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Bahrain-based Bank Alkhair has obtained approval from the State Bank of Pakistan to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited (ABPL). This transaction follows the announcement on 5 September 2016 about the merger of Pakistan’s Burj Bank and ABPL, creating an institution with assets totaling more than $1.1 billion. Ayman Sejiny, Group CEO of Bank Alkhair said the bank was pleased to sell its stake in Pakistan’s Burj Bank to Al Baraka Pakistan Limited. Bank Alkhair has completed several landmark transactions since its inception, including the establishment of t’azur, a regional Takaful company and the acquisition of Bahrain Financing Company, the oldest foreign exchange and remittance houses in the GCC.

In this interview CEO of MCB-Arif Habib Savings and Investments (MCBAH) Saqib Saleem gives advice to new individual investors who want to save a portion of their money. He recommends increasing purchasing power over a period of time and seeking reliable investment advice. For this reason, MCBAH has 14 types of mutual funds, two voluntary pension schemes and different investments plans in its product portfolio. The mutual funds industry in Pakistan is still in its infancy stage standing at mere 1.6% of GDP. Saleem believes that an increase in awareness and introduction of innovative products to reach out to general public will provide an impetus to growth. As the Pakistani economy is entering the growth phase, he expects young investors to enter the market and increase their investment profile.

Iran and Venezuela inaugurated a joint bank to finance their development projects. The opening ceremony took place in Tehran during a visit by Venezuelan President Hugo Chavez. The Tehran based Iran-Venezuela Joint Bank has an initial capital base of 200 million dollars, with each nation providing half of the funds. The Export Development Bank of Iran, which is under sanctions from the US Treasury, was tasked with creating the joint bank. The joint bank will work within Iran’s banking regulations and its activities will be overseen by the Islamic republic’s Central Bank. The board of directors comprises four Iranians and four Venezuelans. A joint investment fund will also be launched in Venezuela.

Dawood Islamic Bank Limited (DIBL) has received Rs1 billion (US$12.9 million) investment from Bahrain-based Unicorn Investment Bank Limited. Unicorn already had a 22.2% equity stake in DIBL prior to the current investment. Unicorn Managing Director Aamir Khan said that the decision to invest in Dawood Islamic Bank is based on excellent opportunities that are available in the Islamic banking sector of Pakistan. DIBL Chairman Rafique Dawood said the investment by Unicorn would further boost the bank's ability to provide support to trade and industry through its various Riba-free banking products. DIBL has a network of 21 branches spread over the major cities of Pakistan including Karachi, Lahore, Islamabad, Faisalabad, Multan, Sialkot, Iqbalabad and Joharabad.

Russia and Iran are exploring the establishment of an Islamic bank as the two countries expand their economic cooperation. According to Russian Energy Minister Alexander Novak, the banks are exploring the mechanism, but the related decision has not been made yet. State-linked Russian lenders Vnesheconombank, Sberbank and Tatfondbank have been developing Islamic financial products of their own over the past year. Iran is keen to diversify funding options for its companies. At present, most financing in Iran is sourced from domestic lenders with only a small portion sourced from foreign sources and the debt capital markets.

The Islamic Development Bank (IsDB) had agreed to provide USD 500 million loan to part-finance the USD 15 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project.
IsDB has expressed interest in financing the project not just on Turkmenistan's territory, but in Afghanistan and Pakistan, too. The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day gas for 30 years. The project had been planned to become operational in 2018, but it is unlikely to see the light of day before 2022. The four nations to the project in April this year had signed an investment agreement in Ashgabad. The technical study of the TAPI project, done by Penspen, has estimated that it will take over six years to complete from the start of the FEED process.

Meezan Bank, Pakistan's first and largest Islamic bank, has recently signed a multi-faceted Memorandum of Understanding (MoU) with the International Shari'ah Research Academy for Islamic Finance (ISRA), aimed at jointly expanding the role of Islamic finance through collaborations on various aspects of this field.
This comprehensive MoU further sets out a clear roadmap for research into the domains of Shariah and Islamic finance that should be facilitated by exchange of best practices in research and training. Meezan Bank would also be providing joint services with respect to arrangement of seminars, conferences, workshops and short-term courses.
While commenting on this agreement, Irfan Siddiqui said: "This MoU recognises the critical need for addressing the Islamic finance challenges through collaborations and partnerships in order to meet the heightened demand for Islamic banking products and services. The Meezan Bank is committed to develop and promote Shariah-compliant finance industry and we are quite hopeful that this agreement would enhance opportunities through increased exposure and knowledge sharing."

The financial crisis of 2008-09 shifted the world's focus towards greater accountability, enhancement in transparency, improvement in governance and a strict limit on leveraging. This has persuaded the world to look towards Islamic finance as a viable financial alternate. The asset-backed nature of Islamic financial transactions, in addition to the prohibition on speculative activities make it a more stable system than its conventional counterpart. Sukuk is being used by many developing countries as a tool of fiscal policy for economic development. Projects like roads, railways, airports and hospitals etc, are particularly appropriate for Sukuk financing. The Pakistani government has issued total 18 domestic Sukuk and three international Sukuk. The financing of infrastructure developmental projects can be achieved through issuance of Sukuk.

#Pakistan's Islamic banks are introducing new products and adjusting policies to take advantage of government incentives designed to boost growth in the industry. Shariah-compliant banks in the country held 11.4% of total banking assets in June, which is well below levels of around 25% seen in Gulf Arab states. To change this, the government introduced a 2% tax rebate for shariah-compliant manufacturing firms in July to encourage them to eliminate interest-bearing debt from their balance sheets. Abdullah Ghaffar, head of investment banking at Al Baraka Bank Pakistan, said he detected signs of an increase in demand for Islamic financing. According to Syed Abubakr, sharia board member of Emaan Islamic Banking, there is some demand for new products from conventional banks planning to convert their operations into fully-fledged Islamic banks.

Standard & Poor’s believes that in view of the fast growth of the Islamic finance industry robust Sharia governance structures are very important. While this model has provided an additional layer of control, actions requested by internal auditors are typically not disclosed to the public. So far only the authorities in Oman and Pakistan have asked Islamic banks to submit themselves to an external Sharia audit. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) have already made significant strides in this area. However, S&P believes the current governance framework shows room for improvement. Only a handful of Islamic banks disclose their profit and loss sharing formulas, profit equalisation reserves, or investment risk reserves.

Iran has established correspondent relationships with 230 foreign banks since January 16, following the implementation of the nuclear deal. In addition, Iran's Ministry of Economic Affairs and Finance reported that the Export Development Bank of Iran (EDBI) has begun brokerage relations with numerous banks around the world. This includes 64 banks in 20 European countries, 36 banks in 17 Asian states, four banks in Africa as well as one bank in Latin America. However, the Islamic Republic complains that it still does not have access to global financial markets. Many international banks still shy away from financing trade deals and processing transactions for fear of US penalties.

The Reserve Bank of #India (RBI) has proposed opening of "Islamic window" in conventional banks for "gradual" introduction of Sharia-compliant or interest-free banking in the country. Both the Centre and RBI are exploring the possibility of introduction of Islamic banking for long to ensure financial inclusion. The central bank's proposal is based on examination of legal, technical and regulatory issues regarding feasibility of introducing Islamic banking in India on the basis of recommendation of the Inter Departmental Group (IDG). RBI has also prepared a technical analysis report which has been sent to the Finance Ministry.

The State Bank of #Pakistan (SBP) has announced a reduction in Statutory Liquidity Requirement (SLR) for Islamic banks and Islamic banking branches by 5% to fix at 14%. Presently, some Rs 570 billion of Islamic banking industry has been placed under the SLR with SBP. This amount includes some Rs 308 billion of Sukuk and Rs 225 billion of Bai-Muajjal. With the maturity of Rs 255 billion Bai-Muajjal, the amount will reach Rs 345 billion, therefore SBP has decided to cut the SLR and fix it at 14%. Time Liabilities, including Time Deposits with a tenor of 1 year and above, will not require any SLR. According to Islamic banking representatives, with the maturity of Rs 225 billion Bai-Muajjal, surplus liquidity of Islamic banking industry will surge to some Rs 400 billion, while there are no more investment opportunities for the Islamic banks in Pakistan.

Many Muslims contacted me in the last years with one single repeating question: Are CFD and/or Binary Options halal meaning permissible in Islam? There are indeed forex brokers offering so called Islamic accounts avoiding outright interest. But still: A contract of difference does not involve the ownership of any underlying (currency, stocks etc.) hence money against money is exchanged in different amounts - this is the most simple test for the prohibited Riba. Any Muslim receiving such offers should therefore insist of receiving the Fatwa and if not provided leave out.

The intention on those trading activities everyone can ask himself; mostly it will be akin to gambling and this on top of the fact that the trading activity itself is a zero sum game; meaning what one wins another looses, which rules out again to participate in such business. It does not do any better that aside from luck the outcome is influenced by know how - the same is true for classical money games as Poker or Backgammon. Still nobody would classify Poker therefore as halal.

Kazakhstan is currently working on the launch of its new Astana International Financial Center (AIFC) in order to become a financial hub for the Commonwealth of Independent States (CIS), West and Central Asia. It is part of Kazakhstan President Nursultan Nazarbayev's vision entitled 100 Steps to lift Kazakhstan into the world’s 30 most developed nations by 2050. The creation of the AIFC is step 70 in the programme. Its regulatory framework is modelled after the Dubai International Financial Center and will open avenues for investors within the Eurasian Economic Union between Kazakhstan, Russia, Belarus, Kyrgyzstan and Armenia. Plans are to attract more than $350bn in foreign investment and to issue a total value of $91bn in sovereign bonds, mostly sukuk. The launch of the AIFC is anticipated for 2018 after the country will have had hosted the Astana Expo 2017 in the capital from June 10 to September 10 next year.

Al Baraka Bank (Pakistan) and Burj Bank have successfully merged operations under the name of Al Baraka Bank (Pakistan). The amalgamated entity will operate with a combined network of 224 branches and net assets in excess of 120 billion. Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group (ABG) said that the merger was part of the group’s strategy to expand its reach in Pakistan and strengthen the global footprint of Islamic Finance. This merger will further catalyze the growth by establishing Al Baraka as an even stronger institution in the Islamic Banking sphere. The substantial increase in combined capital and branch network will help to reach out to a broader customer base with a full range of Islamic Banking services.

Bahrain-based Al Baraka Banking Group plans to expand its network in Pakistan following its merger with Burj Bank. CEO Adnan Ahmad Youssef said the Group's strategy in the Pakistani market was built on expansion in all Pakistani cities. Burj Bank’s 74 branches will be added to those of Al Baraka Bank (Pakistan) to form a network of 224 branches. Al Baraka Bank (Pakistan) aims to increase the number to 300 branches in the next four years. The merger is expected to take effect from the last quarter of this year, and the Bahraini bank will be the major shareholder in the merged institution. Al Baraka Banking Group is also setting up in Morocco after the North African nation introduced legislation allowing Islamic banks into the domestic market. With this entry the Group completes its network in almost all Arab Maghreb countries.

Two successful investment funds have facilitated the Secura Investment Management, the first SEBI registered and Shariah compliant venture capital fund, to come out with a third fund – Realty AIF – with a target to raise 200 crore. The first scheme Secura India Real Estate fund Domestic Scheme 1 has completed with a pay back record of 18%, while the second fund is in the investment stage and its tenure will be over next year. Managing Director M.A.Mahaboob said funds will be invested in equity modes, quasi-equity and equity related instruments, investment in a co-investment capacity with development companies and other promoters. The minimum investment under the scheme is 1 crore which is to be paid in instalments in three years with a down payment of 10% of the capital commitment.

Al Meezan Investment Management (Al Meezan) announced the launch of Meezan Strategic Allocation Plan-I (MSAP-I), an allocation plan under the newly launched fund of funds scheme, Meezan Strategic Allocation Fund. According to Al Meezan CEO Mohammad Shoaib, the plan has an initial term of two years and is now open for subscription. He added that the previous plan with two years duration was very well received by the investors as it gained a cumulative return of 26.21% since its inception. He said the new MSAP-I plan was an ideal investment for those who wished an active asset allocation between Shariah-compliant equity and money market schemes. Al Meezan is the largest private sector asset management company in Pakistan with total assets under management of Rs 86.96 billion in 11 funds and has investor base of 47,000 clients.

Emirates NBD Asset Management (Emirates NBD) has entered into a partnership agreement with UTI International (UTI) to launch the Emirates Islamic India Equity Fund. The fund will expand Emirates NBD’s global portfolio and offer investors exposure to Shariah compliant Indian equities. Emirates NBD is looking to develop a portfolio of global funds with leading international partners, and its latest collaboration with UTI forms part of this strategy. Leo Puri, managing director of UTI, said the new fund presents an excellent opportunity for GCC investors to realise strong returns on Shariah compliant Indian equities. The rationale for the agreement is driven by Emirates NBD’s strong interest in India as a growth market. According to a recent McKinsey report, India is expected to rank in the top five global economies by 2020 and to reach the top three by 2030.