IslamicFinance.de

The Thomson Reuters Global Sukuk Index is at 117.50283 points, up from 117.48601 at the end of last month and 115.79726 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 115.60967 against 115.34912 at the end of January and 113.69014 at end-2014. Sukuk in the pipeline include: Emirates airline hired banks to help it arrange a sukuk issue of up to $1 billion, backed by UK Export Finance. The Malaysia-based International Islamic Liquidity Management Corp will auction $490 million worth of three-month sukuk and $500 million of six-month sukuk on Feb. 24. Oman's government is expected to conduct its first sukuk issue, for 200 million rials ($520 million), this year.

Dr. Kaldari Surgi-Art Centre, a cosmetic surgical facility in Qatar, has tied up with Tajmeel, the Qatar International Beauty Academy, for the sharing of expertise to both the Centre’s staff and Tajmeel’s students. As part of their collaborative effort, Tajmeel will be hosting staff members of Dr. Kaldari Surgi-Art Centre in attending some of its sessions, while the Centre will be providing students of Tajmeel with an Observer Program that will enable them to observe, witness and attend procedures and treatments at the facility.

The Turkish Treasury said on Wednesday it issued a lira-denominated sukuk with a volume of 1.8 billion lira ($736 million). The instrument will mature on Feb. 15, 2017, the Treasury said on its website. With the latest sukuk, the Treasury's outstanding lira-denominated sukuk amount has increased to 6.8 billion lira. Treasury also has $3.75 billion worth of outstanding dollar-denominated sukuk.

Global assets under management by Islamic funds grew slightly last year and are likely set for rapid growth in coming years as the relatively young Muslim population of the world ages, hedge fund analysis firm Eurekahedge says. Assets under management peaked at about $91 bn in the second half of 2012, but are still up sharply from less than $50 bn at the beginning of 2007, Eurekahedge data shows. The firm says the Islamic finance industry globally now measures about $2 tn, including Islamic banking, sukuk (financial certificates), takaful (insurance) and Islamic funds. Islamic banking accounts for about 80 percent of the sector, while sukuk issuances account for about 15 percent.

Emirates, the Dubai-based airline, has hired banks to help it arrange a sukuk of up to $1 billion, as the airline seeks to raise cash to finance its pipeline of aircraft orders. The issue will be backed by UK Export Finance (UKEF). UKEF expected to guarantee an Islamic bond in 2015 issued by a customer of Airbus, Britain finance ministry said in October. The upcoming U.K.-backed Emirates deal could close by the end of the first quarter. The transaction is likely to be worth up to $1 billion, with the lifespan being between five and 10 years. Eight banks are arranging the transaction: HSBC, Citigroup, JP Morgan , National Bank of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates NBD and Standard Chartered.

Researchers are seeking to apply the principles of game theory to Islamic finance, one of several efforts to shed new light on economic behaviour in an industry driven by religious principles. A competition launched this month by the Islamic Development Bank (IDB), in partnership with universities in Morocco and Saudi Arabia, invites entrants worldwide to submit computer models of some aspect of Islamic economics or finance. Models are to employ agent-based simulation (ABS), which uses individual rules for the behaviour of each participant and shows how their interaction can have results that no participant intended.

In spite of the fact that more than 60 percent of Bank Asya's A-type shareholders have submitted the documents requested by the Banking Regulation and Supervision Agency (BDDK) that were the basis for recently taking control of the management of the bank, the watchdog agency has not given up that control, stoking claims that the management takeover was part of campaign of intimidation against the lender. Many believe that the government is not allowing the supposedly independent BDDK to give management control back to the partners. Even though the bank recorded a TL 875 million loss in 2014, its non-performing ratio is still one of the highest in the sector at about 18 percent.

Bank Asya has declared a commercial loss for corporate tax of TL 942 million ($383.44 million) and its "net term loss" for the fiscal period of Jan. 1 and Dec. 31, 2014 was TL 875 million. The bad debts of the bank had increased to TL 2.1 billion in the first nine months of 2014 and now the fourth quarter is being examined. Further, whether loans exceeding TL 3 billion, which were granted in violation of Articles 50 and 51 of the Turkish Banking Code, have been repaid or not will also be revealed after the examination of the 2014 balance sheet as publicly traded companies and banks have to hand in their balance sheets to the KAP. Besides, there are various allegations about the asset management companies to which the bank has transferred its bad debt files.

Eduware, a provider and integrator of comprehensive technology-based learning products and services in the MENA region, said Wednesday that 21st century education is inevitable and should undergo a paradigm shift to prepare children for the jobs that have not yet been invented. The company, which will be addressing challenges facing educators, parents and businesses at the Microsoft in Education Global Forum taking place in Dubai on Feb. 22-23, said the new generation has to be armed with a different set of skills than their parents did if they were to enter the emerging job market. The company will present its 21st Century edu-digital tools at the forum.

Malaysia-based International Islamic Liquidity Management Corp (IILM) will hold two auctions next week to issue a combined US$990mil (RM3.6bil) worth of sukuk, under a programme that is now authorised to issue US$3bil (RM10.9bil) in short-term paper. The IILM would auction US$490mil (RM1.8bil) worth of three-month sukuk and US$500mil of six-month sukuk on Tuesday. It is only the second time IILM has issued six-month paper. The IILM programme, rated A-1 by Standard and Poor’s, has US$1.85bil (RM6.7bil) worth of sukuk currently outstanding.

Asia is set for the busiest year for dollar sukuk sales in at least five years as Malaysia’s state oil company plans a record offering and Indonesia’s government seeks to beat rising US borrowing costs. Malaysia’s Petroliam Nasional may sell as much as $7 billion of Islamic notes while Cagamas and Export Import Bank of Malaysia have also planned offerings for this year. Meanwhile, Indonesia is seeking to return to the fold in the first half of this year. The average yield on US currency sukuk has dropped 13 basis points to 2.92 percent this year. The planned sales by Petronas, Malaysia and Indonesia will be positive as they will help ease the shortage of sukuk.

The Qatari bourse is all set to list one of the four planned investment funds soon. CEO of Qatar Exchange (QE) Rashid Al Mansoori said they were just waiting for the necessary approval to list the fund, while the approval process for listing the second fund is also ongoing. The remaining two proposed funds are under study, he added. One of the four funds is Al Rayan Islamic, while another one will be bonds-based. Details of the four funds are yet to emerge. Al Mansoori said several new companies would be listed on the QE this year. A number of companies have applied for listing and their requests are being looked into by the regulator.

Islamic International Rating Agency ( IIRA ) has reaffirmed the ratings of Jordan Islamic Bank ( JIB ) on the national scale at A+/A1 (jo) (Single A plus/A One). Ratings of JIB on the international scale have also been reaffirmed with the foreign currency rating at 'BB+/A3' (Double B Plus/A Three) and the local currency rating at 'BBB-/A3' (Triple B Minus /A Three). Outlook on the ratings is 'Stable'. Ratings are supported by JIB 's strong franchise and retail presence. Stability at Board and management level has reinforced the organizational culture and has allowed uninterrupted implementation of the bank's business strategy. Regional instability may however continue to be a significant challenge.

One of the foremost critics of the Islamic finance industry, Mahmoud Amin El-Gamal, a professor of economics at Rice University in the United States, considers modern Islamic finance to be “Shari’a arbitrage” wherein what is prohibited in conventional finance becomes permissible when deemed “Shari’a compliant” despite having similar, if not the same, economic substance. Duke University economist Timur Kuran claims that Islamic banking is based on an operational principle [of profit and loss sharing] that is simply unfeasible. There are lots of other views and opinions on Islamic finance. Those who consider it a failure point to its tendency to favor legal form over economic substance and the lack of substantive differentiation from conventional finance.

Oman's State Council yesterday approved the draft Takaful Insurance Law referred to it by the Council of Ministers and the report which was prepared by Majlis Ash'shura and the State Council Economic Committee concerning that law. Out of 58 articles, 46 articles have been ratified in compliance with the views expressed by the government and the Majlis Ash'shura, although some articles were not agreed upon. The law ensures the formation of a non-conventional mechanism in the insurance system. It's expected to contribute significantly in stimulating the economy by attracting investors and encouraging consumers who are interested in Islamic insurance system.

Islamic banks have yet to devise strategies for attracting large swathes of the global Muslim population, limiting the industry's prospects, according to researchers at the International Monetary Fund. Growth of Shariah-compliant finance has done little to boost inclusion for individuals and businesses without bank accounts, a working paper from staff at the Washington-based fund said this month. Banks need to focus on small- and medium-sized enterprises and pursue private equity and venture capital initiatives, according to the paper. While the IMF's researchers found that Islamic banking within OIC countries was associated with greater use of bank credit by households and by firms for investment, it said there was no significant effect on other indicators of credit use.

Morocco is to create a sharia board of Islamic scholars to oversee the country's fledgling Islamic finance industry. Called the Sharia Committee for Participative Finances, the board will be composed of 10 Islamic scholars plus at least five financial experts. The members of the committee will be named by the president of the country’s Islamic Scholars Council, the bulletin said. The board will approve the conformity of the Islamic products proposed by the participative banks, as they will be known under the legislation, and insurance (takaful) to sharia law. It will also oversee the central bank decisions regarding the participative finances sector.

Morocco has issued a royal decree to create a sharia board of Islamic scholars to oversee the country's fledgling Islamic finance industry. Called the Sharia Committee for Participative Finances, it will be composed of 10 Islamic scholars and financial experts, the country's official bulletin said. The members of the committee will be named by the president of the country's Islamic scholars council. The board will approve the conformity of the Islamic products proposed by the participative banks, as they will be known under the legislation, and insurance (takaful) to sharia law. It will also oversee the central bank decisions regarding the participative finances sector.

Indonesian and Malaysian Islamic bonds are diverging as cheaper oil has opposite impacts on fiscal budgets. The yield on Indonesia’s US dollar Sukuk due 2022 fell to a 21-month low of 3.72 per cent in February, while Malaysia’s 2021 debt yield climbed to 3.05 per cent. Default risk for Indonesia has dropped nine basis points this year to 148, while that for Malaysia rose 15 to 121 just as both nations plan US currency global offerings before the Federal Reserve starts raising interest rates. Barclays Plc forecast a sovereign credit upgrade for Indonesia after an overhaul of a decades-old fuel-subsidy program last month. Malaysia, the region’s only major crude exporter, is contending with a drop in revenue and a higher budget-deficit target, prompting Fitch Ratings to warn of a possible rating downgrade.

Islamic lender Masraf Al Rayan announced it will be launching two debut funds. Of these, the Shariah-compliant Qatari equity ETF, to be listed on the Qatari bourse , is targeting foreign investors. A sukuk fund will be focused on sukuk in the GCC. Both funds will be managed by Masraf Al Rayan 's wholly-owned subsidiary, Al Rayan Investment. Al Rayan Investment manages the Sharia-compliant Al Rayan GCC Fund which invests in select companies across the GCC based on a 24-month investment horizon. The fund has two classes, 'Q' and 'F'. The Q-Fund is denominated in Qatari Riyal and is open to Qatari individual and institutional investors, while the F-Fund is denominated in US Dollars and is open to all investors, resident in any part of the world.