IslamicFinance.de

Dr. Mark Mobius, Executive Chairman, Templeton Asset Management, is set to give a Special Keynote address at the CIBAFI Global Forum to be held in Bahrain. Mr Mobius will cover the following topics: Thoughts on how finance can contribute to sustainable growth of the economy; Insights on how financial markets in the global and emerging markets are expected to perform; Expert views on MENA market and the impact of oil prices on economies; Assessment of and what structural reforms are required to spur good growth; The potential growth markets in mid-to- long terms; Lessons for Islamic finance.

The recent instructions issued by the Qatar Central Bank (QCB) for insurers operating in Qatar are credit positive. These instructions are related to licensing, regulations and controls, risk management, accounting and actuaries reports. The instructions include prudential requirements and took effect this month. Insurers that will benefit from the new law include the largest Qatari insurance groups: Damaan Islamic Insurance Company, Qatar Insurance Company, Qatar General Insurance & Reinsurance Company, Doha Insurance Company, Al Khaleej Takaful Group and Qatar Islamic Insurance Company.

Dubai Islamic Bank (DIB) has listed its latest sukuk worth $500 million on Nasdaq Dubai, bringing the bank’s total sukuk listings on the region’s international exchange to $3.25 billion. Following a total of seven sukuk listings this year by regional and international issuers, the total value of sukuk currently listed in Dubai has reached $42.61 billion, the largest amount of any listing centre in the world, underlining the rapid expansion of Dubai as a global capital of the Islamic Economy. Given the challenging market conditions, it was critical to have a strong credit come in and successfully close a deal, said Dr Adnan Chilwan, group CEO, DIB.

The Daaboul Industrial Group (DIG) was established in Syria by Mohammed Daaboul in 1976. After almost 40 years the family patriarch is still the acting chairman of the family-owned group and is considered as one of Syria's living legends. By increasing the revenues with consistent growth rates of 20%-25% per annum until 2013, Mohammed created one of the largest aluminum producers in the Middle East. The constant growth was not sustainable without someone clearly defining actual roles and responsibilities and creating a rigid reporting culture within the family. A future goal for DIG is to add senior professionals in key positions to the group.

The 11th annual World Takaful Conference concluded its two-day proceedings, following the launch of an intelligence report by the forum’s conveners, Middle East Global Advisors. "The Finance Forward World Takaful Report: Connecting the Dots, Forging the Future" was launched as part of WTC’s commitment to supporting the Takaful industry. The Report provides a way forward to addressing various challenges ranging from price wars and pricing regulation, to closing the gap of human capital, and includes contributions from UK & Netherlands-based boutique consultancy, Takaful Outsource. The 12th annual edition of WTC will take place in April 2017.

The value of sukuk being issued in the GCC has been falling, but there is still opportunity in the market, Zamir Iqbal, lead financial sector specialist at the World Bank said. The potential lies in the huge infrastructure financing, but a proper legal and tax environment for the structuring of the sukuk and the SPV laws must be established. There’s already excess liquidity in the market, and banks are looking for high-quality, highly-rated sukuk, Iqbal noted. The International Monetary Fund said in November that the GCC region was suffering from a lack of availability of Sharia'a compliant financial instruments, or tradable assets, leading to excess liquidity and to an uneven playing field for Islamic banks.

Oman’s market watchdog Capital Market Authority (CMA) has announced its new sukuk regulation, which includes stipulation on establishing a trustee structure and an LLC company as a special purpose vehicle for issuing sukuk. The regulation, which is effective from Wednesday, also allows structure of the sukuk subject to the approval of respective Sharia Supervisory Board issuer and the choice of the board is left to the issuer. The regulation made rating optional for the issuer and there is no restriction on the sukuk amount to be raised based on the company’s capital. The regulation will complement the existing bond regulatory framework.

Qatar has teamed up with American billionaire and co-founder of Microsoft Bill Gates to combat poverty. Representatives from the Qatar Development Fund pledged $50 million to the Lives and Livelihood Fund, a $2.5 billion fund established by Bill and Melinda Gates Foundation and the Islamic Development Bank, in an effort to provide financing for some of the world’s poorest Muslim countries through grants and shariah-compliant loans at below market rates. The fund’s projects will focus on four areas including infectious diseases control and eradication, primary healthcare, agriculture and food security, and basic infrastructure.

In a statement to Dubai Financial Market, it was reported that Ajman Bank’s AGM has approved and ratified a proposal from the board of directors to increase the bank’s capital base. Under the proposal, Ajman Bank’s authorized capital will become AED 2.1 billion and the paid up capital will increase from AED 1.05 billion to AED 1.55 billion.

The Islamic insurance penetration in Qatar far exceeded that in the Middle East, where lack of differentiation and associated pricing pressure, along with poor distribution networks, are key challenges for the takaful companies, though the region made the early moves to establish Islamic insurance, according to A M Best. The overall penetration figures for the Middle East mask underlying differences between various countries in the region with Bahrain and Qatar both enjoying good takaful penetration rates of 22% and 13%, respectively compared to the Middle Eastern average of 8% in 2014, A M Best said in a report ‘Takaful Life and Nonlife Issue Review’.

Regulators of financial markets in the Gulf Cooperation Council (GCC) are urged to develop the infrastructure and regulatory framework in order to boost the sukuk market in the region, according to Zamir Iqbal, a World Bank expert. The sukuk market in the GCC presents ample opportunities, especially as governments are likely to resort to it for capital given the plunge in their revenues from lower oil prices, the lead financial sector specialist at the World Bank said. Iqbal added that the overall debt and capital market in the region needs to be strengthened with laws governing elements such as investor protection, and how to handle disputes and insolvency, among others.

Gemeinschaftsbank für Leihen und Schenken (GLS), a German bank that focuses on investing in socially responsible and ecological projects, recently invested EUR 13 million (USD 14.5 million) in Sanad Fund for MSME, a Luxembourg-based public-private partnership that provides debt and equity financing in the Middle East and North Africa. As of March 2016, Sanad has raised total investor commitments of USD 186 million. As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a loan portfolio of EUR 1.7 billion (USD 2.1 billion) and 165,000 customers.

Bank of Tokyo-Mitsubishi UFJ (BTMU), through its newly established Dubai branch, has become the first Japanese lender to provide Shariah-compliant corporate financing through an overseas branch after respective regulations have been loosened by Japan’s Financial Services Agency last year. The bank said it is issuing a $200mn loan to a unit of Saudi Arabian national mining company Ma’aden. BTMU launched an overseas branch in October last year in the Dubai International Financial Center with an Islamic window after receiving permission from the Dubai Financial Services Authority. The bank is currently preparing a number of Islamic products with an initial focus on commercial loans and trade finance services.

American Express said it had not witnessed a rise in credit card debt in the Gulf region, despite over a third of households reporting they had spent more than they planned last year and one in four in the United Arab Emirates (UAE) saying they had contributed less to their savings and pension. Despite the economic headwinds across the region, Amex's research titled 'Spending Habits in the GCC: A Research Report' shows little slowdown in the volume of spending, CEO Mazin Khoury said. Khoury told Zawya he had not seen any increase in levels of credit card debt and that he was not concerned about changes in repayment trends, despite rising consumer spending levels and a more challenging financial environment as a result of lower oil prices and slower economic growth.

The Saudi Capital Market Authority Board approved the Investment Accounts Instructions after publishing the Draft Instructions on the CMA's official website for 30 days, and reviewing the concerned and interested parties' comments and observations. The Investment Accounts Instructions comprise 17 articles regarding several aspects of investment accounts such as the mechanism on how to accept clients, availability of specific data to open an investment account and instructions of opening and operating the investment account. The Instructions also include the specifications to open investment accounts.

Dubai-based lender Emirates Islamic is laying off 200 staff to cut costs, according to a report. An un-named source confirmed that the bank was downsizing its workforce. However, Emirates Islamic declined to deny or confirm the report. Several banks in the United Arab Emirates have trimmed local operations as they look to reduce costs. Barclays is reducing its Dubai workforce by 150 people and closing its offices in Emaar Square. Earlier this year, the National Bank of Ras Al Khaimah also revealed that it will cut expatriate staff as it seeks to reduce its headcount by up to 250. The overall banking industry across the GCC is slowing because of low oil prices.

Shareholders with Bahrain-based Ithmaar Bank recently approved of the new group structure plans that will help the core retail banking business grow along with the bank’s strategic focus. The new plans were part of a proposal from the bank's board of directors and are still subject to approvals and further changes. The new structure will better allow the bank to compete with the global market. Ithmaar Bank Chairman Prince Amr Al Faisal said this new group structure will help lower the risk profile of the new banking entity and enhance shareholder value.

Warba Bank's financing portfolio grew by 40 percent to KD 543.8 million at the end of 2015, compared with KD 388.2 at the end of 2014. The bank's total assets reached KD 776.1 million at the end of 2015, compared with KD 594.8 million in 2014 with a growth rate of 30 percent, Vice Chairman and CEO Al Jassar Dakheel Al-Jassar added during the bank's general assembly on Wednesday. In 2015, the bank achieved significant growth in its operating income, which rose by about KD 7.7 million and amounted to KD 26.3 million, marking a growth of 42 percent compared with KD 18.5 million in 2014, Al Jassar stated.

Nogaholding, the holding company for oil and gas assets owned by the government of Bahrain, signed to obtain a five-year, $570 million murabaha financing facility. The Islamic funding will support investment in a number of large oil and gas projects in the kingdom, including the BAPCO Modernisation Programme, a liquefied natural gas import terminal, and the Bahrain Gas Plant Project. The facility is provided by 10 international, regional and local institutions: Arab Banking Corp, Ahli United Bank, Arab Petroleum Investments Corp, Gulf International Bank, National Bank of Bahrain, Qatar Islamic Bank, Kuwait Finance House, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas and HSBC.

UN study paper on the humanitarian financing gap.

Excerpt:
"The world today spends around US$ 25 billion to provide life-saving assistance to 125 million people devastated by wars and natural disasters. While this amount is twelve times greater than fifteen years ago, never before has generosity been so insufficient. Over the last years conflicts and natural disasters have led to fast-growing numbers of people in need and a funding gap for humanitarian action of an estimated US$ 15 billion. This is a lot of money, but not out of reach for a world producing US$ 78 trillion of annual GDP.