IslamicFinance.de

Reselling, giving, swapping, short-term renting and lending are all models that can help to increase the usage duration of resource-consuming goods. They are part of a real sharing economy that is undergoing regeneration due to the development of digital technologies. Public authorities should build an economic and regulatory framework that is favourable to virtuous models. Sharing economy entrepreneurs should analyse and improve their environmental performance. Users have a particularly important role in the case of peer-to-peer models. Environmental impact depends heavily on user behaviour and on the values that drive their actions.

In a remarkable and long-overdue change in attitude, institutional investors are starting to tell private equity titans that they think they don’t earn their outsized pay. As Oxford professor Ludovic Phalippou explained in a 2011 paper, the prototypical 2% management fee, 20% profit share structure is deceptive. Remember that that 2% fee starts ticking as soon as the investor makes his commitment to the fund. But no money has passed hands. The private equity fund isn’t managing any money at that time, just on the hunt for deals. It typically takes several years for all the funds to be invested. Phalippou estimates that the effective management fee level, as a percent of funds at work, is a mind-boggling 4%.

EIIB-Rasmala, a Dubai-based investment bank and asset manager, is moving to buy the remaining 49 per cent of an associate company based in Egypt. The takeover of Rasmala Egypt Asset Management (Ream) follows new strategic initiatives for next year. EIIB-Rasmala is now opening discussions with potential joint venture partners to expand its investment activities in both Egypt and other parts of Africa, its chief executive Zak Hydari said. In November, EIIB-Rasmala announced it was finalising the launch of two leasing fund strategies and planning to expand its UAE property business. The Dubai investment bank also said it expected to raise about US$1 billion for its growing leasing and alternatives business and approximately $250m to invest in a broad mix of property transactions in the United Kingdom.

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will revise four of its standards in the first half of next year while expanding its guidance for Islamic bonds. AAOIFI's new secretary general, Hamed Hassan Merah, said the standard setting body is looking at the possiblity of developing clearer guidance on sukuk that will incorporate accounting, legal, technical and tax-related aspects. Besides, a revised investment accounts standard is to be released by the end of 2014. Consultations on takaful, ijara and murabaha will be conducted in the first half of 2015, AAOIFI said. On takaful, AAOIFI is considering how to extend its guidance to retakaful, and clarifying the definition of benevolent loans (qard hassan).

Dubai Islamic Bank (DIB) and Air Arabia announced today the signing of an aircraft financing deal to facilitate the delivery of six new Airbus A320 aircrafts in 2015. The US$230 million Ijara facility will finance the delivery of a new aircraft every two months starting January 2015, the program culminating with the final unit being handed over by the end of the year. Air Arabia, recently named amongst the Global Growth Companies (GGC) by the World Economic Forum, has seen its route network expand rapidly in 2014 with the addition on new routes such as Cairo in Egypt, Antalya in Turkey, Tbilisi in Georgia, and Samara in Russia. The low-cost airline pioneer now serves 100 destinations from its four hubs in the UAE, Morocco and Egypt.

Bahrain-based Gulf Finance House has completed a capital reduction plan, a move that helps the Islamic investment firm to cut accumulated losses. It had received approval from the Bahraini authorities for the step, which reduces the nominal value of its shares by 13.8 per cent to $0.265 per share from $0.3075. As a result, paid-up capital had been reduced to $837.9 million from $972.3 million. Accumulated losses on GFH’s balance sheet had been reduced by $134.4 million under the measure. The reduction doesn’t involve any cash transfer and doesn’t impact on shareholder positions as the bank’s net equity remains unchanged.

The GCC economies are dominated by Sovereign Wealth Funds that account for more than 30% of the global SWF assets, valued at $6tn, said Doha Bank Group CEO, Dr R Seetharaman. He was delivering the keynote address on “Uncertain times — can GCC banking take off?” at a conference hosted by the ICAI Abu Dhabi Chapter recently. Gulf SWFs have invested in a wide range of industries and high-risk assets with higher expected return. The assets under management growth in the GCC will be mainly driven by positive economic outlook, family businesses & entrepreneurship and the population demographics, Seetharaman said.

This week, 40 young leaders from the World Economic Forum’s Global Shapers community will travel to the Vatican to hold a private audience with Pope Francis. They are there to respond to a question posed by the pontiff: how do we create a new global mindset that can overcome social and economic exclusion? The challenge of overcoming socio-economic exclusion is too large for governments, charities, non-profits and agencies to tackle alone. The private sector has played a crucial role in catalysing important advances in health, engineering, communications and technology.

The Middle East and North Africa is in dire need of entrepreneurial growth and opportunities. However, research from the Wamda Research Lab highlights substantial challenges preventing companies from receiving the funding they need to grow. In the recent report, Enhancing Access: Assessing the Funding Landscape for MENA’s Startups, a sample of 254 companies analyzed that have received equity investment as well as 65 institutions providing funding to entrepreneurs in the region. To capitalize on the region's burgeoning startup community, the supporting ecosystem will need to understand the most appropriate sizes, types and frequency of funding that its most promising companies need.

Baku will become the regional Islamic financial center and has a potential to press internationally recognized centers. According to Behnam Gurbanzadeh, IBA (International Bank of Azerbaijan OJSC) Islamic Financing Department Manager, the idea to establish the CIS Islamic Development Bank proposed several years ago has become very attractive for the countries of the Commonwealth. In addition to Azerbaijan, Russia and Kazakhstan are very interested in establishing such a bank, Gurbanzadeh said. Today there are up to 700 million users of Islamic financial services in the world.

Bahrain’s Arcapita Bank BSC has raised $100 million from shareholders to fund a return to dealmaking a year after it emerged from bankruptcy. The new equity will be used to fund Shariah compliant private equity and real-estate investments in Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Oman and Kuwait. Arcapita will also look at U.S., Asian and European investments at a later stage. Arcapita emerged from bankruptcy in September 2013 after securing a $350 million loan from Goldman Sachs Group. Under the terms of its debt restructuring, a new company called RA Holding Corp. was created to manage Arcapita’s $3 billion of assets. Arcapita earned $10.1 million in the fiscal year ended June, mostly from fees for managing RA on behalf of creditors.

IIFM through its research and industry consultation process has managed to develop a Master Collateralized Murabahah Agreement that has been designed to meet the urgent requirements of the Islamic Financial Services Industry. The MCM Agreement is a master agreement which sets out terms upon which the parties to the MCM Agreement (Parties) can subsequently enter liquidity management arrangements. Its main objective and each subsequent Collateralized Murabahah Transaction is to allow a Buyer an opportunity to raise liquidity by creating security over its Shar'ah compliant assets. Find more information in the attached pdf file or on the website www.iifm.net.

Investment firm Kurwitu Ventures Limited has become the first Sharia-compliant firm to list at the Growth Enterprise Market Segment of the Nairobi Securities Exchange. The company has listed 102,272 shares by introduction at the GEMs making it the third company in Kenya to list on this segment. The others are real estate firm HomeAfriKa and Flame Tree Group, a cosmetics and water tanks manufacturing outfit. Kurwitu provides investment products and services that are based on Islamic laws on finances.

Countries gain or lose economic competitiveness not by one or two major decisions, but by the steady drip feed of political decisions that either enhance or weaken their competitiveness. While Islamic finance is only a small part of the financial scene in the UK, the way that the UK government has facilitated its grown illustrates the above point very well. Competitiveness is rarely lost by a single dramatic mistake. Similarly, success in increasing competitiveness is often achieved by having a large number of “micro-policies” affecting particular parts of the economy. Promoting Islamic finance as the government has done is clearly in the best interests of the economy and therefore of all British citizens and taxpayers.

R Hotels is to develop the first sharia-compliant, four-star resort and spa on Palm Jumeirah, with the company targeting a Q4 2016 opening following AED500 million (US $136.2 million) of investment. Located on the East Crescent of the man-made island, the hotel will be the sixth property for R Hotels, the hospitality management division of R Holding. No operator has been confirmed yet, although a spokesperson said that it will be an international hotel brand. Aimed at leisure travellers, iIt will feature 259 rooms, modern recreational facilities and family-friendly entertainment. Besides, R Hotels is currently developing a hotel on Al Mina Road in Jumeirah, expected to open in the second quarter of 2015.

There is a growing role for Japan in the development of the Islamic finance market, according to RAM Ratings. RAM said tax reforms were introduced in 2011 to level the playing field for the issuance of J-Sukuk and conventional bonds for tax purposes, and amendments had also been made to Japanese Securitisation Law to facilitate the issuance of J-Sukuk. While there has yet to be any issuance of J-Sukuk in the Japanese market, BTMU Malaysia Bhd – a wholly-owned subsidiary of Bank of Tokyo-Mitsubishi UFJ – has taken the first important step by debuting a US$500mil Sukuk programme in Malaysia in September.

The Malaysian government plans to roll out a new sharia-compliant investment platform next year. The government is backing the Investment Account Platform (IAP) with an initial start-up fund of 150 million ringgit ($45 million), intending that the IAP will serve as a central marketplace to finance small and medium-sized businesses. Under the scheme, announced as part of the 2015 budget, Islamic banks would vet businesses seeking funds, provide a secondary market for investors and in some cases underwrite the equity transactions. With elements of crowd funding and microfinancing, the IAP is expected to raise the profile of Islamic banks as investment houses.

Global Islamic bond sales, which had the busiest first three quarters on record, are mired in what’s set to be the worst end to a year since 2008. Borrowers have raised $1.9 billion in the fourth quarter so far, 73 percent less than in the same period a year ago. Issuers have also sold the fewest number of securities in six years. During the first nine months, the U.K., Luxembourg, South Africa and Hong Kong were among debut issuers of Islamic bonds. Some borrowers probably accelerated sales on concern borrowing costs may rise as the Federal Reserve ended its bond buying program. Sales this quarter may have slowed after crude prices declined 14 percent.

As oil prices plunge to four year-lows, the big news in the Gulf's debt market is that it is outperforming most of the rest of the world. Although the Gulf's oil exporters will suffer from low oil prices, Gulf bond prices have mostly been firm since June, for two reasons. One is that most investors and economists think the big Gulf Arab economies are not seriously under threat; they have amassed huge financial reserves. Also, Gulf funds and investment institutions have large amounts of free cash - the result of the region's economic boom - which they are happy to use to buy local bonds whenever foreign investors are tempted to sell.

One of the major reasons why Saudi Aramco's investment wing Wa'ed became a partner in PayTabs was because PayTabs has the ability to build entrepreneurs in Saudi Arabia. PayTabs can help build businesses and make entrepreneurs by tackling one of the major problems people face when they start an online business; collecting payments online. PayTabs is a payment gateway with its instant online invoicing system PayPage and ready to integrate eCommerce APIs/Plugins. PayPage can be used even without a website. With additional features like Express CheckOut, PayTabs has introduced some features enabling the customer to pay without leaving the merchant's website.