariah-compliant financial services, it will be tapping into significant pent-up global demand for Islamic asset management, which could reach as high as $185 billion by 2019. The study, issued in mid October, highlighted additional measures that could be considered in order to raise Dubai's profile as a centre for IFS. Industry growth could be accelerated through wider consultation between fund managers and the authorities, with a focus on identifying ways to spur the creation of multi-asset-class, multi-geography funds.

Kazakhstan's central bank is considering halving the capital requirement for Islamic banks to 5 billion tenge ($16.3 million) from 10 billion tenge, part of a series of initiatives to attract foreign capital to Central Asia's largest economy. The majority Muslim state is keen to develop Islamic finance, according to a Thomson Reuters study released on Tuesday. A proposed reduction in capital requirements for Islamic banks would apply for both local and foreign investors, deputy governor Nurlan Kussainov was quoted as saying in the study. This could encourage new entrants in a market that now has one full-fledged Islamic bank, Al Hilal Islamic Bank.

The Directors General of the Infrastructure Concession Regulatory Commission (ICRC) Aminu Diko and Debt Management Office (DMO) Dr. Abraham Nwakwo have said that Nigeria would not be left behind in benefiting from the growing global Sukuk. They gave the assurance on Tuesday in Abuja at the two-day 2015 International Conference on Islamic Finance themed: "Islamic Capital Market: Infrastructure, Sukuk and Asset Management in Africa". Based on a 30-year National Integrated Infrastructure Master plan (NIIMP), Nigeria requires an expenditure of US$ 3.10 trillion in 30 years covering energy, transport, agriculture and water resources, social infrastructure and vital registration and security.

Shahjalal Islami Bank has reappointed Farman R Chowdhury as its managing director and chief executive, the bank said yesterday. Chowdhury will serve the bank for the next three years, it said in a statement. He joined Shahjalal Bank in 2013 as its managing director and chief executive. Prior to this assignment, he served ONE Bank as its managing director for six years. Chowdhury started his banking career in 1986 as a management trainee at American Express Bank and served there for 12 years. Later, he joined ONE Bank in 1999 as its first branch manager and served there until 2013.

Thomson Reuters, the Islamic Research and Training Institute (IRTI) and the General Council for Islamic Banks and Financial Institutions (CIBAFI) have launched a new report analysing the state of Islamic Finance in Kazakhstan titled “a future perspective of Islamic finance”. The report, produced in partnership with the National Bank of Kazakhstan, was launched during a dedicated Roundtable on Islamic finance emerging markets, ahead of the World Islamic Banking Conference (WIBC) in Manama, Bahrain. The report predicts a positive economic outlook for Kazakhstan, with an estimated GDP growth of 2.4% in 2016.

Standard Chartered Pakistan has established a Shariah board to help guide the bank's transactions in accordance with the principles of Shariah. This board has been formed in compliance with the Shariah Governance Framework and from the directives of State Bank of Pakistan. The members are: Sheikh Nizam Yaquby (Chairman), Mufti Muhammad Abdul Mubeen, Mufti Irshad Ahmad Aijaz and Mufti Muhammad Abdullah. Through liasing with the board of directors and senior management of the bank, the Shariah board shall ensure Shariah compliance as per regulatory requirements. The board would also endeavour to provide guidelines for devising new products and services.

Is it possible for businesses to have a bottom line that is not profit and endless growth, but human dignity, justice, sustainability and democracy? Or an alternative economic model that is untainted by the greed and crises of current financial systems? Christian Felber says it is. Moreover, in Change Everything he shows us how. The Economy for the Common Good is not just an idea, but has already become a broad international movement with thousands of people, hundreds of companies, and dozens of communities and organizations participating, developing and implementing it. Published in English for the first time, this is a remarkable blueprint for change that will profoundly influence debates on reshaping our economy for the future.

Saudi Arabia has approved proposals for a 2.5% ‘white land tax’, which will apply to undeveloped residential and residential/commercial plots within urban boundaries. The law will come into force six months after the Ministry of Housing’s release of detailed regulations, the publication of which will take place within the next six months. Once implemented, proceeds from the tax will be deposited into an account of the Saudi Arabian Monetary Agency, and will be used to fund housing and related infrastructure projects in the Kingdom. The law is intended to stimulate further development to meet the demand for middle-income housing in Saudi Arabia. JLL predicts that some land owners will bring forward plans and begin development in order to avoid the additional tax burden of holding undeveloped land. Others, it suggests, will seek to sell sites to other developers, which should help to reduce land values.

The collapse in the price of oil has compounded the problems for Aberdeen Asset Management, with Europe’s third-largest listed fund house reporting its 10th consecutive quarter of net fund outflows. The Scottish-based asset manager has been battling with investor nervousness over the continued turmoil in its core regions, but net redemptions have been exacerbated by oil-producing countries pulling money from their wealth funds to make up for a loss of export earnings. Aberdeen suffered net outflows of almost £13bn during the three months to the end of September. So far this year, the Saudi Arabian Monetary Agency — the world’s third-largest sovereign fund with $661bn invested — has withdrawn about $70bn from external asset managers to support its economy.

Bahrain-based Arcapita has sold real estate assets it jointly held with Saudi Arabia's Al Rajhi Capital for 1.35 billion Saudi riyals ($359.81 million), the two companies said in a joint statement. The ARC Real Estate Fund, which had a lifespan of five years, acquired seven assets in logistics, warehousing and retail in Saudi Arabia and the United Arab Emirates, they said in the statement. The fund appointed an external consultant to advise on the sale in April. They did not say who they had sold the assets to. Al Rajhi Capital is the investment banking arm of Saudi Arabian lender, Al Rajhi Bank.

MAA Group Bhd, Solidarity Group Holdings BSC and Zurich Insurance Co Ltd (Zurich) has jointly submitted an application to Bank Negara Malaysia (BNM), for the sale of MAA Takaful Bhd stakes. In a filing with Bursa Malaysia, MAA Group said the application was for the Minister of Finance's approval, pursuant to the Islamic Financial Services Act 2013. The group did not reveal any detail of the divestment. MAA Takaful is a joint venture between MAA Group and Solidarity Company BSC (C) of Bahrain, of which MAA controlled a 75% equity stake, while the remaining 25% is controlled by Solidarity Group. BNM had on June 15 said it granted its greenlight for MAA Group to commence negotiations with Zurich for disposal of its 75% stake in its takaful insurance arm.

In his keynote address at the IFN forum Saudi Arabia 2015, Khaled Al-Aboodi, CEO of Islamic Cooperation for the Development of the Private Sector (ICD) said that there is still a need of acquiring more knowledge and experience in Islamic finance. Al-Aboodi, while reviewing the latest global economic situation in the world, said growth remains moderate and uneven. The growth trajectories in emerging and developing markets vary significantly across countries, and in general, the outlook shows more weakening due to low prices of oil and other commodities, as well as the slowdown in China. As far as the Middle East and North Africa (MENA) region is concerned, the economic growth prospects is further hampered by geopolitical tensions and security challenges in some countries, he said.

Al Baraka Islamic Bank-Bahrain is interested in purchasing Islamic bonds expected to be issued by the Kuwaiti government before the end of the year, CEO Mohamed Isa Al Mutaweh said. Kuwait's finance ministry said in September that it intends to issue bonds and sukuk before the end of 2015 to finance its public deficit, which is estimated to reach KWD 8 billion (USD 26.3 billion). The CEO said the bank, owned by Al Baraka Group, hopes to achieve growth in assets in line with the expected growth of the global Islamic banking at an annual average of 15-20%. Real estate financing accounts for around 40% of Al Baraka Islamic's portfolio in Bahrain and Al Mutaweh said the housing sector was expected to see strong activity due to rising demand.

Lunch menu during the Arab Forum for Environment and Development’s conference on sustainable consumption constituted entirely of local organic food. Moreover, this was the first conference in the Arab region where “recycled” food was served: intact remains of Mediterranean fish served on day one were used to make a delicious fish-filet plate on day two. In addition, no plastic bottles were used during the two day conference, which were replaced by re-usable glass bottles. Within the same context, and in cooperation with AFED, the International Centre for Advanced Mediterranean Agronomic Studies (CIHEAM) organized a session during the conference on the Mediterranean diet as part of sustainable food systems.

Après l’Afrique du Sud et le Sénégal, la Côte d’Ivoire lance à son tour une émission de sukuks. Le pays vient de lancer une émission de sukuk, pour 150 milliards de francs CFA, soit 230 millions d’euros. L’opération a commencé le 20 novembre, et les investisseurs peuvent souscrire jusqu’au 21 décembre. Les fonds obtenus seront affectés à des projets de développement. En cas de succès, le gouvernement ivoirien compte bien renouveler l’opération ultérieurement. Il pourrait également faire des émules chez ses homologues, notamment au Niger et au Nigeria. Pour ces pays, l’intérêt de ce type d’emprunt est d’abord de diversifier leurs sources de financement.

Even some prominent scholars are of the view that while charging interest is not permitted in Islam, paying interest on loans is not impermissible. This is a view that demands an analysis from both an intellectual and economic perspective. A scholar argues that those who pay interest do not fall under the category of those who “eat others’ property unjustly” and that they must not also be deemed as “cooperating” in dealing in interest. The Prophetic tradition also prohibits cooperation in matters related to interest-based business. According to the scholar, the payer of interest does not “eat others’ property unjustly.” Hence, he does not commit any sin when he pays interest. This is a flawed argument, as interest-based transactions are by their very nature cooperative in nature.

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has published its new five issuances: the Shari'ah standards books (both in Arabic and English), the Accounting, Auditing, and Governance Standards and Codes of Ethics (both in Arabic and English), and the compendium of Shari'ah standards research papers. The new publications will be available for sale across various markets. They will be inaugurated at a special gala dinner to be hosted by AAOIFI on 6 December 2015 in Bahrain. The gala dinner will feature inauguration of the five hard copies editions as well as the digital version and the mobile and tablet applications, in addition to the launch of the projects of translating the Sharia standards to French and Russian languages, and other initiatives.