IslamicFinance.de

AlKhair Capital Dubai has successfully managed the last listing of Sukuk by the Saudi property developer Dar Al Arkan Real Estate & Development Company. AlKhair Capital Dubai was the financial advisor for the Sukuk listings program on Nasdaq Dubai, with a total value of $1.15 billion. The Sukuk program, in US dollars, included a $400 million, listing - the third tranche which was issued last month and orders opened on May 20, 2014. The value of the orders was 2.3 oversubscribed the size of the tranche exporters. The third tranche was issued for five years and will mature on May 28, 2019 at a coupon rate of 6.50%.

Moody’s Investors Service on Tuesday assigned to Sharjah Islamic Bank ( SIB ) issuer ratings of A3/Prime-2 and a stand-alone bank financial strength rating of D+, which is equivalent to baseline credit assessment (BCA) of baa3. The rating assignment reflects SIB’s very strong capital buffers, relatively low borrower and sector concentrations and satisfactory profitability and liquidity metrics, according to the rating agency. Moody’s assessment of Sharjah Islamic Bank’s franchise takes into account the growing importance of Islamic finance and associated franchise opportunities in the United Arab Emirates, according to the rating agency.

United Arab Bank (UAB) has announced the completion of a 3-year syndicated Murabaha facility worth US$100m with four banks based in the UAE, Bahrain, and Kuwait. The Murabaha deal is the first Islamic syndication completed by UAB. Al Hilal Bank , headquartered in the UAE, served as the Mandated Lead Arranger and Bookrunner for the deal, while the Arab Banking Corporation, headquartered in Bahrain and Sharjah Islamic Bank, were the other Mandated Lead Arrangers. The National Bank of Kuwait also served as a Lead Arranger. The syndicated Murabaha facility which has been taken out for general corporate purposes, was almost twice oversubscribed.

The Islamic Bank of Britain plc (IBB) has accredited a new fully Sharia compliant auto-enrolment Pension Scheme: the Islamic Pension Trust. It has been launched to address the need for a Sharia compliant pension scheme to meet the criteria for automatic enrolment, as defined by the Government. This means that employers in the UK can meet their legal obligation to automatically enrol eligible Muslim employees into a qualifying workplace pension scheme. Eligible employees - i.e. those who are not in a company pension scheme, earning more than £10,0000 a year (2014/2015) and aged over 22 but under State Pension Age - represent a large proportion of the Muslim population.

Barwa Bank has been appointed as one of five Joint Lead Managers for the UK's £200m debut sovereign sukuk. The Qatari lender takes its place alongside HSBC, Standard Chartered, National Bank of Abu Dhabi and CIMB of Malaysia. Of the five banks involved, Barwa Bank is the only Qatari bank selected and the only wholly Shariah-compliant mandated bank on the panel. Britain's first sovereign sukuk delivers on the government's commitment to become the western hub of Islamic finance. Very strong demand for the sukuk is expected, resulting in a price that delivers good value for money.

Muslims in America are becoming a significant demographic force, and with that comes significant votes, which in turn translates into influence wielded in the social world they inhabit. And if Muslims in America today want to see interest payments prohibited on loans, then banks must find alternative ways to do business with them. These banks get around the prohibition of interest on loans by treating loans more like leases or profit-sharing arrangements. Giant financial institutions in the US now have their own Sharia advisory boards, while banks with relatively small assets rely on opinions from the Sharia Advisory Board of America.

According to a recent IFC study on Islamic banking opportunities across small and medium enterprises in Mena, there is potential gap of up to $13.2 billion for Islamic SME financing across nine countries in the region. The study, carried out in Iraq, Pakistan, Yemen, the Kingdom of Saudi Arabia, Egypt, Lebanon, Morocco, Tunisia and Jordan, shows that approximately 35 per cent of SMEs are excluded from the formal banking sector because of the lack of Islamic products, despite huge demand. A high level of risk aversion by banks, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products have been identified as lack of bank funding to SME sector in the region.

Islamic banks are beginning to make inroads into the banking scene in the US. Chicago-based Devon bank, for example, has transformed itself into an interest-free financing establishment, with Islamic financing accounting for more than 75 percent of the bank's mortgage portfolio. Giant financial institutions in the US now have their own Sharia advisory boards, while banks like Devon Bank in Chicago, with relatively small assets, rely on opinions from the Sharia Advisory Board of America. Muslims in America are becoming a significant demographic force, so Islamic banking is here to stay and offers a lot of potential.

Dubai Islamic Bank PJSC (DIB) has completed their first phase of accumulating shares in PT Bank Panin Syariah Tbk (Bank Panin Syariah) in Indonesia. As per the envisaged plan, DIB has completed the acquisition of 24.9% shares in Bank Panin Syariah by acquiring 2,427,750,000 shares. Afterwards, DIB will initiate formal regulatory approval process to obtain "Significant Shareholder Status" from the Financial Services Authority (OJK) to complete phase 2 of the share purchase plan by increasing its stake in Bank Panin Syariah to up to 40%. Bank Panin Syariah is currently controlled by PT Bank Panin and operates through a network of 10 branches. The bank is listed on the Indonesia stock exchange.

The Islamic Financial Services Board (IFSB) is organising a Seminar on Islamic Finance in Kazakhstan with the theme, "Prospects and Challenges in the Development of Islamic Finance for Kazakhstan" on 16 June 2014 in Almaty, Kazakhstan. The National Bank of Kazakhstan will host the Seminar on Islamic finance as well as the IFSB Facilitating the Implementation of Standards (FIS) Workshop Series for Banking and Takaful on 17 - 19 June 2014. The one-day Seminar will cover the following topics: Islamic Finance for Central Asia: Growth with Stability - Regulatory Issues and Key Preconditions; The Role of Sukuk: Infrastructure Financing, Capital Market Instruments and High Quality Liquid Assets (HQLA); Panel Discussion on the Way forward for the Development of Islamic Finance for Kazakhstan.

QInvest sees Turkey as being a key driver is Islamic finance growth worldwide and will be exploring the opportunity at the 9th Turkish-Arab Economic Forum, takingplace in Istanbul on 28th and 29th May 2014. QInvest has an office in Istanbul and offers cross-border services to clients from its presence in Qatar, Turkey and Saudi Arabia.The bank has been involved in a number of high profile sukuk issuances in Turkey. Besides, QInvesthas also been active in other areas of Islamic finance in the country, including Murabaha, and mezzanine and equity finance. The Bank is active in the Turkish asset management industry and is in talks with a leading portfolio management company to advise on sharia'a-compliant asset management.

ISFIN has agreed on a MoU partnership with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). This Agreement established between ISFIN and the organisation of Islamic countries (OIC), through the ICIEC and the Islamic Development Bank, provides Islamic Insurance and credit risk operating under Shariah principles. The driving ambition behind the Agreement is to strengthen the economic relations between member countries of the OIC. ISFIN professional firms present in some 65 countries will be able to assist ICIEC on legal and accounting issues. ISFIN wants to encourage exports from ICIEC Member Countries to the ISFIN partners countries and to encourage the flow of capital and investments from ISFIN partners countries to the markets where ICIEC is active.

Takaful received a grim assessment in the Islamic Financial Standards Board (IFSB) and Islamic Research & Training Institute (IRTI) Mid-Term Review (MTR), which was released last week. The takaful business model faces significant challenges, according to the MTR. The challenge starts with the gap between how takaful operators are organized in theory and practice. Moreover, Islamic insurance firms have been not been successful so far outside of a few countries like Saudi Arabia and Malaysia in reaching "critical mass". If the new firms are unable to grow to a large enough size, administrative costs become very steep and reserves will not be sufficient enough to cover losses. If takaful operators engage in a consolidation process (should regulations allow it), it would improve the underwriting marketplace.

Thomson Reuters released a country report on Islamic Finance in Morocco in collaboration with the Islamic Research and Training Institute (IRTI) and the General Council for Islamic Banks and Financial Institutions (CIBAFI). Based on exclusive retail consumer and corporate surveys, the report estimates that Islamic banking assets could potentially reach US$8.6 billion by 2018, with a profit pool of between US$67 million and US$112 million for Islamic finance providers. The national retail consumer survey indicates Moroccan Islamic banking assets could potentially reach up to 5% of total banking assets by 2018. However, Moroccans know very little about Islamic financial products, the report adds. Islamic banking and Takaful laws are expected to be passed by the Moroccan parliament this year.

RAM Ratings has assigned AA3/Stable/P1 financial institution ratings to Turkiye Finans Katilim Bankasi AS (the Group). RAM moreover assigned an AA3/Stable rating to the proposed RM3.0 billion Sukuk Murabahah MTN Programme to be issued by the Group's wholly owned asset leasing subsidiary, TF Varlik Kiralama AS. The assigned ratings reflect a high likelihood of extraordinary support from the Group's major shareholder, The National Commercial Bank (NCB). Turkiye Finans enjoys sound earnings which support its capital position. Although its asset-quality indicators are healthy, they may weaken amid Turkey's more challenging economic and political backdrops. On the other hand, Turkiye Finans' ratings are constrained by its limited domestic franchise and relatively weak funding position.

Bahrain-based Al Baraka Banking Group B.S.C (ABG) announced a net profit of US$ 67 million for the first quarter of 2014, reporting an increase of 1% over the net profit of the same period of last year. While total assets increased by 1%, total financing and investments by 2% and customer accounts by 1% at the end of March 2014 compared to the end December 2013. Towards the end of 2013 and the first quarter of 2014, the subsidiary units of the Group continued their expansion plans by opening new branches, with 54 new branches in 2014. The group plans to open another 84 new branches in 2014, which will raise the total branch network to 569 branches, spread over 15 countries and providing employment to over 10,000 employees.

Middle Eastern investment banking fees reached US$120.3 million during the first quarter of 2014, down 17% from the previous quarter and a 2% decline compared to the first quarter of 2013. Fees from completed M&A transactions totaled US$46.4 million, up 19% from the same period in 2013, and accounting for 39% of this year’s overall Middle Eastern fee pool. Equity capital markets underwriting fees totaled US$39.6 million, more than twice the amount registered during the first quarter of 2013 (US$17.4 million) and marking the best annual start for ECM fees in the Middle East since 2008. Fees from debt capital markets underwriting declined 47% year-on-year to US$17.4 million, while syndicated lending fees fell 49% to US$16.9 million.

Pakistan's Minister for Finance Muhammad Ishaq Dar held a meeting with officials from Dubai Islamic Bank ( DIB ) in Dubai where they discussed prospects of another sukuk issuance and hiring an advisor for transparent sukuk transaction. Following the success of Euro Bond wherein Pakistan raised $2 billion from capital market recently, the minister said government intends to tap the sukuk market to increase its foreign exchange reserves. Pakistan plans to sell $1 billion dollar-denominated sukuk which will be marketed at the end of the third or in the fourth quarter of 2014. Dar said Pakistan government would soon release an advertisement in international and local press to hire financial advisor for sukuk transaction through a transparent and competitive process.

Sharjah Islamic Bank (SIB) has joined NASDAQ Dubai’s Islamic financing Murabaha platform, which offers bank customers solutions for processing Sharia’a-compliant financing transactions. SIB is the first bank to join the facility since the official launch of the NASDAQ Dubai Murabaha Platform last month. Through the NASDAQ Dubai Murabaha Platform, individual and institutional clients of SIB will be able to complete financing transactions within minutes. The platform is an alternative to many traditional Islamic financing solutions, which can carry a risk of losses through price movements, spreads and poor liquidity as well as delays.

The International Islamic Financial Market ( IIFM ) held its 30th Board of Directors meeting at Bank Indonesia's headquarters in Jakarta. The Board commended IIFM efforts in holding two successful industry consultative meetings on Sukuk standardization requirements from documentation, structures and guidelines point of view which were very well attended by industry stakeholders. Moreover, IIFM aims is to come up with more standards as per its well established comprehensive development process, some of which will be issued during 2014 and in the next year. On the sidelines of the Board meeting, a specialized industry seminar on "Islamic Capital & Money Market" was also organized, discussing the technical aspects of Sukuk, Islamic hedging and liquidity management tools.