IslamicFinance.de

Kazakhstan's parliament has approved legislative amendments to facilitate Islamic finance, paving the way for Central Asia's largest economy to issue its first sovereign sukuk next year, a government official said.
The amendments, which still require the president's signature, would also allow for the conversion of conventional banks into Islamic ones, said Yerlan Baidaulet, an adviser to the Investments and Development Ministry.

«We expect the sovereign sukuk in early spring of next year. Probably in March, it depends on the decision of the Ministry of Finance as it has its own budgetary process», Baidaulet said on the sidelines of an industry conference in Kuwait. The legal amendments to the banking services and securities laws are the latest steps by the majority Muslim state to help develop Islamic finance. A dedicated Islamic banking law is also currently in preparation, Baidaulet said. Lawmakers have also passed a law to establish an offshore centre in the capital Astana, which is partly aimed at attracting Islamic finance business, he added.

The nation’s eight largest banks, representing 46 % of national banking assets, have committed to implementing sustainable financing as part of global environment goals.

Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Bank Negara Indonesia (BNI), Bank Muamalat, BRI Syariah, Bank Jabar Banten (BJB) and Bank Artha Graha Internasional signed the commitment with the Financial Services Authority (OJK) and the World Wildlife Fund (WWF) Indonesia on Monday. The commitment was manifested in a pilot project called “first step to becoming a sustainable bank”, marking a big move taken by the banks less than a year after the OJK launched the 2014-2019 Sustainable Financial Roadmap, according to OJK head Muliaman D. Hadad.

“I hope these eight banks, which are the prime movers in this project, can encourage other banks and financial institutions to join the country’s implementation of sustainable finance,” Muliaman said in his speech. Through the green banking pilot project, Muliaman said participating banks were expected to balance their pursuit of profits with willingness to conserve the environment, serving as examples to their peers.

The Middle East and North Africa region recorded strong growth in the Sukuk market in the first 10 months of 2015, according to Michele Leung, Director, Fixed Income Indices, S&P Dow Jones Indices.
The market value, as tracked by the S&P MENA Sukuk Index, rose 14 % YTD to 37 billion, compared with the mere 1 % growth in the conventional bond market in the region. The Sukuk market has expanded 37 % since the S&P MENA Sukuk Index’s inception in July 2013. United Arab Emirates is the most active issuing country in the region, and it remains dominant in terms of country exposure at 52 %, followed by Saudi Arabia at 17 %.
Overall, governments have continued to diversify their funding platforms, and the global Sukuk market has witnessed solid support from the lack of primary supply. Looking at the indices’ total return performance, there has been a 1.1 - 1.3 % decline in both Sukuk and bond markets month-to-date. As of Nov 18, 2015, the S&P MENA Sukuk Index rose 1.05 % YTD, while the S&P MENA Bond Index outperformed and gained 1.90 % in the same period.

BLME Holdings has appointed James Harrowsmith as a director to the BLME leasing team. He will report to Fred Yue, head of leasing at BLME and will be responsible for leading the bank’s heavy goods and commercial vehicles funding business.
Harrowsmith has over 20 years of experience in financial services, specialising in asset finance to the commercial vehicles sector. He was most recently at Eddie Stobart where he was responsible for sourcing all of the business funding solutions for its fleet of 2,500 HGVS and 3,000 trailers.
Prior to this, he was at Close Brothers Asset Finance and also HBOS, specialising in the HGV and LCV sector and was part of a team managing a £2 billion portfolio of assets.

The Islamic Financial Services Board (IFSB) is pleased to announce the second dissemination of its Prudential and Structural Islamic Financial Indicators (PSIFIs) from 16 member countries. The PSIFI data, which aims to provide data on the financial soundness and growth of the Islamic banking systems in participating IFSB member jurisdictions, covers the quarterly data from December 2013 to December 2014.
Secretary-General of the IFSB, Mr Jaseem Ahmed stated that "The support of multilateral organisations - such as the IMF, ADB and IDB - have greatly assisted the progress on this project. It is our aim to continue to expand the scope of the PSIFI to include the participation of new jurisdictions, as well as expansion of data to the Islamic capital market and Takaful sectors of the industry".

The Waqf Fund, a Bahrain-based special fund to support Islamic finance training, education and research, hosted its tenth Sharia Scholar session with Dr. Abdulbari Mash'al. Dr. Mashal made a presentation on "What Sharia Reviewers can do to enhance Sharia governance and compliance at Islamic banks". This was followed by an interactive two hour session during which the participants asked questions and gave their comments. Dr. Mash'al explained the general internal Sharia control environment of an Islamic bank and then focused on governance and Sharia compliance. He also explained the interplay between internal Sharia compliance and internal Sharia audit. Dr. Mash'al explained how inherent risks pass through the protection pillar or filter of internal Sharia supervision and the Sharia non-compliance risk is subjected to internal Sharia audit procedures to reduce the likelihood of such risks occurring. If the process is robust it will substantially reduce Sharia non-compliance risk. He emphasized that in order to be effective the internal Sharia auditor has to demonstrate independence and objectivity, technical competence and due care.

Expected to decrease by up to 30 % of land and real estate value. Real estate experts expect property prices in Saudi Arabia to decline gradually over the coming years and return to normal levels.
According to their forecasts, this will only happen with implementing the new regulation of fees on undeveloped plots of land in urban areas (white lands), the decline in real estate mortgage and the drop in oil prices in the Kingdom. Prices are expected to fall by up to 30 % of the land and real estate value, reports investing.com.
On this basis, Ihsan Buhulaiga, a former member of the Shura Council and an economic expert, says: “White lands’ law will ensure that landlords have only two alternatives: the first one is selling the land and the other is to develop an economic project based on market need.”
Eng. Mohammed Babahar says: “These new procedures are considered an excellent step to cure the Saudi real estate market and escape the inflation that has swept the market and pushed the prices up by more than 300 % and doubled the rental rates.”

QInvest and Carnegie Mellon University in Qatar (CMU-Q), a branch of Carnegie Mellon University in Pennsylvania, USA, signed a Memorandum of Understanding (MoU) to cooperate and coordinate in the fields of research and education.
The MOU will offer QInvest the opportunity to use CMU-Q’s educational programs, research and strategic studies, as well as those from select schools at Carnegie Mellon’s US campus. QInvest in return will provide CMU-Q’s new graduates and students in their final year the opportunity to spend one month working at QInvest under the bank’s QTALENT initiative.

Standard Chartered has appointed Rehan Shaikh as chief executive of its global Islamic banking business, it said in a statement on Wednesday.
Shaikh moves to Standard Chartered Saadiq from Dubai Islamic Bank, where he was senior vice president and business head, private sector and transaction banking. He previously worked for StanChart in Pakistan from 1998 to 2007, the statement said.
He takes over from Sohail Akbar, who was interim chief executive of the Islamic banking operation after the departure of Afaq Khan earlier this year.
StanChart remains committed to the business despite a period of hiatus across other parts of the bank as global chief executive Bill Winters moves to restore profitability. It announced plans this month to reduce costs by $2.9 billion by 2018 and cut 15,000 jobs.
"Islamic finance is an integral part of the business at Standard Chartered and we continue to see growing demand from clients in many of our markets," said Sunil Kaushal, the bank's regional chief executive for Africa and the Middle East.

The leading Russian companies consider Islamic finance as a new and effective source of capital attraction. The issue of forming a collaboration with the Middle East and Southeast Asia capital markets will be discussed at the debate seminar of the Russian finance directors’ club.
The financiers of the largest Russian companies such as Vnesheconombank, Rosselkhozbank, Rosevrobank, SIBUR holding, the RUSSIAN INVESTMENT SOCIETY, VTB Capital Investment Management, Svyaztransneft, Inteco, Promsvyazkapital, Far East energy Management Company, INTERAVIAGAZ and others have confirmed their participation in the conventional meeting.
The key topic of the seminar – «Crisis – it is time to make an important decisions. TODAY IS TOO EARLY, TOMORROW WILL BE TOO LATE». The discussions will also touch on the issues of economic situation and risks assessment, forecasts, collaboration with banks, financing import from the West Europe with the assistance of the export and credit agency. The first Vice-President of the Russian finance directors’ club Tamara Kasyanova, who is in the top 100 of the Russian economy and finance experts, will hold the seminar.

As the Shariah-compliant Islamic finance sector booms in the GCC region, the President of the Islamic Development Bank (IDB) Group, Dr. Ahmad Mohamed Ali, asked experts in the field to develop new Islamic microfinance structures. Ali says the industry needs to leverage existing technologies and business approaches, such as mobile banking, to start developing microfinance initiatives that would support small and medium enterprises (SMEs). Ali said those actions would help local economies and cement the Islamic finance industry’s place as a leader in the global economy.
Ali’s remarks came at a conference in Kuwait entitled "Islamic Finance: Meeting Global Aspirations." There, Ali told the assembled financial professionals that Islamic microfinance would facilitate the inclusion of more people from various income brackets into the financial industry and provide greater access to financing, grow small local businesses and contribute to financial stability.

There is, however, some risk with lending money to inexperienced business owners. That means that on top of providing Islamic microfinancing, the banking industry needs to help educate and guide SMEs.

The merger negotiations between Bank Muamalat and Malaysia Building Society Bhd (MBSB) is going on very well and smoothly, says Bank Muamalat Chairman Tan Sri Dr Munir Majid. He said there was no conclusion yet but the progress, thus far, was good. "We will still have to report to Bank Negara on what we have achieved by year-end, after which we will proceed to the next stage," he said at a 'Charity Free Market - Back to School' programme, organised by the bank.

Bank Negara Malaysia gave its approval to Bank Muamalat and MBSB to begin merger talks on Sept 30, a move that could pave the way for the creation of the countrys biggest standalone Islamic bank.
The central bank required the merger negotiations to be finalised within three months from the date of the approval. It was reported earlier that assuming the merger talks go through, the combined asset size of the two lenders is estimated to be over RM60 billion, higher than the RM54 billion asset size of BIMB Holdings Bhd, the holding company of Bank Islam Malaysia Bhd, Malaysias largest full-fledged Islamic bank.

The board of directors of Faysal Bank has decided to covert make the bank’s operations Sharia compliant from conventional, but the snail’s pace migration is raising questions about its success in a highly competitive regime and in times when Islamic banking is expanding at a fast pace.

The bank is operating its 277 branches with 63 dedicated Islamic Banking branches having vision to migrate overall operation into full-fledged Islamic banking in next three to four years but its strategy is not being reflected into its plan but seems confusing with its offering to customers and investment in government papers. In a talk show “Aap Aur Karobaar” on Business Plus Tv, Host Khalil Ahmed and Banking Analyst SN Arif discussed business, operations and strategy of bank and its success in its peer in the banking industry.

Five year 150 billion CFA issuance sukuk priced at a profit rate of 5.75%
The Ivory Coast is to become the latest state to issue a Sovereign Sukuk as it today launched its debut five year 150 billion CFA issuance sukuk priced at a profit rate of 5.75%. The addition of the Ivory Coast displays the continued growth of the Islamic finance market into Africa and represents a highlight in quiet year for sukuk issuance’s with total issuance volumes down considerably due to tightening of liquidity in traditional Islamic financial markets of the Gulf and South East Asia.
The sukuk is being arranged by the Islamic Corporation for Private Sector Development (ICD). The ICD signed an agreement in April 2015 for the implementation of a five-year Sukuk programme for 300 billion CFA to be issued in two equal phases of 150 billion CFA each. A road show was held in Saudi Arabia from 14 to 19 November and followed a recent upward revision of the Ivory Coast’s sovereign rating by Moody’s from B1 to Ba3.

Global Islamic finance assets had an estimated value of $1.8 trillion in 2014 and are expected to almost double by 2020 to reach $3.2 trillion, according to the ICD Thomson Reuters Islamic Finance Development Indicator.

The projections come ahead of the 2015 World Islamic Banking Conference (WIBC 2015), which will be hosted by Thomson Reuters, the world's leading provider of intelligent information for businesses and professionals, and The Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group.

The head of National Bank of Kyrgyzstan Tolkunbek Abdygulov and the president of the Islamic Development Bank (IDB) Ahmad Mohamed Ali Al-Madani had discussed the prospects of jointly opening an Islamic bank in Kyrgyzstan.
Additionally, they had talked about the other relevant things such as the perspectives of Kyrgyz Republic economy development, the establishment of a joint Shariyah compliant commercial bank and the possibility of opening an IDB representative office in Kyrgyzstan. The discussion took place during the International Financial conference “Islamic Finance: Meeting Global Aspirations” in Kuwait, on November 11, 2015.

Tolkunbek Abdygulov also had a meeting with Christine Lagarde, the Managing director of the International Monetary Fund, in which they discussed further course of cooperation between Kyrgyzstan and the IMF and drew a plan on joint actions during the financial crisis. Ms Lagarde also noted the concerted actions of Kyrgyztan’s National Bank and the government on monetary and fiscal policies.

Linar Yakupov is marked out in ISLAMICA 500, the unique project of ISFIN, the largest consulting organization for the Islamic financial markets.
In ISLAMICA 500, data on leading experts in area of Islamic economy and the "halal" industry from around the world are published. The peculiar guide contains curriculum vitae about each of experts, whose efforts and achievements formed the basis of development of the Islamic economy on a global scale. The encyclopedia contains information on pioneers of the Islamic finance world, Muslims and non-Muslims, men and women who represents a range economy sectors: finance, science, business, politics, the international relations, the law, mass media and the capital markets – all the areas that exert influence on Islamic economy.

Baiza Bain had the opportunity to attend the recent World Islamic Economic Forum.
“It was a surreal experience as I had the opportunity to interact with a number of international delegates on areas that are outside my realm of Islamic finance. The various conversations I had certainly allowed me to have a different perspective on my area of practice. It made me realise that there are many ways in which Islamic finance could evolve to keep up with the rapidly changing times.
So, in what way has Islamic finance tried to keep up with the times? I remember having a conversation with an old friend who highlighted a unique initiative that is currently being worked on. This initiative was actually announced under Budget 2015. Called the Investment Account Platform (IAP), its aim is to diversify the roles that are currently being played by the Islamic financial institutions by way of adding on the responsibility of being an investment intermediary.

The King Abdullah University of Science and Technology (KAUST) and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IDB), in collaboration with Anfaal Capital agreed to establish a Saudi Arabia-focused venture capital fund.
The joint initiative aims to promote and foster the development of the domestic venture capital market in Saudi Arabia. The initiative leverages KAUST’s expertise in new technologies, as well as the ICD SME Program’s experience in the development and management of investment vehicles.
The Fund will provide venture capital (VC) funding for high-tech start-ups located in Saudi Arabia and lead early-stage financing rounds attracting local investors and international venture capitalists. Furthermore, it will invest in sectors that are strategic for the region and nurture entrepreneurship and technological innovation, stimulating the creation of high-value jobs.
The Fund will search for unique and innovative venture capital opportunities and provide the “smart and hands-on capital” needed to start and then sustain these companies.

Islamic finance is based on growth of assets, not financial engineering, and this organic growth makes it different from Western debt constructs, Justice and Development (AK) Party parliamentarian and economist has said.
Ibrahim Turhan, member of Turkish parliament for AK Party from Izmir, made the remarks in an interview with Anadolu Agency on the sidelines of the Second International Islamic Finance and Economics conference in Istanbul on Thursday.
Turhan, who is also an economist and former chief executive officer of Borsa Istanbul, said: “One of the principal causes of financial crisis of 2008-2009 was the vast market that had grown up for securitized instruments.