IslamicFinance.de

The Islamic Corporation for the Development of the Private Sector (ICD) and the Regional Council for Public Savings and Financial Markets (CREPMF), Regional Financial Market Regulatory Body of the West African Economic and Monetary Union (WAEMU) zone sign a partnership and cooperation agreement to promote Islamic finance in the WAEMU sub-region. The goal is to help mobilize long-term resources of the Union Member states and private sector companies, especially SMEs. The agreement covers the cooperation, the exchange of information, the development of the regulatory framework in order to create an enabling environment for Islamic finance, and the sharing of experiences and expertise of both institutions in the agreed areas.

Al Rayan Bank is renewing its commitment to Birmingham as it gets set to relocate to a new head office in Edgbaston. The bank has purchased offices in Calthorpe Road and will move 100 of its employees from its current leased offices later this month. In February 2014, Al Rayan Bank was acquired by Masraf Al Rayan, the second largest Islamic bank in Qatar by market value. A rebrand followed before the bank posted its financial performance. In 2014, the bank’s operating income increased by 168%, customer financing increased by 86% and retail deposits increased by 59%. The bank also transformed a £5.5m loss in 2013 to an after tax profit of £1.2m.

Allianz Life Insurance Malaysia Bhd, which is aiming to have 10,000 agents by year-end from 8,300 now - remains interested in the takaful business although it is not in talks with any potential acquisition target now. Allianz Life CEO Rangam Bir said it sees that a large part of the market has the need for takaful solutions. Allianz Life is a subsidiary of Allianz Malaysia Bhd, which in turn is Allianz SE’s subsidiary. Allianz SE had failed in an attempt to buy a local takaful operator in 2011. Last year, a member of the board at Allianz SE said that it is not economically viable to enter into the domestic takaful market just yet.

News that Islamic Bank of Asia, a subsidiary of Singapore’s banking major DBS, will be closing down left the Islamic finance community in the city state baffled. The institution was founded just eight years ago by DBS to tap the Islamic finance potential in Southeast Asia and beyond – with $500mn of paid-up capital shared between DBS and prominent Gulf investors. However, DBS announced in a statement to the Singapore stock exchange on September 14 that IB Asia “will be gradually wound down as it was unable to achieve economies of scale.” The wind-down will likely take two to three years. The apparent failure of IB Asia has been partly attributed to Singapore’s lacklustre regulatory framework for Islamic finance and the absence of a larger local client base.

The introduction of Islamic finance could be boon to development in Africa, say experts. Beyond the religious aspect, Islamic finance has been identified by many experts as a way to avoid the risks associated with speculation. Global ratings agency Standard & Poor’s (S&P) said in a recent report that new regulations and fiscal incentives could accelerate Islamic finance development in Africa, which could help the continent fund its infrastructural needs. Aware of the challenges, the African Institute of Islamic Finance has launched several initiatives aimed at developing the Islamic Finance sector. Besides, Ivory Coast is about to issue its first Sukuk in the amount of 350 billion CFA francs (roughly $700 million) with the support of the IDB.

Indebted Kuwaiti financial firm Investment Dar is seeking court approval to help close a 813 million dinar ($2.7 billion) debt restructuring. The new plan, called Dasman, is designed to overcome minority creditor dissent to earlier proposals by asking Kuwait's Court of Appeal to impose the deal on all creditors. The plan involves transferring Investment Dar's assets, and the management of their disposal, directly to creditors. About 60 percent of creditors have voiced support for the new plan, said Investment Dar. Investment Dar continued to defend legal action from a minority of creditors not supportive of the plan and who were pursuing claims against the company independently.

La Cote d’Ivoire s’apprête, après l’Afrique du sud et le Sénégal, à souscrire son premier emprunt obligataire (Sukuk) en vue de mobiliser 350 milliards de FCFA (environ 534 millions d’euros). Le pays compte sur l’appui de la Banque Islamique de Développement (BID). En Côte d’Ivoire, le gouvernement travaille, en partenariat avec la Société islamique pour le développement du secteur privé (Sid), à l’élaboration d’un programme quinquennal de mobilisation de ressources sous forme de Sukuk. La première émission est prévue pour fin 2015.

MSCI has announced the expansion of the existing MSCI Islamic Index Family with the launch of the M-Series that addresses client demand for financial screening criteria based on market capitalisation. The M-Series of indices uses three financial ratios in this process: total debt-to-market cap, cash and interest-bearing securities-to-market cap, and accounts receivables and cash-to-market cap. Using market capitalisation is argued, by some, to provide a more accurate representation of these ratios. In addition to screening companies based on financial ratios, the indices avoid companies involved in activities contrary to the principles of Shariah investment.

Turkish Islamic bank Kuveyt Turk has picked seven banks to arrange a potential dollar-denominated sukuk to bolster its supplementary or Tier 2 capital. Kuveyt Turk Participation Bank, which is 62 percent owned by Kuwait Finance House, is planning to issue the sukuk after the Muslim festival of Eid al-Adha which begins this week. Kuveyt Turk has picked KFH Capital, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD, HSBC, Noor Bank and QInvest to arrange investor roadshows ahead of the potential issue. The lender is expected to raise around $400 million.

Qatar National Bank (QNB) has halted preliminary talks with Kuwait Finance House (KFH) to buy its Malaysian unit, the Gulf Arab region's largest bank said. An agreement has not been reached. Earlier, KFH's chief executive Mazin al-Nahedh had said the bank had ruled out a sale or merger for its Malaysian unit, adding the largest Islamic bank in the Gulf Arab state will begin restructuring the unit with immediate effect. The disclosure from KFH comes after a source familiar with the matter said last week that QNB had bid to buy the unit, with the Qatari lender later acknowledging it was in early talks about an acquisition.

CIMB Group Holdings Bhd is expected to appoint Rafe Haneef, who currently heads HSBC Amanah Malaysia Bhd, as the new chief executive officer of its Islamic banking arm CIMB Islamic Bank Bhd. It is understood that Rafe has tendered his resignation, after almost five years of helming the foreign Islamic lender. The appointment is still in the process of getting Bank Negara Malaysia’s approval. CIMB Islamic Bank has been without a captain ever since Badlisyah Abdul Ghani resigned as its CEO and board member in July. CIMB Islamic Bank then appointed Mohd Shafri Shahul Hamid as the person in charge of the bank while it looked for a new CEO.

Kickstarter announced the company’s reincorporation as a public benefit corporation, meaning that the crowdfunding company is now legally obligated to make a positive impact on society. The company has legally changed its name from Kickstarter Inc. to Kickstarter PBC and is now required to submit an annual public benefit statement detailing its work for public good. The first of these statements will be issued in February 2017. The crowdfunding company still serves as a for-profit, while doubling down on its social mission of supporting creative endeavors. Time will tell what this move will mean for the company’s financial projections.

slamic finance is gaining prominence as a channel for China to expand its economic influence abroad as banks strengthen ties with Muslim-majority countries and Chinese companies start to tap offshore pools of Islamic funds. With a Muslim population of about 20 million, China has little reason to develop Islamic banking at home. But there are powerful reasons for it to get involved in the sector overseas. China wants to build stronger trade ties with Asian countries under its "One Belt, One Road" strategy to rebuild Silk Road trade links with Asia and Europe. The network will include the world's main centers of Islamic finance, the Middle East and Southeast Asia.

Kuwait Finance House (KFH) has ruled out a sale or merger for its Malaysian unit, its chief executive said on Tuesday. Mazin al-Nahedh added the lender, the largest Islamic bank in the Gulf Arab state, will begin restructuring the unit with immediate effect. The disclosure from KFH comes after a source familiar with the matter said last week that Qatar National Bank had bid to buy the unit, with the Qatari lender later acknowledging it was in early talks about an acquisition.

An interesting trend is developing in the halal sector: regional hubs are developing in places that have some local demand but not the size that would be significant markets on their own. Think of Malaysia (the largest) or Dubai or tiny Brunei. Each sees the halal sector as being strategic to their economic growth, and for Dubai and Brunei at least, as key aspects of their economic diversification. This trend has the potential to support global growth in the Islamic economy as well as SME development but need a lot of (costly) infrastructure put in place to open up the international side to SMEs.

Dubai-based bank Emirates NDB has expressed interest in spending $300 million to establish Islamic banks in Indonesia as it seeks to tap into the archipelago's underdeveloped financial sector. Emirates NDB would join Middle Eastern banking rivals Qatar's Masraf al Rayan and Dubai Islamic Bank in its quest to set up shop in the nation. Emirates NDB will have to team up with local partners in order to fulfill its aim of establishing a new bank as a current government regulation limits foreign ownership to 40 percent, said Dhani Gunawan, OJK director of Islamic banking research and development, supervision and licensing. Meanwhile, Al Rayan seeks to acquire shares in existing Islamic banks, he added.

Abu Dhabi Islamic Bank (Adib) said on Monday it has raised Dh504 million in its rights issue, which was nearly three times oversubscribed, with Dh1.46 billion in subscriptions received. Following the close of the subscription period on September 10, all 168 million shares were fully subscribed, the bank said in a statement. The rights, which were traded on the Abu Dhabi Securities Exchange, offered investors Adib shares at a price of Dh3 per share, and are part of the bank’s plan to raise capital to support growth.

Dubai's DAMAC Properties said on Tuesday that it raised $100 million through private placement of 18-month sukuk certificates. The certificates, rated BB by Standard & Poors, were issued by its unit Damac Real Estate Development Ltd, it said in a bourse statement. Emirates NBD was the sole lead manager for the transaction.

There are some misconceptions about Islamic banking in Oman, which need to be dispelled through raising awareness about this sector, Dr Jamil El Jaroudi, chief executive officer of Bank Nizwa said. El Jaroudi noted that they do not want to simply replicate what is out there in the conventional banking and continuously try to innovate and build an industry based on Sharia objectives, and not necessarily just to be Sharia-compliant. However, during the initial phase, they do have to provide alternatives to the current conventional products to suit the demand of customers, he added. Another misconception is that Islamic banking is similar to a social philanthropic entity. Nevertheless, Islamic banks are commercial and profit oriented businesses.

Africa's strong demand for Islamic financial services and products was highlighted in the inaugural Africa Finance Forum 2015 held in Abidjan. Recent developments have seen African governments focusing more on creating a more enabling environment for sukuk issuances. Those that have not tapped into the sector have expressed keen interest in the market for infrastructure financing with legal frameworks underway to promote sukuk issuances. Although the Islamic financial services industry in Africa is currently dominated by the banking and sukuk segments, growth potential remains in the asset management and Islamic insurance. However, financial inclusion still remains the greatest challenge.