IslamicFinance.de

Borsa Istanbul (BIST) aims to become one of the most prominent centers that work in accordance with the principles of participation banking in the Middle East, Europe and Africa. Capital Markets Board (SPK) has prepared a regulation on non-interest financing tools, such as five new types of Islamic bond. The new rules, which were sent to Prime Minister’s office for approval this week, will allow Turkish corporate and banks, as well as the Treasury, to issue the world’s most widely used types of sukuk, giving them access to a wider pool of investors via a global market estimated at more than $100 billion. Turkey has also started an initiative to allow companies from 60 countries, chosen according to BIST’s vision of “Istanbul International Finance Center,” to sell their capital market tools in Istanbul and also to buy and sale of tools which are already sold.

Barwa Bank has acted as joint lead manager on Albaraka Turk Participation Bank's (ABT) $200m Tier 2 sukuk. This transaction represents the first Sukuk Murabaha transaction issued in the international capital markets from Turkey. Barwa Bank has been involved in almost all meaningful sukuk business over the last 12 months, guided by its strategy to become a key player in the Islamic debt capital markets. The ABT sukuk is another milestone for the bank, having been involved with several high profile issuers earlier this year as Co-Lead Manager, notably, the government of Dubai, Emirates Airlines and Dubai Islamic Bank.

European Islamic Investment Bank PLC Deputy CEO Keith Mcleod is to leave the board with immediate effect.

London-based Gatehouse Bank is considering applying for two or three licences in Malaysia in universal banking, investment banking, and or, wealth management to expand its business in Asia. The bank, which recently commenced operations in Malaysia via a representative office in Kuala Lumpur, would closely discuss licensing options with the Securities Commission and Bank Negara, according to chief representative of Gatehouse Bank in Malaysia Richard Thomas. The establishment of the representative office will be the first step in a two-year larger strategic plan to apply for a full-fledged licence. In these two years, the bank will conduct and collect research as well as analyses of the risks and rewards of investing in Asia.

Luxembourg-based SEDCO Capital Global Funds (SCGF) has announced the first ever Shariah-compliant funds managed according to environmental, social and governance (ESG) principles. The SEDCO Capital US Equities Fundamental Indexing® Fund and SEDCO Capital Global Higher Dividend Yield Fund are screened for compliance with international conventions and guidelines on environment, human rights and business ethics such as UN Global Compact and OECD Guidelines. Non-compliance is dealt with through a process of engagement and exclusion. The funds are targeted at institutions, high net worth individuals, family offices, and qualified distributors wishing to invest in a socially responsible manner, while complying with Shariah principles. The funds can also be distributed by banks who wish to offer this investment opportunity to customers.

Luxembourg-based SEDCO Capital Global Funds (SCGF) has announced the first ever Shariah-compliant funds managed according to environmental, social and governance (ESG) principles. The SEDCO Capital US Equities Fundamental Indexing Fund and SEDCO Capital Global Higher Dividend Yield Fund are screened for compliance with international conventions and guidelines on environment, human rights and business ethics such as UN Global Compact and OECD Guidelines. Non-compliance is dealt with through a process of engagement and exclusion. The funds will also incorporate proxy voting according to best corporate governance standards in its ESG programme. The funds are targeted at institutions, high net worth individuals, family offices, and qualified distributors wishing to invest in a socially responsible manner, while complying with Shariah principles.

KFH-Research issued a report stating that participation banks (Islamic banks) in Turkey form 5.2% of banking assets and will reach 10% by 2018, since those banks surpass the rest of the banking sector and have steady financing growth over 20% per year. The report noted that KFH-Turkey is first in deposits, and that participation banks are highly demanded and offer a wide array of products. There are currently four participation banks in Turkey, which are Albaraka Turk, Kuveyt Turk, Turkiye Finans, and Bank Asya. The low penetration rate of participation banking should ensure that its significant growth will continue over the coming years. Continuous measures and initiatives taken by the Turkish government as well as the large Muslim population will drive the participation banking sector to grow in the longer term.

The Turkish government has announced it will be seeking to tap into the $1 trillion Islamic financial industry. Stronger Islamic banks would enable Turkey to attract more cash from the Gulf and Asia, where the appetite for Sharia-compliant products far outstrips the existing supply. This could potentially make Istanbul a regional financial hub. For now, Europe still accounts for the lion's share of trade with Turkey's financial institutions and wider economy. But with Europe still in the grip of financial woes, the Turkish economy is diversifying and looking at alternative markets in the Middle East or North Africa. The development of Islamic finance could become an increasingly useful instrument in that strategy.

London-based firm Cobalt has developed a sharia-compliant insurance platform that uses a syndication model to help spread risk across a panel of underwriters. Cobalt allows multiple insurers to pool their capacity and each can subscribe to the desired level of risk though individual Islamic Windows. The company aims to address capacity constraints in the takaful industry. The platform allows each insurer to have a takaful window, where policyholder funds are segregated from conventional funds, without affecting their rating levels and helping price the risk competitively. The risk is priced by a lead insurer and other firms must then subscribe under similar terms, a similar approach to the subscription model used in London's insurance market.This novel format could boost capacity in the sector.

The successful closure and signing of a US$ 230,500,000 and EUR 115,300,000 Syndicated Dual-Currency Murabaha Financing Facility for Asya Kat?l?m Bankas? A.?. (Bank Asya) was announced by its Initial Mandated Lead Arrangers and its Bookrunners. The Facility was signed on 30 April 2013 and a commemorative event was being held to mark the occasion. Launched at US$ 225 Million, the Facility was oversubscribed to close at US$ 382 Million equivalent with participation from 28 banks from across the globe. It carries a profit rate of 125 bppa over the relevant benchmark. Bank Asya will use the proceeds to expand its financing activities in Turkey.

Turkey has begun to give new banking licenses after the 2001 banking crisis, with no exception for interest-free Islamic banks, called participation banks. The format of two participation banks which will be established by the state-run Banks Ziraat Bank and Halkbank, will be clearer in a few months. As of now four banks have operated in the participation banking industry: Bank Asya, Turkiye Finans, Albaraka Turk and Kuveyt Turk. They constitute 5.3 percent of the Turkish banking industry. The aim of the Participation Banks Association of Turkey is to triple the share of Islamic banking assets in Turkey by 2023. Besides, Ziraat Bank has been planning to set up a separate Islamic bank. Moreover, Turkish lender Halkbank appears to be the second bank to start offering sharia-compliant services under a new entity.

Aston Martin has confirmed that the Investindustrial partnership has been completed. The deal brings £150m of investment in the form of a capital increase. The investment underpins a significant new product development programme of more than half a billion pounds over the next five years. Aston Martin production will remain at the luxury British marque’s global headquarters at Gaydon in Warwickshire, a purpose-built facility where the current range of sports cars is assembled. Details of this year’s first quarter results will be announced to bondholders later in May.

Shares in Turkey's Gozde Girisim were up 9.49 pct to 4.50 lira, its upper limit for the session, after it mandated asset manager Unlu to sell its 11.57 percent stake in Turkish Islamic lender Turkiye Finans. Turkiye Finans is majority owned by Saudi Arabia's National Commercial Bank, and Gozde by Turkish conglomerate Ulker.

As part of an initiative backed by the Islamist government, state-run Ziraat Bank is working to set up a Shari’ah-compliant entity. Turkey already has four Islamic banks, known locally as participation banks, of which three are foreign-owned. But Shari’ah-compliant assets account for just 5 percent of total banking assets, far below the average of 25 per cent in the Gulf región. Size is mostly the problem. Islamic banks in Turkey are also lagging in innovation compared to peers elsewhere in the Muslim world. Stronger and larger Islamic banks could strengthen Turkey's financial position. Domestically, they could lure funds that could help fund Turkey's GDP growth. Internationally, stronger Islamic banks would enable Turkey to attract more cash from the Gulf and Asia.

PwC Luxembourg in association with the Luxembourg Stock exchange publishes a new brochure about Sukuk listing in the Grand Duchy. This document distributed on 6 May 2013 during the “Journée boursière” provides an overview of the Islamic Finance Market in Luxembourg and highlights the benefits of Sukuk Listing and Trading in Luxembourg. 16 Sukuk have been listed on the Luxembourg Stock exchange. With more than 3,127 listed issuers coming from 103 countries, the Luxembourg Stock Exchange meets capital market players’ needs. Luxembourg remains one of the most competitive, stable and secure environments in Europe to locate securitisation transactions. The development of Islamic Finance in Luxembourg has been set as priority by the Grand Duchy.

A sukuk deal issued by Asya Sukuk Company Limited is the first Turkish bank sukuk internationally placed where the obligor is a company which is entirely Turkish owned. The sukuk certificates issued are unconditionally and irrevocably guaranteed by Bank Asya. The inaugural issuance is for $250,000,000 and will have an initial yield of 7.5% per annum. The sukuk will be issued in fixed rate resettable Tier 2 certificates which are due in 2023. BNY Mellon has been appointed delegate, principal paying agent, registrar, transfer agent and Irish listing agent on the deal. It will perform fiduciary duties and make profit and principal payments to investors on behalf of Asya Sukuk Company Limited. It will also handle administrative duties related to the issuance of the certificates.

Insurance major XL Group and Islamic specialist Cobalt underwriters will offer sharia-compliant insurance for companies buying commercial property, paving the way for Islamic investors to tap London’s subscription-based insurance market for the first time. The new offering will allow multiple insurers to take part in Islamic insurance deals, adding scale to the fledgling sharia-compliant insurance industry in the UK. Under Islamic insurance, premiums are reflected as contributions, capital is segregated from the participants' funds and there is transparency on cost. It's necessary to abide by the scholars' principles on how things should be structured.

With the ongoing credit squeeze from the debt crisis and uncertainty still stalking capital markets, many Western firms are eyeing up the Islamic liquidity pool as an alternative source of finance. The Irish energy group ESB had applied to local regulators in Malaysia for permission to issue a bond, with the aim of raising €1 billion. Had the issuance gone ahead, the ESB would have become the first Irish company, and one of the non-financials in Europe, to issue a Sharia-compliant bond. Nonetheless, prospective investors reportedly showed interest in investment in asset-rich companies like the ESB. Ireland already commands a share of pie when it comes to fund management, with some 20 per cent of Europe’s Sharia-compliant funds domiciled in Dublin’s Irish Finance Services Centre (IFSC).

Islamic Bank of Britain (IBB) narrowed its losses in 2012 a week after it raised £10 million ($15.5 million) from majority shareholder Qatar International Islamic Bank (QIIB). Last week, IBB raised £10 million by placing 1 billion shares with QIIB at a price of 1 penny each, raising the number of its outstanding ordinary shares to 4.5bn. In 2012, IBB posted a loss of £6.99m versus a loss of £9m a year earlier. Home financing business helped narrow the gap by nearly doubling to £117m in 2012 versus £61m a year earlier. The bank did not disclose personnel or administrative expenses, which in the past have represented the bulk of its costs. QIIB, which now owns 91 percent of IBB, has been in discussions since last June with Qatari lender Masraf Al Rayan to sell a controlling stake in the British bank.

Prime Minister David Cameron is looking to Southeast Asia to boost the UK’s role in Islamic finance. It’s the Bank of England he needs to convince first, say Shariah-compliant lenders based in Britain. Central bank rules require lenders to hold easy-to-sell assets as protection against short-term funding shocks. Most are off-limits for Islamic banks because they pay interest. Cameron visited Malaysia last year to build on a pact to promote bilateral engagement in the industry and created an Islamic Finance Task Force in March. Britain’s six Shariah-compliant lenders will struggle to grow unless regulators adapt bank liquidity rules or highly rated borrowers issue sukuk in pounds.