IslamicFinance.de

Fundamental change is only achieved by a congruence of change, both from the bottom, and from the top, a double reconfiguration of classes to a new system. Socialist proposals cannot account for this. The owners of capital have zero interest in such a radical change of ownership, while the workers cannot point to any successful alternative patterns that could form the basis of a new society, instead having to opt for radical but unproven social experiments. The key problem therefore was that it could not point to any other proven alternative that would be more productive, and elicit congruent change both from the top and from below.

According to the recently released “Global wealth management outlook 2014-15: New strategies for a changing industry” by Strategy&, the GCC has been the most consistent of the emerging markets, recording growth of 16 percent or more each year since 2010 and doubling total private wealth from $1.1 trillion to $2.2 trillion for an overall compound annual growth rate (CAGR) of 17.5 percent. The UAE led the GCC countries with 25 percent CAGR, followed by Oman (21 percent) and Bahrain (18 percent), which grew from much smaller bases. Not surprisingly, high-net-worth individuals (HNWIs) continue to account for the largest chunk of the region’s wealth at 41 percent.

Qatar has called for a global regulatory framework for the industry, saying it is needed to ensure the sector's stability. An important task of the authority would, naturally, be to collect data on credit risks of Islamic financial institutions so that those risks could be identified, said the Governor of Qatar Central Bank (QCB). There are certain high-risk areas in the Islamic banking and financial sector and they, for example, include real estate and consumer lending to certain categories of people, H E Abdullah bin Sauod Al Thani said. Efforts have indeed been made to diversify Islamic financial products, but they are not enough.

The President of the Islamic Development Bank (IDB), Dr Ahmad Ali, will host an online press conference on Thursday, March 19th, 2015 at 09:30 GMT. Journalists interested in attending this online press conference will be able to ask questions live via the internet. The conference will be held in English, Arabic and French. This service is free and only requires a computer connected to the internet. Register on the following website: http://www.apo-opa.com/application.php?L=E&vc=ISB

Dentons advised the Islamic Development Bank (IsDB) on the update of the IsDB Trust Services Limited $10 billion Trust Certificate Issuance Programme completed on 24 February 2015. Dentons also advised the IsDB on the issue of $1 billion Trust Certificates due 2020 under the Programme, completed on 12 March 2015. The Programme was listed on the London Stock Exchange and NASDAQ Dubai. The Programme was arranged by HSBC and CIMB, HSBC, National Bank of Abu Dhabi PJSC and Standard Chartered Bank acted as Dealers. The Dentons team was led by Alex Roussos and included senior associate Beene Ndulo and associate Katie Phillips.

The efforts of proponents of Shariah-compliant investment in Malaysia, Dubai and elsewhere were fruitful in 2014. Several Sukuk offerings from non-Muslim countries represented a major breakthrough for a type of product that had previously been largely local in nature. Shariah-compliant equity and Sukuk investments remain relatively small in scale. Islamic finance is still a young industry in comparison with its conventional counterpart, growing fast but still representing a small fraction of global financial assets. The bulk of industry assets are still accounted for by Islamic bank deposit accounts.

Despite the green bond issuance market increasing more than threefold to US$36bn last year on 2013, according to the Climate Bond Initiative (CBI), the UAE is still uncharted territory. However, the race is on to release the world’s first green sukuk, and this country is looking like a strong contender for the first issuer of a green sukuk. Instead of hitting the conventional bond buyers, a green sukuk can attract conventional bond investors to those diversifying their portfolios. All it would take is one issuer to come out in the region to show the demand.

IdealRatings has launched of a Shari’ah compliant Asia-Pacific REITs Index, called the IdealRatings Asia-Pacific REITs Index, for the use of Fund Managers who are benchmarking REITs funds. For a start, the REITs Index will cover Asia-Pacific REITs and it will subsequently widen the coverage to include the entire global REITs universe. The market cap-weighted, free-float Index has a methodology to review the universe eligibility annually. The Shari’ah screening of the eligible universe takes place quarterly and the index is also re-balanced on quarterly basis. The IdealRatings Asia-Pacific REITs Index is calculated in US Dollars with REITs listed in Australia, Japan, Singapore and other countries.

The Federal Government of Nigeria has inaugurated an advisory council for the implementation of the Takaful insurance product in the country. he Minister of State for Finance, Ambassador Bashir Yuguda, who inaugurated the council in Abuja, stated that the move was part of the implementation of some of the reforms in the insurance sector. The minister said the inauguration was the result of the National Insurance Commission’s resolve to key into the National Financial Inclusion Strategy introduced by the Federal Government in 2012. The Chairman of the advisory body, Prof. Dawud Noibi, said the council would do all within its power to effectively discharge its mandate.

Ownership restrictions, corporate governance limitations and a lack of geographical or cash flow diversification are the key credit risk challenges faced by GCC’s family owned businesses from a rating perspective, said Martin Kohlhase vice president and senior credit officer of Moody’s. Despite such restrictions some of the long-established merchant families enjoy access to attractively priced sources of funding from local banks. Family-owned corporates often benefit from very competitive short-term domestic bank market funding rates suggesting they have a lower risk profile as compared to the ratings Moody’s would assign assuming a medium to long-term funding exposure.

According to Standard & Poor's (S&P), the replacement of Bank Asya's management and upcoming general elections do not create risks for the banking industry. The international rating agencies' ratings for Turkey are not affected by the decision by the Banking Regulation and Supervision Agency's (BDDK) in regards to the seizure of Bank Asia. S&P futher noted that the bank's share in the banking system was only around 0.1 percent and therefore does not create any systematic risk for the banking sector. Moreover, Turkey's banking system is being positively affected by geopolitical developments with Turkish banks benefiting from what is happening in Russia and Ukraine.

Islamic finance is surging across the globe, gobbling up an ever-increasing share of the more than $220 trillion in international assets outstanding. That is, everywhere except in the US and Canada. A combination of regulatory hurdles, a lack of proper rules and standards, and general Islamophobia can be blamed. Another hurdle is the requirement that US banks keep their risk ratios fairly low. In order to be compliant while also maximizing profit, banks usually invest in the huge supply of fixed-income securities such as treasuries and conventional corporate bonds, which are prohibited by Islamic laws. Despite the challenges, both the US and Canada are a natural fit as homes to the bustling and dynamic Islamic finance industry.

The Islamic Corporation for the Development of the Private Sector (ICD) and the African Export-Import Bank (Afreximbank) have signed an agreement under which they will cooperate in the development of the private sector in ICD member countries in Africa. However, Uganda is the only member ICD country in the East African Community. According to the agreement, ICD and Afreximbank will share information on projects and business opportunities in Africa and on participation in the arrangement of syndications or investment in funds. The two will also cooperate in structuring sukuk/debt capital market transaction opportunities, co-invest in Islamic leasing companies and support local financial institutions in Africa.

Although many states with large Muslim populations have set up businesses to offer alternative financing products that comply with Islamic law, no such companies exist in Maine. That means no credit cards, no mortgages, leaving little opportunity for Muslims in Maine to establish credit or participate in certain aspects of the state’s economy. Several organizations that assist immigrants and refugees in Maine have convened to examine the problem, which they say is holding back economic growth in some of the state’s most depressed areas. Despite those challenges, a surprising number of immigrants and refugees are starting businesses and creating jobs by relying on alternative financing methods such as borrowing from friends and family

Emirates Investment Bank (EIBank) has published its second “GCC Wealth Insight Report”, which outlines the views of high net worth individuals (“HNWIs”) across the Gulf on local and global economies as well as the main elements that define their investment and banking decisions. The Report found that GCC HNWIs are more positive about the economic situation in the Gulf region than globally. The more cautious approach to the global economy taken by regional HNWIs is matched by an increasing preference to keep assets closer to home, which has risen 19 percentage points since last year to 83 per cent. Regional HNWIs are also more likely to have a local rather than international bank to help manage their wealth compared to last year.

A recent study conducted by the International Monetary Fund (IMF) has explored the possibility of using Islamic finance for increased financial inclusion. Their recently published paper entitled ‘Can Islamic banking increase financial inclusion?’ concluded that there was weak and tentative evidence of Islamic banking’s positive impact on some types of inclusion. The IMF paper sais improving financial infrastructure, introducing more competition in the banking system, improving the quality of credit information, and enhancing the efficiency of the legal system would be instrumental in improving financial inclusion across the continent.

Arab Women's Enterprise Fund (AWEF) aims to empower poor women, increasing their income and well-being and ultimately improving their livelihoods and growth opportunities. The programme will do this by increasing their participation in markets through working with market actors to encourage the adoption of new practices and also by addressing constraints in the enabling environment. AWEF is an 10 million pouns market development programme that will work in Egypt, Jordan and the Overseas Palestinian Territories (OPTs). DFID will work in partnership with the Islamic Development Bank (IDB) who will contribute an additional 10 million pounds in sharia-compliant concessionary finance through financial intermediaries.

According to a new report by McKinsey Global Institute, Morocco is the most indebted among Arab and African countries. The kingdom’s debt-to-GDP ratio stands at 136 % or an increase by 20 percentage points of GDP. The analysis focuses on the debt of the “real economy”: governments, nonfinancial corporations, and households. The report has revealed that debt-to- GDP ratios have increased in all 22 advanced economies reviewed by the study. Morocco comes ahead of both Egypt and Saudi Arabia which have actually succeeded in reducing their debts. The report has also found that global debt has grown by $57 trillion or 17 percentage points of GDP since 2007, to stand at $199 trillion, equivalent to 286% of GDP.

Japan's three megabanks are considering whether and how they will offer financial services under Islamic law overseas now that the Financial Services Agency will allow them to engage in such operations at their foreign branches starting as early as April. Mitsubishi UFJ Financial Group would offer deposit and lending services that are permissible under Sharia at its Dubai branch in the United Arab Emirates as early as fiscal 2015, pending approval from the local authorities. Sumitomo Mitsui Banking Corp. may offer similar services at its branches in Dubai and Singapore. Mizuho Financial Group likely will make its London branch the operational centre for Islamic finance in the Middle East.

Dubai-based Emirates REIT announced that Eiffel Management has acquired a 25 per cent in the REIT manager that was previously held by Dubai Islamic Bank (DIB). The value of the transaction was not disclosed. The REIT Manager is responsible for running the property portfolio of Emirates REIT and all the operations concerning the REIT. It is incorporated in Dubai international Finance Centre and licensed by DFSA. Following the deal, Eiffel Management will own 100 per cent of REIT manager’s total issued share capital. Emirates REIT reported a net profit growth of 39 per cent to reach $48.5 million in 2014 from $34.8 million in 2013.