IslamicFinance.de

Plans to levy capital gains tax on property owners who hold their homes through a company structure risk discouraging investment in the private rented sector, tax specialists and investors warn. Scott Nicol, vice-president of Gatehouse Bank, which channels Middle Eastern investors' money into UK property, said he was also worried about the proposals. Gatehouse backed Sigma Capital last year to develop 6,600 privately rented houses in a deal worth £700m. If all the homes are built, Sigma will become Britain's biggest private landlord.

From 2002 UK banks, led by Lloyds and HSBC, tried to appeal to British Muslims by offering specialised mortgage products differing in structure. The lender generally buys the property outright and leases it to the consumer, charging a rental fee in addition to taking repayments. However, the mainstream market’s foray into the sector did not go as planned and Lloyds ceased offering the products in 2010 with HSBC following suit in 2012. Sharia home purchase plans can be more expensive than standard mortgages, with the Islamic Bank of Britain charging variable rates of 3.99% and 3.59% for 20% and 35% deposits until 30 June 2016. However, the market may simply need more competition to drive rates down.

Jordan's Prime Minister Abdullah Ensour on Thursday acted as patron at a ceremony to launch a historic piece of legislation regulating the Islamic sukuk. The prime minister described the Islamic Sukuk Law as a milestone in Jordan's financial and economic history, noting that launching these items of legislation is the final step in building the pillars of finance compatible with Sharia. He also noted that the government will use sukuk to finance its productive projects, especially those in partnership with the private sector. The Jordan Securities Commission (JSC), Amman Stock Exchange (ASE) and the Securities Depository Centre are now ready to receive orders for issuing sukuk for the public and private sectors.

EFU Life Assurance and EFU General Insurance, Pakistan's largest private insurance group, will offer sharia-compliant insurance products through takaful windows. The plans come two months after regulators cleared the way for conventional firms to offer Islamic products, part of regulatory effort to increase insurance penetration in Pakistan. Company officials declined to comment on their plans but a source at one of the units said the takaful windows could be operational in two to three months. The Securities Commission had earlier said it had received five applications for takaful windows and expected as many as half of all conventional insurers in Pakistan to eventually apply for a licence.

The Islamic Research and Training Institute (IRTI) is pleased to announce the IRTI YouTube channel with plenty of valuable video lectures in all areas of the Islamic Economics, Banking and Finance. Please visit the following links:

IRTI YouTube Channel: http://www.youtube.com/channel/UCy-k4v4XdMUnu641FY_MF5Q

IRTI Facebook page: https://www.facebook.com/IRTIKSA

Al Rajhi Bank posted a fourth successive quarterly profit decline as its second-quarter earnings fell 8.2 per cent year-on-year, with Saudi Arabia’s largest listed lender hit again by higher provisioning. The bank said it made 1.95 billion Saudi riyals in the three months ending June 30, compared with 2.12bn riyals in the same period a year earlier, citing an increase in total operating expenses for the drop without elaborating. Despite the decline, Al Rajhi’s net profit figure was in line with analyst forecasts, with a poll conducted by Reuters expecting an average profit of 1.97bn riyals for the quarter. Al Rajhi’s quarterly profit decline stands against the positive earnings performance reported by most other Saudi lenders.

Saudi Arabia’s plan to open its $531 billion stock market to foreigners is prompting speculation that Islamic bonds will be next. The government’s approval of overseas financial institutions to trade equities may herald a similar relaxation of rules in the local-currency primary debt market. Opening the local-currency sukuk market would give foreign investors access to companies that sold 42 billion riyals ($11.2 billion) through a dozen sales in the past year. That’s more than three times the amount of dollar Islamic bond sales, which are open to overseas buyers. However, access to the kingdom’s debt market may appeal more to investors wanting to broaden their exposure than to those seeking yield since lots of Saudi debt prices very tightly.

Qatar International Islamic Bank (QIIB) has announced the appointment of Ehab Eshehawi (pictured) as its Chief Operating Officer (COO). Eshehawi has more than 25 years’ experience in managing Technology and Operations in the USA, Europe, Asia and Mideast, including 14 years’ experience in the US with Fortune 500 Companies, and 15 years’ experience with international banking institutions. He spent the last 15 years with Arab Banking Corporation and Ahli United Bank focused on supporting banking mergers and acquisitions. Eshehawi is holder of a Bachelor degree in Business Administration, minor in Business Computers Information Systems, and a MBA from the USA.

The Maidah Foundation, a non-governmental organisation for muslim women entrepreneurs has urged the federal government to adopt a non-interest financing to boost micro small and medium enterprise (MSME) in the country. This is contained in a communique read to newsmen by the Secretary-General of the Foundation, Hajia Latifat Balogun, at its stakeholder forum in Abuja. The communique said the development had capacity to bring millions of unbanked Nigerians to the formal sector. The communique further said the foundation was prepared to support government efforts to formulate appropriate template for the adoption of the new finance regime. The objective of the foundation is to contribute towards the economic development of women entrepreneurs in the country.

Following the receipt of the Securities and Exchange Commission clearance of the Offer Documents in respect of the proposed initial offer for subscription of 100 million units of the Lotus Halal Equity Exchange Traded Fund, Lotus Capital Limited has announced the successful hosting of the signing ceremony in respect of the proposed initial offer. The board of directors of the company and relevant professional parties, including Vetiva Capital Management Limited (issuing house to the offer), were present to execute the offer documents during the signing ceremony. Lotus Capital, upon receipt of final approval from the Securities and Exchange Commission, plans to launch the Lotus Halal Equity Exchange Traded Fund, an Exchange Traded Fund (“ETF”) based on the NSE Lotus Islamic Index.

The Saudi Ministry of Social Affairs is warning Saudis seeking to fulfil their zakat duty during the holy month of Ramadan against donating funds to those who solicit money via social networking tools. Those who wish to donate money are encouraged to give to the more than 700 licensed charitable organisations in the kingdom, to social security offices or to organisations involved in the Al-Khair al-Shamel (Global Goodness) project, the ministry said. These groups document donations in a transparent fashion under the state's auspices, it added. In Saudi Arabia, cash donation boxes are not allowed in mosques, markets and malls, as cash donations are accepted only at banks.

The Reserve Bank of India (RBI) has begun the process of reviewing regulations on Islamic banking in India. The central bank has set up an internal committee to examine the matter. The three-member panel comprises senior RBI officials, Rajesh Verma, a deputy general manager, department of banking operations, Archana Mangalagiri, general manager, non-banking supervision and Bindu Vasu, joint legal adviser. The demand for re-look at Islamic banking regulations have revived again with the Indian central bank opening up doors for differentiated banks in India – payments banks and smaller banks – to begin with. Supporters of Islamic banking are making a case for Islamic banking in the face of the reforms in the banking sector.

Latham & Watkins advised Etihad Etisalat Company (Mobily), a telecommunications operator in the Kingdom of Saudi Arabia, in connection with a $200m murabaha facility made available by Export Development Canada. The facility will be used by Mobily to purchase eligible goods and services supplied to it by affiliates and subsidiaries of Alcatel Lucent S.A., including Alcatel Lucent, Canada Inc. This transaction represents Mobily’s third ECA-backed Islamic financing following on from its $646m murabaha facility with the support of Exportkreditnämnden and Finnvera plc in August 2013. In 2014 Latham & Watkins advised Mobily in connection with its $561m murabaha facilities made available by Exportkreditnämnden and Finnvera plc.

Abu Dhabi Islamic Bank (ADIB) and Thomson Reuters’ second Ethical Finance Innovation Challenge and Awards (EFICA) have already received high levels of take-up with over 200 potential entrants downloading the application form, to date. The submission for the awards opened on 5th of July and will close on the 5th of August. ADIB and Thomson Reuters are calling on institutions, research centres, and individuals to submit entries in three categories. The first category of the awards, the Islamic Finance Industry Development Award, offers a prize of $100,000, the second award, the Ethical Finance Initiative Award, offers a prize of $50,000 and the final award is a Lifetime Achievement Award.

The Global Islamic Microfinance Forum (GIMF) will be organized jointly by AlHuda Centre of Islamic Banking and Economics (CIBE) and AKHUWAT on November 01-02, 2014. The purpose of this 4th GIMF is to unite Islamic Microfinance Industry under one roof. Islamic microfinance is going through big challenges e.g. non availability of Shariah Compliant funds, misconceptions regarding Islamic microfinance, lack of man power, regularity and Shariah problem. The purpose of this forum is to gather the stakeholders under one platform to find out the remedy to these problems to give a strong support to rapidly increasing Islamic Microfinance industry.

Islamic Development Bank (IDB) issued $1 billion in five-year Islamic bonds, or sukuk, earlier this month, the largest ever privately-placed transaction from the supranational institution. The sukuk was priced on July 17 and carried a 1.8118 percent coupon at issue, underwritten by the IDB itself. The deal follows a $100 million three-year private placement in April and a $1.5 billion five-year sukuk in February, the largest ever public issuance from the multilateral lender. IDB usually prints one public transaction a year, with plans to issue a benchmark-sized - around $500 million - sukuk around May of next year.

Bank Islam Malaysia Bhd, is revising its base financing rate (BFR) to 6.85 per cent per annum from 6.6 per cent per annum effective tomorrow. Bank Islam in a statement today said the revision is in line with Bank Negara Malaysia’s recent move to increase the overnight policy rate (OPR) by 25 basis points to 3.25 per cent. The last revision in Bank Islam’s BFR was on May 16, 2011, when the rate was revised from 6.3 per cent to 6.6 per cent.

A Chittagong court yesterday placed Mohammad Solaiman, director of Shahjalal Islami Bank Ltd, on a five-day remand in a case filed for misappropriating Tk 140 crore. Solaiman was on remand for seven days once before. Referring to an investigation of the bank, Farman R Chowdhury, managing director of the bank, said Solaiman had influenced the bank to lend Tk 140 crore to SK Steel and gave false assurances about the loan and Solaiman's company Paradise Corporation took over Tk 18 crore as bribe from SK Steel for this. On April 13, the case was filed accusing Solaiman and others.

Turkish lender Turkiye Finans Katilim Bankasi has raised 800 million ringgit ($252.21 million; Dh922.5 million) from an Islamic bond in Malaysia, its first issuance from a 3 billion ringgit programme announced last month. The issuance by Turkiye Finans, in which Saudi Arabia’s National Commercial Bank is the largest shareholder, is the first ringgit-sukuk done in Malaysia by a Turkish issuer. Proceeds from the five-year sukuk will fund general corporate purposes and working capital requirements, according to HSBC Amanah Malaysia Bhd. HSBC Amanah and Standard Chartered Saadiq Bhd are jointly advising the Turkish bank.

Islamic finance is a trillion-dollar industry with many financial institutions, corporations and governments keen to embrace it as a profit-making alternative to mainstream financial dealings. The book "Heaven’s Bankers: Inside the Hidden World of Islamic Finance" by Harris Irfan asks the reader to consider whether the Islamic world can bring something of benefit to the Western world, and vice versa. Irfan’s intentions might be noble, but I suspect that here in the West he faces a real struggle. The big banks and companies hit by the financial crisis are determined to recover and some are increasingly wary of Islamic banking for all kinds of reasons.