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Securities and Exchange Commission of Pakistan (SECP) Chairman Zafar Hijazi said on Wednesday the regulator is looking to enhance Shariah compliance in the capital markets by restructuring and reorganising the Islamic capital market. Speaking at the fourth Islamic Finance Expo and Conference as chief guest, Hijazi discussed in detail the roadmap for the promotion of Islamic finance in Pakistan. He added that the SECP is centralising the Shariah-related capital market activities besides improving the regulatory framework for Takaful, Modarabas, Islamic mutual funds, Islamic pension funds and Islamic real estate investment trusts (REITs).

Sabana Shariah Compliant REIT (SGX: M1GU) had released its fiscal first-quarter earnings yesterday evening. The real estate investment trust is sponsored by the small conglomerate Vibrant Group Ltd (SGX: F01). Currently, Sabana REIT owns a portfolio of 23 properties in Singapore, with assets worth a collective S$1.3 billion. Sabana REIT had achieved revenue of S$25.4 million in its fiscal first-quarter (three months ended 31 March 2015), a slight 3.2% year-on-year increase. However, its net property income only managed to grow by 1.1% from a year ago to S$18.6 million as a result of much higher property expenses. Besides, Sabana REIT’s net asset value per unit has decreased slightly to S$1.06 as at 31 March 2015 from S$1.09 a year ago.

Central banks in developed economies have created an environment of ultra-low interest rates to rekindle economic growth and to battle falling inflation. They’re doing this by keeping policy rates close to zero and “printing money” on an unprecedented scale via a veritable alphabet soup of programs, such as QE, CE, LTRO and TLTRO. These low interest rates have put a lot of pressure on investors, such as pension funds, to generate a decent return, setting off a massive search-for-yield frenzy. As a result, foreign investors current allocate more than $4 trillion to emerging and developing economies. Cheap foreign money can be highly addictive. It produces a pleasant growth buzz at first.

Is it fair to compare Greece with Lehman Brothers? May be not, but in fact many would want to figure out, what would happen if sometime later, e.g. in summer Greece would default. Will it be like Lehman? Wouldn't a country's default be more serious than a bank's?

Thus the question is how to compare the size of a country with a size of an investment bank? Surely not exactly but some figures are indeed interesting:

The economy of Greece has a national income of USD 242 billion (nominal gross domestic product) according to World Bank statistics for the year 2013. And the GDP to Debt ratio is said to be around 174%.

http://en.wikipedia.org/wiki/Economy_of_Greece

Lehman Brothers back in the 2007 annual report showed a net income of USD 4 bn. With long term borrowing of Lehman stood at USD 123 bn this would look much worse in terms of income and debt level than Greece. A better comparison for debt sustainability would need to take into account the assets of a country and a corporate of course. Lehman had reported USD 691 bn. What are the national assets of a country???

https://www.zonebourse.com/NB-PRIV-EQ-PARTN-56192/pdf/87896/NB%20PRIV%20...

The Kuala Lumpur-based Islamic Financial Services Board (IFSB) has released final guidance on liquidity risk management for Islamic banks, which may spur national authorities to issue more sukuk and establish sharia-compliant deposit insurance schemes. The guidance note, known as GN-6, clarifies the tools that Islamic banks can use to meet Basel III regulatory requirements, now being phased in for both conventional and sharia-compliant banks around the world. It defines the types of high-quality liquid assets (HQLA) that Islamic banks can hold and the weights that should be assigned to Islamic deposits.

Russia hopes to learn from the experience of Azerbaijan in the field of Islamic banking, said Sergey Drobyshevsky, the scientific director of the Gaidar Institute for Economic Policy in Baku. He said the presence of IBA Moscow, a Russian subsidiary of the International Bank of Azerbaijan, must contribute to this. Drobyshevsky believes it will be easier for the Azerbaijani banks and businessmen to work in Russia than the Malaysian specialists of that sphere. Behnam Gurbanzada, the director of Islamic banking at the IBA, earlier called Russia a "promising" platform to further the development of Islamic finance.

Dubai's drive to develop its Islamic finance sector is fuelling growth of sharia-compliant banking but the benefits are unevenly distributed, with some lenders struggling to compete against burgeoning competition. Several initiatives announced by Dubai could have a big impact on the Islamic banking sector but have not yet materialised. One such initiative is a central sharia board of Islamic scholars that would oversee the sector. This could reduce costs for banks and increase the confidence of customers. Another project still in the planning stage is the world's first fully sharia-compliant export-import bank, which could spur the growth of Islamic trade financing.

Middle East buyers took up only 2% of the 30 year sovereign Sukuk issued by Malaysia (the 10 year issuance allocation consisted of 24% Middle East buyers). This low take up by Middle East can be read a few ways: 1. Sukuk primary subscribers remain hold to maturity investors, and a 30-year note was too long for Middle East buyers to commit to. 2. The drop in price of oil is hurting and Gulf investors are planning only up to a ten year horizon. 3. With the issuance being oversubscribed and attracting interest of over US$9 billion, Malaysia decided to be give Gulf investors only the shorter term ten year issuance. 3. CIMB and Standard Chartered did a great job of marketing to Asian buyers, whilst HSBC did a less stellar job in the Middle East market.

Turkey, as the chair of G20 group, promotes Islamic finance because it offers additional financial instruments with less uncertainty and shared risks, according to the country’s deputy prime minister Ali Babacan. His comments were made during a panel discussion at the annual spring meetings of the IMF and World Bank Group in Washington. Islamic finance is safer, according to Babacan, who cited the 2000 and 2009 financial crises. Also for regulation purposes, macro credential purposes, it is considered as a less risky kind of financing means, he added. The more countries develop stronger legal frameworks to support Islamic finance, the more attention the system would get as issuers and investors who are sensitive to Islamic rules participate in the structure.

Pervez Said is no stranger to adversity. In his 33 year-long career, he has worked with 10 different organizations, having served as chief executive at four different institutions. He is considered to be the pioneer of Islamic banking in Pakistan due to his instrumental role at the State Bank of Pakistan in the formative years of Islamic banking. But his current stint at the House Building Finance Company may well be the biggest challenge he has taken on yet. You can find excerpts from a recent interview in which Said discussed the housing crisis in Pakistan and the role HBFCL is playing in alleviating it following the article link.

We are pleased to inform you that the July - December 2014 issue of the Malaysian ICM Bi-annual Bulletin published by the Securities Commission Malaysia (SC) is now available online at the Source link below.

Zakat House Director General Ibrahim Al-Saleh applauded Kuwait Finance House’s support to Zakat House to execute charitable projects that serve the community. Al-Saleh praised, during receiving a cheque with a value of KD 5,878,129 million from KFH’s Chief Executive Officer, Mazin Saad Al-Nahedh, KFH for collaborating with Zakat House which contributes to accomplish the goal of encouraging charity and the spread of meanings of brotherhood among various segments of the society. It’s worth noting that the donated value will be distributed to help the poor families in Kuwait, to support charity committees and societies working in the field of humanitarian aid and to execute pro bono projects as per the rules and regulations of Zakat House.

The Money we are working towards here is a value-led means of exchange – the manifestations of value being decided by its users – the commoners. What follows is a consideration of three important design areas from a commons perspective: convertibility, the equitable allocation of issued money, and how to provide capital investment; followed by a comment on division of labour. The paradigm of money as a common pool resource may be able to provide insight and encourage radical monetary innovation. New money forms do not need growth. Designers can choose to exclude or discriminate against deprecated behaviours, recognise and reward behaviour compatible with an explicit transparent value-set, and prioritise the well being of commoner-insiders.

XL Group P.L.C. and London-based managing general agency Cobalt Underwriting Services Ltd. have launched a Sharia-compliant equine coverage. The policy, which is sold through Lloyd's of London, covers named perils, mortality, theft, infertility and permanent disability. No further information on the policy limits or premiums was given.

Sydney-based Waratah Resources Limited plans to launch an Islamic commodities trading business as it shifts focus from Asian markets to the Middle East. The move adds to a growing number of firms keen to tap into an Islamic finance market that is developing beyond its traditional homes in the Middle East and southeast Asia. Waratah will setup a company domiciled in the Malaysian offshore finance centre of Labuan under a 50/50 joint venture agreement with Malaysia's Amanie Holdings, an Islamic finance advisory firm. The firm's next goal is to secure funding arrangements with partners who have been introduced by its sharia partners over the past few months, to provide the required capital for its joint venture vehicle, said executive chairman Ben Kirkpatrick.

Bahrain-based Gulf Finance House (GFH) has won approval from the shareholders for a reduction in the group’s issued and paid-up capital. GFH board chairman Dr Ahmed Al-Mutawa said the rate of reduction approved is six shares for each 10 shares held at a nominal value of $0.265 per share, thereby resulting in elimination of $897 million of accumulated losses. In addition to this, the investors also discussed the continuation of GFH’s shares listing in London and Kuwait Stock Exchange and authorised the board of directors to adopt the necessary resolutions in this respect. The firm reported a consolidated net profit of $17 million for the year 2014.

Geopolitical entanglements and new Cold War era tussles with the west, compounded by lower oil prices, have brought the Russian economy to its knees. Investment prospects for the Eurasian giant appear bleak, with credit ratings agencies Standard & Poor's and Moody's downgrading its economy to 'junk' status earlier this year. For support Russia is turning its attention to the Muslim populations of its various republics. Around 14 per cent of Russians follow Islam. However, the tradition of centralisation in the Russian Federation offered until now little room for the growth of Islamic finance. This, however, appears to be changing.

Investors are no closer to understanding how the opening of Saudi Arabia’s stock market will work than they were in August, when the country published draft rules on the plan. Eleven weeks before the deadline that the Middle East’s largest bourse set itself to give foreigners direct access to the market, the Riyadh-based Capital Market Authority has yet to explain how it will square the new rules with existing restrictions on foreign involvement in Saudi businesses. The lack of clarity underscores the difficulty the world’s biggest oil exporter has in giving outsiders greater influence. The kingdom is seeking to attract increased investment to the $521 billion stock market without angering conservatives dedicated to preserving the nation’s Islamic roots.

Turkish Islamic asset manager Alkhair Capital plans to launch new funds this year and will start a service to advise on Islamic bonds, its general manager Ali Ilhan said. Alkhair Capital, majority-owned by Bahrain's Bank Alkhair, is the only full-fledged Islamic investment firm in the country, with AZ Global and BMD Securities offering some sharia-compliant products of their own. Last month, the firm raised its capital to 5 million lira ($1.86 million) from 2 million lira, to meet new capital requirements coming into force in July, a move that will also help fuel its expansion drive.

According to a survey for Zurich International Life by YouGov, 71 per cent of UAE residents will receive a company bonus during 2015. However, for 39 per cent of bonus recipients, the primary use of their payment will be to settle debt, with a further 16 per cent using the bonus to pay bills, such as rent or school fees. Another 13 per cent of respondents said they will leave their bonus in the bank, 11 per cent will invest in property and 10 per cent will invest in a savings scheme, while only seven per cent will spend the majority of their bonus. Besides, only 44 per cent of expats believe they will fulfil their financial goals when they leave the UAE.