IslamicFinance.de

The Islamic Corporation for the Development of the Private Sector (ICD), the IDB's private sector arm, will cooperate with ICBC Financial Leasing, a wholly owned subsidiary of ICBC, China's biggest lender by assets. China's population of Muslims is estimated at over 20 million but there is very little if any Islamic finance activity inside the country, and it is not clear whether the industry will develop the legal and regulatory backing to develop there. However, some Chinese companies see Islamic finance as a way to expand their trade and investment in fast-growing Muslim majority markets such as the Gulf and southeast Asia, and to access pools of capital there.

Demand for Islamic financial products has increased over the last decade—not just in the Gulf and Southeast Asia, but also in America. There are 5.7 million Muslims in the U.S. with $98 billion in disposable income, according to a report by DinarStandard, and many are looking for Sharia-compliant investments. But for many advisors in the U.S., it’s a peculiar market because not a lot of financial experts have expertise in Sharia law. Deals often involve multiple layers to enable them to be Sharia-compliant, and that can lead to added costs, such as double taxation. But one of the biggest issues is the diverging opinions about what makes investments Sharia compliant.

Malaysian fund manager i-VCAP Management has launched Southeast Asia’s first fully Sharia-compliant ETF, which will track equities in markets including Malaysia, Indonesia, Thailand, Singapore and the Philippines. Malaysia is arguably the planet's top market for Islamic and Sharia-compliant products, with an estimated US$135 billion or so in such assets. The MyETF MSCI SEA Islamic Dividend ETF is i-VCAP Management's third ETF, following the launch of two other similarly-themed Sharia-compliant ETFs.

International banks used to dominate Islamic finance. But their desire to innovate risked the market straying from its principles. Local and specialist firms have benefited from their withdrawal. Clearly there is immense growth potential. Nevertheless, many multinationals abandoned the field. At any of the innumerable Islamic finance conferences in the mid-2000s, one could more or less be guaranteed to see a familiar cast of characters onstage. The most likely would be a man who was not actually a Muslim: Geert Bossuyt, a Belgian who was the head of structuring for the Middle East at Deutsche Bank. Deutsche was a pioneer in Islamic structuring; for a period of three years it was a dealmaker and structuring brains trust without compare, even if some of its ideas, culminating in the deeply technical double wa’d, really did stretch the spirit of Islamic finance.

There are close to an estimated 500 million Muslim youth under 30, and they are social media-savvy, faith-inspired, connected to the Internet via their phones, and they are the middle class in the wait. Social media provide “access” to leaders, and leaders to constituents, where followers can favourite, share or comment; hence the companies, via their social media team, have an immediate or real time pulse on the sentiments of the people beyond traditional offline media sources on laws/regulations, developments, accomplishments etc. Social media is here to stay, grow and develop, and the young customers will be your best brand ambassador or your worst nightmare.

SEDCO Holding Group, a Shariah-compliant private wealth management organization, has acquired a 50% stake in Mektebim Okullari, a company operating in the private education sector in Turkey. Anees Moumina, CEO of SEDCO Holding Group, and Ümit Kalko, Mektebim's founder and Chairman, signed the accord. Under a partnership agreement with the Turkish company which currently operates 17 schools from pre-school to high school levels, SEDCO Holding Group will own 50% of the company's shares and play an active part in the company's growth strategy in the region. The schools currently have over 4,000 students and Mektebim Okullari will add 8 more schools this year to its portfolio and has many other projects under consideration.

China remains a major market that Islamic finance has not yet reached. But this could be set to change in the coming years – and one province in particular is leading the way. Ningxia, in the north-west of China, is an autonomous region where 35% of the population is Muslim and there has recently been talk of establishing an Islamic Financial Centre there in the next five to seven years. Local laws and tax regulations need to be modified to permit shariah-compliant investments. However, the effort could be undermined by cultural insensitivities such as allowing Muslim restaurants to serve alcohol alongside halal food. The growth potential of Islamic finance in China is huge given the country’s 1.3 billion population.

The CMA announced on Monday rules allowing foreign institutions to begin investing directly in the stock market, subject to restrictions such as a 10 percent cap on combined foreign ownership of the market. On the other hand, foreigners will be allowed to buy directly into initial public offers of shares in Saudi Arabian companies on a case-by-case basis. IPOs are a special matter because they are usually priced in Saudi Arabia well below market value, as a way to spread the kingdom's oil wealth among its citizens. Letting foreign investors buy directly into the offers could be politically sensitive.

We can see the second intelligent species coming from all directions in the form of self-driving cars, automated call centers, chess-playing and Jeopardy-playing computers that beat all human players, airport kiosks, restaurant tablet systems, etc. The frightening thing is that these robots will soon be eliminating human jobs in startling numbers. Marshall Brain’s new book “The Second Intelligent Species: How Humans Will Become as Irrelevant as Cockroaches” explores how the future will unfold as the second intelligent species emerges. The book offers a look at the future of the human race, and the choices we will need to make to avoid massive unemployment and poverty worldwide as intelligent machines start eliminating millions of jobs.

The government of Hassan Rouhani, Iran's centrist president, has made attracting foreign investment a priority since taking office as he seeks to create jobs and bring down a youth unemployment rate that stands at 25 per cent, as well as stave off any Arab spring style unrest.

The Islamic Corporation for the Development of the Private Sector (ICD) is considering options for support of the private sector in Azerbaijan. According to the Ministry of Economy and Industry, Minister Shahin Mustafayev has received Khaled Mohammad Al Aboodi, ICD CEO. During the meeting, the Minister proposed to cooperate in the industrial and agricultural sector including the project of the Sumgait Chemical Industrial Park and establishment of agricultural parks in Azerbaijan, the Ministry said. Aboodi expressed his satisfaction with the cooperation with Azerbaijan and proposed to expand it.

Fajr Capital has been recognised as the Middle East's "Private Equity Firm of the Year" at the Global M&A Network's Atlas EMEA Awards 2015. The company also collected the "Middle East Deal of the Year" award for leading a consortium of investors to acquire the Dubai-based oilfield services company, National Petroleum Services. Headquartered in the Dubai International Financial Centre, Fajr Capital has a portfolio consisting of companies operating across a range of demographic-driven sectors, including: financial services, infrastructure, education, manufacturing and renewable energy, among others.

The make-up of Islamic banks' loan books is changing in Pakistan and Indonesia with the growing use of profit-sharing contracts that could help Islamic finance win more customers in the two largest Muslim-majority countries. Murabaha has been the workhorse of Islamic bank financing globally, but after years of dominance the structure is losing favour in some areas to profit-sharing contracts such as musharaka, istisna and salam, which are seen by many scholars as closer to the economic principles of Islam. In Indonesia, the change is more gradual as murabaha still represents over half of all financing by Islamic banks.

The Asian Development Bank (ADB) and the Islamic Financial Services Board (IFSB) have announced the launch of a joint ADB-IFSB publication called "Islamic Finance for Asia: Development, Prospects, and Inclusive Growth". The book was launched by ADB Vice President, Stephen Groff during an ADB-IFSB panel discussion on "How Islamic Finance Can Contribute to Sustainable Growth in Asia", which took place on 4 May 2015 in Baku, Azerbaijan, during the ADB Annual Meeting 2015. The publication is a resource for better understanding the Islamic financial services industry in Asia, and a reference for jurisdictions in other regions that aim to understand, introduce and develop Islamic finance.

As part of the initiatives of the Dispute Resolution Authority (DRA), the DIFC has launched the DIFC Wills and Probate Registry, established by Resolution No. 4 of 2014. The new service aims to provide non-Muslim expatriates the ability to register English language wills that will allow their assets to be transferred upon death according to their wishes. The new rules have been drafted on the basis of Common Law principles from the Estates Act and Probate Rules of the UK, and legislation of other leading common law jurisdictions such as Singapore and Malaysia. While the rules are comprehensive, they are also easily accessible to legal professionals in the UAE.

The second International Investment Summit held in Istanbul between April 29-30 gathered international investment funds and investors from Qatar, Saudi Arabia, Kuwait and the United Arab Emirates, in total managing about 1.5 trillion dollars of Gulf investment funds. Turkey’s Science, Industry and Technology Minister Fikri I??k stated that Turkey is making huge efforts to facilitate foreign investments over the last decade, both for encouraging them to make joint ventures with the domestic firms and also investing jointly in third countries. Last year, Turkey has attracted about six billion U.S. dollars of foreign direct investment, while the country aims to reach 80 billion U.S. dollars annually.

Tumbling oil prices may have dented Gulf investors’ surplus reserves, but their appetite for high-yield overseas-based assets remains robust, says Korosh Farazad, Chairman and CEO of Boutique Investment Bank Farazad Investments Inc. (FII). Middle East investors, particularly those from the Gulf countries such as UAE, Kuwait and Qatar, are attracted to trophy assets that could yield a minimum of 8% return on their investments, he says. These assets are typically located in Europe, Turkey and North America, where a transparent legal system, relatively stable political and security environment, and strong macroeconomic fundamentals have proven to be appealing to overseas investors.

President of the Nasrul-Lahi-L-Fatih Society of Nigeria (NASFAT), Abdulahi Yomi Bolarinwa, speaks on how uneducated many Nigerians are on Islamic banking, resulting in uninformed comments on the financial practice. About his expectations from the incoming administration, he said the incoming government should work hard to improve the economy. The government should retool whatever Nigeria has in the power supply, work on its oil industry and explore other sources of income so that the country does not depend on one product - oil. NASFAT recently celebrated its 20th anniversary. The organisation teaches Nigerians to respect other religions and live in peace.

Fatima Qasimi has been appointed as the Chief Executive Officer of Aseel Islamic Finance. Ms. Fatima joins Aseel Islamic Finance with almost 20 years of experience in consumer, corporate and Islamic banking. She joined the FGB group in 2008 as Head of Corporate Banking. She has a Bachelor’s degree in Business Administration from Strayer University, Washington, USA and an MBA in Financial Management from South Eastern University, London, UK. In her new position as CEO of Aseel, Fatima’s focus is on developing two business models for the company to cater to the Islamic financing needs of UAE consumers and corporates, particularly SME and mid-market businesses.

Four weaknesses in the financial system explain Indonesia’s capitulation to the crisis in 1998: the undercapitalisation of the banking system, a substandard regulation and supervision, the lack of inter-bank competition and the availability of cheap credit from state-owned banks with low risk which provided no incentive for the corporate sector to raise funds in the capital and bond markets. Between 1997 and 2013, the Indonesian government adopted a number of policies to rebuild and modernise Indonesia’s financial sector. It is through these policies that the Indonesian government has effectively reduced risks and moved the Indonesia financial sector from a state of collapse towards a modern financial system.