IslamicFinance.de

Last week, Ceres and its Investor Network on Climate Risk released an illuminating analysis of how some major companies are responding to shareholder engagement on environmental, social and governance (ESG) issues. The report, which covers the 2014 and 2015 proxy seasons, makes clear that long-term investors are putting increasing pressure on public companies to undertake ESG initiatives. Moreover, while most company responses are incremental and tailored to placate pesky activist shareholders — and others fall short entirely — these investors have won some significant sustainability victories.

Saudi Arabia is the region's leader in built asset wealth according to the according to the latest Global Built Asset Wealth Index published by Arcadis. The index calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87% of global GDP. On average, countries analyzed have a built asset stock worth 2.9 times GDP. China now has a built asset wealth of US$ 47.6 trillion, overtaking the USA which comes in second place with a wealth of US$ 36.8 trillion. On a regional basis, Saudi Arabia has a built asset wealth of US$ 3.15 trillion, while the UAE and Qatar rank respectively at US$ 1.33 trillion and US$ 0.45 trillion.

Last week Credit Suisse released its annual Global Wealth Report. Their analysis shows that the top 1% of people now own 50% of the world’s wealth. However, the report had another finding that was even more astonishing and largely overlooked. What they found was that, as a percentage of the world’s population, there are now more poor people in the United States and Europe than there are in China. 10% and 20% of the world’s poorest are in North America and Europe. Here, they define poor as lacking ‘wealth’, i.e. taking into account assets and liabilities like cash and debt. Credit Suisse estimates that half of the world has a net worth less than $3,210. And a large chunk of Americans and Europeans can’t make that cut because their net worth is negative.

The Islamic Financial Services Board (IFSB) has issued a Working Paper on Financial Consumer Protection in Islamic Finance (WP-03). The objective of consumer protection requires that the regulator takes adequate measures to ensure that the claim made by a financial institution to sell its products and services is sufficiently justified. The Working Paper lists some important findings from behavioural economics on the relevance of financial consumers' information-processing capabilities and cognitive biases in ensuring the effectiveness of consumer protection measures. It also provides a summary of both traditional and new approaches to financial consumer protection.

A number of mechanisms have been developed to enable companies to execute Shariah compliant hedges. The most straightforward approach is through back-to-back loans – agreed separately – of different currencies, which do not carry any interest or any other benefit. However, this does not take into account forward FX rates and therefore tends to be used in day-to-day dealings between local traders and in small amounts. Another option is based on commodity murabaha whereby a financier or intermediary purchases goods from a supplier and sells them to an end-user at a deferred price that is marked-up to include the intermediary’s profit margin.

During last six months, the Government of the Republic of Tatarstan and the Malaysian-Russian consortium comprising UNIRAZAK, IBFIM and IBFD Fund have been working up on the possibility of preparing the feasibility study on launching Islamic banks or Islamic banking windows on the territory of the Republic of Tatarstan as a pilot region for the introduction of Islamic banking and finance in the Russian Federation. The Feasibility study includes main principles and philosophies of Islamic finance, strategies and approaches of Islamic banking and takaful implementation, market study on the potential Islamic finance consumers, considerations and prerequisite of successful implementation.

The collapse in oil prices, which have more than halved from their previous peaks, has not been painless for Saudi Arabia. However, it’s far too soon to start writing the kingdom’s obituary: Its economy is far better insulated now than it was during the slump of the 1980s and 1990s, when oil reached below $10 a barrel in 1998. Although spending increased in the oil boom years of the 2000s, Saudi Arabia saved quite a bit of money during this time. Cash reserves as a ratio of GDP reached close to 100 percent in 2014. Saudi Arabia will not incur a fiscal or currency crisis of any sorts for the next few years. Its balance sheet has recently made tremendous improvements.

L’AAOIFI entreprend l’initiative de faire traduire ses Shari’ah Standards en français selon une méthodologie rigoureuse pour assurer une traduction une traduction fiable comportant plusieurs niveaux de révision, d’édition et d’assurance qualité pour obtenir une édition française qui reflète fidèlement la connotation arabe de ces standards. A cet effet, l’AAOIFI invite les prestataires de traduction qualifiés pour cette mission à soumettre leurs offres financières et techniques pour la traduction des Shari’ah Standards de l’AAOIFI (54 volumes) de l’Arabe au Français, conformément aux Termes de Référence téléchargeables ci-dessous.

The Islamic Development Bank's (IDB) ordinary capital resources has increased its use of sukuk instruments, not only boosting its lending capacity but also promoting the global Islamic financial markets, Moody's Investors Service said in its report "Islamic Development Bank - Ordinary Capital Resources". The IDB currently has a long-term issuer rating of Aaa with a stable outlook. Despite increased leverage from sukuk issuance, the IDB benefits from a large and expanding capital base. because of the recent general capital increase. The debt-to-equity ratio is expected to rise to 125% in the coming years, a level still well below that of other Aaa-rated MDBs.

The catalog of 6,500 numismatic pieces – coins, glass weights, dies, medals, etc. - is the third major catalog of Islamic numismatic material held in the Egyptian National Library, formerly the Khedivial Library. The catalog differs from its predecessors in a number of ways. First, it is a new catalog in that inscriptions had to be read from the digital images which were taken under difficult and rushed conditions and not from the actual objects. Second, inscriptions in Arabic are included in this electronic catalog. Inscriptions in European languages and references are the work of Dr. Norman D. Nicol from the 1982 catalog of the collection.

The so-called "halal tourism" market was once seen as a niche revenue stream, limited to pilgrimages. But now there's a movement in the tourism industry to widen the "halal tourism" market to cater to Muslim travelers worldwide, particularly those from wealthy Gulf Arab states. Travelers from Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, Bahrain and Oman will spend $64 billion traveling this year and are expected to spend $216 billion by 2030, according to a 2014 study for the travel tech company Amadeus. The study found that, on average, a traveler from these countries spends around $9,900 per trip outside the Gulf. For Emiratis, the figure reaches $10,400.

The 2014 Financial Inclusion Insights (FII) survey estimates that 93% of Pakistani adults are financially excluded as only 7% of the respondents reported to having a bank account, while registered accounts with other financial institutions were negligibly low. A more promising statistic is that of mobile phone ownership, as the FII survey finds that 54% of Pakistani adults own a mobile phone. This high proliferation of mobile phones is considered by many to be an opportunity for the financially excluded to attain financial inclusion through Mobile banking. However, various products such as loans, insurance, and interest on savings are not offered by mobile money companies yet.

Financial inclusion is one of many the areas that caught the new public authorities’ attention in Tunisia. A decree-law was passed in November 2011 that authorized the establishment of credit institutions dedicated to low-income people. It also created a modern regulatory agency, the microfinance supervisory authority. Beyond micro-lending, the Ministry of Finance now aims at modernizing the entire financial sector in Tunisia by 2020. Such a plan is timely and provides hope for further financial deepening. In this regard, a recent snapshot on financial inclusion completed by CGAP and the World Bank provides insights.

Qatar has become the world's richest country per capita measured by the value of its built environment according to the latest Global Built Asset Wealth Index published by Arcadis. Qatar has become a global leader, toppling Singapore as the most asset rich country per capita, with built assets of US$198,000 for every citizen. The index, which was compiled for Arcadis by the Centre for Economics and Business Research (Cebr), calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87% of global GDP. Total built asset wealth globally now stands at an estimated US$218 trillion, which is the equivalent to US$30,700 per person alive today.

The Bahrain Economic Development Board (EDB) hosted a Market Consultative Meeting on Islamic Credit Support Arrangement in association with the International Islamic Financial Markets (IIFM) and its Islamic hedging joint-partner International Swaps & Derivatives Association (ISDA) in the Kingdom of Bahrain. Credit Support Arrangement (CSA) is one of the key documentations for risk management where counter-parties transactional risk is managed through collateral and margin maintenance mechanism. The Islamic CSA will be developed under the already published ISDA/IIFM Tahawwut Master Agreement for Islamic hedging transactions.

Islamic banking has gradually been making inroads into the Nigerian banking system. But as a renowned Islamic finance and risk management expert and Registrar of the Islamic Institute of Accounting and Finance in Nigeria (IIAF), Dr. Busari Shaamsuddeen Akande said, there are grey areas in the strict practice of Islamic banking. Islamic banks, Dr Akande asserts, suffer from an identity crisis in practising the system. He delivered the paper titled, “Ethical Challenges and Product Innovation Crisis for Islamic Banks”at the South-South Summit on Islamic banking. The underlying fact of the paper is that the major crisis is that Islamic banking products are modelled after existing conventional bank products.

First National Bank (FNB) is looking to expand its Islamic banking offering to Zambia and Tanzania before the end of its financial year in June next year. FNB, which has been on an expansion phase in select countries in the rest of Africa, is looking to use the Islamic banking offering to capture clients, especially in those countries that have big Muslim communities. Amman Muhammad, the CEO of FNB Islamic Banking, said that in sub-Saharan Africa there were about 280-million Muslim people and the FirstRand group had a presence in countries that had about 200-million Muslims. The bank already offers Islamic banking in Botswana.

Saudi Arabia would be open to relaxing its rules on foreigners investing directly in its stock market to help it get included in global indices, the chairman of the Saudi financial-markets regulatory agency, the Capital Market Authority, said. In his first interview with international media since his appointment in January, Mohammed al-Jadaan also defended the limited trading so far by qualified foreign investors (QFIs) and noted the kingdom was already seeing wider benefits from having direct foreign access to its $470 billion stock market. On June 15, the Saudi stock exchange, the Tadawul, became one of the last major emerging markets to let foreigners buy shares directly.

Halalbooking.com, an online booking platform in the halal tourism sector, said it was targeting growth, with plans to launch a $1 billion (Dh3.67 billion) initial public offering (IPO) in three years, according to Elnur Seyidli, chairman of the company’s board. The UK-based company is still looking at global stock markets for the IPO but said it will either be in the UK or the US. Halalbooking has been growing to three times its initial size per year (300 per cent). The chairman said that the company was looking to grow its consumer base to half a million to a million per year. This will be achieved through adding more hotels to the website. He added that he expected growth in the next few years to come from Muslim countries. Halalbooking is also looking to capitalise on the GCC as a source market.

Qatar Islamic Bank has opened order books for a five-year benchmark dollar-denominated sukuk issue, a document from lead arrangers showed on Tuesday. The initial price guidance for the offering has been set in the area of 145 basis points over midswaps, the document showed. The bank has mandated Barwa Bank, Citi, HSBC, Noor Bank, QInvest and Standard Chartered as joint lead managers for the issue. The sukuk issue will be under Qatar Islamic's existing $1.5 billion Trust Certificate Issuance Programme.