IslamicFinance.de

At the 5th Global Islamic Finance Awards (GIFA) 2015 held at the Gulf Convention Center, the CEO of Islamic Corporation for the Development of the Private Sector (ICD), Mr Khaled Al-Aboodi, was awarded the "Islamic Finance Personality of the Year" for his contribution to the development of the Global Islamic finance industry. The Global Islamic Finance Awards (GIFA) aims to highlight the best practices in Islamic banking and finance, and honor the efforts and contributions of individuals and institutions in the Islamic finance industry. Previous award recipients of GIFA include leaders such as Tun Abdullah Badawi, former Prime Minister of Malaysia and HE Shaukat Aziz, former Prime Minister of Pakistan.

Egypt's Wethaq Takaful Insurance is to launch its first real estate fund during upcoming general assembly scheduled for next November, head of financial and administration affairs Abdel El Aziz Labib said. Wethaq will present 50 million Egyptian pounds (US$6.4 million) as an initial capital for the new fund. The Egyptian Financial Supervisory Authority (EFSA) has granted initial approval for the fund. Wethaq intends to raise the capital of its fund to 250 million pounds within few years after inception, a step toward a plan to launch another fund. Furthermore, Labib said Wethaq's talks with the Egyptian regulator had also included a proposal to establish a new subsidiary to manage the new fund. The new subsidiary shall be 20% owned by Wethaq Egypt, he added.

The Bank of Ghana is in the process of licensing Islamic Bank, which is expected to provide interest free loans to its customers across the country. The Central Bank Governor, Dr Henry Kofi Wampah, told journalists at a press conference in Accra that the Banking Supervision Department of his outfit is working assiduously to issue new banking licenses to Islamic Bank, as well as the Ghana Armed Forces Bank by the close of the year. Research from Lotus Capital Limited in Nigeria shows there is a growing appetite for Islamic finance as approximately 30 per cent of the Muslim population around the world would be interested in Islamic finance. Nevertheless, the operations of Islamic banks give rise to a unique set of risks, in addition to the standard risks associated with banking activities.

Indonesia is drawing interest from Middle Eastern banks seeking to tap the world’s biggest pool of Shariah-compliant investors as some Islamic lenders wind down or close operations in Malaysia and Singapore. Emirates NBD PJSC wants to invest at least US$300 million in a new Shariah lender or acquire a stake in an existing one. The investments would be a boost for Indonesia in its ambition to become an Asian hub in the US$2 trillion industry. Emirates NBD’s plan comes as Kuwait Finance House prepares to close its Islamic operations in Malaysia, while Bahrain’s Elaf Bank BSC has already done so. DBS Group Holdings Ltd is winding down its Singapore arm catering to Muslims.

World Islamic finance market is set to almost double by 2020 from the current $1.81 trillion to $3.25 trillion, led by banking and Takaful assets, a study has revealed. Commercial banking contributes to about $1.34 trillion, while $33.4 billion is contributed by takaful insurance, while sukuks contribute to about $295 billion of the world Islamic Finance market. The growth has been fuelled by banking and Takaful assets, which have grown 12 per cent and 10 per cent respectively, while sukuk and funds witnessed modest growth of 6 per cent and 7 per cent respectively. However, the continued presence of significant macroeconomic and geopolitical hazards do not augur well for Islamic Finance sector.

Pak-China Joint Chamber of Commerce and Industry (PCJCCI) has called for making the businesses and commercial activities in accordance with Islamic financial laws. The PCJCCI President Shah Faisal Afridi said all stakeholders should understand the limitations at this stage and work towards its advancement to develop an economic system truly reflective of the sacred principles of Islam. According to Global Islamic Finance Report, Pakistan ranked at number nine in the world in terms of development of Islamic financial services industry in the country, and second largest Islamic market (population-wise) after Indonesia, and could become the most important player in Islamic banking and finance, if it attained 20 percent market share.

The Islamic Corporation for the Development of the Private Sector (ICD) and the Regional Council for Public Savings and Financial Markets (CREPMF), Regional Financial Market Regulatory Body of the West African Economic and Monetary Union (WAEMU) zone sign a partnership and cooperation agreement to promote Islamic finance in the WAEMU sub-region. The goal is to help mobilize long-term resources of the Union Member states and private sector companies, especially SMEs. The agreement covers the cooperation, the exchange of information, the development of the regulatory framework in order to create an enabling environment for Islamic finance, and the sharing of experiences and expertise of both institutions in the agreed areas.

News that Islamic Bank of Asia, a subsidiary of Singapore’s banking major DBS, will be closing down left the Islamic finance community in the city state baffled. The institution was founded just eight years ago by DBS to tap the Islamic finance potential in Southeast Asia and beyond – with $500mn of paid-up capital shared between DBS and prominent Gulf investors. However, DBS announced in a statement to the Singapore stock exchange on September 14 that IB Asia “will be gradually wound down as it was unable to achieve economies of scale.” The wind-down will likely take two to three years. The apparent failure of IB Asia has been partly attributed to Singapore’s lacklustre regulatory framework for Islamic finance and the absence of a larger local client base.

The introduction of Islamic finance could be boon to development in Africa, say experts. Beyond the religious aspect, Islamic finance has been identified by many experts as a way to avoid the risks associated with speculation. Global ratings agency Standard & Poor’s (S&P) said in a recent report that new regulations and fiscal incentives could accelerate Islamic finance development in Africa, which could help the continent fund its infrastructural needs. Aware of the challenges, the African Institute of Islamic Finance has launched several initiatives aimed at developing the Islamic Finance sector. Besides, Ivory Coast is about to issue its first Sukuk in the amount of 350 billion CFA francs (roughly $700 million) with the support of the IDB.

Indebted Kuwaiti financial firm Investment Dar is seeking court approval to help close a 813 million dinar ($2.7 billion) debt restructuring. The new plan, called Dasman, is designed to overcome minority creditor dissent to earlier proposals by asking Kuwait's Court of Appeal to impose the deal on all creditors. The plan involves transferring Investment Dar's assets, and the management of their disposal, directly to creditors. About 60 percent of creditors have voiced support for the new plan, said Investment Dar. Investment Dar continued to defend legal action from a minority of creditors not supportive of the plan and who were pursuing claims against the company independently.

La Cote d’Ivoire s’apprête, après l’Afrique du sud et le Sénégal, à souscrire son premier emprunt obligataire (Sukuk) en vue de mobiliser 350 milliards de FCFA (environ 534 millions d’euros). Le pays compte sur l’appui de la Banque Islamique de Développement (BID). En Côte d’Ivoire, le gouvernement travaille, en partenariat avec la Société islamique pour le développement du secteur privé (Sid), à l’élaboration d’un programme quinquennal de mobilisation de ressources sous forme de Sukuk. La première émission est prévue pour fin 2015.

MSCI has announced the expansion of the existing MSCI Islamic Index Family with the launch of the M-Series that addresses client demand for financial screening criteria based on market capitalisation. The M-Series of indices uses three financial ratios in this process: total debt-to-market cap, cash and interest-bearing securities-to-market cap, and accounts receivables and cash-to-market cap. Using market capitalisation is argued, by some, to provide a more accurate representation of these ratios. In addition to screening companies based on financial ratios, the indices avoid companies involved in activities contrary to the principles of Shariah investment.

Kickstarter announced the company’s reincorporation as a public benefit corporation, meaning that the crowdfunding company is now legally obligated to make a positive impact on society. The company has legally changed its name from Kickstarter Inc. to Kickstarter PBC and is now required to submit an annual public benefit statement detailing its work for public good. The first of these statements will be issued in February 2017. The crowdfunding company still serves as a for-profit, while doubling down on its social mission of supporting creative endeavors. Time will tell what this move will mean for the company’s financial projections.

slamic finance is gaining prominence as a channel for China to expand its economic influence abroad as banks strengthen ties with Muslim-majority countries and Chinese companies start to tap offshore pools of Islamic funds. With a Muslim population of about 20 million, China has little reason to develop Islamic banking at home. But there are powerful reasons for it to get involved in the sector overseas. China wants to build stronger trade ties with Asian countries under its "One Belt, One Road" strategy to rebuild Silk Road trade links with Asia and Europe. The network will include the world's main centers of Islamic finance, the Middle East and Southeast Asia.

An interesting trend is developing in the halal sector: regional hubs are developing in places that have some local demand but not the size that would be significant markets on their own. Think of Malaysia (the largest) or Dubai or tiny Brunei. Each sees the halal sector as being strategic to their economic growth, and for Dubai and Brunei at least, as key aspects of their economic diversification. This trend has the potential to support global growth in the Islamic economy as well as SME development but need a lot of (costly) infrastructure put in place to open up the international side to SMEs.

Africa's strong demand for Islamic financial services and products was highlighted in the inaugural Africa Finance Forum 2015 held in Abidjan. Recent developments have seen African governments focusing more on creating a more enabling environment for sukuk issuances. Those that have not tapped into the sector have expressed keen interest in the market for infrastructure financing with legal frameworks underway to promote sukuk issuances. Although the Islamic financial services industry in Africa is currently dominated by the banking and sukuk segments, growth potential remains in the asset management and Islamic insurance. However, financial inclusion still remains the greatest challenge.

Iraq will seek up to $500 million in loans from the Jeddah-based Islamic Development Bank (IDB) to help cover its projected deficit, complementing the country's return to the international debt market, according to the bond's prospectus. Baghdad wants to raise up to $6 billion in a series of dollar-denominated bonds, Iraq's first in nine years, to fund salaries as well as infrastructure projects in the oil and gas, electricity and transportation sectors.

President Joko Widodo has laid out his invitation for increased foreign investment in Indonesia before the Islamic Development Bank, which already has sizeable interests in the country. Joko, on a tour of the Middle East, met with Jeddah-based IDB president Ahmad Mohamed Ali to discuss a wide range of topics, from ways to finance infrastructure projects and increase investment by Middle East countries into Indonesia, to expanding the nation’s Islamic banking industry. The IDB currently finances nearly $4.2 billion in development projects in Indonesia. The group is also processing a member-country partnership strategy with Indonesia for the 2015-2019 period.

The agreement Iran has reached regarding its nuclear programme could bring about its eventual economic rebound, and help boost Islamic finance, according to a report published by Standard & Poor's Ratings Services titled ‘Lifting sanctions augurs well for Iran's economy and the growth of Islamic finance’. Iran agreed the joint comprehensive plan of action with the P5+1 (China, France, Russia, the UK and the US plus Germany) in July. If the agreement is approved and Iran meets all deliverables, sanctions may start to lift in the first half of 2016. The World Bank estimates this would help Iran's oil exports rebound to pre-2012 sanction levels within 8-12 months. Sanctions lifting could also restore Iran's access to the global financial markets.

Qatar National Bank is among suitors that submitted final bids for Kuwait Finance House KSC’s Malaysian operations, people with knowledge of the matter said. Kuwait Finance House is evaluating offers from Qatar National Bank and at least one other party, according to the people. It may not proceed with the sale unless it can agree on a high enough price, one of the people said. Kuwait Finance House’s Malaysian unit had a book value of 1.7 billion ringgit ($395 million) and total assets of 10.5 billion ringgit at the end of December, according to its 2014 annual report. Offers for the business were affected by the difficult economic environment in the country, one of the people said.