IslamicFinance.de

The Thomson Reuters Global Sukuk Index is at 117.39361 points, down from 117.49811 at the end of last month but up from 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 115.67036 against 115.48693 at the end of February and 113.69014 at end-2014. Sukuk in the pipeline include the following: Telekom Malaysia will set up a $750 million multi-currency sukuk programme to diversify its funding avenues and enhance its flexibility to raise capital. The emirate of Ras al-Khaimah has invited bankers to pitch for arranger roles on a potential U.S. dollar-denominated benchmark sukuk issue, the deal is expected before end-April.

The UAE’s insurance market grew 12 per cent in 2014 to Dh33 billion, said Ibrahim Al Zaabi, director- general of the Insurance Authority. The number of companies providing these sharia-compliant services has reached 11. The director-general said that the investments made by 60 insurance companies reached to Dh40 billion in the year. He said that the Insurance Authority has issued new rules and regulations in order to organise Takaful insurance business. The rules organise the financial, technical, investment, and accounting functions of Takaful insurance companies aiming to protect the rights of stakeholders, from future risks, the minister said.

The Islamic Development Bank (IDB), rated Aaa/AAA/AAA by Moody's, S&P and Fitch (all stable outlook), has successfully priced $1 billion, 5-year, trust certificates (sukuk) issued at par with a 1.83 percent semi-annual profit rate under its $10 billion trust certificate issuance program. Despite an uncertain market environment, IDB achieved extremely attractive pricing, with the deal pricing approximately 22bps inside the secondary market levels. The trust certificates will be listed on the London Stock Exchange, Nasdaq Dubai and Bursa Malaysia under an exempt regime.

A recent study conducted by the International Monetary Fund (IMF) has explored the possibility of using Islamic finance for increased financial inclusion. Their recently published paper entitled ‘Can Islamic banking increase financial inclusion?’ concluded that there was weak and tentative evidence of Islamic banking’s positive impact on some types of inclusion. The IMF paper sais improving financial infrastructure, introducing more competition in the banking system, improving the quality of credit information, and enhancing the efficiency of the legal system would be instrumental in improving financial inclusion across the continent.

Standard & Poor's Ratings Services has assigned its preliminary 'A-' issue rating to the proposed US-dollar-denominated Wakala trust certificates to be issued by Petronas Global Sukuk Ltd. Petronas Global Sukuk - a special-purpose company incorporated in Labuan for issuing sukuk trust certificates - will enter into a "Wakala" agreement with national oil corporation Petroliam Nasional Bhd. Under this agreement, the issuer will enter into an Ijara for at least 33 per cent of the issued amount and a Murabaha for at most 67 per cent of the issued amount with Petronas. S&P assesses remote the risks that a total loss event jeopardises the full and timely repayments of the trust certificates.

Islamic International Rating Agency (IIRA) has reaffirmed national scale credit ratings of Bank of Khartoum (BOK) at 'AA-/A-1' (Double A Minus / Single A One). Outlook on the assigned rating is 'Stable'. The fiduciary score has been assessed in the range of '70-75', reflecting adequate fiduciary standards wherein rights of various fund providers are adequately defined and protected. Ratings derive strength from the bank's strong franchise and retail presence in Sudan, with an established history of rapid assets growth since acquisition by the present shareholders and into 2014. The bank maintains sizable liquid reserves, though liquidity management is constrained by systemic concerns.

The Grand Duchy of Luxembourg is keen to issue another sukuk next year following the success of the QInvest-assisted, first euro-denominated sovereign sukuk issued in September 2014, Finance Minister Pierre Gramegna said. He attended a roundtable discussion in Doha, focussing on strategic co-operation between the two countries in the field of international finance, among others. According to Gramegna, the seminar focused on Luxembourg as a diversified financial centre for private and institutional investors from the Middle East, as well as a leading Islamic finance centre in Europe. He noted that economic ties between the two countries led to a number of Qatari investments in the Grand Duchy.

The Ministry of Finance (MoF) hosted the first UAE-Luxembourg Council for Islamic Finance Cooperation meeting in Dubai yesterday. The meeting was attended by a number of prominent economic and financial institutions from both countries. UAE members of the council include MoF , the Central Bank, UAE University, Dubai Islamic Economy Development Centre, World Trade Center Abu Dhabi, Dubai Chamber, Etihad Airways, Al Hilal Bank, Sharjah Islamic Bank and Abu Dhabi Islamic Bank. Luxembourg's representativesinclude the Ministry of Finance, Luxembourg Bankers' Association, Association of the Luxembourg Fund Industry and the University of Luxembourg.

Arab Women's Enterprise Fund (AWEF) aims to empower poor women, increasing their income and well-being and ultimately improving their livelihoods and growth opportunities. The programme will do this by increasing their participation in markets through working with market actors to encourage the adoption of new practices and also by addressing constraints in the enabling environment. AWEF is an 10 million pouns market development programme that will work in Egypt, Jordan and the Overseas Palestinian Territories (OPTs). DFID will work in partnership with the Islamic Development Bank (IDB) who will contribute an additional 10 million pounds in sharia-compliant concessionary finance through financial intermediaries.

The Central Bank of Iran (CBI) and CEOs of commercial banks reached an agreement that the institutions should not offer a deposit rate of more than 22%. The CBI has focused on restricting the monetary base and raising profit rates on participatory loans to curb inflation over the past 18 months. The policy has been a successful attempt as inflation dropped from 34.7% in the year up to March 20, 2013, to 15.8% in the year up to Feb. 20, 2015. However, Abbas Kamrei, a board member of Bank Melli, the largest state-run commercial bank, criticized CBI's interest rate policy as incorrect. He urged CBI officials to take into account the public expectations from banks.

Turkish banking regulators on Wednesday seized a small stake in the Islamic lender Bank Asya over an alleged illegal share sale. The banking watchdog said in a statement on Wednesday that Turkey's Savings Deposit Insurance Fund had seized preferred shares in Bank Asya held by a publishing company and a construction firm, citing irregularities in the sale of their parent company, Kaynak Holding, to a Dutch firm in January. The watchdog said that only preferred shares had been seized, but did not specify the size of that holding. The announcement came just hours after the ratings agency Standard & Poor's warned that actions against Bank Asya illustrated "the potential for political risk, or the perception of it, to directly or indirectly spill over into the financial system".

According to a report by the General Insurance Association of Malaysia (PIAM), the general insurance sector is set to record a 5.5 to 6 per cent increase in gross written premiums in 2015. The weaker local currency should help boost domestic consumption, despite global economic headwinds as revenues from oil and other commodities plummet. The government’s plans to maintain development spending should also promote growth, which in turn will see an increase in demand for insurance products. The new goods and services tax (GST) – to be introduced in April – is not expected to have a lasting impact on the sector, though it could slow growth over the next few months.

A two days specialized Takaful workshop arranged for Insurance and risk management professionals by Al-Huda, Centre of Islamic Banking & Economics (CIBE) took place in Dar es Salaam. At the workshop, Mr. Paul J. Ngwembe, Director Legal Enforcement, of Tanzania Insurance Regulatory Authority (TIRA) disclosed that TIRA is at the final stage of drafting Takaful Regulations with a view to setting up a regulatory mechanism of Takaful in the country. He added that TIRA encourages all stake-holders to attend such workshops so as to acquire the requisite know-how of this system. Mr. Zubair Mughal, the Chief Executive Officer of Al-Huda CIBE said that AlHuda CIBE has a long term vision for the development of Islamic Banking and finance industry in Tanzania and other African countries.

Islamic Development Bank (IDB) has tightened pricing on a $1 billion five-year sukuk which could price later on Thursday. The lender tightened its pricing on the senior unsecured sukuk to 8 basis points over midswaps. It had opened books on Tuesday after setting initial price thoughts at around 10 bps over midswaps. Investors have committed to orders worth around $1.7 billion for the issue; the book is expected to close at 0900 GMT. IDB has picked CIMB, Dubai Islamic Bank, GIB Capital, HSBC, Natixis, NCB Capital, National Bank of Abu Dhabi, RHB Islamic Bank and Standard Chartered to arrange roadshows in the Middle East and Asia, which would wind up on Thursday.

Although microfinance client numbers have roughly quadrupled in the last half-decade, they still represent the proverbial drop in the bucket of potential clients. Some 650 million Muslims hover at or below the poverty line today. There are five takeaways from CGAP's most recent research on the subject, "Understanding the Costs and Sustainability of Sharia-Compliant Microfinance Products". First, some "Islamic" products are tough to scale. Second, comparing Islamic products to conventional microfinance doesn’t always work. Third, sustainability is possible, but it will take significant investment. Fourth, we need more time to understand how these products are working - and who is using them. Fifth, in the meantime, Islamic financial service providers are here to stay.

According to a new report by McKinsey Global Institute, Morocco is the most indebted among Arab and African countries. The kingdom’s debt-to-GDP ratio stands at 136 % or an increase by 20 percentage points of GDP. The analysis focuses on the debt of the “real economy”: governments, nonfinancial corporations, and households. The report has revealed that debt-to- GDP ratios have increased in all 22 advanced economies reviewed by the study. Morocco comes ahead of both Egypt and Saudi Arabia which have actually succeeded in reducing their debts. The report has also found that global debt has grown by $57 trillion or 17 percentage points of GDP since 2007, to stand at $199 trillion, equivalent to 286% of GDP.

Japan's three megabanks are considering whether and how they will offer financial services under Islamic law overseas now that the Financial Services Agency will allow them to engage in such operations at their foreign branches starting as early as April. Mitsubishi UFJ Financial Group would offer deposit and lending services that are permissible under Sharia at its Dubai branch in the United Arab Emirates as early as fiscal 2015, pending approval from the local authorities. Sumitomo Mitsui Banking Corp. may offer similar services at its branches in Dubai and Singapore. Mizuho Financial Group likely will make its London branch the operational centre for Islamic finance in the Middle East.

Moody's Investors Service has assigned a provisional (P)A3 senior unsecured (foreign and local currency) MTN rating to the $3 billion Trust Certificates Issuance Program of SIB Sukuk Company III Limited, a special purpose vehicle incorporated in the Cayman Islands by Sharjah Islamic Bank PJSC (SIB). The outlook on the issuer is stable. The (P) A3 rating assigned to the Sukuk trust certificates is at the same level as the A3 foreign and local currency issuer rating of SIB. The proceeds of each issue of Certificates will be used by the Issuer to acquire an ownership interest in a portfolio of assets. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavour to assign definitive ratings to any issue of Certificates.

Qatar Islamic Bank (QIB) has announced the opening of its new headquarters in the United Kingdom for its subsidiary QIB -UK. The new five storey office is located at 43 Grosvenor Street in the Mayfair district. QIB -UK's focus is on supporting the investment and trade flows between Qatar and the UK. The firm offers real estate investment opportunities for clients looking to purchase premium properties in London. QIB -UK has assembled a team of real estate specialists to ensure clients are well placed to get premium real estate opportunities in the market. QIB -UK, was fully authorised as an Islamic Bank by the UK Financial Services Authority in January 2008, and is fully owned by Qatar Islamic Bank .

There are five Islamic banks operating in Pakistan. The significant shares of paid-up capital actually comes from the high net worth families and institutions in the Middle East, especially the six countries comprising the Gulf Cooperation Council (GCC). There are six countries - Kuwait, Saudi Arabia, UAE, Bahrain, UK and Singapore - from where individuals and institutions have invested in the five fully-fledged Islamic banks in Pakistan. Almost all of these banks are advised by the graduates of Darul Uloom Karachi, Jamiatul Uloom Islamia Binnori Town Karachi and Jamiatul Rasheed Karachi – well-known religious seminaries of Deobandi school of thought.