IslamicFinance.de

BMI Bank, a subsidiary of Bahrain's Al Salam Bank (ASBB), has announced that Jamal Al-Hazeem, director and CEO of the bank had stepped down. Al-Hazeem who took on the helm of BMI Bank in 2010 as CEO, cited personal reasons for his resignation and called the decision to step down as CEO of the Bank as "mutual and amicable". He will continue to stay on as a director on the board at BMI Bank which is currently finalising the operational aspects of its merger with Al Salam Bank as it converts its business to a Sharia compliant one.

Investment Dar, the Kuwaiti firm best-known for its stake in luxury carmaker Aston Martin, hopes to complete a second debt-for-assets deal with creditors by the end of March. The firm has received the backing of a significant majority of investors for the proposal, which would see creditors voluntarily exchanging debt for ownership of a portfolio of assets. No details or terms for the so-called settlement-in-kind proposal have been released, although the Nov. 18 update said there would be no losses imposed on creditors under the plan and no change to the existing maturity of the debt.

Kenya plans to create an enabling regulatory framework to boost Sharia financing in the country. The country's Capital Market Authority is holding a workshop in Nairobi. Islamic finance, which follows religious principles such as bans on interest and gambling, is currently offered by two full-fledged Islamic lenders in Kenya - Gulf African Bank and First Community Bank.

Investors’ antennas had gone up in the investment markets when SBI Mutual Fund announced first official launch of a stock fund structured in line with Islamic rules (Shariah Equity Fund) in the first week of December. But this mutual fund arm of India’s largest bank, State Bank of India, took no time to defer the launch of SBI Shariah-compliant fund on the pretext of its ‘restructuring in a better and more attractive format’ is not digestible. This is a statement which makes even an ordinary mind to believe that the reason for deferring the offering could be political. Meanwhile, the two actively-managed Shariah mutual funds in the market have outperformed the Sensex recently.

Last week an immunisation programme secured a $500 million issuance of sukuk, under a broader trend to use bond markets to fund development and humanitarian projects. The sukuk from the International Finance Facility for Immunisation Co (IFFIm), for which the World Bank acts as treasury manager, is a break from the predominantly commercial nature of most Islamic finance transactions. Future sukuk from IFFIm could help reinforce that change by financing other high-profile immunisation efforts, and the Global Alliance for Vaccines and Immunisation (GAVI) is actively in discussions over taking a role in fighting Ebola when a vaccine becomes available.

Global Islamic bond sales look set to miss out on a record year after Malaysia’s sovereign wealth fund postponed what would have been 2014’s biggest offering. The top underwriter is also cautious over the coming year. Issuance to date is $2.1 billion shy of the unprecedented $46.8 billion in 2012 and more than last year’s $43.1 billion total. Bond issuance will likely taper off now as bankers and investors go on their year-end holidays. It's expected to be a challenge for sales to test new highs next year as the slump in crude oil prices may deter issuance. Most of the issuance is expected to still come from Malaysia and some from the Middle East.

The Capital Market Authority (CMA), represented by the Oman Centre for Corporate Governance and Sustainability, in cooperation with the Pearl Initiative, organised a seminar on 'Governance of Family Businesses and the Separation of Ownership from Management and Succession Planning'. The seminar was aimed at airing the views of those present and fostering dialogue among the representatives of the family businesses, business experts and specialists in this regard. Speakers underlined the importance of accountability and transparency in the family and state-owned companies that seek to successfully achieve permanence and continuity.

The global population of 2 billion Muslims remains largely unprotected against risk. There is a growing need to design insurance products that meet the needs of these excluded adults to provide better risk protection. Takaful is one possible solution for people who would not otherwise use conventional insurance products. The greatest potential for Takaful may be in countries with predominantly Muslim populations. However, these countries also tend to be ones with some of the lowest levels of financial literacy. This situation creates a significant challenge for supervisors. With the help of an enabling regulatory environment, Takaful can deliver on the promise of necessary products at the right price.

Shariyah Review Bureau (SRB) is celebrating its 10th anniversary of service to clients. In the last five years, SRB has intensified its dedication to serving clients by providing shari’a consultation, certification (Fatawa), Islamic industry jurisprudential foresight, and functional Shari’a compliance audit expertise. The number of Islamic projects have been increasing, so far SRB has completed more than 300 projects in the last four years, helping clients cover a wide spectrum of transactions ranging from sukuks (including trade finance sukuk), private equity funds, equity projects, trade finance transactions, margin trading, real estate developments, ICT deals, money market, textile, sports and pharma funds.

The World Social Forum (WSF) will hold its next global gathering in March 2015 in Tunis. Since 2001, the forums took place annually around the same dates as the World Economic Forum in Davos. Organized every two years since 2007, the event has now become somewhat less visible. Some of the reasons for the frustration with the WSF are related to dilemmas of representation. For the activists that reject representation as a political principle, the forums have been too embedded in traditional politics. For those who want to build global political parties, the WSF’s open space has lacked the capacity for action. These are some of the questions that need to be debated on the road to the next WSF in Tunis.

The study, “Sukuk Perceptions and Forecast,” released by Thomson Reuters, said the total global outstanding sukuk, which is currently at $241 billion, is also expected to grow to $907 billion by 2020. With the potential demand for sukuk expected to outstrip supply, the global Islamic bond issuance is expected to surge to $175 billion in 2015, up from $110 in 2014, and is projected to hit $250 billion by 2020, the report said. Investors view the UK as the most attractive emerging Islamic finance market for sukuk investment while lead arrangers also expect that more sukuk would be issued from the UK. Some investors are planning to reduce their allocations to sukuk which could push yields higher.

Over 150 young leaders, innovators, thought leaders and decision makers representing over 30 countries participated in the annual two-day Shape MENA conference which was held December 3-4 at the Qatar National Convention Centre. This year’s Shape MENA event addressed the theme of “Economic Growth and Job Creation in the MENA Region,” and over the course of two days participants examined such issues as the changing nature of work, current and future workplace skills gaps, technology and philanthropy, Islamic finance, and social entrepreneurship. Shape MENA 2014 was supported by a number of local organizations.

The sixth World Innovation Summit for Education (WISE), which recently concluded in Qatar’s capital city of Doha, tackled a number of education issues on a global level. In recent years, WISE has launched a series of on-going initiatives, including the Learners’ Voice Program. It is designed to equip young people aged 18 to 25 with the relevant soft skills, tools, and know-how to address global education issues. This year, 34 young men and women were chosen from hundreds of promising applicants to take part in the 2014-2015 Learners’ Voice Program , launched at WISE 2014 with a series of workshops.

Standard and Poor's has lowered the outlook for the world's top oil exporter Saudi Arabia to stable from positive and its Gulf partner Oman to negative on sliding oil prices. However, the ratings agency affirmed the strong "AA-/A-1+" long- and short-term foreign and local currency sovereign credit ratings for Riyadh over the "strong external and fiscal positions" it has built up in the past decade when oil prices were too high. It said low oil prices will place pressure on the kingdom's gross domestic product (GDP) and per capita income because Saudi Arabia's economy is undiversified and vulnerable to a sharp and sustained decline in the oil price.

The 2015 outlook for GCC banks is stable, but it is negative for those in the rest of the MENA region, says Moody's Investors Service. The stable outlook for GCC banks is driven by strong operating conditions coupled with expansionary fiscal policies and continued infrastructure spending, which remain supportive of credit growth. However, declining oil prices if prolonged at these levels will reduce fiscal surpluses, affect economic confidence and moderate growth expectations. The negative outlook for the rest of the MENA region reflects more subdued credit growth and unsettled domestic environments, which translate into high credit risks. In addition the high exposure to low-rated government securities links non-GCC banks' credit profiles to their respective sovereigns.

The Chinese government has donated 500,000 U.S. dollars to the Maldives government to speed up repairs in a desalination plant and restore water to the capital. The donation was done after the Maldives government announced an estimated 20 million U.S. dollars would be needed to repair the plant that was damaged in a fire on Thursday resulting in the capital's population of 130,000 being without water for four days. The country hopes to also get monetary aid from Saudi Arabia, Qatar, Kuwait, and other Arab governments. Private donors have also chipped in with an anonymous 1 million U. S. dollars coming in from a Saudi businessman.

Islamic banks in Gulf Cooperation Council (GCC) nations need to expand abroad to maintain their pace of growth in the future, according to Al-Baraka Banking Group, which operates in 15 countries from the Middle East to Asia. Expansion of market share for Shariah-compliant lenders within the six-member GCC may be limited as conventional banks constrain the pace of growth. Thus, lenders need to consider consolidating, and to target corporate business deals to gain market share. A point of maturity has been reached in some markets and this is why Islamic finance needs to reach out to a new market segment and continue to identify new innovations to help it grow further.

Takaful is set to grow in Turkey, with its predominantly Muslim population showing increasing interest in Islamic finance products and the government keen to support their growth. However, insurance of any kind can be a hard sell in Turkey, with the population generally averse to insurance cover and penetration levels as low as 1.4%. Consultancy firm Ernst & Young (E&Y) has identified Turkey as a new market for sharia-compliant insurance. E&Y suggests a number of hurdles have to be removed before such products could take off, with supply-side constraints and a limited legal infrastructure for Islamic finance currently hindering growth.

Takaful Ikhlas Bhd is confident the gross contributions for its financial year ending March 31, 2015 (FY15) will hit RM800 million, up from RM772 million in FY14, driven by its newly launched and final quarter awareness programmes. President and Chief Executive Officer, Ab Latiff Abu Bakar said the full-year target was achievable as the company had already secured RM400 million in gross contributions in the first six months of FY15. Ab Latiff said more promotional campaigns would be executed in the fourth quarter of FY15, that is from January-March next year, and expected non-Muslims to account for one-quarter of customers by end-March 2015.

Despite the global takaful insurance market exhibiting impressive double digit growth of 18 percent over the period 2007-2012, the regulatory environment remains a work in progress and faces the challenge of inconsistency and conflicting interpretation across jurisdictions. These are the findings of Deloitte’s 2014 Takaful Insurance Report for Asia, Middle East and Africa, entitled ““The Way Forward for Takaful". Examining six key markets, the report identifies practice gaps and product offerings. Among the findings the study observes that takaful product offerings and diversity of products are lacking, and that the Takaful business is by far underpenetrated in the six countries examined.