IslamicFinance.de

The ‘social contract’ is an idea that dates back to the ancient Greeks, and refers to the implicit agreement among members of a society that defines their relationship with each other and the state. That relationship holds the key to unravelling the puzzle of the ‘Arab Spring.’

To development economists, the uprisings that started in Tunisia and spread to several countries in the Arab world in 2010-11 came as somewhat of a surprise. For the previous decade, almost all the indicators of economic well-being were strong and improving. GDP growth was substantial, at about 5 percent a year. Extreme poverty (people living on $1.25 a day) was low and declining. Conventional measures of inequality, such as the Gini coefficient, were lower than in other middle-income countries, and in some cases declining. In Egypt and Tunisia, the per-capita income of the bottom 40 percent was growing faster than the average. In terms of human development, the Middle East and North Africa region recorded the fastest decline in child mortality rates and the steepest increase in school attainment.

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

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.

Faisal Islamic Bank of Egypt is offering the country's central bank three proposals to activate the mortgage finance initiative for the low and medium-class incomes. Mahmoud Idris - Faisal Bank's Product Manager for Mortgage Unit - said that one of the three proposals offered by the bank to the CBE is to raise premiums of the housing unit gradually every year. The second suggestion is to elongate the funding period from 20 to 25 years. Idris stated that the third proposal is to launch a national campaign by the CBE in coordination with banks to raise citizens' awareness about the importance of the initiative and the necessary steps to participate in it.

Egypt's Wethaq Takaful Insurance is to launch its first real estate fund during upcoming general assembly scheduled for next November, head of financial and administration affairs Abdel El Aziz Labib said. Wethaq will present 50 million Egyptian pounds (US$6.4 million) as an initial capital for the new fund. The Egyptian Financial Supervisory Authority (EFSA) has granted initial approval for the fund. Wethaq intends to raise the capital of its fund to 250 million pounds within few years after inception, a step toward a plan to launch another fund. Furthermore, Labib said Wethaq's talks with the Egyptian regulator had also included a proposal to establish a new subsidiary to manage the new fund. The new subsidiary shall be 20% owned by Wethaq Egypt, he added.

Egypt is planning to introduce sukuk and revisit the international capital market to help finance its $36bn financing gap during fiscal year (FY) 2015/2016, Minister of Finance Hany Kadry Dimian said. In June, the Egyptian government sold 10-year international bonds worth $1.5bn, with revenue of 6%. Dimian added that the best bet to bridge the financing gap is to continue reforming the economy. The Suez Canal Zone that was entirely a military zone now is opening to everyone, Dimian added. The oil sector is also opening up to new private investors, Dimian noted. Moreover, having a fully fledged VAT system will increase competitiveness, he added, highlighting that competitiveness will help stabilise the pound.

The Egypt part of the Bahraini Al Baraka Group plans to pump one billion Egyptian pounds (US$127.8 million) into mega projects in the country. According to Ashraf El Ghamrawy - CEO of Al Baraka Bank Egypt, the bank intends to invest in the Suez Canal Corridor Area as well as East Port Said (Tafreeaa) Port projects. The Suez Canal Corridor Area project's aim is to increase the role of the Suez Canal region in international trading and to develop the three canal cities: Suez, Ismailia, and Port Said. Al Baraka Bank Egypt has allocated around 250 million Egyptian pounds to invest in one of the logistics projects in Suez Canal, however, no details were given until an agreement is reached.

Faisal Islamic Bank of Egypt is currently negotiating with four real estate investment firms to take part in the central bank's social housing initiative, Product Manager-Mortgage Unit Mahmoud Idris said. Idris stated that the bank is to sign a protocol with one of those companies this week. He refused to reveal the names of the four firms before finishing the agreements. In 2014, Egypt's Central Bank (CBE) launched a new initiative worth 10 billion Egyptian pounds (US$1.4 billion) to stimulate the mortgage sector.

Kuwait-based Wethaq Takaful Insurance Company intends to sell its stake in the Egyptian unit, Wethaq Takaful Egypt for KWD1.3 million (US$4.3 million). The board of the Kuwaiti insurer had given Wednesday the go-ahead to sell its stake in the Egyptian unit in favour of a buyer whose name was not mentioned in the company's statement to the Kuwaiti Stock Exchange. The Shareholders' structure in Wethaq Egypt includes: Wethaq Takaful Insurance Company of Kuwait (60%), Kuwait-based Adeem Investment and Wealth Management Company (39.9%), and Kuwaiti investor Najeeb Al-Humaidhi (0.1%).

The Egyptian Islamic Finance Association (EIFA) obtained the licence from Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), EIFA's Chairman Mohamed Al-Beltagy said. By this licence, the association is capable of conducting accreditation tests for bankers and auditors of Islamic banking on behalf of AAOIFI in Egypt, the chairman stated. A number of bankers have already applied to conduct the accreditation tests, he added. The Bahraini organization will provide the necessary training for the bankers and auditors before conducting the test. Passing the accreditation tests is considered as an international accreditation for those who work in the field of Islamic banking.

Al Barak Bank Egypt's total cash and due from Central Bank of Egypt reached around EGP 3.656 billion (US$ 229.8 million) at the end of June 2015 versus EGP 1.850 billion at the end of December 2014. The financial lists showed that bank's investments in governmental notes recorded 5.319 billion Egyptian pounds at the end of June 2015 opposed to 3.604 billion Egyptian pounds at the end of 2014, making EGP 1.71 billion increase. According to the lists, Al Baraka Bank Egypt 's total volume of Murabaha, Mudaraba and Musharka for customers hit EGP8.534 billion at the end of June 2015 compared to EGP8.462 billion at the end of 2014.

Faisal Islamic Bank of Egypt (FAIT) has achieved profits volume of 387.1 million Egyptian pounds (US$49.4 million) within the first half of 2015 versus EGP 351.48 million in the same period of 2014 marking 10% increase. The bank's revenues has been increased to 2.15 billion Egyptian pounds in six months opposed to 1.81 billion within the first half of 2014 registering 19% increase. The volume of bank's total assets also has been boosted to EGP 53.2 billion at the end of June 2015 compared to EGP 49.05 billion at the end of 2014 with 8.5% increase. The business volume of Faisal Islamic Bank of Egypt has recorded EGP 53.2 billion. Moreover, the number of accounts managed by the bank has been increased from 1.083 million at the end of June 2014 to 1.086 million at the end of June 2015.

President Abdel-Fattah al-Sisi aims to slash a subsidy bill, mostly for food and energy, that ballooned to about 8 percent of economic output last fiscal year. Instead, money will be directed to those who need it most – eventually, about 18 million Egyptians, the poorest 20 percent of the population. After years of political turmoil the government is eager to make sure they’re spared the impact of spending cuts. Yet it’s also under pressure from investors to trim one of the region’s biggest budget deficits. Targeted handouts are a way of achieving both goals. The program called Takaful or Solidarity gives cash to families on condition that their children attend school and undergo regular medical checkups. Another plan, Karama or Dignity, covers the elderly and the disabled.

Egyptian Takaful Insurance Company (Non-life) aims to achieve premiums worth EGP 10 million (US$ 1.3million) in FY 2015-16, Managing Director Ahmed Arfeen revealed. The company expects to attain premiums volume of EGP 350 million at the end of June 2015, Arfeeen said. The initial indicators showed that the company has achieved 95% of its plan for current FY 2014-15. On other side, Egyptian Takaful Company is negotiating with a number of banks to sign bankassurance agreement in 2016, Arfeen said, noting that banks had not signed any agreements with non-life insurance companies till now. It is worth mentioning that 66% of the shareholding structure of Egyptian Takaful Company (Non-life) is divided equally among seven financial institutions.

Egyptian social entrepreneur Mohamed Ashraf Abdel Samad started Shagara (‘tree’ in Arabic) back in 2011! The idea of Shagara is to act by planting trees and plants inside cities to offset problems, increase environmental awareness, and—last but not least—help the economically disadvantaged. To do this, Shagara integrates vegetation into urban areas, blending design concepts with modern agricultural techniques and architecture. The flagship project is “Shagara at School”. It was carried out for the first time at a school in Egypt’s Al-Qalyubia Governorate in February 2013. Today, it is still going, the school extending it in 2015 by using its own resources after receiving an award for quality for the second year running.

Islamic International Rating Agency (IIRA) has assigned an international scale rating of 'B-/B' (Single B Minus / Single B) and national scale rating of 'A-(eg)/A2(eg)' (Single A Minus / A Two) to AlBaraka Bank Egypt. Outlook on the assigned ratings is 'Stable'. The fiduciary score has been assessed in the range of '66-70', reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected. Ratings assigned to ABBE derive strength from the franchise of Albaraka Banking Group (ABG) as the bank's principal owner. The bank's sound liquidity and profitability indicators in addition to favorable and improving asset quality lend support to the ratings assigned.

The Islamic Development Bank 's total funding portfolio for Egypt has reached US$12.5 billion, including US$3.1 billion in 2014, director country department Mohammad Al-Saati said. The IDB official has referred that his bank had signed financing agreements for important projects in Egypt, including US$450 million for South Helwan power station, US$460 million for Sharm El-Sheikh Airport, and US$220 million for Egyptian-Saudi electricity grid linkage project. Towards bolstering its partnership with Egypt, IDB will sign within the third quarter of this year a new agreement to launch a representative office in the North African country, Al-Saati noted.

The volume of Faisal Islamic Bank of Egypt’s (FAIT) business increased to LE52.8 bln at the end of April 2015, compared to LE47.9 bln in the same period last year, the bank announced. The increase marks a rise of 10.3% in comparison to last year. Additionally, the total assets of the bank increased by 9.8%, from LE47.4 bln in March 2014 to LE52 bln in April 2015. Meanwhile the bank’s net profits reached LE196.97 m in the first quarter of 2015, compared to EGP 172.3m during the same period in 2014. The bank’s capital is worth LE66.8bln, divided into 13.36 m shares at LE5 per share.

Emirates Islamic Bank prévoit de s’implanter au Maroc et en Egypte au cours des deux prochaines années pour saisir les énormes opportunités qui se présentent sur ces deux marchés dans le segment de la finance halal. Le groupe bancaire compte se positionner dans les marchés marocain et égyptien en acquérant des banques existantes ou en demandant de nouvelles licences. A noter qu’une loi sur les banques islamiques a été adoptée en novembre 2014 par le parlement marocain. La Banque centrale marocaine a annoncé récemment avoir déjà reçu 15 demandes de licences émanant d’autant de banques islamiques étrangères.

Egypt's sukuk law is likely to be ready by the start of the new fiscal year in July, according to Finance Minister Hany Kadry Dimian, who told reporters in March the government will sell dollar-denominated Shariah-compliant notes once the rules are in place. Egypt also said in early March it’s preparing to issue its first conventional international bond since 2010. Egypt has hired banks including Morgan Stanley, BNP Paribas and Natixis for a $1.5 billion non-Shariah compliant bond sale, Dimian said in March. The cash raised will be partly used to pay dues to foreign oil companies. The sukuk sale will probably also be used to finance mega-projects that have been approved by the government during the investment conference.