IslamicFinance.de

Many Islamic banks thought the financial crisis as the ultimate marketing opportunity. In contrast to the scandals in Western banks, Islamic banks could present themselves as the opposite. Thus they could tempt consumers with promises of fairness, transparency and morality.

A company statement on Wednesday said Qatar Islamic Bank is planning a sukuk issuance programme of up to $1.5 billion. The bank will seek the approval of shareholders of the plan in a meeting on September 16.

According to the IFIA, CIMB-Principal Islamic Asset Management has become the first Malaysian firm to launch funds from Dublin. Thus it is reinforcing the position of the domicile as Europe's leading funds centre. The start of the CIMB-Principal Islamic Irish Ucits fund range follows the constitution of CIMB-Principal Islamic Asset Management (Ireland).

Syarikat Prasarana Negara Bhd is paying 20 per cent less to finance railway expansion than China, as sliding sukuk costs mean. In an interview yesterday the company’s finance director Mohd. Zahir Zahur Hussain said Prasarana RM1 billion each of 2022 and 2027 Syariah-compliant notes to yield 3.77 per cent and 4 per cent, respectively. The government’s debt clearing house website shows China’s Ministry of Railways issued 10-year non-Islamic bonds at a coupon rate of 4.68 per cent on Aug 21 and 15-year securities at 5 per cent.

Abu Dhabi National Insurance Company’s financial strength rating and credit rating were reaffirmed by A.M. Best’s rating agency and Standard & Poor’s rating agency as A and A-, respectively. Thus, ADNIC is placed among an elite group of financial services institutions to have their financial rating maintained in the A category across the Middle East and North Africa region.

Sharia banks in the country will soon be subject to Bank Indonesia’s new policy regulating minimum down payments for housing and automotive loans. However, a deputy governor for the central bank says that they may have different limits than those for commercial banks. This month, BI said that sharia banks would soon be included in its policy to restrict loans to value in automotive and housing lending. These had entered into effect for Indonesian commercial banks in June.

Islamic finance has considerably grown in North Africa, with many Middle East financial institutions investing in the region. There has also been significant development in the south of the continent. Though there is a low Muslim population in South Africa, the government has been one of the front-runners to make it a centre for Islamic finance in Africa. South Africa is the most advanced African nation in terms of robust legislative structures, strict governance structures, and regulations. This gives it an advantage in implementing Shariah-compliant financial systems.

From the beginning the Islamic non-governmental organisations, cooperatives and microfinance institutions have been encountering numerous challenges. The principal challenge is Funding Islamic microfinance programme. A huge fund is required for covering the poor living below the poverty line. Resulting from the lack of fund, many Islamic NGOs, MFIs and cooperatives have not succeeded in reaching the poorest of the poor. Donors and developing agencies usually demonstrate almost no interest in funding Islamic NGOs-MFIs because of their misconception about Islamic views towards empowerment of women and modernisation. Thus, Islamic microfinance is yet to expand its country-wide outreach effectively in order to be provided with a fund from national and international Islamic donors and development agencies.

In a recent announcement, Fajr Capital Limited has informed about its acquisition of Dubai International Capital’s stake in the Mena Infrastructure Fund. Fajr Capital will join the other two major partners of the fund, HSBC Bank Middle East and Abu Dhabi-based Waha Capital, being a limited partner with other regional and international investors. Fajr Capital’s transaction is expected to result in strengthening the company's position in the MENA region, building exposure in the key markets of Egypt, the Sultanate of Oman and the Kingdom of Saudi Arabia as well as increasing the company's assets.

According to a statement by Fitch Ratings, Indonesia's consumer finance will probably see an improvement in the underwriting quality and regulatory consistency. The precondition is that Bank Indonesia harmonises prudential rules for sharia-compliant products with the ones for mainstream consumer loan products. Applying tougher loan to value (LTV) regulations to sharia products would make the competition with non-sharia products even. Moreover, asset quality diverging within the consumer finance sector would be prevented.

The expansion of Islamic finance throughout the Middle East has caused an increasing interest in knowledge and experience levels required by banking professionals to operate in this financial area. Numerous conflicts and political changes in the Middle East require new systems of government as well as corresponding risk management.

According to most fund managers, people usually invest in equities. FTSE 100 companies dominate portfolios and provide the assets under-pinning financial products using pension or other similar investments. However, a closer look at these companies shows that many of them are involved in activities and products such as alcohol, gambling and entertainment which puts them out of bounds to Muslim clients. Sharia law excludes many mainstream financial products and investments from the practices of these companies.

Islamic microfinance (IM) continues its development into a very popular mechanism for alleviating poverty, especially in developing countries. The expected growth of the Islamic microfinance industry is over $2.0 billion in 2012. Its ethical principles and prohibition of riba cause a continuous growth in this sector. According to the principles of Islam, which lay the basis for IM, investors in IM projects only take part in halal projects, thus benefiting the community to a large extent. An example of such a project is the charity based zakat.

The IMF and Egypt continue to negotiate a potential $4.8 billion loan at an interest of 1.1%. The Salafi Nur Party made a statement claiming that this interest is not a forbidden riba. Their statement was followed by one by a another Salafi preacher with similar content.

Istanbul Real Estate Investment Trust Is REIT signed a Murabaha facility worth $50 million in a syndicate with a number of GCC banks. The facility has a two-years tenor and a profit rate of LIBOR +250 bps. Playing different roles, banks included in the syndicate are Qatar Islamic Bank, Barwa Bank, First Gulf Bank, and Mashreq Bank. Sole Bookrunner and Structuring Advisor to Is REIT was QInvest .

It was reported that Indian authorities intend to introduce some form of interest-free banking. Thus, the country’s unbanked Muslim populations shall be brought into mainstream banking. This initiative is likely to result in a huge rise in Islamic Banking and in a significant gain for Indian banking as well. While a channel for substantial fund flow from areas such as the Gulf region will be opening up, a huge number of new customers will join the Indian banking sector.

Jomana Al-Kandari, nutritionist at Amiri Hospital, was sponsored by Kuwait Finance House (KFH) to attend the first international conference for the nutrition of kidney patients in the USA. This sponsorship is part of KFH's initiative in support of healthcare and education. The knowledge and experience Jomana Al-Kandari gained during the conference shall contribute to the development of the medical services to a world-class level.

Malaysia maintains its leading position in Islamic finance having a large volume of Islamic investors looking for syariah-compliant investments like sukuk compared to Singapore. The huge number of Muslim-owned companies in Malaysia is one of the most significant reasons for the high demand for syariah-compliant financing and sukuk issuance. 60 percent of global sukuk deals are concluded in Malaysia.

Gatehouse Bank has bought the Debenhams department store in Leeds city centre for £33.4m ($52.6m). thus, the sharia-compliant investment bank continues property acquisition in this city, the BT building in Sovereign Street being the first one. The new acquisition was chosen for its strategic location for retail and real estate fundamentals.

After the approval for “Sharia compliant” equities by Central Bank of Nigeria (CBN) last year, in 2012 an Islamic window opened on the trading floor at the Nigerian Stock Exchange (NSE). This is the first faith-based financial window in Nigeria, which fact causes fears that a deliberate Islamic financial services industry may have unintended consequences on equity transactions. The goal is to enthrone Islamic financial principles in equity trading, by tracking the performance of Sharia compliant stocks on the exchange floor.