IslamicFinance.de

Morocco will launch Takaful next year after introducing Islamic banking services in 2017. In July 2017, the Moroccan Government Council adopted a draft decree paving the way for implementation of the Takaful Law. Insurers wishing to operate in the segment will be required to offer exclusively Islamic products. Some big insurers such as French AXA and US Atlanta have already shown an interest. The Moroccan conventional insurance sector is thriving as shown by the growth of its turnover, which increased in 2017 by 10.9% to $4.1 billion. Insurance penetration increased in Morocco by one percentage point to 3.7% of GDP in 2017, against 2.1% in Tunisia and 1.7% for the MENA region.

After decades of giving to charity, a growing number of Catholics are starting to put their philanthropic billions into profitable investments instead. The new aid model is also backed by Pope Francis. Catholic investment funds are increasingly investing in projects in emerging economies and earning a return while also doing good. Impact investing is growing in popularity among investors who want to support development goals such as clean energy, education and healthcare. According to the Global Impact Investing Network (GIIN), $228 billion was managed in impact investments worldwide in 2017, double that of 2016. An organisation spearheading the new mission is Catholic Relief Services (CRS). CRS has lent $1 million to banks in El Salvador that lend on to city authorities to spend improving and expanding their erratic water services. CRS aims to give 300,000 people reliable water access in the next three years while also earning single digit returns from the loans.

The Islamic Research and Training Institute (IRTI) and Dar Al Sharia have signed a memorandum of understanding (MOU) for strategic collaboration. The MOU was signed by IRTI Director General, Dr. Humayon Dar, and CEO of Dar Al Sharia, Mian Muhammad Nazir. IRTI and Dar Al Sharia will jointly provide Islamic finance advisory services to Islamic financial institutions, multilateral financial institutions, sovereigns and quasi-sovereigns, corporate entities, development funds, regulators, Fintech companies, educational institutions and other clients offering Sharia-compliant products and services. Nazir said the strategic collaboration with IRTI was a landmark initiative towards the development of a sustainable platform for innovation in the Islamic finance industry.

The International Islamic Trade Finance Corporation (ITFC) will provide Egypt with $1 billion to support the provision of basic goods. The financing is part of a $3 billion agreement with the ITFC, which is part of the Islamic Development Bank (IDB). Egypt's economy was battered after a 2011 uprising ushered in political instability that scared off tourists and foreign investors.
Earlier this week Egypt signed contracts with two global banks to hedge against fluctuating global oil prices. The investment ministry said the ITFC financing was part of a new cooperation strategy between Egypt and the IDB lasting until 2021.

New York-based Wahed Invest has launched two sharia compliant index-tracking funds under its robo-adviser platform. According to CEO Junaid Wahedna, the company's goal is to make every asset class available to Muslim investors. The new equity funds launched by Wahed will track indices that are screened by Standard & Poor's. The funds have no lockup period and only charge an advisory fee rather than a management fee. Wahedna added that a recurring deposits tool has proven to be popular among clients, most of whom are first-time investors. Wahed raised $5 million in seed capital last year. The investment firm is backed by Gulf investors and venture firms including Boston-based Cue Ball Capital and Dubai-based BECO Capital.

According to Moody’s Investors Service, the GCC region's sukuk issuance fell by 32% to reach $16.7 billion in the first half of 2018. This contributed to a reduction in the Gulf’s overall share of the global sukuk issuance to less than a third (30%) compared with 39% a year earlier. The GCC also dragged down total global issuance which fell by 12% to reach $55 billion in the first six months of the year. Recovery in the oil price has reduced pressure on Gulf government’s budget deficits and helped lower their borrowing requirements. While Islamic bonds have fallen out of favour in the Gulf, their appeal remains strong in Malaysia. The South-East Asian country increased its issuance by 9% in the first half of the year to reach $22.4 billion, making it the world’s leading Sukuk issuer.

In this interview Amir Riad, head of corporate finance at Abu Dhabi Islamic Bank (ADIB) talks about the UAE's economy and the lender's sukuk business. Riad sees a positive traction as the oil price is stabilising and the capital markets are deepening. ADIB has just announced the issuance of a new tier 1 sukuk, which replaces the bank's issuance in 2012. He expects a strong sukuk activity in the second half for the whole GCC region.

The use of artificial intelligence (AI) has made it easier for retail investors to access investments that adopt environmental, social and governance (ESG) principles. According to Omar Selim, CEO of Arabesque Asset Management, technology is democratising ESG investing. Nowadays, both large and small financial institutions are able to extract and analyse ESG-related data using AI, which is cheaper and faster. One advantage of using AI is the ability to tap a larger pool of information and monitor the ESG performance of companies on a daily or monthly basis. Selim believes that ESG investing will gain more traction in the future as people’s views on investments change. More and more people want to invest in companies that have good corporate governance and sustainable business models.

Saudi Arabia's finance ministry sold 4.0 billion riyals ($1.1 billion) of domestic Islamic bonds in its monthly auction. The issuance is actually a re-opening of the issue originally made in July. The ministry sold 2.25 billion riyals of five-year sukuk, 500 million riyals of seven-year and 1.25 billion riyals of 10-year, bringing the total issue size to 7.465 billion riyals.

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Financial inclusion is high on the agenda for governments as well as for organizations such as the World Bank.

Research has pointed out that Muslims worldwide are less included in the formal financial system than non-Muslims, but there is no knowledge about the extent to which religious norms (most importantly the ban on interest on money) lead to financial exclusion among Muslims in the West.

In this article I approach the issue of financial exclusion and inclusion through three interrelated questions that will be answered with data collected in Norway 2015 and 2016.

The questions are:
(a) To what extent do Muslims see conventional banking as a problem in their own lives?
(b) Do level of education, age, national background or level of religiosity predict demand for Islamic banking?
(c) Is demand for Islamic banking changing?

This article is a first step in what should be a broader research program to find out whether and how religious norms cause financial exclusion of Muslims in the West.

Hill International has received a three-year contract from Bank Aljazira to provide project management services for Aljazira’s Regional Management Office Building in Riyadh. The project will be one of Riyadh’s landmarks, reflecting Bank Aljazira’s image and its alignment with the Saudi Arabia National Vision 2030. The project location is planned to be north of the Capital, in the center of new major developments for the next 20 years. Hill International provides program management, project management, construction management and other consulting services to clients in a variety of market sectors. According to Engineering News-Record magazine, Hill International is the eighth-largest construction management firm in the United States.

Bahrain’s largest lender Ahli United Bank (AUB) has announced that two investment banks are evaluating a potential merger with Kuwait Finance House (KFH). HSBC and Credit Suisse are currently undertaking necessary valuations studies to assist AUB and to arrive at a fair share exchange ratio. If a merger proceeds, the total assets of the two banks would be $90.57 billion, making it the sixth largest bank in the Gulf. The major shareholders in the two lenders are Kuwait state-owned entities. The Public Institution for Social Security owns 18.59% of AUB, while KFH's largest shareholder is the Kuwaiti sovereign wealth fund, the Kuwait Investment Authority (KIA).

The Islamic Financial Services Board (IFSB) published country-level data on financial soundness and growth of the Islamic banking systems for Q1 of 2018 from 21 IFSB member jurisdictions. This report includes the data from four newly joined countries, namely: Qatar, Palestine, Lebanon, and the first time for the United Kingdom. With the inclusion of new countries’ data, the total assets of the Islamic banking industry grew by 8.0% from USD 1,573 billion in 2017Q1 to USD 1,699 billion in 2018Q1. Financing by Islamic banks grew by 6.7% and reached USD 1,033 billion in 2018Q1 from USD 968 billion in 2017Q1. The number of full-fledged Islamic banks and Islamic windows of conventional banks in 21 IFSB member participating countries stood at 188 and 85 in 2018Q1 as compared to 184 and 84 in 2017Q1 respectively.

Nigerian Fintech company Paystack has received an investment of $8 Million from Stripe, Visa, Y Combinator and Tencent. Over the last three years, Fintechs in the country have received funding, and that has increased steadily. Including Flutterwave’s $10 Million there was roughly $100 Million deployed into Fintechs. SureRemit, another Fintech raised $7 Million in an ICO this year. Over the last couple of years, more Nigerian Fintechs are being chosen for Y Combinator. All this activity and traction is also suitably backed by ecosystem players, policy makers and regulators. The rationale behind the investment from the Visa, Stripe and Tencent into Paystack is to help their expansion within Nigeria and to bring financial services to people who have so far been denied the opportunity.

Abu Dhabi Global Market (ADGM) has facilitated the transaction of a 12 year Sukuk issued by Natixis and Noor Bank. It is the first instance where an ADGM structure has been used specifically to hold aircraft assets for issuing Sharia compliant bonds. The transaction follows the successful completion of the first aviation sale and leaseback transactions arranged by Natixis in ADGM in late 2016 and the registration of three international aviation leasing companies earlier this year. ADGM aims to position Abu Dhabi as an international aviation finance hub to deliver bespoke solutions for both Islamic and Conventional transactions.

Bricklane’s funds have been certified as compliant by the Shariah Committee of Minarah Consulting chaired by Sheikh Faizal Manjoo. Through Bricklane’s online platform, individuals can invest flexibly in geographically focussed funds that buy and let residential properties, one focussed on London, and another on the Regional Capitals of Leeds, Manchester and Birmingham. Available through ISAs and SIPPs, and with Real Estate Investment Trust (REIT) tax status, it is the most tax-efficient way to invest in UK residential property. Performance for the Bricklane funds has been strong in both absolute and relative terms, with the Regional Capitals fund returning 8.7% to investors in its first year, and its London fund returning 10% at its first anniversary in July 2018.

Sukuk remains an important segment in Islamic finance in Asia where they are preferentially used to fund large public or private infrastructure or combined public-private projects. Recent estimates by the Asian Development Bank (ADB) have put the infrastructure financing needs of developing Asian economies at $22.6tn from now up to 2030, which equates to $1.7tn per year. Looking back, more than ten Asian countries issued a total of $73.1bn in infrastructure sukuk between 2002 and the end of 2015. Malaysia’s ongoing Economic Transformation Programme is expected to accelerate the issuance of Infrastructure sukuk. In addition, China’s Asia-wide Belt and Road Initiative has created a business case for Islamic funding. The Philippines and Indonesia are both seeking to use sukuk for badly needed infrastructure improvements. Kazakhstan and more Central Asian countries are expected to follow.

Malta continues to take the lead in attracting blockchain and cryptocurrency ventures and now also in the upcoming Islamic finance scene. The new Sharia compliant cryptocurrency exchange Huulk has applied for a digital exchange license in Malta and hopes to partner with several European exchanges in the coming weeks. According to Huulk CEO Ibrahim Mohammed, Malta’s Bianchi Holdings would be an equity partner in the exchange. Bianchi Holdings Chairman Michael Bianchi is also involved in other blockchain and cryptocurrency ventures. The Huulk exchange is aiming to list around 20 Islamic fintech firms, some of which operate in Muslim-majority countries like Turkey and Malaysia. OneGram also plans to list its own sharia-compliant cryptocurrency on the exchange by mid-September. OneGram has sold around $400 million in gold-backed tokens over the past year.

Assets and revenues at Qatar's Islamic banks have grown over the past year, but an increase in problem loans and a drop in foreign currency lending underscore the impact of a diplomatic rift in the region. Qatar Islamic Bank, Masraf Al Rayan, Qatar International Islamic Bank and Barwa Bank held a combined 358.6 billion riyals (US$96 billion) in assets in the first quarter of this year, an 8.8% increase from a year earlier. Most of that increase was due to their holdings of Islamic bonds, which stood at 65.1 billion riyals in the first quarter, a 37.7% rise from a year ago. Capital adequacy and profitability measures were mostly unchanged, but foreign exchange financing decreased by 7%.