IslamicFinance.de

There are basically two models of Islamic insurance that is, al-Mudarabah model and the wakalah model though most jurists prefer the first one. This element enables members to fulfill their obligations of mutual help and guaranteeing one another. It should, however, be noted that the element of profit sharing among participants from the proceeds of the Islamic insurance operations is only made after fulfilling the mutual obligation of assisting one another and this calls for proper asset keeping and sufficient protection of funds against over exposure to loss. Where the insured is still alive on the maturing of the policy he/she is entitled to the whole amount of the premiums, a share of the profit made over the premiums, a bonus and dividends according to the company policy.

Orix Leasing Pakistan Limited (OLPL) plans to tap the high growth Islamic finance market. The company has entered into a non-binding Memorandum of Understanding (MoU) with Standard Chartered Bank (Pakistan) Limited (SCBPL) with regard to a prospective merger/amalgamation of Standard Chartered Leasing Limited (SCLL), a subsidiary of SCBPL with and into OLPL or acquisition of SCBPL’s 86.45 per cent equity stake in SCLL. The MoU further provides the acquisition of SCBPL’s 100pc stake in Standard Chartered Services of Pakistan (Private) Limited and acquisition of SCBPL’s 20pc stake in Standard Chartered Modaraba. There is no certainty that the MoU would result in a binding transaction.

Qatar Charity CEO Mr. Yousef bin Ahmad Al-Kuwari and Silatech CEO Dr. Tarik M. Yousef signed an agreement committing the two organizations to work jointly to support young Arab entrepreneurs through Silatech’s Narwi micro-giving portal. The agreement follows the 2013 signing of a Memorandum of Understanding to cooperate in technology, fund-raising and technical assistance. “Narwi” (narwi.com) will allow visitors to the site to directly contribute toward financing the young Arab entrepreneur of their choice in countries including Palestine, Lebanon, Jordan, Iraq, Yemen and Somalia. Funds on Narwi are given as revolving donations, so that when the entrepreneur repays the original loan, the donation moves on to support others as well.

The Thomson Reuters Global Sukuk Index is at 114.57474 points, down from 114.88023 at the end of last month but up from 109.78969 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 112.19700 points, against 112.59309 at end-August and 107.28036 at the end of 2013. Some of the sukuk issues in the global pipeline are the following: Turkiye Finans Katilim Bankasi plans to issue $50 million worth of ringgit-denominated sukuk in Malaysia by year-end. Luxembourg planned to meet fixed income investors starting on Sept. 21 ahead of a debut issue of five-year euro-denominated sukuk. The government of Oman is expected to issue 200 million rials ($520 million) of sukuk early next year.

Emirates Islamic recently held interactive sessions at five schools in Dubai aimed at teaching children the importance of savings. The initiative, in partnership with Dubai Educational Zone (DEZ), is part of Emirates Islamic’s strategy to instil a savings culture in the community, and in particular create awareness amongst youth on the importance of savings. The bank plans to visit several other schools across the seven emirates to spread awareness in the coming months. Last year, Emirates Islamic created a special ‘Child Savings Account,’ to promote a savings habit for youngsters. The account is free for children and includes a hassala, the traditional Emirati savings pot, and a complimentary pre-paid card with Dhs100 credit.

For the second year in a row, Bahrain has been named the Gulf Cooperation Council (GCC) countries leading Islamic finance market and second out of 92 countries worldwide, according to the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI). Bahrain was also ranked as having the best governance in Islamic finance in the world, with the report praising the well-established regulatory framework covering all sectors, and high levels of disclosure. The IFDI is a measure of five components (including quantitative development, governance, corporate social responsibility, knowledge and awareness).

Standard & Poor’s (S&P) a annoncé la nomination de Dr. Mohamed Damak comme responsable mondial de la finance islamique. Il dirigera le secteur de Finance Islamique de S&P mis en place depuis 2007 pour renforcer l’offre de finance islamique. Dans ses nouvelles fonctions, il sera responsable de la croissance du secteur et de la notation en finance islamique chez S&P et de la recherche sur le secteur dans le monde entier. Ses nouvelles fonctions s’ajouteront à ses responsabilités actuelles au sein de l’équipe des services financiers pour la région CEEMEA chez S&P. L’agence de notation a récemment été nommée "meilleure agence de notation islamique" en 2014 par l’Islamic Finance News Awards Service Providers Poll.

SWIFT, in collaboration with The Association of Islamic Banking Institutions Malaysia (AIBIM) and the Malaysian Islamic financial community, say they will launch a new rulebook for the usage of SWIFT MT messages for Islamic finance. The SWIFT Islamic Finance Rulebook will be available to the Message User Group (MUG) by the end of 2014. The rulebook will provide greater clarity around SWIFT MT message usage based on Islamic principles in order to enable straight-through processing (STP), thereby improving efficiency as well as reducing risk and cost. It will provide a platform for exchanging Islamic finance messages and further promote the usage of message standards.

Prospects for the 2022 World Cup in Qatar are unsettling bond investors already rattled by political turmoil between the country and its neighbors, with its sukuk on course for its worst month in more than a year. FIFA Executive Committee member Theo Zwanziger told Germany’s Bild this week that Qatar probably won’t host the world’s biggest soccer event in 2022 because of the summer heat. While Qatar dismissed his comments, it’s creating more market turbulence for the country, which has been at odds with Saudi Arabia and the United Arab Emirates over its support for the Muslim Brotherhood in the region. The bond due January 2018 will drop further if its neighbors continue to isolate Qatar and this FIFA situation isn’t resolved.

Bank of Tokyo-Mitsubishi UFJ (BTMU) will issue Islamic bonds in two tranches under its debut multi-currency sukuk wakala programme in Malaysia. BTMU will issue US$25 million (RM81 million) in a US dollar tranche and 2.5 billion yen (RM74 million) in a yen tranche on Thursday, a statement said. Both sukuk issues will have maturities of one year; the statement did not give other details such as pricing. Malaysia's CIMB Investment Bank is managing the issues. BTMU, part of the Mitsubishi UFJ Financial Group, set up a US$500 million multi-currency sukuk programme through its Malaysian unit in June.

Japan’s Bank of Tokyo-Mitsubishi UFJ is set to issue a two tranche Wakala Sukuk. At present the bank is allowed by the regulator in Japan only to handle Islamic financial transactions out of Malaysia through a subsidiary called BTMU Malaysia. BTMU will issue the Sukuk in a $25m US$ tranche and a 2.5bn yen tranche with both tranches carrying maturities of one year. CIMB Investment Bank is managing the issues.

Competitive pricing, product innovation and deeper liquidity have made Shariah-principled finance increasingly appealing as a funding source in the global financial industry, according to QInvest head of financial institutions and structured finance, Alex Armstrong. Finding that several issuers from outside the Islamic world - including the Hong Kong Monetary Authority and the UK government - have successfully raised funding through sukuk or Islamic bonds in recent months, he said, others are expected to follow suit. Investor demand for Islamic products is strong and QInvest fully expects demand to exceed supply for some time to come, he added.

The Cyprus Investment Funds Association is calling for the government to sell sukuk to lure investment from the Middle East. In addition, the Cyprus Stock Exchange wants to encourage the listing of Shariah-compliant bonds and sees potential for the nation of 1.2 million to become a “gateway to the European Union” for Islamic investors, Chief Executive Officer Nondas Metaxas said. The island, where Muslims make up 18 percent of the population and Turkey has kept troops since the 1974 conflict, is being asked by the European Union to tackle a bad-loan ratio of 45 percent after a joint bailout with the International Monetary Fund in March 2013. However, the government isn’t currently looking into developing an Islamic finance industry, Finance Minister Harris Georgiades.

The Governor of Osun State in Nigeria, Rauf Aregbesola, introduced Sukuk Bond to fasttrack the state’s economic development. According to the issuing houses, Governor Aregbesola’s sukuk initiative was said to be the first Islamic bond in sub-Saharan Africa. Though the governor knows that Sukuk is Islamic in nomenclature, the Sukuk bond is a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The N14. 4 billion sukuk (14. 75 percent) fixed return tranche 2 has 42 investors with Lotus Capital Limited as the leading issuing house and Augusto and co as the rating agent. The bond, which is being used to finance roads and school constructions across the state, is due in 2020.

Standard Bank has acted as Joint Lead Manager on the National Treasury of South Africa's debut Sukuk in the international capital markets. The US$500m 5.75-year Sukuk is the largest Sukuk issuance from Sub-Saharan Africa and only the third Sukuk to be issued by a non-Islamic country. The Sukuk will be used to fund South Africa's National Revenue Fund. It also creates a benchmark for the market which will assist state-owned companies to access diversified sources of funding from Islamic investors. The Sukuk is based on the Ijara principle.

Islamic Bank of Britain plc (IBB), has appointed Keith Leach to the newly created position of Chief Commercial Officer (CCO). Mr Leach’s remit is to grow IBB’s corporate and real estate business, focussing on higher value transactions. His appointment follows the Bank’s acquisition by Masraf Al Rayan (QSC) earlier in the year. A £75.8 million cash injection from IBB’s new parent company, provided in February 2014, will support its expansion plans. Appointed to the position from his role at the Arab Banking Corporation (ABC), Mr Leach has over 30 years of banking experience with Lloyds, Ahli United and ABC, 20 years of which has been spent in the UK Islamic finance industry.

Islamic International Rating Agency (IIRA) has lowered the foreign currency international scale and local currency credit rating of Bank Asya to respectively B+ and BB- (previously BB+ and BBB-), in response to the weakened financial profile of the institution. IIRA has also revised the bank's national scale rating to BB+ from A. IIRA said the bank's opportunities to raise fresh capital and to reach liquidity in the market have decreased. It can no longer endure this situation. The credit rating agency Moody's also adjusted the ratings of the bank downward in a statement released in the last week of August.

The Islamic banking industry needs to take more meaningful steps to benefit the poor, says Universiti Sains Islam Malaysia (USIM) Economics and Muamalat Faculty Dean Assoc. Prof. Dr. Amir Shaharuddin. Amir said although microfinance is still new in this country, in Indonesia, Sudan, Bangladesh and Pakistan it has given the poor a chance to take part in the Islamic banking system. He said many wakaf funds and parcels of wakaf land in Malaysia are not effectively managed, and the full potential of wakaf assets has yet to be realised. The situation could improve with with more professional management, he said, citing the substantially higher zakat collection now with better management.

The National Bank of Abu Dhabi (NBAD) has launched the NBAD Shariah MENA Dividend Leader Fund, which invests in dividend-paying companies traded on MENA equities markets. The Fund is inspired by and modeled after NBAD MENA Dividend Leader Fund (MDL) which was recently voted Newcomer Fund of the Year 2013 by Zawya. The NBAD Shariah MENA Dividend Leader Fund will invest in bourses of Saudi Arabia, UAE, Qatar, Oman, Kuwait, Egypt, Jordan, Morocco and Tunisia. The Fund is actively managed by the Equity desk of NBAD 's Asset Management Group. NBAD Shariah MENA Dividend Leader Fund is UCITS IV compliant - regulated by the Central Bank of Ireland. Northern Trust Group acts as the Fund's administrator and custodian.

Dubai, Kuala Lumpur and even London aspire to be hubs for Islamic finance, but Bahrain still has a strong and respected role in this sector. The International Islamic Liquidity Management Corporation has put in place sound standards for a global liquidity management platform. There have been significant developments, like the successful restructuring of a number of Islamic wholesale and retail banks, including Venture Capital Bank, GFH, Bank Alkhair and Bahrain Islamic Bank, which were badly affected by the global financial crisis of 2008. In the coming years, more momentum in the area of real estate funds is expected to take place.