IslamicFinance.de

Takaful Insurance of Africa Ltd. plans to expand its operations into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland under its five-year plan 2013-2017. In Kenya, Takaful Insurance has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, according to its CEO Hassan Bashir. Takaful’s premiums totaled 430 million shillings last year.

Bahraini lender Al Baraka Bank's Turkish unit plans to issue a $200 million, 10-year subordinated sukuk by the end of April or early May, the Bahraini bank's chief executive Adnan Ahmed Yousif said yesterday. Al Baraka Turk, which signed a $450m murabaha loan in September, has appointed BNP Paribas, Al Hilal Bank, Barwa Bank, Emirates NBD and Japan's Nomura for the Tier 2 sukuk.

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Fitch Ratings has assigned Turkiye Finans Katilim Bankasi A.S.'s (Turkiye Finans) forthcoming Sukuk issue an expected rating of 'BBB(EXP)'. Turkiye Finans as the managing agent will actively manage this portfolio and ensure that profits are in line with the entire expected return on the Sukuk. The sukuk are asset-based not asset-backed. The 'BBB(EXP)' expected rating assigned to the Sukuk is driven solely by Turkiye Finans' Long-term foreign currency Issuer Default Rating (IDR) of BBB' as the Sukuk structure is viewed as an originator-backed/asset-based structure.

The Malaysian government is encouraging takaful operators to invest abroad in order to internationalise its Islamic finance industry. Takaful operators will be allowed to invest abroad without limit, lifting a requirement for them to hold at least 80 percent of assets locally. However, Takaful firms in the country are usually reluctant to invest abroad due to a low risk appetite and lack of expertise. Furthermore, the domestic focus is partly due to ample supplies of sukuk in Malaysia. Another obstacle to internationalisation is the meagre experience of some Malaysian takaful firms. Dependence on local assets, however, has come at a price, with many takaful firms missing their target returns.

According to a report released at the opening of the 8th Annual World Takaful Conference (WTC) in Dubai on Monday, the growth of family takaful has outperformed the growth in conventional life insurance, with an annual growth rate of 32 per cent. Its gross contributions are set to treble to $5.6 billion by 2016. However, the latest industry data reveals a slight deceleration in the growth rates. A critical factor that will determine the industry's success is the existence of players with the right quality, as well their readiness to respond to new market opportunities. The report addresses the increased need for a pertinent reference source to help industry leaders navigate the evolving family takaful landscape.

The Saudi Stock Exchange (Tadawul) announces that the suspension of Saudi Basic Industries Corp Sukuk 3 took place on Monday 15/04/2013 based upon the CMA approval of Saudi Basic Industries Corp. request to purchase (redeem) the SABIC SUKUK 3 issue. Accordingly, the SUKUK will be delisted from the Saudi Stock Exchange (Tadawul) on Wednesday 15/05/2013.

Qatar Financial Centre Authority in its first ‘Mena Asset Management Barometer‘ has predicted that Qatar will soon become a “key international distribution hub” for Shariah-compliant products. It suggests that Qatar’s position in the Islamic finance market will be boosted with the development of new infrastructure projects that will help in the growth of alternative fund structures and encourage public-private partnerships. However, the report also highlights that the asset management sector in Qatar is still in its infancy and the alternative sector will need time to develop. Besides, Qatar was also chosen by hedge fund management firms as the most favored location to establish a presence in the GCC.

The constant growth in global sukuk issuance is not necessarily a sign of healthy development for the Islamic finance industry, for three reasons. Although at first sight, it appears that sukuk issuers have the necessary internal fund resources to finance their investment projects, the massive sukuk issuance actually evidences the fact that many of them are facing a shortage of liquidity. The second reason is that 95% of the sukuk issued recently are non asset-based sukuk and thus regarded as unsecured debt. As such, they are identical to conventional bonds in terms of credit risk. Furthermore, a considerable part of the issued sukuk don't comply fully with Shariah guidelines and close monitoring is still absent. There is a need to rethink the entire sukuk industry in order to tend towards more Shariah compliance and mitigate the adverse economic risks associated with the current trend.

Barwa Bank Group held its annual general meeting (AGM) on the 14th April at which the financial results for 2012 were approved and a new Board of Directors was elected. The Chairman, H.E. Sheikh Mohamad Bin Hamad Bin Jassim Al Thani, gave a detailed report on the bank's activities, and highlighted the group's strong growth in both balance sheet and profitability. The bank's net income for 2012 increased by 41% to QR345m, total assets increased by 32% to reach QR25.3bn. Following the AGM, Barwa Bank Group also held an Extraordinary General Meeting (EGM) to approve QR1bn in additional capital through a Rights Issue of 50 million shares at QR20 per share and an Initial Public Offering of 50 million shares at QR21 per share.

Omani lender Alizz Islamic Bank, the second full-fledged Islamic bank in the sultanate, plans to begin operations in the third quarter of this year, according to its chief operating officer Jamal Darwiche. Last October, the bank raised OMR40 million ($104 million) by selling 40 per cent of its capital through a month-long initial public offer of shares. It is targeting a 3.5 per cent share of financing and a 3.6 per cent share of deposits in Oman’s banking sector by 2017. Moreover, it aims for annual growth in total assets, financing and deposits of 15-20 per cent, and to build a customer base of between 65,000 and 100,000 accounts over five years.

Qatar Islamic Bank (QIB) has launched its new investment product called International Sukuk Portfolio. It will be invested predominantly in global sukuks issued by sovereign, quasi-sovereign and corporate issuers using well defined investment guidelines and is designed to keep risk exposure under control. The portfolio will be managed by QIB’s subsidiary in the United Kingdom QIB-UK, which has experience in asset management. Since International Sukuk Portfolio is priced and available for trading on a weekly basis, liquidity will be ensured. The portfolio will be diversified across sukuk issuers, a wide sector split and a broad geographic allocation. Part of the profits will be distributed to investors on a quarterly basis.

Turkiye Finans mandated Citigroup, HSBV, NCB Capital and Noor Islamic Bank for a dollar-denominated sukuk issue. Turkey's Capital Markets Board approved last week the bank's application for a sukuk issue of $500 million and 100 million lira ($55.78 million). ($1 = 1.7929 Turkish liras). Turkiye Finans is majority owned by Saudi Arabia's National Commercial Bank.

Saudi's Bank Aljazira has gotten the approval to sell shares in its insurance unit Aljazira Takaful Taawuni Co. The unit will offer 10.5 million shares at 10 riyals per share in IPO. Bank Aljazira plans to own 30 percent in the new firm. The new firm is to have capital of 350 mln riyals.

Al Salam Bank-Bahrain has successfully completed and sold a joint venture comprising seventy three villas worth an estimated gross development value of RM260.6 million ($86m), in one of Malaysia's Penang Island's largest seafront residential developments. The venture, Martinique Villas By-the-Sea, was named as the Best Villa Development in Malaysia at the South East Asia Property Awards 2011. Successful completion of this project was a result of a tripartite venture involving Al Salam Bank-Bahrain, Eastern & Oriental and CIMB-Mapletree Management Sdn, who entered into the agreement in 2006. The successful collaboration was celebrated at a private event in Penang.

More than 5,000 organizations and over 60,000 participants took part in this year’s World Social Fórum. The four day event was held at the University of Tunis on the outskirts of the Tunisian capital. Among the 1000 workshops offered, popular themes were climate change, women, migration, globalization and economic justice. However, workshops on issues related to sub-Sahara Africa, The U.N., and the wars in Afghanistan and Iraq were absent. On the third day, two groups, one supporting President Assad, the other one supporting the opposition were confronting each other. A scuffle ensued and Forum organizers had to intervene. Some organizers proposed that the next Forum, to be held in two years, also take place in Tunisia to build on the contacts and structures built during this year's forum.

Independent consulting firm CSR Lebanon held the 3rd CSR Lebanon Forum on March 18 and 19 entitled "Corporate Social Responsibility in Times of Uncertainty". The fórum was attended by more than 500 leaders from the business community, government, civil society and academia. Among them, there were 30 international, regional and local corporate sustainability experts, along with chief representatives from the United Nations Global Compact (UNGC) and Global Reporting Initiative (GRI). All speakers and international representatives provided business cases which Lebanon can build upon to promote responsible business practices and transparent sustainability reporting.

The CMA Board has issued its resolution approving the initial public offering of 10,500,000 shares, which represent 30% of Aljazira Takaful Ta’awuni Company’s share capital. The offer price will be SAR 10 per share, and the subscription period will be from 03/07/1434H (13/05/2013G) to 09/07/1434H (19/05/2013G). The prospectus will be published within sufficient time prior to the subscription period. The prospectus includes all relevant information that the investor needs to know before making an investment decision, including the company's financial statements, activities and management.

Ethica Institute of Islamic Finance in Dubai interviewed Pakistan-based Akhuwat, a microfinance program that has given loans to over 1 million people, without charging interest. Akhuwat-founder Dr. Muhammad Amjad Saqib explained that they rely on 4 core principles: giving up interest, volunteerism, localization, and empowerment. Akhuwat started a decade ago with a $100 loan, and until now has dispersed $30 million. 99.8% of the loans were paid back in full. Dr. Saqib said that financial institutions began their activities on the basis of doubt, but they started their activities on the basis of trust.

According to a report titled "Record Low Borrowing Costs Are Boosting Gulf Issuers' Credit Quality, But Will They Last?", published by Standard & Poor's, corporate and infrastructure issuers in the Gulf region are benefitting from sustained positive macroeconomic fundamentals and strong appetite from regional and international investors. Moreover, GDP growth of 4% and above in 2013 is expected for most of the GCC nations. All GCC sovereigns have stable outlooks. The key risks to this rosy picture are an escalation in regional political instability or an unexpected fall in oil prices. Fortunately, these risks are negatively correlated, with any threat to supplies of hydrocarbons normally resulting in immediate price hikes.