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Turkish Islamic lender Bank Asya, whose shares were suspended and removed from all indices on Aug. 7 amid political pressure, will ask the authorities to end a month-long trading suspension, CEO Ahmet Beyaz said. Beyaz's statement comes on the heels of reports in the media last week that Turkey's banking watchdog the Banking Regulation and Supervision Agency (BDDK) had put Bank Asya under close monitoring. The reports claimed this would give the BDDK the power to restrict or temporarily halt Bank Asya's operations. Bank Asya said it will file a lawsuit against the watchdog for remaining indifferent to a smear campaign against the bank. Beyaz also said that Bank Asya would consider selling stakes or subsidiaries in case of a capital adequacy problem.

Nigeria-based Lotus Capital Limited recently launched the first sharia compliant exchange traded fund in sub-Saharan Africa – the Lotus Halal Equity Exchange Traded Fund (“LHE ETF”), with a target of raising about N1.5 billion during the initial offer period. The offer opened August 15, 2014, and closes September 11, 2014. Subscription is at an indicative unit price approximately equal to 1/200th of the value of the NSE-Lotus Islamic Index (“NSE LII”) on the day preceding the subscription. The LHE ETF would be listed and traded on the Nigerian Stock Exchange (NSE) and will contribute to overall market capitalisation and the global exchange traded fund universe.

Until recently the banking and financial services sector and business in Uzbekistan have had limited exposure to and understanding of Islamic finance. The key laws such as the Civil Code, the Tax Code and laws on banking and investment do not refer to Islamic finance or to Islamic finance instruments. It is therefore important that Islamic finance and Islamic banking instruments are first recognised as a legislative concept before any regulatory mechanisms are put in place. Foreign banks including Islamic banks may open representative offices or set up subsidiary outlets in Uzbekistan provided they comply with minimum criteria and qualify under requirements imposed by the CBU in accordance with the Regulation on the Procedure for Registration and Licensing of Banking Operations.

EY’s latest report, Global Takaful Insights 2014, forecasts a continued double-digit growth momentum of the global takaful market of approximately 14 percent from 2013 to 2016 and expects the industry to reach $20 billion by 2017. The Gulf Cooperation Council (GCC) countries and Association of Southeast Asian Nations (ASEAN) markets are likely to maintain their current growth path in the next five years, subject to their economic growth. Saudi Arabia will likely remain the core market of Islamic insurance business, commanding approximately half (48 percent) of the global contributions. With strong competition from conventional incumbents, takaful operators are likely to continue their struggle in the medium term, although some will look at alternative customer segments and explore merger options.

Growth of takaful business is rebounding, fuelled by improved economic conditions across its core markets and increased underwriting needs from the broader Islamic banking sector, a study by Ernst & Young showed. In previous years, inefficiency and intense competition have limited the sector's expansion, and growth rates slowed around the turn of the decade. But driven largely by Saudi Arabia and Malaysia, the sector is expected to grow 14.4 percent this year. Key drivers of the recent upward trend include improving economic conditions and a revitalised Islamic banking industry generating assets for takaful operators to underwrite. The sector will also benefit from an upswing in banking penetration rates across its core markets.

Saudi Islamic investment firm Itqan Capital plans to expand its investment and advisory activities in the kingdom after it received regulatory approval to boost its capital. The firm will increase its capital by 100 million riyals ($26.6 million) to 173.4 million riyals by the end of October, said Adil Dahlawi, managing director and chief executive of Itqan Capital. Itqan currently manages four sharia-compliant funds: a money market fund and three real estate funds. New product launches are scheduled this year with two funds in the pipeline, the first of which is a private equity fund investing in the Saudi education market, Dahlawi said. About half of all assets under management in Saudi Arabia follow Islamic investment principles.

Kuwait Finance House (KFH) has taken the top spot among banks locally and the 161st place globally, among the list of the top 1000 banks worldwide issued by "The Banker" international magazine. It’s worth noting that KFH’s leadership and the diversity of its investments through presence in various areas of investment as well as the global expansion provides the bank with investment opportunities. KFH posted in the first half of this year a gross profit of KD 144.032 million (USD 510.887 mln), and net profit for shareholders was KD 54.568 million (USD 193.555 mln) with an increase of 10% over the same period last year. Total Assets increased by 11 % over the same period last year to reach KD 16.7 billion (USD 59.3 bln), shareholders’ equity reached KD 1.7 bln (USD 6.1 bln).

The global primary market volume has reached USD80.35 billion in eight months ended August 2014 (8M14), 6.8 percent higher than the USD75.23bln volume in 8M13, Kuwait Finance House said in its monthly sukuk report. A strong pipeline waits in the remaining months of 2014 including debut sovereign issuances by the AAA-rated jurisdictions of Luxembourg and Hong Kong. KFH also stated that global primary sukuk market activity remained moderate in the month of August as a total of USD7.54 billion worth of new sukuk were issued. Analyzing by the country of sukuk origination, the report disclosed that the primary market activity was heavily concentrated in Malaysia.

The creation of a mega Islamic bank will push Malaysian banks to look beyond local shores should the proposed merger of CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd materialise. While the local market for Islamic finance remains lucrative, banks should not be content to remain in the local market as a market downturn could cause a reversal of fortunes. Low risk tolerance is why local banks are not expanding their reach overseas. Some attempts thus far to go abroad have been on a partnership basis contributing knowledge and technical expertise. In addition, local banks’ issuance of Islamic sukuk in the international arena is still low relative to international banks.

As the hard currency denominated sukuk issuance gains momentum, analysts expect more new Islamic and non-Islamic sovereign issuers to enter the market. Since 2001, governments of South Africa and Sharjah, and at least eight other governments - Luxembourg, Morocco, Tunisia, Egypt, Jordan, Oman, Bangladesh and Kenya - have expressed firm intentions and are likely to issue sukuk in the next two years. The United Kingdom issued its inaugural sukuk, while Hong Kong and South Africa are expected to conclude sales in September 2014. Various other countries such as Australia, the Philippines, South Korea, Russia and Azerbaijan have shown moderate interest in the sector.

Corporate and infrastructure Sukuk issuance is likely to rise over the next few years, despite the dip in issues over the past eight months compared to the same period of 2013, says Standard & Poor's Ratings Services in its new report 'Why Corporate And Infrastructure Sukuk Issuance Is Declining, Despite Healthy Prospects'. S&P attributes the decline in corporate and infrastructure Sukuk in large part to cheap and ample bank liquidity, which has made issuers less reliant on the capital markets. The overall small pool of Sukuk issuers, and seasonal factors have also played a role. Nevertheless, corporate and infrastructure Sukuk issuance is expected to increase again over the next few years as companies' refinancing needs grow and entities establish themselves as Sukuk issuers.

XL Group has extended its support for Shariah compliant managing general agency, Cobalt Underwriting, by adding fine art & specie coverage to its suite of products. The insurer already provides cover for property, construction and financial lines. The coverage, which spans precious metals, cash, fine art and rare collectibles, particularly complements XL Group’s Shariah compliant Financial Lines offering. In practice this means financial institutions and collectors can now buy cover with significant limits for a range of assets and their exposures, including gold and other valuable assets both in situ and transit. XL sees growth in the arts market in the Middle East and Asia with the opening of new galleries.

The International Financial Facility for Immunization seeks to sell as much as $500 million of dollar-denominated Shariah-compliant notes, using the bond proceeds to supply vaccines to some of the world’s poorest nations. IFFIM, a non-profit organization based in London, will sell the three-year vaccine bonds backed by commodities as early as this month. The sukuk will be of the Murabaha type and are rated AA by Standard & Poor’s. Ethical or green sukuk aren’t governed by any industry standards and don’t need a separate endorsement from an Islamic scholar. Issuance of green sukuk is expected to rise as there is growing awareness of environmental preservation.

Iran has eight state-run and 19 “privately owned” banks – although these are frequently subject to interference from the state, with their shares bought by entities affiliated to power centres, which then influence banking policies and exploit funds - all of which have invested heavily in the ownership and management of commercial entities outside the banking sector. The central bank, state-run Bank Melli and privately owned banks of Ansar, Saderat, Mellat, Pasargad and Parsian refused to comment. Pasargad and Parsian are considered the leading private banks in non-banking operations.

Goldman Sachs Group Inc. (GS) will probably succeed in its latest attempt to sell sukuk as investors clamor for Islamic bonds. GS will meet investors in the region this week before potentially selling a dollar-denominated, benchmark-sized issue through its unit JANY Sukuk Co. The New York-based lender’s first foray into the Islamic capital markets three years ago ended without a sale amid criticism from scholars about the structure of its sukuk program and the use of funds raised. This time the planned security will be a Sukuk al Wakala. Goldman Sachs along with Abu Dhabi Islamic Bank PJSC, National Bank of Abu Dhabi PJSC, Emirates NBD Capital Ltd. and NCB Capital will manage the new offering.

Volumes of sovereign sukuk have increased significantly over the last three years as governments in Asia, the Gulf Cooperation Council (GCC), Europe and now Africa seek to tap increased demand for Sharia-compliant financial assets. However a large portion of these issuance is denominated in local currencies, according to Moody’s. In the medium term, these international issuances will remain driven by sovereign and government-related issuers from the GCC countries because of their US dollar currency pegs. According to Moody’s estimates global sukuk issuance this year will exceed the 2013 level to reach around $70 billion, with sovereign issuance increasing to around $30 billion this year.

The Employees Provident Fund (EPF) stressed it has the right to vote on the proposed merger between RHB Capital Bhd (RHBCap) and CIMB Group Holdings Bhd as it is the major shareholders of both entities. The pension fund’s chief executive officer Datuk Shahril Ridza Ridzuan reminded that it has the interests of 14 million members at stake. Some within the board of RHBCap were against allowing the pension fund to vote in the merger deal. The dissented parties thought that it was “inconceivable” that the EPF had not been engaged in prior discussions relating to the proposed merger between RHBCap and CIMB in which the pension fund holds a 41.34% and 14.46% stake respectively.

XL Group's global and professional unit formed the cyber and technology risk business unit named North America Cyber & Technology Risk business unit, to capitalize on the rising demand for cyber insurance in the U.S. and Canada. Moreover, XL Group has extended its Shariah compliant cover to Financial Lines and entered into a collaboration with Citation Jet Pilots (CJP) in August. The tie-up will provide competitive insurance policies to Citation owners and pilots who finish the safety education seminars. These expansion initiatives are expected to help it in many ways such as strengthening of operational capacity, increasing competitiveness, and increasing the scope for revenue generation.

RAM Ratings sees great potential in Green Sukuk, in tandem with the increased interest in both Shari’ah-compliant and ethical investment. The use of Islamic instruments to raise capital for sustainable development projects will set a new precedent; Green Sukuk is anticipated to become key to the financing of low-carbon and renewable-energy economies. As the phrase implies, Green Sukuk involves certifying the environmental credentials of the project to be funded as well as its compliance with Shari’ah principles. Nonetheless, a sustainable Green Sukuk market is not without its challenges; one of these is to assure investors that the utilisation of Sukuk proceeds is for projects with economic value while simultaneously meeting accepted and credible green standard

As more and more conventional banks are now discovering, the Small and Medium Enterprise (SME) sector provides a huge opportunity for increasing profitability and diversifying risks. Less well known is that a large number of SMEs, especially in the Middle East and North Africa (Mena) region, would prefer to deal with Islamic banks rather than conventional ones. These SMEs are often unable to access banking services, since few Islamic banks have stepped up to the challenge of catering to their needs. Once Islamic banks have put in place the requisite infrastructure and capabilities, there is little doubt that the SME sector will be able to provide them with a profitable and sustainable revenue stream.