IslamicFinance.de

The Council of the Islamic Financial Services Board (IFSB) has resolved to admit Bank of Korea, the Central Bank of the Republic of Korea into the IFSB membership as an Associate Member. The 24th meeting of the IFSB Council was held on 27 March 2014 in Brunei Darussalam. It was chaired by the Managing Director, AMBD, H.E. Dato Mohd Rosli Sabtu and attended by 10 central bank governors and heads of regulatory and supervisory authorities, as well as 12 senior representatives from among the Council and Full members of the IFSB, representing 17 countries. The meeting was also attended by the President of the Islamic Development Bank.

The Council of the Islamic Financial Services Board (IFSB) has resolved to approve the adoption of a new Standard in its 24th Meeting in Brunei Darussalam on 27 March 2014. The document is IFSB-16: Revised Guidance on Key Elements in the Supervisory Review Process of Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Tak?ful) Institutions and Islamic Collective Investment Schemes). The overall aim of the revised Standard is to update the earlier standard on this subject (IFSB-5). IFSB-16, which is broadly analogous to Pillar 2 of the Basel Accords, is about the supervisory process and how regulatory and supervisory authorities should supervise some specific areas pertinent to the IIFS. The softcopy of IFSB-16 will be available on the IFSB website, www.ifsb.org in due course.

Thomson Reuters has released the Islamic Social Finance Report 2014 in collaboration with the Islamic Research and Training Institute (IRTI). The report is the first of its kind study covering Islamic social finance across countries in South and Southeast Asia with sizeable Muslim populations including Indonesia, India, Pakistan, Bangladesh, Malaysia, Singapore and Brunei Darussalam. According to the report, Islamic social funds could potentially meet resource shortfalls to alleviate widespread poverty in those countries. The potential of Islamic social funds remains unrealized as actual Zakah and returns of Awqaf are not fully utilized in most countries. Additionally, there is no Islamic microfinance industry in most countries, which further diminishes the optimal potential of Islamic social finance.

The Omani Ministry of Awqaf and Religious Affairs held a seminar for Waqaf agents, in cooperation with Meethaq for Islamic banking at the Institute of Sharia Sciences. The seminar aims to recall the importance of Waqaf in contemporary life, the call to revive the Waqaf Sunnah in modern methods and strengthening the spirit of cooperation and partnership between the Ministry of Awqaf and Religious Affairs, Waqaf agents and other entities. Many working papers were presented in the seminar. The first paper which was presented highlighted the efforts of the ministry to organise Waqaf work, types and importance of Waqaf, the memorandum of understanding with Meethaq for Islamic banking and the management techniques to develop the Waqaf fund, among others.

Experts at the seminar of ‘Developing a sustainable Islamic banking industry in Oman’ have said that the demographic changes in the country and the rising employment level will bring a ‘huge potential’ for growth in the financial sector. Islamic banks will need to play an effective role in order to have their share of the cash. When it comes to the regulation of Islamic finance, particularly in liquidity and treasury management, Oman is one of the most advanced countries. However, the lack of a global Islamic capital market, particularly an Islamic interbank market, and the shortage of short-term, long-term, or highly tradable investments which will bring the capital risk, are the main issues concerning the development of Islamic banking.

Dubai's Tecom Investments has sent a delegation from Dubai’s Knowledge Village and Dubai International Academic City to meet representatives from Islamic finance academic institutions in Malaysia in an effort to bring some them to the emirate. The delegation examined different Islamic economics courses related to Sharia-compliant funds, sukuk, murabaha and the regulatory frameworks related to Islamic finance. Dubai aims to bring two renowned Islamic finance universities to the city – the International Islamic University Malaysia and The Global University of Islamic Finance. It is also keen to bring in governmental professional development centres such as the Islamic Banking and Finance Institute Malaysia. The delegation also visited the Labuan International Business and Finance Centre, which has a research focus on Islamic wealth management.

Dubai-based Souq.com, an Arab e-commerce site, has secured a $75 million investment from Naspers, a South African media organization. Besides, Silent Herdsman, which produces wearables for cows, has received £3M ($4.9 million) in funding. Moreover, Waltham, MA-based Actifio, which provides copy data virtualization to customers, has gained $100 million in an oversubscribed investment round. Software defined storage company Amplidata has realized an $11 million investment led by Intel Capital and Singapore sovereign wealth fund GIC has pumped about $63 million into U.K.-based energy tech company Intelligent Energy Holdings. Moreover, there have been several Mergers & Acquisitions, including Palo Alto Networks buying cybersecurity startup Cyvera.

Premier of Bermuda, Craig Cannonier, and Finance Minister Bob Richards are in London this week to lead efforts to bring Islamic finance business to the Island. The pair will attend the Global Islamic Finance and Investment Group (IFIG) Conference and speak to a number of industry stakeholders. The objective of the IFIG Conference is to highlight the necessary regulatory frameworks for Islamic finance and to outline strategies for successful international collaboration. In addition, the Premier is due to meet with UK Government Minister Mark Simmons of the Foreign and Commonwealth Office and representatives of the UK Treasury. Bermuda has already established partnerships with the main financial centres in a range of Muslim countries and has signed double taxation agreements with Qatar and Bahrain.

Cagamas, the Malaysian mortgage corporation, has issued RM500 million three-month Islamic commercial papers (ICPs), its first ICP for the year. Proceeds from the murabahah ICPs will be used to fund the purchase of Islamic financing from the financial system. Investors' preference for high grade issues and short duration investment strategy results in strong demand for the company's three-month ICPs particularly from financial institutions with a bid to cover ratio of over 2.4 times and competitively priced at three-month KLIBOR. The ICPs, which will be redeemed at their full nominal value on maturity, will be listed and tradable under the Scripless Securities Trading System.

Companies in the UAE will require a lot more than 8,000 new employees trained in Islamic finance next year as Dubai positions itself as the capital of the $8 trillion Islamic economy. The bulk of the additional manpower will be required by banks offering Sharia-compliant products and services. Recruiters in the UAE are already seeing a 50 per cent growth in demand for candidates with Islamic finance experience. Many companies are currently looking to fill positions across all levels, from relationship management, project management to risk management and marketing. The talent shortage can be addressed by utilising the existing pool of professionals working in banks and financial services firms, and providing them with Islamic finance training.

According to the GCC Wealth Insight Report 2014 by Emirates Investment Bank (EIB), 59 per cent of the GCC millionaires prefer a local bank to help them manage their money. 38 per cent of the respondents cited perceived security and trust as the main reasons for their preference. Nearly three in ten (28 per cent) said they believe local banks have a better understanding of the local regulations or the market. When choosing a bank to manage their money, the millionaires consider an institution’s level of service, brand and reputation and fees before making a decision.

Sharia-compliant investment is rapidly growing in the UK and has become a “financial powerhouse”, according to specialist asset manager London Central Portfolio (LCP). The UK government has taken a number of steps to promote London as a place for Muslims to invest, including launching an Islamic Finance Task Force and issuing Sharia bonds. According to LCP, London has taken in over £11.7 billion worth of Islamic investment in the last 10 years, making it the largest Islamic financial centre in the western world. However, there are still limited investment options in the sector when compared to the wider financial market. In order to address this issue, LCP and Simply Sharia have teamed up to organise a series of roadshows to look at the best Islamic investment opportunities in the market today. The events will be hosted by Signature Tax and will take place in Manchester, Birmingham, Leicester and London.

Bahrain’s Khaleeji Commercial Bank and unlisted Bank Al Khair have dropped their plan to merge after failing to agree on terms. The primary reason for this decision is due to the non-agreement on the structure and the valuation of the deal. The two lenders had been in talks since June last year. The decision to call off the merger was reportedly mutual and the two banks will continue to maintain a close business relationship. Mergers in the Gulf banking sector are rare as powerful local shareholders are often unwilling to give up controlling positions except for vastly inflated valuations.

The Board of Directors of The First Investor (TFI), Barwa Bank Group’s 100 percent owned investment banking subsidiary, has appointed Yousef Ali Al Obaidan as the Acting Chief Executive Officer of TFI. Since joining TFI in 2007, Yousef has spearheaded the company’s Investment Banking activities. He has gathered experience leading investment banking initiatives targeting investment opportunities through originating and successfully overseeing the establishment of several projects and companies in Qatar. Yousef graduated with a Bachelor of Arts in Finance and a Master of Arts in Integrated Marketing & Communications from the California State University.

Islamic banking was introduced in 2008 in Kenya when the first two Islamic Banks, Community Bank (FCB) and Gulf African Bank (GAB), opened their doors. Islamic finance has evolved rapidly into insurance, investments, and pensions which are in line with the Islamic law. Owing to the success of the two Islamic Banks in terms of attracting deposits from the Muslim community, other commercial banks have quickly opened up Islamic segments to compete for the Muslim wallets. Currently, 10 out of the 42 commercial Banks in Kenya have created such segments. However, one of the main challenges facing Islamic finance in Kenya is lack of Shari`ah-compliant investment instruments in the financial markets, such as shares, stocks and bonds.

While suspended governor of the Central Bank of Nigeria, Lamido Sanusi, is trying very hard to clear his name from the indictment of financial recklessness by the Financial Reporting Council of Nigeria (FRCN) and the presidency, his colleagues appear to be gradually distancing themselves from actions taken during his reign at the regulatory bank. A deputy governor at the bank and once a leading contender to replace Mr Sanusi, Kingsley Moghalu, said that his boss overstepped his authority. Mr. Sanusi, however, said that he believed that his suspension was hastened after he threatened to commission a special audit of all Nigerian banks to unravel the whereabouts of the missing $20 billion. Ironically, the FRCN report also indicted that Mr Moghalu and his colleagues were also recommended for dismissal and prosecution.

Abu Dhabi-based Mubadala Development Company (Mubadala) has appointed H.E Dr. Sultan Ahmed Al Jaber as chairman of the board of Masdar, Abu Dhabi’s renewable energy company, and Dr. Ahmad Belhoul will be CEO of the company. Dr. Al Jaber will be succeeding H.E Ahmad Al Sayegh, Masdar’s former chairman. He will continue to serve as UAE minister of state within the federal cabinet of the UAE. In addition, he serves as the UAE Special Envoy for Energy and Climate Change. Dr. Belhoul joins Masdar from Dubai’s Department of Tourism and Commerce Marketing, where worked as CEO of Strategy. Since its 2006 launch, Masdar has delivered a portfolio of projects and initiatives, including the launch of large-scale renewable energy projects and the development of Masdar City.

The year 2013 was a successful year for the Sustainability Network Task Groups operating under the aegis of Dubai Chamber of Commerce and Industry’s Centre for Responsible Business (CRB). Therefore, the chamber has recently launched the task groups for 2014. The Sustainability Network, which was initiated in December 2010, has 55 member companies till date. Membership of the Sustainability Network has jumped by 60% as 20 new companies came on board last year while 10 Task Groups were launched that examined key areas of opportunity, like Sustainable Energy, Supply Chains, Diversity, Social Enterprise, Health and Safety and Sustainability for SMEs. The companies within the Sustainability Network are playing a leading role in driving forward CSR and sustainability amongst businesses in UAE.

The State Bank of Pakistan (SBP) has allowed MCB Bank to commence due diligence of Burj Bank Limited for proposed acquisition of its 55 percent share. The management of MCB Bank disclosed to its shareholders that the central bank has given an approval to the bank for conducting a detailed due diligence of the bank to invest in new and existing shares along with additional investment by Islamic Corporation for Development of Private Sector. MCB Bank is conducting due diligence of Burj Bank Limited from March 18, 2014. Burj Bank is operating with 75 branches countrywide, but it is facing some financial complications and failed to meet SBP's minimum capital requirement of Rs 10 billion by end-2013.

Islamic banks are required to reclassify their deposits into Islamic deposits and investment accounts under the Islamic Financial Services Act 2013 (IFSA). To do so, they are given a two-year transition period until June 30, 2015. Bank Negara Malaysia (BNM) said Islamic banking institutions will engage with their customers in providing information and clarification on the differences between the Islamic deposit and investment account products as well as the options available to them to either retain their placements in Islamic deposit or migrate to investment accounts. During the transition period, all lslamic deposits accepted under IBA will continue to be protected by Perbadanan Insurans Deposit Malaysia while the Islamic banks will also ensure that the customers' rights are protected.