IslamicFinance.de

As Islamic finance emphasizes the connection between real economy and financial activity this BIS Working Paper is very interesting and supportive for the understanding:

Abstract:
"In this paper we examine the negative relationship between the rate of growth of the financial sector and the rate of growth of total factor productivity. We begin by showing that by disproportionately benefiting high collateral/low productivity projects, an exogenous increase in finance reduces total factor productivity growth. Then, in a model with skilled workers and endogenous financial sector growth, we establish the possibility of multiple equilibria. In the equilibrium where skilled labour works in finance, the financial sector grows more quickly at the expense of the real economy. We go on to show that consistent with this theory, financial growth disproportionately harms financially dependent and R&D-intensive industries."

Dubai-based Emirates REIT announced that Eiffel Management has acquired a 25 per cent in the REIT manager that was previously held by Dubai Islamic Bank (DIB). The value of the transaction was not disclosed. The REIT Manager is responsible for running the property portfolio of Emirates REIT and all the operations concerning the REIT. It is incorporated in Dubai international Finance Centre and licensed by DFSA. Following the deal, Eiffel Management will own 100 per cent of REIT manager’s total issued share capital. Emirates REIT reported a net profit growth of 39 per cent to reach $48.5 million in 2014 from $34.8 million in 2013.

The Saving Deposit Insurance Fund (TMSF), which has seized Bank Asya, has determined the details of a precautions package. The bank will not be able to open new branches due to uncertainties in its liquidity structure. With the seizure by the TMSF, loan allocation and tracking processes and procedures will be improved. The new management assigned to the bank is striving first to preserve the current business and recover its customer portfolio. The information and documents submitted by the shareholders after the TMSF seized Bank Asya are currently being examined. Furthermore, criminal and judicial lawsuits will be filed against the previous management, which signed agreements that resulted in bad debt.

Regardless of its average GDP growth, the widening of the gap between the rich and poor is certain to affect the well-being of everyone, the rich included. Although some governments aim to achieve narrower gaps through reducing gaps in earnings, others realize that goal through taxation and redistribution of wealth. Many Egyptians abide by redistribution constituted both by the state, in the form of taxes, and religion. Among the five main pillars of Islam is Zakat, which calls on well off Muslims to annually pay 2.5% of their net monetary wealth. Putting the previous through a simple mathematical calculation while bearing in mind that Egypt’s population has grown to 95 million, it isn’t hard to imagine the amount of money being willingly circulated in Egypt out of faith and spirituality.

A plan is being floated on a “marriage” between Malaysia Building Society Bhd (MBSB) and Bank Islam Malaysia Bhd. Sources say the idea of a merger between the two is being mooted at the shareholder level of both companies, namely the Employees Provident Fund (EPF) and Lembaga Tabung Haji (LTH). A common factor the two companies have is Tan Sri Samsudin Osman, who is chairman of EPF and BIMB Holdings Bhd – Bank Islam’s listed parent company. BIMB wholly owns Bank Islam, which is its main income generator. Bankers say that if a merger is to take place, the EPF would be able to vote, unlike the situation in the failed merger with CIMB and RHB.

Indonesia's Bank Syariah Mandiri, a unit of state-owned Bank Mandiri, is targetting total assets worth 100 trillion rupiah ($7.72 billion) by 2017, up 49 percent from 67 trillion rupiah as of December, the Investor Daily newspaper reported, quoting Bank Syariah Mandiri finance director Agus Dwi Handaya.

Jeddah-based Islamic Development Bank (IDB) has opened books after setting initial price thoughts for a potential dollar-denominated sukuk, which could price as early as Thursday, a document from lead arrangers showed. IDB has set initial price thoughts for the senior unsecured five-year sukuk issue at around 10 basis points over midswaps, the document showed. The AAA-rated IDB on Feb. 24 said it had 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. The roadshows will continue until Thursday, the document showed.

La Chaire Éthique et Normes de la Finance de l’Université Paris 1 Panthéon-Sorbonne a le plaisir de vous inviter au Séminaire Mensuel qui aura lieu le Mercredi 11 Mars 2015 au 2 rue Cujas, Salle 208 (2ème étage) à 9h. Ce séminaire se fera par vidéoconférence entre le Centre de Recherche sur l’Économie Islamique à Djeddah et l’Université Paris 1 Panthéon-Sorbonne. L’invité d’honneur pour cette séance sera Monsieur Anass Patel qui nous présentera son travail de recherche : “Channeling Asset-Managed Sukuk towards SMEs financing: Sukuk Mudaraba prototype applied to a French SME”. Si vous souhaitez participer à ce séminaire, vous pouvez vous inscrire en http://cenf.univ-paris1.fr/jp/agenda/inscription-en-ligne-au-prochain-se....

Dr Haron Sirima is likely to be appointed the new Central Bank of Kenya Governor following the expiry of Prof Njuguna Ndungu’s term on Tuesday. Sirima, whom analysts gave a nod ahead of fellow nominees, is currently the Deputy to Ndungu who has been at the helm for eight eventful years. Geoffrey Mwau, Economic Affairs Director at the National Treasury, Isaac Awuondo, Managing Director of Commercial Bank of Africa, and Rose Ngugi, an adviser at the International Monetary Fund make up the broader list of nominees. President Uhuru Kenyatta will announce the latter’s successor once approval has been sought by Parliament.

Turkey's third-largest state bank Vak?fbank has received regulatory approval Tuesday from the Banking Regulation and Supervision Agency to establish an Islamic banking division. Vak?fbank will be allowed to set up a stand-alone Islamic unit capitalized at $300 million. After the approval, the bank has nine months to establish its banking unit according to Turkish law. Shareholders of the new Islamic bank will include Turkish Directorate General of Foundations, Bayezid Han-? Sani (II. Bayezid) Vakf?, Mahmud Han-? Evvel bin Mustafa Han (I. Mahmud) Vakf?, Mahmud Han-? Sani bin Abdülhamid Han-? Evvel (II. Mahmut) Vakf? ve Murad Pa?a bin Abdusselam (Murat Pa?a) Foundation.

The Islamic Corporation for the Development of the Private Sector (ICD) has signed an agreement with the African Export-Import Bank (Afreximbank) to cooperate in the development of the private sector in ICD member countries in Africa. ICD and Afreximbank will share information on projects and business opportunities in Africa and on participation in the arrangement of syndications or investment in funds. They will also cooperate in structuring sukuk/debt capital market transaction opportunities, co-invest in Islamic leasing companies and support local financial institutions in Africa through the raising of capital via lines of finances. In addition, they will exchange information aimed at upgrading knowledge and expertise about Islamic finance, among others.

Sharjah Islamic Bank plans to launch a dollar based sukuk, and will hold meetings with fixed income investors on March 5. The bank plans to meet investors in Asia and Europe, it said in a statement on the Abu Dhabi Securities Exchange. Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, and HSBC will act as be arranging meetings on SIB’s behalf.

Tunisia's El Wifack Leasing plans to become the country's third full-fledged Islamic bank by August and will receive a capital injection from the Islamic Corporation for the Development of the Private Sector (ICD). The ICD will not only provide technical assistance, but also inject up to 30 percent of the bank's capital, helping it increase its authorized capital to at least 150 million dinars ($77 million), El Wifack's general manager Mohammed Mellousse said. It will start offering sharia-compliant deposits through eight branches and build a network of 60 branches within five years, aiming for a 1.5 percent share of Tunisia's total banking market, he added. Currently, there are two full-fledged Islamic banks in Tunisia, Zitouna Bank and the Tunisian arm of Bahrain's Al Baraka Banking Group.

Global sales of Sharia-compliant debt have slumped more than 70 per cent this year amid a plunge in crude prices. The drought underscores the industry’s dependence on sales from the GCC. Activity will pick up over the coming weeks, with Emirates Airline planning to sell US$1 billion of Sharia-compliant notes this quarter. Petroliam Nasional, the Malaysian state oil company known as Petronas, is seeking to raise as much as $7bn in the largest sale of dollar-denominated sukuk. The Islamic Development Bank will meet investors from this week before a possible issue. Meanwhile, Garuda Indonesia may issue $500 million of US currency Sharia-compliant debt in April.

The Thomson Reuters Global Sukuk Index is at 117.49811 points, up from 117.48601 at the end of January and 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 115.48693 against 115.34912 at the end of January and 113.69014 at end-2014. Some of the sukuk in the pipeline are: Kuveyt Turk is seeking a window to sell maiden ringgit-denominated sukuk in Malaysia; the lender will set up a 2 billion ringgit ($549 million) Islamic medium-term note programme. National airline Garuda Indonesia said in late February it had taken a $400 million bridge loan from National Bank of Abu Dhabi and Dubai Islamic Bank and would refinance it with a $500 million sukuk issue later this year. Khazanah Nasional plans to issue sukuk worth up to 1 billion ringgit to help fund schools.

Malaysia's $40 billion sovereign wealth fund Khazanah Nasional plans to issue a sukuk worth up to one billion ringgit ($279.17 million) to help fund schools, its managing director Azman Mokhtar said. The planned "social impact sukuk" is awaiting regulatory approval from Malaysian financial regulators. The move is aimed at opening funding for education to a broad pool of investors rather than financing it out of its own reserves, he added. Mokhtar said a lot of charitable organisations, family offices and trusts wanted to participate in the fundraising and this had helped prompt Khazanah into setting up the sukuk rather than using its own money.

Liquidity Management Centre (LMC) has announced 18 per cent increase in the net profit at $4.22 million for last year when compared with $3.57m for 2013. This resulted in a return on capital equivalent to approximately 8pc while the average one-year interbank rate remains below 0.75pc. Total operating income was $10.11m as against $10.57m for 2013. Net profit for the fourth quarter was $847,000 versus $784,000 for the same period in 2013. Portfolio-based activities saw a growth of approximately 13pc while the bank's balance-sheet continues to see significant improvement in terms of asset quality and liquidity. Shareholders' equity grew by 7.18pc from $62.96m as of 2013-end to $67.48m as of December-end last year.

Niger's government will establish an Islamic bond programme worth 150 billion CFA francs ($260 million), permitting its first issue of sukuk, with assistance from the private sector arm of the Islamic Development Bank. Niger's sukuk would be issued over the next five years in two separate transactions worth 75 billion CFA francs each, the Islamic Corporation for the Development of the Private Sector (ICD) said. The government already has a number of projects that could be financed through sukuk, Amadou Boubacar Cisse, Niger's planning minister, was quoted. Niger would follow Senegal and South Africa, which issued sovereign sukuk for the first time last year; Ivory Coast has been considering a 200 billion CFA franc sukuk issue. Tunisia plans a debut sukuk issue in the third quarter of this year.

Afriland First Bank, the Cameroonian banking institution, has set high fundraising and loan approval targets for its Islamic finance clientele. Indeed, according to Youssoufa Bouba, the bank’s Director of Specialised Finance, Afriland First Bank is aiming to achieve 3 billion FCFA in Islamic checking accounts. Bouba goes on to state that the bank intends to grant 2 billion FCFA in loans at the same branch. These goals depend not only on the size of the Muslim population in Cameroon (the institution’s target market), which represents 20% of the population there, but also on the products the bank implements with private sector support provided by the Society for International Development (SID).

European Islamic Investment Bank PLC Wednesday said it has appointed Neil McDougall as its interim finance director. According to the company, McDougall is a qualified accountant who has held senior board and management positions at financial institutions including Europe Arab Bank and Commerzbank. The company has continued the search for a finance director after the appointment of Michael Warren Kidd, the chief operating officer of its majority-owned Rasmala Investment Bank and head of Strategy and Principal Investment at EIIB, fell through back in July of 2014. European Islamic Investment Bank shares were down 3.9% at 161.00 pence on Wednesday.