IslamicFinance.de

Despite the rapid economic and social development in countries across North Africa, the Middle East and South Asia, many companies may be wary of exploring new business opportunities in these jurisdictions due to the complexities with local laws governing foreign businesses and taxation. To respond to this, KPMG has launched a new guide – the Middle East, North Africa and South Asia (MENASA) Tax Guide 2014-15. The guide is available online, free of cost and provides a quick and easy summary of the main regulations affecting foreign companies in 19 countries across the region.

Malaysia is on track to become an international Islamic financial hub, Deputy Finance Minister Datuk Ahmad Maslan said. He said according to the Bank Negara Annual Report, Malaysia was ranked second after Saudi Arabia in Islamic banking with the total Islamic financial assets reaching RM599.5 billion, financing (RM408.1 billion) and deposits (RM472.1 billion). Ahmad said Malaysia was also ranked second after Saudi Arabia in takaful (Islamic insurance), while in the global sukuk market, Malaysia was ranked first with the United Arab Emirates trailing in the second place.

The State Bank of Pakistan has added to its Islamic finance push with the hire of a well known market specialist. Yavar Moini, the former head of Islamic finance at Morgan Stanley, has joined SBP as a director in Islamic banking.

Hong Kong's government is trying to maintain the territory's momentum toward becoming an Islamic finance centre, as other potential sukuk issuers show little enthusiasm. In September, Hong Kong made the first U.S. dollar-denominated sukuk issue by an AAA-rated government, a $1 billion (£636.3 million) deal that put it on the map in the global competition among banking centres to attract Islamic finance business. Since then, however, there have been few if any signs of other sukuk issuers emerging in Hong Kong - demonstrating that however hard governments try, they may struggle to develop Islamic finance sectors if a strong economic rationale is absent.

Malaysian sukuk investors are designing strategies for 2015 that will profit as a new tax both pushes up inflation and forces central bank rate increases. Malaysian consumer-price increases will average 4 percent in 2015, the highest in seven years, as a new consumption tax starts in April. One-year interest-rate swaps climbed to a six-year high of 3.87 percent this week. Experts recommend buying Islamic bonds in the middle of the so-called yield curve, which are less exposed to losses from inflation and interest-rate moves. The government will implement a 6 percent goods and services tax as part of efforts to cut the fiscal deficit that included scrapping fuel subsidies.

The Islamic Development Bank (IDB) has confirmed that it would provide financing worth $1 billion on the basis of an agreement to carry out various development projects in Cote d'Ivoire during the next two years. Cote d'Ivoire President Alassane Ouattara said that his country is looking forward to greater cooperation and partnership with IDB in various fields including capability building for sukuk in order to mobilize resources for development. The president also sought IDB loans to finance the country's infrastructure projects. The meeting saw the signing of a loan agreement worth $15 million to establish a vocational training center in the country.

The Kingdom joined the rest of the world in observing International Anti-Corruption Day on Tuesday to raise awareness about the importance of making Saudi Arabia a corruption-free country. The Anti-Corruption Day is observed by the United Nations every year on Dec. 9 in order to highlight the evils of corruption and its negative impact on government systems globally. To mark the occasion, Nazaha, Saudi national anti-corruption commission, hosted a forum. A seminar entitled “The role of medial and cultural institutions in maintaining integrity and fighting corruption” was organized by Nazaha on the sidelines of the event.

Last week Pakistan rejoiced at its ranking in the Corruption Perception Index (CPI) 2014 improved by a notch with a score of 29 out of 100 in a scale from 0 (perceived to be highly corrupt) to 100 (very clean) as per the report issued by Transparency International (TI). Denmark comes on top of the list with a score of 92 and North Korea and Somalia share last place scoring 8. The Corruption Perceptions Index (CPI) ranks countries and territories based on how corrupt their public sector is perceived to be. It's a composite index-a combination of polls- drawing on corruption - related data collected by a variety of selected institutions.

At a time of great reshaping, optimism and hope in the Arab world, entrepreneurs, especially the youth, have found new avenues in leading innovation. Large-scale transformations in some countries, combined with social dynamism particularly among the youth, have clearly put the employment challenge on the top of the regional agenda, with entrepreneurship being a key imperative. The UAE and other countries in the region are at the forefront of the global entrepreneurship movement. Hundreds of initiatives are being launched in the Arab World to drive and encourage innovation and the spirit of enterprise amongst Arab Youth.

BMCE bank is reportedly planning to create a new subsidiary specializing in Islamic finance. The group owned by the Othman Benjelloun, Morocco’s richest man, will embark on a joint venture with Saudi Arabia’s Al Baraka Banking Group to create a new subsidiary specializing in Islamic finance. Al Baraka Banking Group will reportedly hold 51% of the new subsidiary while the Moroccan bank BMCE will hold the remaining 49%. Several BMCE executives have received training on Islamic finance in Jordan and Turkey. The step follows the adoption of the law authorizing the creation of participatory banking by the parliament.

Le 25 novembre dernier, après plus de deux années d’attente, le projet de loi n° 103.12 relatif aux établissements de crédit et organismes assimilés a été adopté à Rabat. Il définit le statut des banques islamiques au Maroc et précise les produits qui pourront y être commercialisés. La loi va permettre non seulement la création d’institutions dites "participatives" mais aussi aux entreprises marocaines qui le souhaitent de se financer via des émissions de sukuk. En faisant le choix d’offrir un cadre législatif adapté aux spécificités de la finance participative, le Maroc met tout en œuvre pour assurer un développement pérenne sur son sol.

The Islamic Social Finance Report 2014 is a thorough analysis of the current state of three institutions of Islamic philanthropy: zakah, sadaqah and awqaf, in seven countries of South and Southeast Asia - India, Pakistan, Bangladesh, Malaysia, Brunei, Indonesia and Singapore. The report is written by the Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group, with research led by prominent economist Dr Mohammed Obaidullah.

The ‘Arab Knowledge Report 2014: Youth and Localization of Knowledge’ was launched in Dubai on Wednesday, the second day of the First Knowledge Conference. To meet increasing social and economic development challenges, Arab countries must integrate better in today’s global knowledge economy. Their most effective route toward that end is investment in empowering the full and active engagement of their youth in processes of knowledge generation, transfer and localization, the report says. The report applauded the UAE’s efforts to build the capacities of its human capital, particularly its youth.

Investment Dar, the Kuwaiti firm best-known for its stake in luxury carmaker Aston Martin, hopes to complete a second debt-for-assets deal with creditors by the end of March. The firm has received the backing of a significant majority of investors for the proposal, which would see creditors voluntarily exchanging debt for ownership of a portfolio of assets. No details or terms for the so-called settlement-in-kind proposal have been released, although the Nov. 18 update said there would be no losses imposed on creditors under the plan and no change to the existing maturity of the debt.

Kenya plans to create an enabling regulatory framework to boost Sharia financing in the country. The country's Capital Market Authority is holding a workshop in Nairobi. Islamic finance, which follows religious principles such as bans on interest and gambling, is currently offered by two full-fledged Islamic lenders in Kenya - Gulf African Bank and First Community Bank.

Shariyah Review Bureau (SRB) is celebrating its 10th anniversary of service to clients. In the last five years, SRB has intensified its dedication to serving clients by providing shari’a consultation, certification (Fatawa), Islamic industry jurisprudential foresight, and functional Shari’a compliance audit expertise. The number of Islamic projects have been increasing, so far SRB has completed more than 300 projects in the last four years, helping clients cover a wide spectrum of transactions ranging from sukuks (including trade finance sukuk), private equity funds, equity projects, trade finance transactions, margin trading, real estate developments, ICT deals, money market, textile, sports and pharma funds.

Standard and Poor's has lowered the outlook for the world's top oil exporter Saudi Arabia to stable from positive and its Gulf partner Oman to negative on sliding oil prices. However, the ratings agency affirmed the strong "AA-/A-1+" long- and short-term foreign and local currency sovereign credit ratings for Riyadh over the "strong external and fiscal positions" it has built up in the past decade when oil prices were too high. It said low oil prices will place pressure on the kingdom's gross domestic product (GDP) and per capita income because Saudi Arabia's economy is undiversified and vulnerable to a sharp and sustained decline in the oil price.

Bahrain's central bank is setting up a central sharia board to help oversee Islamic finance products in the kingdom and will introduce new rules to strengthen governance in the sector, central bank governor Rasheed al-Maraj said. Traditionally, Islamic banks have practiced self regulation to ensure the sharia-compliance of their products, but a centralised model is increasingly being favoured across the global industry. The central bank will introduce new sharia governance rules to expand the internal sharia review and audit functions, while making it mandatory for banks to have an independent external sharia audit.

The CEO of the International Islamic Trade Finance Corporation (ITFC), Dr. Waleed al-Wohaib, stated that the ITFC - an autonomous entity of the IDB - is planning to increase its annual trade financing volume in Turkey by $700 million within the next three years. The ITFC has been working with numerous banks in Turkey since its official opening in 2008 with current ITFC products trading in favor of Turkish corporations and bank amounting to approximately $1.65 billion. Meanwhile, Dubai-based Noor Bank is also reportedly eyeing off the Turkish finance market in an effort to escape the competitive banking climate of the emirates, CEO Hussain al-Qemzi said last week.

The National Bank of Kazakhstan, the central bank and financial services regulator, has taken up membership in Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The signing ceremony to commemorate the membership was held on December 2 at WIBC 2014. The agreement was signed by National Bank of Kazakhstan deputy governor Nurlan Kussainov and AAOIFI secretary-general Dr Hamed Hassan Merah. Dr Merah said the membership would allow AAOIFI to work more closely with the National Bank of Kazakhstan and the finance industry in the country to support continuing development of Islamic finance.