IslamicFinance.de

The Malaysia-based International Islamic Liquidity Management Corp (IILM) will hold two auctions next week to issue a combined $990 million worth of sukuk, under a programme that is now authorised to issue $3 billion in short-term paper. The IILM will auction $490 million worth of three-month sukuk and $500 million of six-month sukuk next Tuesday. It is only the second time the IILM has issued six-month paper. The IILM programme, rated A-1 by Standard and Poor's, has $1.85 billion worth of sukuk currently outstanding. Its sukuk programme permits maturities of up to one year.

The Thomson Reuters Global Sukuk Index is at 117.18203 points, down from 117.48601 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 115.24315 against 115.34912 at the end of January and 113.69014 at end-2014. The sukuk in the pipeline include: Jordan Islamic Bank plans a 10-year local currency sukuk issue by year-end. The Turkish Treasury said it would issue two-year, lira-denominated sukuk on Feb. 18 in volume of 1.8 billion lira ($736 million). Abu Dhabi Islamic Bank plans to issue capital-boosting Islamic bonds in Malaysia. Qatar International Islamic Bank is seeking shareholder approval to raise up to 3 billion riyals ($825 million) through a capital-boosting sukuk issue.

Bank Albilad has entered into agreement with Waad Holding Company to finance the construction of the company’s academy schools project in Jeddah city. Amounting to SR 150 million, the project represents one of largest deals in the sector. The agreement has been signed by Mr. Saleh bin Suleiman Alhabeeb, the bank’s Director General of Banking for Corporate Sector and Dr. Ahmed bin Hassan Aljazaeiri, the CEO of Waad Holding Company, owner of Waad Academy Schools. Waad Academy Schools are one of Waad Holding Company branches. They offer specialized educational programs for students (boys and girls) ranging from grade 1 primary up to grade 3 secondary. The opening of the academy is scheduled to take place in the middle of the current 2015 year.

The year 2014 brought changes for the Russian economy. The sanctions imposed by the European countries and the US and historically low oil prices have led to prices to double and businesses to lose access to traditional finance. At the annual Gaidar Economic Forum on January 14-16, a session was dedicated to Islamic finance and its development prospects in Russia. Indeed, 2014, especially its second half, was filled with economic and finance forums and seminars, which embraced among other topics, the issue of Islamic finance. The industry, which is capable of bringing new investments into the market, finally seems to be taken more seriously. Islamic finance is now being studied at various government bodies and institutions, both at the federal and regional levels.

The Islamic Center of Nashville is listed as being a church meaning it qualifies for a property tax exemption. Only ICN did have a problem with its property tax exemption. When ICN decided to finance a school it deeded property to Devon Bank, which paid for the construction. ICN leased the property and bought it back over time from the bank. So even though the religious use of the property had not changed, it was no longer owned by a religious organization and hence for a period of time did not qualify for property tax exemption. ICN was asking for the exemption to be retroactive three years. However, the Tennessee State Board of Equalization ruled against ICN.

Zilzar Tech Sdn Bhd (Zilzar) has announced the appointment of Mr. Akira Miyama to its Advisory Board. He joins six other international members: Mr. Saleh Lootah, Mr. Safdar Khan, Mr. Rafik Kassim, Mr. Ebrahim Pate, Sir Iqbal Sacranie and Mr. Rahman Khan. Mr. Miyama recently retired as Executive Director of RHB Bank. He also served as Director of RHB Investment Bank, Director of RHB Sakura Merchant Bankers Berhad and Non-Independent Non- Executive Director of RHB Capital Berhad. Zilzar is a B2B and B2C global information, content, community, and trade platform for the Muslim Lifestyle Marketplace.

Malaysia reportedly plans to tap the global Islamic bond market for the first time in almost four years. Banks have been asked to submit proposals for a dollar-denominated debt offering. Malaysia will become the first sovereign to tap the overseas Islamic bond market this year and Indonesia also plans an offering. Malaysia’s state-owned Petroliam Nasional Bhd. is seeking to sell a dollar Sukuk of as much as $7 billion. Malaysia last tapped the market in 2011, when it sold $2 billion of Shari’ah-compliant notes with maturities of five and 10 years. The yield on the 2.991 percent securities due in 2016 has climbed to 1.4 percent from 2014’s low of 0.98 percent.

Aafaq Islamic Finance, a provider of Islamic finance products and services in the UAE, has been awarded ISO 9001:2008 certification for its quality management system. The company’s implemented system has been recognized for its aim to satisfy Aafaq clients through its services--meeting client expectations as well as the requirements needed in developing the quality management system continuously. The ISO, which covers the set international standards on quality management systems within organizations, was awarded after a review and evaluation conducted by the British Standard Institute (BSI), the assessing body assigned by the International Organization for Standardization to grant the ISO Certificate of Conformity.

Private wealth in the GCC has doubled from $1.1 trillion in 2010 to $2.2 trillion in 2014 at an overall compound annual growth rate (CAGR) of 17.5 percent, according to a study by management consultancy Strategy&, formerly Booz & Company. Most of the region’s private wealth resides in Saudi Arabia (44 per cent), but the UAE has made notable gains with its share increasing from 24 per cent to 30 per cent during 2009 to 2013. Together, Saudi Arabia and the UAE control 74 per cent of the region’s private wealth, up from 71 per cent in 2009. The study reveals that geopolitical events also intensified the migration of new wealth to the region. This growth in private wealth makes the GCC a lucrative market for local and global private bankers, said the study.

One of the reasons the Gulf has been so slow to introduce bankruptcy legislation is because there is still a stigma associated with the process. While some of the biggest companies and business names in the West have gone through the process, in the Arab world it is still seen as taboo and a major cultural failure. One company that has gone through the process, come out the other side and is slowly beginning to scratch away at the doomsday perception associated with bankruptcy is Bahrain-owned, US-based firm Arcapita. Atif Abdulmalik, chief executive, believes the Arcapita experience should be seen as an example to authorities in the region who might be reluctant to push ahead with the introduction of similar procedures in the Arab world for fear of the taboo associated with it.

Fitch Ratings has appointed Bashar Al Natoor as Global Head of Islamic Finance, based in Dubai. In this new role, Mr. Al Natoor will coordinate all Islamic Finance activities and expertise across Fitch's Sovereign, Financial Institutions, Corporate, Structured Finance, Infrastructure and Insurance teams. As well as being involved in the rating process of Islamic Finance instruments, the Islamic Finance Group will continue to monitor and report on this sector, produce research and commentary as well as criteria development. Mr Al Natoor has more than 14 years' experience in the Islamic Finance market. Since joining Fitch in 2007, he has overseen Fitch's Sukuk criteria and Islamic Finance practices, undertaken research and written numerous published articles on Islamic Finance.

RAQABA signed an agreement for an independent external Shari'ah audit with American Finance House (Lariba) in the second half of 2014. RAQABA issued the first Shari'ah audit report in the United States after a professional work continued for several months in an examination of the structures and procedures for LARIBA’s home financing model "Declining Participation in the Usufruct (DPU)". American Finance House (LARIBA) was founded in 1987 in Pasadena, California in the US. The main objective of this company is interest-free financing for all segments of society, by leasing or participation through specialized products in home financing, commercial property financing, auto financing, and equipment financing.

Bahrain-based Al Baraka Banking Group is planning on issuing its first sukuk for its Jordanian unit later this year, chief executive Adnan Ahmed Yousif said. Jordan Islamic Bank is planning a 10-year local currency sukuk by year-end, said Yousif, without giving a size for the transaction. This would mirror deals by Al Baraka units in Pakistan and Turkey which have allowed them to boost regulatory capital as Basel III global banking standards are being phased in around the globe. In December, Jordan Islamic amended its articles of association to allow it to both issue and buy sukuk, as well as to establish special purpose vehicles for such transactions. Al Baraka is also planning a sukuk for its South African unit this year, said Yousif.

To regulate and develop the Islamic financial market, the Securities and Exchange Commission of Pakistan (SECP) has established an Islamic Finance Department. The new specialised department shall carry out the functions of Shariah regulation and compliance, product development, market awareness, Shariah securities market development and international liaison and networking. The Islamic Finance Department will act as a backbone for co-ordination between the SECP's operational departments with the primary objective of regulating and promoting Islamic finance and Shariah compliance in the capital market. Out of Pakistan's total Islamic financial assets of over Rs 1.7 trillion, around 40 percent assets are directly or indirectly regulated by the SECP.

Liquidity management has become easier for Islamic banking institutions as well as for the State Bank with the Sukuk-backed open market operations gaining momentum. The central bank has so far conducted about a dozen Sukuk OMOs since the introduction of this concept in October 2014 and IBIs have responded to it in good spirit. Central bankers say holding of OMOs using Islamic financial concept of Bai-Muajjal is but one component of a broader plan for better liquidity management. The plan, drawn up after seeking inputs from stakeholders, also envisages establishment of a discount window for IBIs later this year. But in addition to several other things, IBI’s want of interest in human resource building also impedes fast-tracking of the planned moves for this purpose.

The Gulf Bond and Sukuk Association (GBSA), the trade association representing the Arabian Gulf fixed income market, has endorsed proposed standard language for collective action clauses and pari passu clauses for sovereign bond contracts. The language would enhance the predictability and orderliness of sovereign debt restructurings by bolstering existing "collective action clauses" through the introduction of a single vote mechanism that would bind all bondholders to a restructuring proposal, as long as 75 percent of bondholders vote in favor. The documents and further information are available on the website of International Capital Market Association: www.icmagroup.org/resources/Sovereign-Debt-Information/

Bank Al-Maghrib, Morocco’s central bank, has reportedly received several requests for approval from Islamic banks from the Gulf countries. Al Baraka Bank (Bahrain), the Kuwait Investment Bank and the National Bank of Qatar are among those banks that wish to settle in Morocco. Some of these institutions have already established agreements with local credit institutions like Bahraini bank Al Baraka Bank. Banque Centrale Populaire (BCP) has, meanwhile, last year signed a strategic partnership in the field of Islamic finance with Guidance Financial Group (GFG), a subsidiary of Barwa Qatari sovereign wealth fund. The Moroccan banking group Attijariwafa Bank, however, has announced in late January that it has intended to develop its subsidiary dedicated to Islamic finance Dar Assafaa without an alliance with a foreign partner.

Securities and Exchange Commission of Pakistan (SECP) Executive Director Nasim Shahid cancelled the licence of the asset management company Dawood Capital Management on March 22, 2013. He concluded in his order that Dawood Capital Management CEO Tara Uzra Dawood used privileged information and forged documents to avoid an imminent loss of Rs18.2 million. He also imposed a penalty of Rs20 million on her. The appellate bench of the SECP set aside the earlier order on January 22, saying the SECP executive director “did not have the power to pass the impugned order”. The bench also overturned parts of the 17-page original order that held Dawood guilty of having defrauded investors in the run-up to the write-down in the value of the mutual funds.

We are in a fluid state of extremists trying to hijack the religion in the Muslim world and coordinated/lone wolf attacks in high-profile non-Muslim countries of US, UK, Australia, France. As a result, there is a vocal minority anti-shariah and halal-hysteria movement in those countries. Now, it would seem almost trivial to lump financial inclusion in context of the above-mentioned challenges, but disenfranchisement not only affects dignities of people, but is also an important pre-condition recruitment tool for those espousing hate and violence. The time has arrived to marry “compliant liquidity with compliant opportunity” as the status quo is no longer acceptable under the law necessity. The necessity is change to be relevant.

The Venture Capital industry in the Middle East and North Africa region is set to grow five-fold in the next three years, according to Dany Farha, CEO of BECO Capital, a regional Venture Capital firm focused on technology investments in the MENA region. Farha said this boom will be propelled by the UAE and Saudi Arabia. Tech VC activity in the region is still on the rise across all functions, from fund raising and deal flow, to closing transactions. Almost 60 percent of the companies that BECO saw were revenue-generating and more 20 percent were close to break-even. BECO Capital is targeting investments in the whole of the GCC region, with a special focus on start-ups in Kuwait, Saudi Arabia and the UAE, Egypt, Jordan and Lebanon.