IslamicFinance.de

In an effort to boost the industry, Bank Indonesia has decided to work with Islamic boarding schools known as pesantren. Anwar Basori, Bank Indonesia's head of Islamic Finance and Economy, said there is a lot of potential in the 27,000 pesantren, which have about 3.6 million students. The central bank said it is finalizing a roadmap for the program under which it will work with the Religious Affairs Ministry to help the business units of pesantren to become financially independent. The schools operate in various business areas, including mini-markets and cattle farms, and provide extracurricular entrepreneurship and Islamic finance education to students. Anwar said that the roadmap would be implemented in early 2017, starting with a pilot project.

RHB Bank is eyeing the top three spot in the Islamic banking space for its syariah complaint unit. RHB Islamic Bank CEO Datuk Adissadikin Ali said growth in the recent past years had been strong and that the bank could continue riding on this growth. He said the contribution of Islamic banking assets to the group’s total assets is 25% and that the aim was to grow this figure to 40% by the year 2020. The group syariah business is identified as one of RHB’s key growth areas under its Ignite 2017 transformation programme. The bank intends to achieve by 2017 a return on equity of more than 14%, double contributions from Singapore to 10%, have 30% in overseas contribution, scale growth in small and medium enterprises, and have Islamic banking accounting for 30% of its assets.

Malaysia and Bahrain should take the lead in exploring the potential of introducing the world’s first Islamic financial technology (fintech). According to Bahrain Economic Development Board (EDB) Director David Parker, the favourable initiatives undertaken by regulators from both countries provide a positive edge for Islamic fintech. In Malaysia, Bank Negara Malaysia Governor, Datuk Muhammad Ibrahim said a regulatory framework to enable the adoption of fintech would likely be announced by year-end. During the 23rd Annual World Islamic Banking Conference held here, Bahrain Central Bank Governor Rasheed Mohammed Al Maraj hinted that the bank would soon issue regulations to facilitate fintech solutions. Bahrain Islamic Bank CEO Hassan Amin Jarrar described the need to introduce Islamic fintech to the world Islamic financial market as "critical" and if Malaysia and Bahrain do not take the first step, other big countries will snatch away the advantages.

#Malaysian fintech HelloGold is the first online gold platform to be endorsed as Shariah compliant by the Shariah Supervisory Board of Amanie Advisors. CEO Robin Lee showcased the savings platform at the global launch of the Shariah Standard on Gold at the World Islamic Banking Conference. According to Lee, with this platform everyone can buy gold and users are able to buy investment grade gold easily through their smartphones. He added that gold is a particularly good safe haven investment against foreign exchange risk and market shocks. Over the last 12 months, gold has risen by 17% against the Malaysian ringgit, 10% against the Thai baht, 9% against the Indonesian rupiah, 17% against the Philippine peso and 12% against the Singapore dollar. The HelloGold app is now available for use in Malaysia and is currently available on Google Play.

Islamic banks are gradually embracing socially responsible finance, from renewable energy to microfinance efforts, helping unlock new funding sources for environmentally-friendly projects, an industry survey shows. The two sectors have developed separately from each other, but green projects could benefit from tapping Islamic banks in countries like the United Arab Emirates and Malaysia, where they now hold a quarter of total banking assets.
Around two-thirds of financing in Saudi Arabia follows Islamic principles, which forbid investing in gambling, tobacco and alcohol. This resembles the screening methodology used by ethical funds in Western markets. Green finance is increasingly important for Islamic banks seeking to differentiate themselves from their conventional peers, the Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) said in a report.

The #Philippines' House committee on banks and financial intermediaries has approved the measures that would pave the way for the expansion of Islamic banking in the country. The new House Bill amends the Philippine’s lone Islamic bank, the Al-Amanah Islamic Investment Bank to regulate and organize an expanded Islamic banking system in the Philippines. Former president Gloria Macapagal Arroyo said the enactment of the measure was very timely as this would help the country’ growth inclusive and sustainable. The consolidated proposal will make the Al-Amanah independent from the Development Bank of the Philippines, be a universal bank with initial paid up capitalization of P10 billion and will be the first in the country to fully engage in Islamic banking that can issue sukuk.

Mirae Asset Global Investments has launched its inaugural sharia-compliant Asian equities fund that will invest in sharia-compliant companies in Asia. Mirae established the new UCITS-compliant fund to address demand from Islamic investors in the Middle East and Southeast Asia and thereby also widen its client base in the region. The new fund will be domiciled in Luxembourg as part of Mirae’s Global Discovery Fund SICAV and will be registered in a number of selected countries. Mirae Asset Financial Group was founded in 1997 and has expanded in recent years to include a global asset management capability with offices in 12 countries on 5 continents.

SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. SGI-Mitabu will offer its sukuk in Labuan, Malaysia. SGI-Mitabu's sukuk issue is set to be the first Islamic finance offering by an Australian corporate and could provide a useful example of alternative sources of capital to other companies. Companies seeking alternative sources of funding may wish to consider whether a form of Islamic finance would be suitable for their next project, even if they have to look outside their own jurisdiction to make it happen.

Pour permettre aux pays africains de régler leurs contrats de constructions de nouvelles infrastructures, il faut sans cesse trouver de nouveaux modes de financement. Les institutions internationales couvrent les deux tiers des projets, mais d’autres formes se développent, notamment à l’initiative de la Chine. Mi-novembre, le Sichuan Development Financial Leasing a annoncé qu’il allait vendre 300 millions de dollars de sukuk via Silk Routes Capital. Un fonds créé sur mesure à Singapour, piloté par des Chinois et une équipe de financiers internationaux. Une première pour la Chine dans ce domaine. Sur le continent, le Nigeria, le Sénégal ou encore le Soudan font de plus en plus appel à la finance islamique pour boucler les financements de projets ferroviaires et de gros équipements urbains.

The total assets of the #Indonesian sharia banking industry in the third quarter of 2016 reached Rp331 trillion, accounting for 5.13% of the national banking industrys assets. Lukdir Gultom, Chief of the Indonesian Financial Service Authority (OJK), said the actual figure outstrips the target set by the OJK at 5%. He added that the OJK continued to encourage the sharia compliant financial service industry covering banks, non-bank financial institutions and the capital market. To date, Indonesia has a total of 13 sharia commercial banks, 21 sharia business units, and 165 sharia rural banks. The OJK will try to increase their number. Having a Muslim majority population, North Sumatra has the potential to become a hub for the Indonesian sharia banking industry.

According to Fitch Ratings, Malaysia’s Islamic financing has maintained its double-digit growth in spite of the country’s moderating economy, with a 12.1% annual growth in the first half of 2016 (1H16). Although the growth was lower compared to last year, it still pushed Islamic loan share to 27.9% in the Malaysian banking system loan sector, versus 27% a year ago, as the sector’s expansion outperformed that of conventional banks over the past five years. Sukuk issuance also exceeded conventional bonds, with total market capitalisation rising to 62.2% by end-June 2016. Investment accounts expanded to RM36.2 billion by June this year from RM4.3 billion in July 2015, while Islamic deposits remained flat. Malaysia still leads the global Islamic finance industry in terms of regularisation, standardisation and sukuk issuance, accounting for over half of the issuances worldwide in 1H16.

Professor Datuk Rifaat Ahmed Abdel Karim was conferred the Royal Award for Islamic Finance 2016 by the King of Malaysia, His Majesty the Yang di-Pertuan Agong. The biennial Royal Award initiative recognises individuals who have excelled in advancing Islamic finance globally. Professor Datuk Rifaat’s contributions include the establishment of two international standard setting bodies, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). He is the first Secretary-General of the IFSB, a post he held since the IFSB started to operate in 2003 until 2011. Under his stewardship, the membership of the IFSB expanded from nine founding members in 2003 to almost 200 members in 2010. He is a prolific writer and has authored several academic papers in key areas including accounting, finance, governance, Shari’ah and regulatory issues to further contribute to the development of Islamic finance.

Italian money manager Azimut Holding will jointly manage its Islamic bonds fund with Maybank Asset Management Group to cater to growing demand for hard currency sukuk products. The partnership will allow the fund to penetrate new markets including Malaysia and Singapore, where Maybank Asset Management already operates. Azimut launched its global sukuk fund in 2013 which has over $130 million in assets. Maybank Asset Management launched a U.S. dollar-denominated sukuk fund of its own in 2014. Sukuk funds remain tiny compared to their conventional fixed-income counterparts, but the sukuk market has widened in recent years thanks to an increasing number of issuers and investors.

China plans its first dollar sukuk issuance to tap a four-fold increase in Chinese funds that can invest in bonds overseas. Sichuan Development Financial Leasing plans to sell $300 million of Islamic bonds via Singapore-based special purpose vehicle, Silk Routes Capital. According to investment manager Hasif Murad, the predominant interest for this issuance will remain from yield-hungry domestic Chinese investors. Silk Routes Capital hired Standard Chartered, CIMB Group Holdings, Bank of China and Bank of China International to help to arrange investor meetings. In a sign that the traditional Silk Road is coming back to life, Chinese companies are building roads, railways and ports along the route to the Middle East, Africa and Europe.

Many Muslims contacted me in the last years with one single repeating question: Are CFD and/or Binary Options halal meaning permissible in Islam? There are indeed forex brokers offering so called Islamic accounts avoiding outright interest. But still: A contract of difference does not involve the ownership of any underlying (currency, stocks etc.) hence money against money is exchanged in different amounts - this is the most simple test for the prohibited Riba. Any Muslim receiving such offers should therefore insist of receiving the Fatwa and if not provided leave out.

The intention on those trading activities everyone can ask himself; mostly it will be akin to gambling and this on top of the fact that the trading activity itself is a zero sum game; meaning what one wins another looses, which rules out again to participate in such business. It does not do any better that aside from luck the outcome is influenced by know how - the same is true for classical money games as Poker or Backgammon. Still nobody would classify Poker therefore as halal.

China plans its first dollar sukuk issuance to tap a four-fold increase in Chinese funds that can invest in bonds overseas. Sichuan Development Financial Leasing plans to sell $300 million of Islamic bonds via Singapore-based special purpose vehicle, Silk Routes Capital. According to investment manager Hasif Murad, the predominant interest for this issuance will remain from yield-hungry domestic Chinese investors. Silk Routes Capital hired Standard Chartered, CIMB Group Holdings, Bank of China and Bank of China International to help to arrange investor meetings. In a sign that the traditional Silk Road is coming back to life, Chinese companies are building roads, railways and ports along the route to the Middle East, Africa and Europe.

The investment arm of the Sichuan provincial government has hired four banks to help raise $300 million via Islamic bonds, the first such deal from a Chinese state-owned company. According to advisor Bobby Tay, the five-year sukuk will be raised through the leasing arm of Sichuan Development Holding (SDH) and is expected to be completed in the next two months. CIMB, Standard Chartered, Bank of China and Bank of China International have been hired to arrange the transaction, with proceeds to be used for the acquisition of sharia compliant assets in mainland China. The sukuk will include credit enhancement features and be listed in Singapore, with listing in other regional exchanges also being considered.

In #Indonesia high-ranking officials announced they were preparing to establish the National Committee of Sharia Finance (KNKS) that would be directly chaired by President Joko Widodo. Bank Indonesia Governor Agus Martowardjo noted that human resources quality would determine the success of the KNKS, including its system and management’s regulation. He added that the committee would be established this month and also aims to involve 22,000 Islamic boarding schools across the archipelago. Boarding school graduates will be expected not only to become knowledgeable in religious affairs, but also to understand sharia economics and develop their entrepreneurship skills.

Allianz Malaysia has received the green light to begin stalks to acquire HSBC Amanah Takaful (Malaysia). According to Allianz, Bank Negara Malaysia (BNM) has no objection in principle for Allianz to commence negotiations with HSBC Insurance (Asia Pacific) Holdings, JAB Capital and the Employees Provident Fund Board on the proposed acquisition. This is subject to all parties concluding the negotiations within six months from BNM's written approval. Pursuant to the Islamic Financial Services Act 2013, parties concerned are required to obtain the prior written approval from BNM or the Minister of Finance on the recommendation of BNM, before entering into any agreement to effect the proposed acquisition.

According to #Indonesian Economic Coordinating Minister Darmin Nasution, the development of the country’s sharia finance industry will increase female participation in the economy. He said Indonesian fashion and halal cosmetics were among the well-performing industries and most businesspeople in the two industries were women. Indonesia is one of the top five Islamic fashion industries in the world, with a total spending of US$12.7 billion annually. It is also in the world's top five regarding the sharia cosmetics/pharmaceutical industry with an average spending of $4.8 billion per year, according to data from Bank Indonesia (BI). BI deputy governor Hendar said inspite of the global slowdown, Indonesia's sharia industry was still giving positive signals.