IslamicFinance.de

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) said last week that it had taken up the development of a standard for gold, a project which was launched last year by the World Gold Council (WGC), a London-based market development body. The WGC published an exposure draft in November which analysts believe could accelerate the timetable for the creation of a final standard. Such drafts have traditionally taken AAOIFI scholars two years to develop internally. The WGC's draft outlines several uses for gold such as investment accounts, derivative contracts, security collateral, exchange-traded funds and Islamic bonds, said Natalie Dempster, WGC managing director of central banks and public policy.

Vice Chairman at Kuwait Finance House (KFH), Abdulaziz Yaqoub Al-Nafisi stressed the importance of international investment and creating further integration in KFH-Group banks in the framework of the coordination that targets boosting development according to a unified vision that prioritizes development and recognizes the value of public-private partnerships and international investment, yet contributes in diversifying non-oil sectors to boost the economy. On the sideline of his participation in the inauguration ceremony of Marassi Al Bahrain project, Al-Nafisi praised the project that was a joint effort between the real estate investment and development company, Eagle Hills, in partnership with Diyar Al Muharraq. He went on to say that the project will provide steady flow of income for investors and will comprise a major destination for tourists in Bahrain.

Governments in the wealthy Gulf Arab oil exporting countries look set to borrow from the international bond market at a record pace this year, putting fresh pressure on bond prices, as they cover budget deficits created by low oil prices. For the first 18 months after oil began tumbling in mid-2014, governments largely held off from borrowing abroad, preferring to draw down their fiscal reserves and in some cases borrow domestically. That strategy is reaching its limits as the drawdown begins to alarm financial markets and push up local market interest rates. So governments in the six-nation GCC will turn to the foreign debt market to help cover deficits which are expected this year to near $140 billion, or 11 percent of gross domestic product (GDP).

Standard & Poor’s Ratings Services said that overall sovereign creditworthiness in the Middle East and North African (MENA) region has deteriorated since Standard & Poor’s last published six months ago. The rating agency has published the report Middle East And North Africa Sovereign Rating Trends 2016. The average rating for the hydrocarbon-endowed sovereigns of Abu Dhabi, Bahrain , Iraq, Kuwait, Oman, Qatar, and Saudi Arabia, is currently close to ‘A’, having been at ‘A+’ prior to the downgrade of Saudi Arabia and the inclusion of Iraq in the average. For those with more limited hydrocarbon resources (Egypt, Jordan, Lebanon, Morocco, Ras Al Khaimah, and Sharjah), it is closer to ‘BB+’. The outlooks are negative on Bahrain and Saudi Arabia, reflecting weakening fiscal profiles and uncertain policy responses.

Iran will receive $32 billion of unfrozen assets after sanctions were lifted in a deal with world powers over its nuclear programme, Iranian central bank chief Valiollah Seif said Tuesday. Seif was quoted as saying that $28 billion (25.8 billion euros) would go to the central bank and $4 billion will be transferred to the state treasury as the share of the government. The unfreezing of assets comes after the U.N. atomic watchdog confirmed at the weekend that Iran had complied with measures imposed by the deal with global powers reached in Vienna in July. The central bank plans to keep the funds in centralized and safe accounts abroad, he added.

The United Nations Security Council announced on Sunday that it has removed Iranian Bank Sepah and its international subsidiary from a sanctions list. This move came after Saturday's announcement of a UN report confirming that Iran has completed necessary preparatory steps to start the implementation of a plan of action aiming to resolve the nuclear issue. Bank Sepah had been under a Council-mandated asset freeze since 2007. It provides support for the Aerospace Industries Organisation (AIO) and subordinates, including Shahid Hemmat Industrial Group (SHIG) and Shahid Bagheri Industrial Group (SBIG), according to the UN website.

Despite prominence in economic activity, SMEs face a funding challenge. November 2014 figures from Souqalmal.com showed that a mere 28% of respondents had resorted to bank financing, while a full 31% were self-funded. This is a gap that Islamic finance offerings can address. Despite this obvious synergy, Islamic finance is still gearing up to effectively service SME needs regionally. The first challenge is one of volume: there are simply not enough Shariah-compliant banks around. This has a chilling effect on SME financing, particularly in those countries where local SMEs won't consider non-Islamic finance. However, the picture is changing for the better as Islamic finance becomes mainstream and is supported by better regulation.

Hawkamah, the Institute for Corporate Governance at the Dubai International Financial Centre and the first centre specialised in Governance in the GCC, is celebrating its 10th anniversary. Over the last decade, Hawkamah has offered advisory services and courses across the Middle East and North Africa region. The Centre is marking its 10th anniversary with the launch of several new strategic initiatives. One of Hawkamah’s milestones in the first quarter of 2016 will be the graduation of the first intake of the Women Directors’ Program, in collaboration with Dubai Women Establishment. The institute will also launch the Arabic version of its flagship ‘Director Development Program’, the DDP. The aim of the programme is to build an understanding of corporate governance and increase the capacity of business leaders.

For the third year running, DP World is the top stock in the S&P/Hawkamah Pan Arab ESG Index. The index is the first of its kind in the Arab world and ranks the transparency and disclosure of regional listed companies based on Environmental, Social and Corporate Governance (ESG) metrics. The participants are derived from the top 150 Pan Arab companies, by total market capitalisation, listed on stock markets of Bahrain, Egypt, Jordan, Lebanon, Kuwait, Morocco, Oman, Qatar, Saudi Arabic, Tunisia and the UAE. The index is reconstituted once a year in December and the names of the top 10 companies are announced. It gathers information in the public domain, mainly from Annual Report and Accounts, to assess the leading company.

The City of London yesterday launched a new initiative which aims to cement London's position as a world leader in green finance. The Green Finance Initiative (GFI) will focus on how to mobilize the capital required to implement both the UN's Sustainable Development Goals and the Paris climate change agreement. The unveiling of the new project came as a separate report released by the UN Environment Programme (UNEP) at the GFI launch event highlighted how the UK is currently a global hub in the emerging green finance market. The report, which profiles the actions that have been taken over the past 15 years to incorporate environmental and social factors into the financial sector, argues the UK has evolved a distinctive model of innovation in sustainable finance.

C. James Townsend published the book "The Singularity & Socialism: Marx, Mises, Complexity Theory, Techno-Optimism and the Way to the Age of Abundance". Townsend explores past ideological ideas that critically examined the trajectory of our economies in relation to scientific and technological development, in doing so to reach a commonly accepted conclusion of which were shared by these various ideologies – a post-capitalist era of abundance and transcendence. Transhumanism is actually an extension and a longing to complete the Hermetic, gnostic and Alchemical vision of antiquity only now it is through the full and complete evolution of science and technology itself that humanity will be transformed and given eternal youth and life.

The “Global Financial Development Report 2015/2016,” published by the World Bank in September 2015 presents how long-term finance may lead to growth and prosperity in developing economies, based on research and analysis of the global financial services market and in addition recommends policies that the authors believe would increase it. According to the report, the use of long-term finance, which is defined having a time horizon exceeding one year, is more restricted in developing countries, especially for smaller firms and poorer households. The availability of equity is limited for firms of all sizes. In addition, the 2008 financial downturn reduced leverage by 0.3 percent for large firms and 1.56 percent for small and medium-sized firms.

Islamic finance is still not viewed as a viable career option by many college bound students. Neither is it offered at many colleges, especially in the Middle East. Over the last decade, the industry has witnessed impressive growth, but there has not been a corresponding increase in the education in terms of the availability of expertise. Many of the programs have addressed the academic need in terms of providing Bachelors- Masters and PhD programs. The investor, however, needs more. There is only a small group in the Islamic world that is interested in academic accreditation of that sort. The larger majority however, demand professional certifications.

Thousands of Muslims in Chicago use the Islamic finance system while also using traditional banks and conventional financing structures. Cynthia Shawamareh, Islamic law and finance lecturer at the University of Chicago, described how Muslims in the U.S. find it more challenging to follow faith-based financing. Some Muslims in the U.S. obey the Shariah-based financial system with different workarounds to process their economic operations under the purview of Islamic finance while still operating in mainstream American financial systems. The Devon Bank initiated a Shariah-based financing alternative for its Chicago customers in 2003, creating a system of residential mortgage and commercial leasing options that are Shariah-compliant.

Dr. Bronwyn King, an oncologist, persuaded 34 Australian superannuation funds to divest from tobacco manufacturers. Tobacco stands alone when compared to all other industries or products. Firstly, there is no safe level of exposure. When used as intended, tobacco will have contributed to the early death of two out of three smokers. Secondly, the scale of the negative impact of tobacco is profound, causing an estimated six million deaths per year globally. Thirdly, positive influence of the industry through professional engagement is futile. The eventual outcome from King's initiative Tobacco Free Portfolios is for the finance sector to have a tobacco free investment mandate.

A new International Finance Corporation (IFC)-supported report by Wamda Research Lab finds that although support for entrepreneurs and start-ups has grown substantially across the Middle East and North Africa, many challenges remain, hindering job creation and economic growth. In Exploring Conditions for Entrepreneurs in Egypt, Jordan, Lebanon, and UAE Wamda surveyed nearly 500 entrepreneurs from the four countries, which have seen the majority of entrepreneurship development initiatives in the region. The report looks at the main trends in entrepreneurship and the challenges entrepreneurs face in growing their businesses. Access to finance is one of the main challenges cited by entrepreneurs in the report.

On Oct. 30, 2015, Standard & Poor's Ratings Services lowered its unsolicited long- and short-term foreign- and local-currency sovereign credit ratings on the Kingdom of Saudi Arabia to 'A+/A-1' from 'AA-/A-1+'. The outlook remains negative. At the same time, S&P revised its transfer and convertibility (T&C) assessment on Saudi Arabia to 'AA-' from 'AA'. Standard & Poor's has converted its sovereign credit ratings on Saudi Arabia to "unsolicited" following Saudi Arabia's decision to terminate its rating agreement. A pronounced negative swing in Saudi Arabia's fiscal balance has prompted our downgrade. The kingdom has run fiscal surpluses over the 10 years to 2013 (averaging 13% of GDP).

Islamic services and products have seen significant growth over the recent years, said Dr. Abdulrahman Al Hamidy, Director-General and Chairman of the Board of Arab Monetary Fund (AMF). Al Hamidy said in his welcome address at the four-day Islamic Insuranceprogramme that since 2000, the Islamic finance industry has grown by up to 20 percent to US$2 trillion by the end of 2014. He noted that the delivery of Islamic insurance services offered a testament to the robust evolvement and expansion of the Sharia-compliant banking services and solutions. Twenty-four participants from 12 countries are attending the event, which is being jointly organised by the Abu Dhabi-based AMF and the World Bank.

Saudi Arabia is considering offering shares in the largest oil company in the world, Saudi Aramco, in an initial public offering (IPO) which may mean that assets of about 3.63 trillion US dollars will be accessible to citizens and investors. Saudi Aramco yesterday confirmed that it had been considering various options to provide the opportunity to a large segment of investors via an IPO in the finance market. The company said in a statement that it is studying two scenarios to present its shares for an IPO; the first is to sell an appropriate share of its assets directly, and the second is to offer a package of major projects for the IPO in several sectors, particularly the refining and chemicals sector. In addition to this, Aramco could sell about 5% of its assets which amounts to about 181.5 billion dollars in the stock market.

Jura Energy Corporation has announced that its wholly-owned subsidiary, Spud Energy Pty Limited ("SEPL"), has entered into a secured long term syndicated financing arrangement totalling Pakistan Rupees ("PKR") 750 million (US$7,153,500) effective December 18, 2015. The syndicate is comprised of Al Baraka Bank (Pakistan) Limited ("ABPL"), the lead arranger and JS Bank Limited ("JSBL"), a related party of Jura, with participation of PKR 500 million and PKR 250 million respectively. The Facility will carry a mark-up at the rate of 3-month Karachi Inter Bank Offered Rate ("KIBOR") (6.48% using the State Bank of Pakistan posted rate on December 29, 2015) plus 2.75%, maturing five years from the date of disbursement.