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Credit insurance: Al Hilal, Euler Hermes sign distribution deal

Al Hilal Takaful, the insurance subsidiary of Al Hilal Bank, signed a distribution agreement in Abu Dhabi with Euler Hermes, a trade credit insurance company. The collaboration is expected to position Al Hilal to deliver better credit insurance solutions, and secure a stronger position in the takaful market. It will also allow Euler Hermes to enhance its presence in Abu Dhabi. The partnership allows Al Hilal Bank’s Abu Dhabi customers access to a range of trade credit insurance solutions for business-to-business trade receivables offered by Euler Hermes.

CIMB plans first collateralised sukuk

CIMB Group Holdings Bhd. plans to sell a sukuk backed by a pool of loans, becoming the world’s first Islamic bank to sell the type of collateralised debt that contributed to the global financial crisis. The Malaysian lender is seeking to raise RM1 billion (US$275 million) from an offering of five-year notes this quarter, CIMB Islamic Bank Bhd.’s Chief Executive Officer Badlisyah Abdul Ghani said. The securitized debt will diversify funding options in the Islamic finance industry. CIMB Islamic’s new notes will be sold via private placement to investors who are comfortable with this type of security, CEO Badlisyah added.

IMF Endorses Islamic Finance, Warns It Must Be Implemented Better

The International Monetary Fund has endorsed the principles of Islamic finance, saying it could prove safer than conventional finance, but the multilateral lender warned Islamic bankers that they must tighten rules and follow them more consistently. A report released by the IMF this week noted that because Islamic banking forbids pure monetary speculation and stresses that deals should be based on real economic activity, it could pose less risk than conventional banking to the stability of financial systems. However, the industry could fail to achieve its promise – and even have a destabilising effect – if it does not design its rules more carefully and implement them more consistently, the report added.

World’s first Islamic Asean ETF launched

The world’s first Islamic Asean Exchange Traded Fund (ETF) is enroute for listing on Bursa Malaysia on May 7. Investment management provider, i-VCAP Management Sdn Bhd (i-VCAP), today launched the prospectus for the Shariah-compliant ETF, which will be known as MyETF MSCI SEA Islamic Dividend (MyETF-MSEAD). Chief executive officer Mahdzir Othman explained that MyETF-MSEAD was an open-ended fund with an approved fund size of 500 million units. Investors can subscribe to the fund until April 22, at RM1 per unit with a minimum subscription size of 100 units.

Taliworks JV gets SC go-ahead for RM210m Sukuk

A Taliworks Corporation Bhd joint venture has received the Securities Commission’s approval for the proposed issuance of the RM210mil Sukuk Murabahah. Taliworks said the Sukuk would be issued by Grand Sepadu (NK) Sdn Bhd, a joint venture in which it has a 75%. The proceeds from the issuance of the Sukuk Murabahah will be utilised to facilitate the roll-over of the short term syndicated bridging loan facility of up to RM200mil undertaken by GSNK into the Sukuk Murabahah and for working capital purposes. Taliworks said Hong Leong Investment Bank Bhd is the principal adviser and lead arranger for the Sukuk Murabahah.

Banks, financial firms on hiring spree in Middle East

Financial institutions and banks are hiring at the fastest pace in the UAE and other Middle Eastern countries as the regional economies show sign of improvement, according to the data released by recruiters Monster Worldwide. Demand for banking and finance professionals jumped in March, with a 65 per cent increase in job postings from a year earlier while job listings for the same sector climbed 38 per cent in the UAE, the Monster Employment Index Middle East revealed. Online hiring in Saudi Arabia and Egypt is soaring, with an increase of 30 per cent and 28 per cent respectively, in job listings. The UAE registered a modest growth of 17 per cent.

Bahrain Islamic Bank to hire Standard Chartered’s Bahrain CEO

It was reported that Standard Chartered PLC’s Chief Executive Officer for Bahrain, Hassan Jarrar, is leaving to head Bahrain Islamic Bank BSC. Standard Chartered confirmed his departure. Jarrar served as CEO of its Bahrain unit since November 2011, and was earlier the head of origination and client coverage for the lender’s wholesale banking unit in the UAE. Jarrar’s departure comes amid a shake-up in top management at the London-based lender after profit slumped. Chairman John Peace, CEO Peter Sands, Asia head Jaspal Bindra and Viswanathan Shankar, head of Europe, Middle East, Africa and Americas, are all leaving the bank.

President Ilham Aliyev met with the President of the Islamic Development Bank Group VIDEO

President of the Republic of Azerbaijan Ilham Aliyev has met with President of the Islamic Development Bank Group Ahmad Mohamed Ali in Jeddah. They expressed their satisfaction with the cooperation between Azerbaijan and the Islamic Development Bank. It was noted that the ongoing development processes in Azerbaijan gave a push to the expansion of the bilateral relations. Azerbaijan and the IDB cooperate in the fields of oil and gas, power industry, water supply, road construction, implementation of infrastructure projects, agriculture and industry, and investment making. The parties exchanged views over the issue of involving other partners in the bilateral cooperation.

Islamic capital market: SECP envisages roadmap for restructuring, reorganisation

The Securities and Exchange Commission of Pakistan (SECP) has envisaged a roadmap for restructuring and reorganising the Islamic capital market. The initiative aims at the promotion of Shariah compliance in the capital market of Pakistan. The roadmap entails centralisation of the Shariah-related capital market activities, introduction of uniform Shariah Regulation for the takaful, modarabas, Islamic mutual funds, Islamic pension funds, Islamic REITs, other Islamic financial institutions (other than banking), Shariah compliant (Non-financial) Companies, Islamic products and instruments.

NBAD global sukuk issuance at $3.9b in first quarter

National Bank of Abu Dhabi managed around $3.9 billion (Dh14.3 billion) of international Sukuk issuance in the first quarter of 2015, representing about 69 per cent of the global market by value. In the first three months of 2015, NBAD worked on four major deals. In addition to acting as a bookrunner on the UKEF-backed Sukuk closed by Emirates Airlines, the Bank also acted as Joint Bookrunner on International Sukuk issuances by Dubai Islamic Bank, Islamic Development Bank and the Government of Ras Al Khaimah.

S&P assigns A- to Malaysia Sovereign Sukuk’s trust certificates

Standard & Poor's Ratings Services has assigned its preliminary 'A-' issue rating to the proposed US dollar-denominated Sukuk trust certificates to be issued by Malaysia Sovereign Sukuk Bhd. The ratings agency said Malaysia Sovereign Sukuk Bhd. is a special-purpose company incorporated in Malaysia for issuing sukuk trust certificates. Under this arrangement, the issuer will enter into an asset sale and purchase agreement for not less than 26% of the issued amount, a grant of rights to services agreement for no more than 26% of the issued amount, and Murabaha agreement agreement for not more than 48% of the issued amount with Malaysia.

UAE, Bahrain to Expand Islamic Cash Products

The only two central banks in the Gulf with products that allow Islamic lenders to make short-term investments are expanding their offerings as demand for cash-management tools rises. Bahrain’s central bank started a seven-day Islamic deposit facility last month, and the United Arab Emirates broadened the range of collateral Shariah-compliant lenders can use for overnight lending effective 1 April. Bahrain’s one-week facility is based on a wakalah contract, where the regulator invests cash on behalf of the lender. In the UAE, the central bank has expanded the list of eligible collateral for its Shariah-compliant overnight facility to include assets other than the regulator’s Islamic certificates of deposit.

Saudi Bank Aljazira Names Advisers For $800m Rights Issue

Saudi Arabia’s Bank Aljazira has appointed the investment banking arms of Gulf International Bank and Riyad Bank to advise it on a SAR3 billion ($800 million) rights issue. The price and number of shares to be issued under the offering, which will be arranged by GIB Capital and Riyad Capital, is still pending approval from the relevant authorities and shareholders, the bank said in a bourse filing. The rights issue by one of the Kingdom’s smaller lenders by assets will be used to strengthen its capital base and finance its activities, the bank added.

IIRA Assigns Fiduciary Ratings to Dubai Islamic Bank

Islamic International Rating Agency ( IIRA ) has assigned ratings of 'A/A1' (Single A / A One) to Dubai Islamic Bank ( DIB ) on the international scale. On the national scale, ratings have been assessed at AA-(ae)/A1+(ae) (Double AMinus / A One Plus). Outlook on the assigned ratings is 'Stable'. Ratings are supported by DIB 's strong franchise and retail market presence, ensuring steady access to cost effective funding. The recent tier-1 capital issue in early 2015 has reinforced capital adequacy ratio to 18.5%. The fiduciary score has been assessed in the range of '76-80', which indicates strong fiduciary standards, wherein rights of various stakeholders are well defined and protected.

Saturna Capital Launches Two Funds Emphasizing Sustainability

Saturna Capital Corporation (Saturna) has announced the launch of the Saturna Sustainable Equity Fund (SEEFX) and the Saturna Sustainable Bond Fund (SEBFX), two mutual funds that will invest globally in securities of issuers rated by Saturna as low risk in the areas of the environment, social responsibility, and governance (ESG). Saturna expects the funds will appeal to the growing number of investors who seek to incorporate sustainability and social responsibility into their investments, particularly retirement portfolios. The Saturna Sustainable Equity and Bond Funds will be available on major platforms such as National Financial Services (Fidelity), Charles Schwab, Pershing LLC, and TD Ameritrade.

The IFSB Council Adopts Core Principles for Islamic Finance Regulation (IFSB-17)

The Council of the Islamic Financial Services Board (IFSB) has resolved to approve the adoption of a new Standard on Core Principles for Islamic Finance Regulation (Banking Segment) (IFSB-17). The main objective of IFSB-17 is to provide a set of Core Principles - along with associated assessment methodology - for the regulation and supervision of the Islamic financial services industry (IFSI), taking into consideration the specificities of the institutions offering Islamic financial services (IIFS) in the banking segment, the lessons learned from the financial crisis, and complementing the existing international standards.

Fitch: Infrastructure Sukuk Challenge Significant But Achievable

The G20 group of nations' decision to examine the use of sukuk to finance infrastructure investment could eventually spur a big increase in the size of the market, Fitch Ratings says. But several significant challenges would need to be overcome first, most importantly finding a legal structure that would be acceptable to governments, investors and the sukuk's Sharia boards. One of the main uncertainties is whether sovereign issuers will be willing to directly pledge infrastructure assets to sukuk investors or accept the most common structure, known as Ijarah sukuk. Alternative structures could be found, but it would take longer to achieve and could see slower take-up, especially as innovative structures would have to be approved by a Sharia board.

Basel III requirements to strengthen Islamic banks’ liquidity management

Regulatory proposals for a liquidity coverage ratio for Islamic financial institutions could help address some of the industry's long-standing weaknesses, particularly the lack of high quality liquid assets (HQLA), Standard & Poor's Ratings Services said in the report “Basel III Requirements Could Strengthen Islamic Banks' Liquidity Management”. Moreover, last year, the Islamic Finance Services Board (IFSB) published guidance on quantitative measures for liquidity management in institutions offering Islamic financial services. This note set three main characteristics of high quality liquid assets (HQLA): low correlation with risky assets, an active and sizable market, and low volatility.

Turkey's Islamic banks turn to Malaysia to cut costs

Turkey's Islamic banks are turning to Malaysia to cut costs as stubbornly high interest rates and slow trading hamper development of the domestic Turk?sh sukuk market. Kuveyt Türk Kat?l?m Bankas? A? plans to offer a five-year bond this week via private placement from a 2 billion ringgit ($539 million) sukuk program. Türkiye Finans Kat?l?m Bankas? A? was the first Turkish bank to sell the debt in Malaysia last year, issuing similar-maturity securities at a coupon of 6 percent. It paid 15.2 percent for a 2017 lira-denominated sukuk. Corporates from Indonesia and France are also coming to Malaysia to raise funds.

Ithmaar Bank's strategic initiatives start yielding results

Bahrain-based Ithmaar Bank has announced that the strategic decisions taken by the Bank's Board of Directors early in 2014 have already started yielding results. The decisions, which aimed at turning the Ithmaar Group around by significantly transforming operations, included initiatives for increased revenue, improved margins, divestment of non-core assets and cost reductions across the Group. Ithmaar Bank 's financing business in Bahrain increased by 23 percent to US$914 million at the end of 2014. This growth in 2014 was driven mainly by Home Financing and Personal Financing. Similarly, total customer current accounts, savings accounts, Thimaar and URIA deposits, increased by 11 percent in 2014.

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