IslamicFinance.de

Indonesia, the country with the world’s largest Muslim population, is developing its Islamic finance industry. It’s speeding up government approvals and fixing a fragmented regulatory system as part of an effort to reach more unbanked Muslims and increase the portion of Islamic assets in the banking system to 15 percent by 2017, from 4.3 percent. Currently, Indonesia ranks fifth in the amount of outstanding Islamic bonds, the number of Indonesians using Islamic financial products increased 36 percent over the past year. However, that’s still only 13.4 million people in a country of 208 million Muslims, which shows Indonesia's growth potential regarding Islamic finance.

Egypt's Principal Bank for Development and Agricultural Credit (PBDAC) is expanding its Islamic finance activities. The bank which has 18 branches offering Islamic finance, plans to open further six branches offering Islamic services in 2013. Furthermore, PBDAC is launching Shari’ah-compliant retail banking this month with a portfolio of EGP 50 million ($7.5 million) that can be raised to EGP 100 million next June based on demand, according to Abdel Rahman Al Kafrawi, head of Islamic transactions at PBDAC. The new Islamic services will reportedly cover areas including purchases of durable goods and agricultural equipment, the setting up of clinics and medical laboratories, and the financing of education fees.

United Gulf Financial Services - North Africa has announced the launch of its 'Themar Investment Fund', with a capital of TND 50 million (approximately US$ 32 million). The fund targets small and medium Tunisian institutions seeking financing in different business sectors that support the Tunisian economy. Priority is given to existing and restructured projects in urban areas. According to Mohamed Fekih, Chairman of UGFS - North Africa, the fund will contribute to boost and diversify the Tunisian economy as well as increase Foreign Direct Investment and further develop Islamic banking in the country.

Bahraini GFH Capital is considering selling a majority stake of Championship club Leeds United which it has owned since December 21. GFH bought Leeds from Ken Bates for £17million plus payments based on reaching the Premier League within four years. A multi-national consortium led by former Hull City executive Adam Pearson has made proposals to buy either 51 per cent or all of GFH's shareholding, which values Leeds at around £25m. According to a GFH statement, they received an offer for a majority stake that has not been accepted, although they have been seeking strategic investors.

Kuwait's Capital Market Authority (CMA) published a statement on Tuesday about self-regulation by Islamic financial institutions to ensure compliance with Shariah standards. The statement recommends to appoint a sufficient number of legal observers in accordance with the size of the institution and to provide full transparency in their communications with compliance officers. The CMA also urged companies’ sharia boards to take more care to issue rulings that were in line with each other.

Speakers at the seminar titled "Agriculture and Micro Insurance: Experience in Afro-Asian Region" discussed the need for Shari'ah-compliant financial services, including Takaful insurance. One speaker said that many poor Muslims are financially excluded because of both involuntary and voluntary reasons. Therefore, providing Shari'ah-compliant financial services is needed to accelerate financial inclusion. At the same session, the speakers also discussed about how Takful (Islamic) insurance can solve challenges in the micro-insurance sector.

A mass awareness campaign to increase public trust and confidence in Islamic banking, to be led by the Islamic banking industry with the support of State Bank of Pakistan (SBP), is being launched shortly. According to Deputy Governor of SBP Kazi Abdul Muktadir, the Islamic banking industry is still facing many challenges which include low awareness and understanding of public at large about Islamic banking and its distinction over conventional banking. The campaign is expected to lead to further acceleration in the growth of Islamic banking.

Technical report for free download regarding the Agricultural Development Fund (ADF), the first lender to the agricultural sector in Afghanistan in over 25 years, which was initially designed to be a wholesale lender utilizing existing financial institutions as conduits to reach farmers.

While the original design did not emphasize on the provision of Islamic financial products, there was the implicit assumption that with the help of technical assistance and grants some financial intermediaries would do so.

Bahrain-based Arcapita Bank is planning to liquidate its assets, and will not seek out new investors or investments, according to its reorganisation plan. Creditors will be given equity in two new companies that hold all the assets of Arcapita and several related companies. The proposal also envisions a new $550 million sukuk to be issued to the unsecured creditors. The reorganisation plan will be submitted to creditors for a vote and to the US court for confirmation.

The Dhaka Stock Exchange (DSE) is planning to introduce an 'Islamic Shariah Index' to increase investment of Islamic Shariah-based banks in the stock market. A meeting was held with the representatives of Islami Bank Bangladesh in order to prepare a guideline for its introduction. According to DSE president and coordinator of the Stock Market Coordination Committee Rakibur Rahman, the DSE is also talking with the Standard and Poor's (S&P) for introduction of the new index.

Kashf Foundation is one of the biggest specialised non-profit microfinance institutions in Pakistan, providing means for entrepreneurship and sustainable growth opportunities. Its focus has shifted from enterprises to individuals and solutions are customised. There are Rs2.8 billion in outstanding loans and 157 locations across the country where they are serviced. Twenty more locations will be opened this year. Kashf Foundation is planning to bring in Shariah-compliant products as part of its strategy.

Sharia-compliant loans are beginning to play a role in Afghanistan's farm sector through a U.S.-funded aid programme. In 2010, the U.S. Agency for International Development (USAID) set up the Agricultural Development Fund (ADF) which offers both conventional credit and Islamic financing. About $11 million of its loans approved between May 2011 and
April 2012, or 70 percent of them, were sharia-compliant. Juan Estrada-Valle, acting chief executive of the ADF, hopes that the credits will enable commercial farmers and other agribusinesses to grow at a rapid pace and contribute to the
growth of rural communities.

Paramount Corporation Bhd (PCB) signed two private bond programmes worth RM550 million today with Hong Leong Investment Bank Bhd, OCBC Bank and RHB Investment Bank. The deals consist of RM200 million Private Debt Securities programme, which allows PCB to issue RM200 million perpetual bonds, and a RM350 million Sukuk Ijarah Programme for PCB's unit, KDU University College Sdn Bhd. Group Chief Executive Officer Chan Say Yeong said the perpetual bonds provide PCB with access to capital to fund its growth plans, while the Sukuk will finance the building of the new KDU UC campus at Ultrapolis in Glenmarie, Shah Alam.

Paramount Corporation will raise RM550 million via a RM200 million perpetual bond sale and a RM350 million sukuk programme, which was put together by Paramount in cooperation with Hong Leong Investment Bank, OCBC Al-Amin Bank and RHB Investment Bank. The money will be used for capital expenditure and working capital, to buy land as well as to fund a new campus. Paramount will become the first private company to issue perpetual bonds which will be issued to institutional investors.

Saudi Arabia replaced the head of its Capital Market Authority with Mohammad Al al-Sheikh, a World Bank executive representing Saudi Arabia. Former chairman Abdulrahman A Al Tuwaijri was relieved of his duties by royal decree, without giving a reason. The action caused speculation that the kingdom will move toward opening its equities market to foreign investors. Al-Sheikh is expected to start regulating the Saudi financial market with new laws and regulations.

Belgium’s first independent market study "Islamic finance in Belgium – sizing the retail market" points out that over 70 per cent of local Muslims are interested in Islamic finance products and services. The study was independently commissioned by the Association for the Development of Islamic Finance (ADEFI) in conjunction with IFAAS (Islamic Finance Advisory & Assurance Services). It analyses Muslim consumers’ current consumption of financial products and services and their predisposition to change from conventional products to Islamic products.

Islamic 'Sukuk' could be an alternative source of financing for constructing Padma Bridge. A day-long international conference on Islamic finance, titled 'Islamic Finance news Roadshow' held Tuesday in the city discussed on the issue. Moreover, key issues pertinent to the country's Islamic financial market and its challenges and opportunities were addressed. The growth potential for Bangladesh's Islamic finance industry is high, and coupled with a steadily growing economy and financial reforms.

Paramount Corporation Bhd (PCB) agreed two private bond programmes worth RM550 million with Hong Leong Investment Bank Bhd, OCBC Bank and RHB Investment Bank. The deals consist of RM200 million private debt securities programme, which allows PCB to issue RM200 million perpetual bonds, and a RM350 million Sukuk Ijarah Programme for PCB’s unit, KDU University College Sdn Bhd (KDU UC). According to group CEO Chan Say Yeong, the fund arising from the bonds would be used for PCB’s future expenditure, increase landbank for development, investment in the education business and for working capital purposes.

ASM Investment Services which manages 14 unit trust funds, of which 11 are already syariah-compliant, will convert the remaining three into shariah-compliant assets. According to the company's CEO Ameer Ali Mohamed, the syariah-compliant unit trust industry has lots of potential. Therefore, ASM Investment aims to be a syariah-compliant fund management company by year-end.

Malaysian SC's Shariah Advisory Council (SAC) revised the screening methodology for shariah-compliant securities, in order to further build scale in the shariah-compliant equity and investment management segments as well as expand the Islamic capital market's international reach. The new screening methodology includes a financial ratio benchmark which looks at cash over total asset and debt over total asset screenings. Therefore, it may shorten the list of shariah-compliant companies when coming into force in November 2013.