IslamicFinance.de

In order to remove any ambiguity and doubt among the general public, the State Bank of Pakistan (SBP) has reiterated its commitment for promotion and development of Islamic banking in Pakistan.
Due to persistent efforts of SBP and the federal government, the share of Islamic banking in total deposits of the banking industry has surged to 12.8% as of June 30, 2015 and is consistently growing with a cumulative average growth rate of over 50% during the past 12 years. To-date, 5 full fledge Islamic banks, one Islamic banking subsidiary and 17 banks with dedicated Islamic banking branches are operating in the country with over 1,700 branches spread all over the country.

Kuwait’s Warba Bank achieved net profit of KD1.251 million ($4.12 million) in the third quarter (Q3) of the year compared to KD318,000 for the same period in 2014. The bank’s total assets grew by 34 per cent reaching KD682.760 million compared to KD507.140 million as on 30 September 2014.
The bank’s financing portfolio grew by 42 per cent reaching KD492.386 million by the end of the third quarter 2015 compared to KD346.747 million for the same period last year.

Emad Abdullah Al Thaqeb, chairman of Warba Bank, said: “Warba Bank’s strong performance continues to the third quarter with growth ascending trend reflecting the bank’s solid financial position, successful and flexible strategy that adapts to accelerating economic and legislative recent changes despite the ongoing political and security turbulences in the region.”

Channel NewsAsia is shining a deserved spotlight on individuals and organizations dedicated to charitable giving with a new program aptly called "Changing Lives," which celebrated its launch on Tuesday with the support of several billionaire philanthropists from Indonesia.
"The idea for the program came from my conversation with pak Tahir," said Debra Soon, head of news and premier segments at MediaCorp, the parent company of Singapore-based Channel NewsAsia.
Soon was referring to renowned Indonesian businessman and founder of the Mayapada Group, Tahir, who was present at the launch in Fairmont Jakarta.
"We talked about what we can do to promote philanthropy. I said, 'Why don't we organize events [and] have a program, because as a channel, we should be raising awareness of issues that matter to Asia.'"
The event included a gala dinner and talk show which featured Tahir as well as Maritime Affairs and Fisheries Minister Susi Pudjiastuti, who is known as a prominent business owner in her own right.

Malaysia’s takaful industry grew at a faster rate than conventional insurance, recording a compound annual growth rate of 12.4% in the last five years and outperforming the conventional insurance’s CAGR of 7.8%. Malaysian Takaful Association chairman Ahmad Rizlan Azman said takaful contributions last year were RM6.3 billion, accounting for a 13% share of the total insurance market.
“With Malaysia’s low insurance penetration rate of 5.2% of gross domestic product (GDP) in 2014 and its young demographics, significant market growth opportunities are yet to be tapped by its insurance and takaful sector,” Ahmad Rizlan said at the launch of the Malaysian Takaful Dynamics report on the sidelines of the 11th World Islamic Economic Forum yesterday.
The jointly developed report by the Malaysian Takaful Association and Ernst & Young (EY) Malaysia is the country’s first central compendium on Islamic insurance.
Ahmad Rizlan said the low penetration rate of takaful in the country is due to a lack of awareness about takaful-related products as well as the issue of affordability, especially among low-income groups.

The Islamic Finance industry in the country is facing an acute shortage of talent to serve the growing needs of the industry, as it is seeing a mismatch between the supply and demand of skilled workers in the niche financial sector. Chief executive director of Finance Accreditation Agency (FAA) Dr. Amat Taap Manshor said that globally, there is a shortage of close to 56,000 professionals to serve the growing industry.
Dr. Amat told the audience during a forum at the 11th World Islamic Economic Forum that there needs to be a deeper collaboration between academia and the industry to address the shortage. “The capital market sector is seeing the most acute shortage of Islamic Finance professionals, followed by takaful and banking,” Dr. Amat told reporters on the sideline after the forum. He said addressing the shortage issue has to be a continuous effort by all parties in the industry, and hopes that the country can see 40,000 Islamic Finance professionals in the market by 2020.

Islamic financing is gaining traction even among non-Muslim countries in a bid to use sustainable and equitable form of alternative models, the Malaysian Prime Minister said on Tuesday. London issued its second Islamic sukuk after its first bond issue was oversubscribed 14 times. In addition to London, Luxembourg and South Africa, Hong Kong has also issued sovereign sukuks.
“Ever since the global financial crisis in 2007-08 there has been a sharp demand for alternative economic and business model that reduces the level of speculation as conventional model that has inherent weakness,” Najib Razak told journalists. “Over-leveraging is believed to have been the root cause of the disaster — but again, that is prohibited in Islamic finance. As a result, Islamic banks remained strongly capitalised and resilient against financial market volatility, while continuing to contribute positively to equitable and sustainable growth,” he said.

The International Shari’ah Research Academy for Islamic Finance (ISRA) and Thomson Reuters, the world's leading provider of intelligent information for businesses and professionals today launched an inaugural joint publication on Islamic Commercial Law Report 2016.
The Islamic Commercial Law Report 2016 was launched by the Deputy Minister, Prime Minister’s Department YB Senator Dato’ Dr Asyraf Wajdi Dato’ Dusuki at the International Shari’ah Scholars Forum (ISSF), organised by ISRA and the Islamic Research and Training Institute (IRTI) in Westin Hotel, Kuala Lumpur on 3 November 2015.
The Islamic finance industry has witnessed exponential growth over the last three decades, and has become one of the fastest growing segments of the global financial industry with estimates of the current market size ranging from $1.66 trillion to $2.1 trillion. One key factor that has contributed to this progressive development is the flexible nature of Islamic commercial law, which has imbued Islamic finance with the same core characteristic of flexibility, as the legal maxim says: “the original ruling in Islamic financial transactions is permissibility”.

The revival of investor sentiment and interest in initial public offerings in the Gulf Cooperation Council countries experienced in 2014, slowed down in the first quarter of 2015, slightly picking up pace in the second and further slowing down in third quarter of the year, according to PwC's Capital Markets and Accounting Advisory Services team.
Regional IPO activity in Q3 is usually slower due to summer holidays, the holy month of Ramadan and Eid. This seasonal trend was perhaps exaggerated in Q3 as markets absorbed the impact of continued lower oil prices, growing geopolitical concerns and wider economic uncertainty, thus potentially impacting new issuers coming to market.

The Islamic Development Bank indicated that it may issue green sukuk bonds compliant with religious law and increase lending for climate-related projects with an announcement at the United Nations global warming conference in Paris at the end of the year.
“Estimates for the 2030 agenda indicate that we need to move from billions to trillions of dollars of support annually for sustainable development,” Savas Alpay, chief economist of the IDB, said in a phone interview. “Traditional sources of development finance will not be enough. We must also look at non-traditional sources. We will be using Islamic finance to bring new resources to the table.”
Khazanah Nasional Bhd, Malaysia’s state-owned sovereign wealth fund, issued green sukuk last November after introducing guidelines for socially responsible debt in August 2014. It was the second entity after the London-based International Financial Facility for Immunization announce plans to sell ethical-based sukuk.
Green Sukuk

With Islamic finance entering London’s financial market and billions of dollars of investment in the UK and global real estate coming from Gulf Cooperation Council countries and other Muslim jurisdictions, the UK government was one of the first in the West that started propelling initiatives on Islamic financing vehicles for property purchases as early as in 2013. Meanwhile, Islamic financing facilities have become so popular for real estate transactions in the UK undertaken by Arab investors that the next International Real Estate Finance Summit, the premier real estate event in the UK scheduled to take place on December 1 and 2, 2015, in London, will entirely focus on the opportunities Shariah-compliant finance vehicles entail for property financing.

Kuwait will host the World Islamic Financing Conference, organized by Kuwait Central Bank (CBK) and the International Monetary Fund, with the participation of the IMF Center for Financing and Economy in the Middle East and Thomson Reuters as strategic partner for knowledge.
The conference will be held on November 11, 2015 under the patronage of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah. This announcement was made by CBK Governor Mohammad Al-Hashel and said the conference will see high ranking international attendance of decision makers headed by Christine Lagarde, Director General of IMF and senior IMF employers and experts around the world.
Several finance ministers, Central Bank Governors, their deputies and representatives in many countries are expected to attend the event. There will also be presence of International Economic Establishments that belong to the United Nations and Regional Organizations in addition to experts and academics.

The Islamic countries of South-East Asia represent a rich potential area of growth for insurers, especially those able to offer Sharia-compliant products, Richard Bishop, chief executive officer of Cobalt Underwriting, told SIRC Today. Bishop said that counties such as Indonesia, Malaysia and Pakistan offered a plentiful source of potential business for insurers, especially those familiar with and able to offer Sharia-compliant insurance.
Cobalt Insurance Holdings and its two specialist operations, Cobalt Underwriting Services and Cobalt Advisory Services, were formed in 2012 with the objective of establishing London as a leading global centre for Sharia-compliant insurance capacity.
“When we started we principally focused our efforts on the Middle East as a market,” Bishop said. “We do business in the UK, or inward investment into the UK via Islamic investors, but we wanted to make our product available in the Islamic markets, and the closest Islamic market to the UK is the Middle East. It’s worked quite well for us as a starter market.”

BMA Asset Management Company Limited (BMA Funds), a non banking finance company, formally signed the trust deed for its forthcoming Islamic income scheme, BMA Minhaj Islamic Income Fund at CDC Pakistan. The event brought together the representatives from CDC, trustee of the BMA Minhaj Islamic Income fund, and the senior management of BMA Asset Management Company Limited.

Following the same trend of leadership, BMA Minhaj Islamic Income Fund will offer a unique one of its kind scheme for investors who wish to benefit from the equity market and at the same time seek capital appreciation that adheres to shariah principles. It primarily aims to generate superior risk adjusted returns to earn a stable halal income over medium to long term by investing in fixed income instruments present in Pakistan debt market.

Prime Minister Datuk Seri Najib Razak credited the 2008 global economic crisis, reportedly the worst since the Great Depression, for paving the way towards the growth of Islamic finance. He said the 2008 financial crisis, which was triggered by the bursting of a housing bubble in the United States and later contributed to the European sovereign-debt crisis, made alternative financial systems more sought after.
“Ever since the global economic crisis in 2007, 2008, I think there’s been a sharp demand for alternative economic and business models, specifically financial models that reduces the level of speculation. “Conventional model has that inherent weakness and more to kind of a genuine partnership, you share the risk and you share the profit. So Islamic finance has gained a lot of traction,” he said during a press conference at the 11th World Islamic Economic Forum in Kuala Lumpur here.

Maybank Islamic, is one of the leading arrangers of sukuk in the world, has viewed Gulf Cooperation Council, including Qatar, as its priority region in mobilising funds through Shariah-principled bonds.
“The GCC is definitely on our radar. It all depends on what kind of opportunities are available,” said Nor Shahrizan Sulaiman, deputy chief executive of Maybank Islamic, which is wholly-owned by Maybank Group with strong credit ratings from Standard & Poor’s and Moody’s.
The lender, a leading Islamic bank in the Asean region with assets to the tune of $42.65bn as on June 30, 2015, has a branch in Bahrain and a 30% stake in Anfaal Capital in Saudi Arabia.
Maybank is exploring opportunities in the Middle East through its stake in the Saudi Arabia’s Anfaal Capital. Almost 90% of the Maybank Islamic’s balance sheet is domestic and the remaining 10% is from overseas operations, according to Sulaiman.

Even though the struggle over Greece’s bailout has receded from the news, with many countries carrying large debt burdens, the need to restructure sovereign debts is not going away. But as Greece illustrates, the recent pattern has been to try to get blood from stones, and to be indifferent to the very real risk of turning fragile economies with weak governments into failed states (it must also be pointed out that Greece actually has gotten a lot of debt relief, but in the form of lowering of interest rates and extensions of maturities, but is being held to such unrealistic government budget and labor market “reform” targets as to virtually that the debt to GSP ratio will continue to worsen).

QInvest, Qatar’s leading investment group and one of the most prominent Islamic financial institutions in the world, announced the completion of its debut $200m five year syndicated facility.

The facility is in line with the bank’s funding diversification and capital efficiency plan and was arranged by QInvest’s key regional and international relationship banks, namely Masraf Al Rayan, Al Khaliji France S.A. and Natixis. QInvest previously announced that it was named the “Most Innovative Investment Bank from the Middle East” at The Banker magazine’s Investment Banking Awards 2015.

Markets across Africa now offer a world of exciting growth opportunities, with experts projecting that 7 out of the 10 fastest growing economies in the world will be in Africa. Djibouti is rapidly becoming an important hub for Islamic finance in Africa, with strong support coming from the President.
The Central Bank of Djibouti is leading the way in terms of driving the practical legal and regulatory framework. Djibouti's strong commitment to Islamic finance is further cemented by its drive to connect with memberships in important international industry organizations, such as the Islamic Financial Services Board and the General Council for Islamic Banks and Financial Institutions.

In a joint press conference with the World Islamic Banking Conference, Ernest & Young highlighted part of its World Islamic Banking Competitiveness Report 2015-2016 in Manama. “The growth of the Islamic banking industry in the GCC, specifically in Saudi Arabia, in the past few years can be attributed to the increased public sector spending on the back of oil revenues. It will be interesting to see how banks are affected as governments draw their reserves from the banking sector to narrow the gap on budget deficits due to the drop in the global oil price,” said Muzammil Kasbati, Director, Global Islamic Banking Centre at Ernest & Young.
According to the statement, the GCC Islamic banking profit pool crossed $12 billion, with expectations that the sector will continue to grow amid regional economic uncertainty. Further, the statement says that nine core markets are currently the growth engines for the global Islamic finance industry. Ernest & Young identified a group of 40 banks across these nine core markets that are “systemically important” to the future progress of the industry.

The Thomson Reuters Global Sukuk Index is at 118.24280 points, up from 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 116.64293 points against 113.69014 at end-2014.