IslamicFinance.de

The Saudi Arabian General Investment Authority (SAGIA) has unveiled new regulations and conditions to promote value-added investment and said investment licences may be issued within five days if all the required papers are submitted. Governor of SAGIA, Abdullatif Al-Othman, said they have introduced a speedy customer service system for the benefit of all investors.

On 9 July 2014, the Luxembourg Parliament approved draft law 6631 on a sale and buy-back transaction of real estate assets necessary to issue an Islamic finance bond. By obtaining parliamentary approval, the Ministry of Finance has now paved the way to the issuance of the Sukuk transaction, marking a milestone in the development of Islamic finance in the Grand-Duchy of Luxembourg. This approval in Parliament underlines the political will to diversify and develop alternative markets within the financial services industry, according to a statement of the Luxembourg Ministry of Finance.

Saudi Arabia's crowded insurance sector is set for consolidation amid low penetration rates and rising costs, highlighting the difficulties for smaller firms in the industry to maintain market share or grow their business. The Saudi market remains dominated by compulsory products, with medical and automotive insurance accounting for well over 75 percent of all gross written premiums. Other products such as personal health or life coverage make up only a fraction of total policies issued and premiums written. However, penetration rates across GCC member states could double by 2017 thanks to longer life expectancies and compulsory health insurance programmes.

Growing their business remains the primary and dominant goal for high net worth business owners in the Middle East, according to a recent study on the wealth management needs and preferences of high net worth (HNW) business owners in Asia, Africa and the Middle East. The report by Standard Chartered Private Bank and Campden Wealth Research showed that 82 per cent of Middle East based high net worth business owners surveyed have already internationalised their businesses, implying the need for international banking services that support the geographic reach and growth of these businesses. Increasing market share is the top growth objective (82 per cent) of participants, followed by increasing production capacity (65 per cent) and international expansion (58 per cent).

Banque Centrale Populaire – BCP a signé un partenariat stratégique avec Guidance Financial Group. Anticipant la promulgation de la nouvelle loi bancaire autorisant la création de banques islamiques au Maroc, la Banque Centrale Populaire (BCP) travaille discrètement depuis deux ans déjà sur le lancement d’une filiale dédiée à la finance islamique. Outre la mise en place des ressources humaines qualifiées et l’adoption d’un système d’information adéquat, la BCP s’est assurée l’expertise de Guidance Financial Group. Sur le marché des particuliers, Guidance propose notamment des produits conformes à la Charia pour l’achat immobilier et le financement des biens de consommation.

CIMB Group Holdings Bhd, RHB Capital and Malaysia Building Society (MBSB) have received Bank Negara Malaysia's approval to start merger talks which would result in the creation of a mega Islamic bank. They announced in a joint statement on Thursday that under the corporate exercise, the proposal was to merge the businesses of both RHB and CIMB. The corporate exercise included plans to create an enlarged Islamic banking franchise with MBSB. The three parties have entered into a 90-day exclusivity agreement to negotiate and finalise pricing, structure, and other relevant terms and conditions for a proposed merger.

Ahmed Bin Sulayem, Executive Chairman, DMCC, announced the launch of the organisation's latest CSR initiative, the 'DMCC Foundation'. The ' DMCC Foundation' will be a non-denominational fund to be governed by independent trustees appointed by the DMCC Executive Chairman to oversee the disbursements of funds. All DMCC employees will be encouraged to contribute 2.5 per cent of the average saving potential of their annual salary. The DMCC Executive Chairman has already led by example in doing so. Ahmed Bin Sulayem hopes to encourage other organisations in Dubai to take on the CSR challenge to bring the UAE to forefront of donating nations in the future.

Turkish Islamic lender Bank Asya has decided to sell its stakes in two subsidiaries for TL 132 million ($62 million). In a statement to Borsa ?stanbul (BIST), Bank Asya said it is selling a 24.18 percent stake in Turkish construction firm Tuna Gayrimenkul for TL 62.8 million. The bank also said it is selling another construction company, Nil Yönetim Hizmetleri, for TL 69.25 million. The move comes amid efforts of Bank Asya to raise capital. Meanwhile, Qatar Islamic Bank and Bank Asya have reportedly ended exclusive talks over QIB acquiring a stake in the Turkish lender, with valuation concerns said to be behind the decision. Turkish state bank Ziraat may now be the most likely partner for Bank Asya.

Turkish lender Bank Asya announced on Sunday that their corporate governance rating had increased in June over its score from last year. The bank released the figures in an announcement addressed to the Public Disclosure Forum (KAP). According to a recent report prepared by the Capital Markets Board (SPK), Bank Asya's corporate governance rating increased from 84.20 in June 2013 to 90.85 in June of this year. The founders of Bank Asya are known for being affiliated with the Hizmet movement, inspired by Islamic scholar Fethullah Gülen. News reports circulated earlier this year indicating the government had attempted to sabotage the bank by withdrawing nearly one-fifth of the bank's deposits.

Bank Asya said on Wednesday it has mandated Goldman Sachs as its financial advisor for a strategic partnership, without providing further details. Bank Asya shares traded on the Borsa ?stanbul (BIST) were down 3.5 percent on Wednesday. In March, the Qatar Islamic Bank (QIB) said it had entered into exclusive talks to buy a stake in Bank Asya without giving further details. Bank Asya also said last week it mandated its management to possibly sell its subsidiaries. The bank was earlier targeted by government officials who claim alleged irregularities in the bank. The government has however failed to prove these allegations.

Some of the major Islamic banks are now planning to drop the word “Islam” from their names. In January, Dubai-based Noor Islamic Bank changed its name to Noor Bank. Abu Dhabi Islamic Bank (ADIB) plans to call itself Abu Dhabi International Bank when operating abroad. In both cases, the changes are part of the banks’ plans to expand. They aim to move well beyond a relatively small group of customers who stress religious permissibility, to a much larger customer base for whom pricing and service quality are key. This approach could help Islamic banks establish themselves globally and appeal to larger numbers of non-Muslims as well as Muslims.

The Islamic Bank of Britain has once again joined forces with the National Zakat Foundation (NZF), a charity which collects and distributes funds to Muslims in the UK. The coming months will see the Bank and NZF roll out a number of activities for the benefit of IBB 's customers, including a Q&A event held via Twitter, NZF's Zakat education guide, available to download on the IBB website, private consultations for IBB customers with NZF Zakat specialists, a Zakat payment service, and an exclusive Zakat video Q&A from NZF. The aim of the IBB and NZF partnership is to promote a better understanding of Zakat amongst British Muslims.

Two weeks after the launch of the 037037 bank account to collect donations to help Egypt’s economy, the total value of donations exceeded EGP 400m, the Central Bank of Egypt’s (CBE) informed. The latest donation was from a Saudi businessman who contributed EGP 214m to the fund. The CBE announced in a Tuesday statement that donations from banks operating in the Egyptian market have increased to record around EGP 160m, including EGP 20m from State-run Banque Misr, Banque du Caire and National Bank of Egypt each. Other contributing banks include the Commercial International Bank (CIB), Arab African International Bank, Emirates NBD, the United Bank, QNB Al-Ahli, Faisal Islamic Bank of Egypt, SAIB, Egyptian Gulf Bank and Arab International Bank (AIB).

Some GCC regulators have recently proposed a host of new takaful-specific regulations that are expected to boost the market access of these companies. Many of the new regulations relate to the implementation of more stringent corporate governance requirements such as board level investment committees, internal audit departments and approved actuaries. Transparency, a key deficiency in the GCC insurance markets, will also improve with periodic (quarterly, bi-annual and annual) and early warning reporting. In many GCC countries, authorities have sought to protect consumer rights through the mandatory purchase of certain insurance covers. The increasing regulation of the insurance market is expected to help to stabilise the market's volatility and further encourage market growth.

Bahrain-based Gulf Finance House (GFH) has signed a land sale agreement to establish a new mixed-use residential development in Dubailand. The agreement with Dubai Properties Group (DPG) involves the purchase of a total area of approximately 1,200,000 square feet of land. The project aims to build residential, commercial and retail space and facilities within Dubailand. The new development includes both villas and apartments in the residential part of the project and is expected to launch later this year. The project is scheduled to be completed within the next five years.

The current issue of the journal Islamic Economic Studies (IES) Vol. 22, No. 1 (Rajab 1435/ May 2014) is now available at the IRTI website www.irti.org under the IRTI Journals Tab. It includes numerous articles highlighting current developments and important issues within Islamic finance. The subscription rate for first class mail is US $15.00 for one year (2 issues). The cost of a single issue is US $8.00.

Commercial Bank of Kuwait has received regulatory approval to issue up to 120 million dinars ($425.8 million) of bonds, as it prepares to convert into an Islamic bank. In April, CBK shareholders approved both the issuance of the subordinated bonds and plans to convert the lender into a full-fledged Islamic bank. The bonds will comply with Basel-III rules. While CBK said its conversion would not be immediate, it would leave Kuwait with only four local conventional banks and could help tip the Islamic banking industry’s market share above an estimated 40 per cent. CBK is not the first to convert into an Islamic bank, with Boubyan and Al Ahli having done so previously.

The shares Bahrain’s Islamic investment bank Gulf Finance House (GFH), at the Dubai Financial Market, rose close to limit up, by 14.86 percent last Tuesday. The number of trades in GFH stock increased by almost two and a half times on the day before, while volumes were also up many times over. On Wednesday morning, GFH put out a statement saying that it had bought a 1.2 million square foot plot of land from Dubai Properties Group in Dubailand, on which it plans to build residential property. Following the announcement GFH shares rose by another 4.6 percent on Wednesday, closing at AED3.47. The Securities and Commodities Authority (SCA) did not say whether it would take this specific issue further.

The Economic Development Board (EDB) and the Islamic Corporation for the Development of the Private Sector (ICD) signed a Memorandum of Understanding (MOU) on July 9 to promote SME growth in Bahrain. Under the terms of the joint partnership, the ICD will establish an Islamic Ijara Company in Bahrain to help SMEs succeed by offering Sharia-compliant financing products. The proposed Ijara Company will also be used as a training centre to help Bahrainis in the area of Islamic finance. In addition, ICD plans to set up a software development centre in Bahrain for software solutions for Ijara, Takaful, Mortgage and Islamic Banking, for export to the international market. Moreover, the ICD will assess the feasibility of establishing an SME Fund in partnership with the EDB, with the aim of supporting and investing in SMEs based in Bahrain.

The Tunisian government is studying the possibility to present cash collateral highways, for the issue of Islamic sukuk so as to mobilise funding from 180 to 300 MTD in 2014, according to Minister of Economy and Finance Hakim Ben Hammouda. The Minister underlined the difficulties on the level of issuing sukuk because of the obligation to present cash collateral. He specified during a hearing session devoted to the examination of the complementary finance law for 2014, that negotiation with the Islamic Development Bank reached an advanced stage.