IslamicFinance.de

GCC Board Directors Institute ("BDI") released insights that Board composition and selection were identified as key priorities in the corporate governance choices faced by GCC businesses, as highlighted during the Institute's Foundations of Directorship Workshop held in partnership with Investcorp on 7-9 Dec 2014 in Bahrain. BDI's Foundations of Directorship workshop is hands-on and experiential where participants are presented with contemporary issues and challenges that boards in the GCC are faced with. The workshop held by BDI in Bahrain this week, was in partnership with Investcorp , a founding member of BDI.

Mishal Kanoo, deputy chairman of the Kanoo Group, believes that the big merchant families of the Gulf are the backbone of the regional economies, and that of the UAE. Most of them came into being around the time Gulf states won independence in the 1970s, so now they are in the third generation of ownership. This creates its own tensions. Part of the problem lies in the blurred distinction between ownership and management, he says. The other question is how to protect minority family members who do not wish to be involved in the management, but who have an economic stake in the running of the business.

Despite the rapid economic and social development in countries across North Africa, the Middle East and South Asia, many companies may be wary of exploring new business opportunities in these jurisdictions due to the complexities with local laws governing foreign businesses and taxation. To respond to this, KPMG has launched a new guide – the Middle East, North Africa and South Asia (MENASA) Tax Guide 2014-15. The guide is available online, free of cost and provides a quick and easy summary of the main regulations affecting foreign companies in 19 countries across the region.

Malaysia is on track to become an international Islamic financial hub, Deputy Finance Minister Datuk Ahmad Maslan said. He said according to the Bank Negara Annual Report, Malaysia was ranked second after Saudi Arabia in Islamic banking with the total Islamic financial assets reaching RM599.5 billion, financing (RM408.1 billion) and deposits (RM472.1 billion). Ahmad said Malaysia was also ranked second after Saudi Arabia in takaful (Islamic insurance), while in the global sukuk market, Malaysia was ranked first with the United Arab Emirates trailing in the second place.

The State Bank of Pakistan has added to its Islamic finance push with the hire of a well known market specialist. Yavar Moini, the former head of Islamic finance at Morgan Stanley, has joined SBP as a director in Islamic banking.

In order to hedge this unfavorable scenario of capital injection, banks are considering the use of a hybrid security known as Contingent Convertible (CoCo) bonds. CoCos are designed to help a bank meet its capital adequacy and funding requirements, while at the same time achieving favorable tax deductibility treatment. These bonds are typically structured either as contingent notes or as contingent convertible notes. However, there is less public guidance from the regulators on write-ups and Standard & Poor's predicts that the CoCo market could grow to USD 1 trillion in the next five to 10 years.

Owned by the Ben Yedder family, the Amen Bank is due to start raising subscriptions on Dec. 11 for two new Sharia-compliant property funds, UFGS Islamic Fund and CEA Islamic Fund. Amen Bank is starting out modestly for what is a first-ever move on its part. Each fund will have an initial value of 100,000 dinars.

Hong Kong's government is trying to maintain the territory's momentum toward becoming an Islamic finance centre, as other potential sukuk issuers show little enthusiasm. In September, Hong Kong made the first U.S. dollar-denominated sukuk issue by an AAA-rated government, a $1 billion (£636.3 million) deal that put it on the map in the global competition among banking centres to attract Islamic finance business. Since then, however, there have been few if any signs of other sukuk issuers emerging in Hong Kong - demonstrating that however hard governments try, they may struggle to develop Islamic finance sectors if a strong economic rationale is absent.

Malaysian sukuk investors are designing strategies for 2015 that will profit as a new tax both pushes up inflation and forces central bank rate increases. Malaysian consumer-price increases will average 4 percent in 2015, the highest in seven years, as a new consumption tax starts in April. One-year interest-rate swaps climbed to a six-year high of 3.87 percent this week. Experts recommend buying Islamic bonds in the middle of the so-called yield curve, which are less exposed to losses from inflation and interest-rate moves. The government will implement a 6 percent goods and services tax as part of efforts to cut the fiscal deficit that included scrapping fuel subsidies.

The Islamic Development Bank (IDB) has confirmed that it would provide financing worth $1 billion on the basis of an agreement to carry out various development projects in Cote d'Ivoire during the next two years. Cote d'Ivoire President Alassane Ouattara said that his country is looking forward to greater cooperation and partnership with IDB in various fields including capability building for sukuk in order to mobilize resources for development. The president also sought IDB loans to finance the country's infrastructure projects. The meeting saw the signing of a loan agreement worth $15 million to establish a vocational training center in the country.

Nakheel today confirmed a profit payment of AED220 million on its trade creditor Sukuk. Instructions have been sent to Deutsche Bank, the registrar and paying agent for the Sukuk, to make the profit payment to all Sukuk holders on the due date of 15 December 2014 against the Sukuk issued amount of AED4.4 billion to date. Nakheel 's current portfolio of developments in Dubai includes Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Al Furjan, Warsan Village and International City. Together, these span nearly 14,000 hectares and provide homes for more than 200,000 people.

The Kingdom joined the rest of the world in observing International Anti-Corruption Day on Tuesday to raise awareness about the importance of making Saudi Arabia a corruption-free country. The Anti-Corruption Day is observed by the United Nations every year on Dec. 9 in order to highlight the evils of corruption and its negative impact on government systems globally. To mark the occasion, Nazaha, Saudi national anti-corruption commission, hosted a forum. A seminar entitled “The role of medial and cultural institutions in maintaining integrity and fighting corruption” was organized by Nazaha on the sidelines of the event.

Last week Pakistan rejoiced at its ranking in the Corruption Perception Index (CPI) 2014 improved by a notch with a score of 29 out of 100 in a scale from 0 (perceived to be highly corrupt) to 100 (very clean) as per the report issued by Transparency International (TI). Denmark comes on top of the list with a score of 92 and North Korea and Somalia share last place scoring 8. The Corruption Perceptions Index (CPI) ranks countries and territories based on how corrupt their public sector is perceived to be. It's a composite index-a combination of polls- drawing on corruption - related data collected by a variety of selected institutions.

At a time of great reshaping, optimism and hope in the Arab world, entrepreneurs, especially the youth, have found new avenues in leading innovation. Large-scale transformations in some countries, combined with social dynamism particularly among the youth, have clearly put the employment challenge on the top of the regional agenda, with entrepreneurship being a key imperative. The UAE and other countries in the region are at the forefront of the global entrepreneurship movement. Hundreds of initiatives are being launched in the Arab World to drive and encourage innovation and the spirit of enterprise amongst Arab Youth.

Bahrain-based Al Baraka Banking Group plans to set up an Islamic bank in Morocco next year with a capital of USD 50 million, CEO Adnan Ahmed Yousif said. Last month, Morocco's parliament gave final approval to an Islamic finance bill that allows foreign banks and local lenders to set up Islamic banks in the North African country. Yousif declined to name the potential partners, but said the new bank would be established in 2015 with a plan to open 10 branches in the first year of operations. He said Al Baraka expected to record growth of 12% in assets, of 11% in deposits and of 10% in income during 2015.

Pakistan's $1 billion sukuk offering was its first shariah-compliant deal since 2005. It signals that Muslim-majority countries will actively rely on Islamic finance markets for at least part of their fundraising going forward. The sovereign's five-year sukuk closely follows its $2 billion souvereign bond sold in April - its first foray into the foreign debt markets after a seven-year hiatus. But investors have anticipated a sukuk due to its strong domestic Islamic finance market. It demonstrates that the global Islamic finance markets have developed to the point that Muslim-majority countries can rely on it for their annual fundraising plans.

BMCE bank is reportedly planning to create a new subsidiary specializing in Islamic finance. The group owned by the Othman Benjelloun, Morocco’s richest man, will embark on a joint venture with Saudi Arabia’s Al Baraka Banking Group to create a new subsidiary specializing in Islamic finance. Al Baraka Banking Group will reportedly hold 51% of the new subsidiary while the Moroccan bank BMCE will hold the remaining 49%. Several BMCE executives have received training on Islamic finance in Jordan and Turkey. The step follows the adoption of the law authorizing the creation of participatory banking by the parliament.

Le 25 novembre dernier, après plus de deux années d’attente, le projet de loi n° 103.12 relatif aux établissements de crédit et organismes assimilés a été adopté à Rabat. Il définit le statut des banques islamiques au Maroc et précise les produits qui pourront y être commercialisés. La loi va permettre non seulement la création d’institutions dites "participatives" mais aussi aux entreprises marocaines qui le souhaitent de se financer via des émissions de sukuk. En faisant le choix d’offrir un cadre législatif adapté aux spécificités de la finance participative, le Maroc met tout en œuvre pour assurer un développement pérenne sur son sol.

The Islamic Social Finance Report 2014 is a thorough analysis of the current state of three institutions of Islamic philanthropy: zakah, sadaqah and awqaf, in seven countries of South and Southeast Asia - India, Pakistan, Bangladesh, Malaysia, Brunei, Indonesia and Singapore. The report is written by the Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group, with research led by prominent economist Dr Mohammed Obaidullah.

The ‘Arab Knowledge Report 2014: Youth and Localization of Knowledge’ was launched in Dubai on Wednesday, the second day of the First Knowledge Conference. To meet increasing social and economic development challenges, Arab countries must integrate better in today’s global knowledge economy. Their most effective route toward that end is investment in empowering the full and active engagement of their youth in processes of knowledge generation, transfer and localization, the report says. The report applauded the UAE’s efforts to build the capacities of its human capital, particularly its youth.