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On the occasion of the Islamic Development Bank Group 42nd annual meeting, the Islamic Corporation for the Development of the Private Sector (ICD) organized a side event entitled ICD Clients Day. During the event, ICD seized the opportunity to meet with potential clients and stakeholders from private sectors. In addition, ICD presented its achievements in 2016 and awarded its Best Clients for 2016, namely Coris Bank International, Vitamed Medical Diagnostic Center and Al-Qadi Specialty Hospital. ICD general manager Khaled Al-Aboodi opened the session welcoming all the participants. Later on, Thomson Reuters presented the last edition of the Islamic Finance Development report. The event was a chance to share knowledge, to assess new opportunities and to network with the decision-makers, industry leaders and experts.

International banking group BNP Paribas, in partnership with startup accelerator Plug and Play, is searching for the brightest minds to develop innovative banking solutions. From June 9 to 11, the bank will host 36-hour hackathons across Berlin, Brussels, Istanbul, Luxembourg, Nanjing, Paris, Rome, San Francisco, Singapore, and Warsaw, open to startups with various fields of expertise. The Singapore hackathon is looking for startups focused on AI chatbots, natural language processing, data aggregation, and analytics. The hackathon will culminate in a pitching event where startups will demonstrate and present their solutions to fintech experts. The winners will get an opportunity to engage in a 5-month co-working phase with BNP Paribas and S$10,000 prize money. At the end of the co-working phase, selected startups will go on a final pitch event in Paris. The final winning team will be announced in December 2017 and will win a cash prize of 10,000 euros.

In 2016 the Africa Finance Corporation (AFC) sought to raise financing at competitive pricing levels to fund a number of new infrastructure projects in Africa. It also aimed to diversify its investor base in the process. This objective was achieved through the successful issue of a Murabahah Sukuk. The AFC initially sought to raise US$100 million, but upsized its issuance o $150 million and was still oversubsribed. Emirates NBD Capital, Mitsubishi UFJ Financial Group and Rand Merchant Bank acted as joint bookrunners and joint lead managers. Emirates NBD Capital also acted as the sole global coordinator. This transaction was awarded the 2017 Deal of the Year in the category Islamic Finance in Africa by The Banker magazine.

A report published by the Islamic Development Bank (IDB) Group and World Bank Group has outlined the potentials of Islamic finance in curbing income inequality and ending poverty worldwide. The report was unveiled by IDB President, Dr Bandar Hajjar, on the sides of the 42nd Annual Meeting of the IDB Group in Jeddah. It details the trends in Islamic finance, identifies the major challenges and recommends policy interventions to leverage Islamic finance. The report notes that the Islamic banking sector needs innovative risk-sharing products and services, enhanced scale and access to Islamic finance, improved liquidity and stability, and bolstered human capital and literacy in Islamic finance. The report also provides an overview of recent policy initiatives taken by several IDB member countries to promote shared prosperity.

A UNICEF study covering 11 countries in the Middle East and North Africa (MENA) states that at least 29 million children live in poverty, one in four children in the region. The analysis said that children were deprived of the minimum requirements in two or more of the most basic life necessities. These include basic education, decent housing, nutritious food, quality healthcare, safe water, sanitation and access to information. It added that lack of education was one of the key factors of inequality and poverty for children. The study showed that almost half of all children were not fully immunized or were born to mothers who did not get birth assistance. UNICEF also revealed that one in five children were forced to walk more than 30 minutes to fetch water, adding that more than one third of children live in homes with no tap water.

Alizz islamic bank recently celebrated the launch of the Tharwa Wealth Management Segment. Tharwa offers an array of financial services led by a team of seasoned relationship managers. Tharwa customers benefit from a selection of exclusive privileges including access to special discounts on travel, accommodation, restaurants, entertainment and various VIP services. Furthermore, Tharwa customers can enjoy the privacy of the Tharwa lounges in conducting their banking transactions, as well as the MasterCard World Credit Card. Tharwa customers also have the flexibility to manage their money through the Izdihar sweep savings account, which adheres to the Islamic principle of unrestricted Mudarabah.

Qatari investors are increasingly looking for opportunites in the booming US propery market. Just Real Estate (JRE) has recently launched its new US portfolio, while QInvest announced its US mulitifamily residential-focused real estate fund Magnolia Real Estate Fund. The fund completed its first acquisition of an outstanding asset in Colorado, US. QInvest has been investing in Western Europe, UK and US for the past 5-6 years. JRE recently added two upscale addresses in Miami and New York City to its ever-growing portfolio of luxury developments in Qatar. Qatar, as a country, is becoming a big player in the New York City’s real estate market, with unconfirmed reports showing Qatar Investment Authority ranking the city's ninth-largest commercial property owner.

A set of new Shariah standards for Islamic banking and financing have been launched by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The launching ceremony was attended by Islamic finance scholars and specialists from across the region. The recently issued Shariah standards include No.(55) Competitions and Prizes Standard, No.(56) Liability of Investment Manager Standard, No.(57) Gold and its Trading Controls Standard and No.(58) Repurchase Standard. These standards are deemed important Shariah reference for the industry, including legislative bodies, regulatory authorities and financial institutions. They are also important to other professional entities such as law firms, accounting and consultancy firms, universities, academic institutions and research centres.

According to analysts, GCC’s banking sector is not expected to see a big surge in mergers and acquisitions. National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE recently merged to create the largest bank in the UAE. Masraf Al Rayan, International Bank of Qatar and Barwa Bank are in the due diligence phase of a planned three-way merger that would create the largest Islamic bank in Qatar. Saudi British Bank and Alawwal Bank are discussing a potential merger that would create the third-largest bank in Saudi Arabia. Despite market conditions and numerous rumours, a big surge in mergers is unlikely due to structural impediments. Some countries have only a small number of local banks, which limits competition. This means that profitability has remained solid despite the macroeconomic pressures. Thus, there is no compelling reason for a big number of regional banks to rush into merger deals.

Hogan Lovells has advised Aktif Bank on the first Sukuk ever to be listed on the Global Exchange Market of the Irish Stock Exchange (ISE). The $118million Sukuk was issued under a mudarabah structure with GAP Insaat Yatirim ve D?s Ticaret, a Turkish construction company. While the Irish Stock Exchange has listed Sukuk historically, this is the first Sukuk to be listed on the ISE's Global Exchange Market. The Hogan Lovells team was led by Imran Mufti (Partner, Dubai), with support from Annalisa Feliciani (Counsel, Rome), Ahmet Kalafat (Senior Associate, Dubai) and trainees Marjun Parcasio and Luigi de Angelis. Onur Aksoy from Aktif Bank said this Sukuk represents a milestone for Islamic capital markets originating out of Turkey. He added that Aktif Bank was pleased to work with the Hogan Lovells team, benefitting from their deep understanding of Islamic finance and capital markets.

The week-long Innovation Forum hosted by the Islamic Development Bank brought together international experts as well as youth to discuss ways to foster an innovation culture. Experts agree that the major challenges of the IDB member countries include cultural barriers, lack of adequate investment in research and development and a low rate of graduates in scientific fields. Dr. Mimics Begivic, innovation specialist at the UNDP Regional Center for Europe and CIS, said that youth unemployment is a stubborn problem faced by countries that has both a direct and indirect cost on governments. Dr. Nabeel Koshak, president of Baha University, said that there remains a gap in funding to support SMEs in the Islamic world. In Saudi Arabia, the last five years have seen a boost in innovation. Dr. Koshak said the major obstacles for Saudi SMEs are the regulations, followed by competing and entering the market.

A total of $453 million worth of infrastructure projects for five member states has been approved by the Islamic Development Bank (IDB). The approval was given ahead of its annual meeting of the Board of Governors on 17-18 May 2017 in Jeddah, Saudi Arabia. IDB also approved three special assistance projects worth $580,000 for Bosnia and Herzegovina, Kenya and Rwanda. The President of IDB, Dr. Bandar Hajjar, underlined the role of infrastructure projects in order to accelerate development activities. He notied that the meeting addressed in detail youth economic empowerment and the significant opportunities created for youth through infrastructure projects.

Islami Bank Bangladesh has removed the head of its human resource division amid a war between the old guard belonging to Jamaat-e-Islami and newly-appointed executives. The removed executive, Md Mahboob Alam, is also an executive vice president of the bank. The bank's board of directors took the decision to remove him from the division on Saturday. The new leadership of the bank are fighting for control of the bank with Jamaat supporters after taking charge five months ago. Vice-Chairman Professor Syed Ahsanul Alam Parvez said Mahboob was removed from the human resource division because he was appointing Jamaat loyalists to top posts of the bank. Another director, Professor Dr Qazi Shahidul said that Jamaat supporters were conspiring in various ways because they plan to take back control of the bank after changes through the next election.

Professor Binta Tijani Jibril is the Director of International Institute of Islamic Banking and Finance, Bayero University, Kano State. In this article she talks about Islamic finance and its role in Nigeria. She believes that Islamic findance will help Nigerians in general in the sense that it will increase financial inclusion. The main challenge in Nigeria is how to educate the people to create awareness of this financial model. Bayero University has now short training programs, a masters degree in Islamic finance and very soon a doctorate programme we will start. There is also a special programme for journalists. According to Professor Jibril, Nigeria may soon raise sukuk, just like Osun state has done. It’s going to be about providing for infrastructure development as well as empowering the citizens. So Nigeria would be expanding and widening its reach into Islamic finance.

The government of #Indonesia recently offered retail sukuk to the public to raise funds to help plug a gap in the state budget. From 2008 to 2017, the Indonesian government issued retail sukuk to tap into the country's growing middle class. In 2017, Indonesian retail sukuk became the highest sukuk issuance in the world, with a total value of Rp 31.5 billion (US $2.37 million). Despite its success, the total value of retail sukuk, corporate sukuk and conventional bonds is still considered small compared to the amount needed to finance priority infrastructure development projects. With the lack of a government budget, specified portfolios need to be explored. Green sukuk is a subset of sukuk that finances green assets. As green projects are relatively new in Indonesia, they need time to set up and engage with the nation's development plans.

A $100 million fund has been launched in Bahrain to invest in the country's small and medium-sized enterprises (SMEs). The initiative has been unveiled by the Islamic Corporation for the Development of the Private Sector (ICD) in partnership with Ibdar Bank and Labour Fund Tamkeen. The Bahrain SME Fund is a Shariah compliant mezzanine private equity fund which will target SMEs with high growth potential in consumer, industrial, ICT, education and healthcare sectors. Khalid Al Aboudi, CEO of the ICD, said that SME support is at the centre of ICD’s strategy as they seek to facilitate further prosperity in Islamic countries. Ahmed Al-Rayes, CIO of Ibdar Bank, added that the creation of this fund is aligned with the Bank’s mission to support Bahrain’s economic diversification through private sector growth.

United Arab Emirates' energy producer Dana Gas has started refinancing discussions with the holders of its $700 million sukuk maturing in October 2017. The company has faced a cash shortage in the last period and is now planning to restructure its dollar sukuk which was issued in May 2013. Dana Gas CEO Patrick Allman-Ward refused to comment. The energy producer in April repaid an outstanding $60 million loan for its Zora gas field project in the UAE to avoid a breach on the facility. Dana is owed receivables of about $1 billion from Egypt and the Kurdistan Regional Government. Its cash balance as of the end of March was $298 million, slightly below $302 million as of the end of last year. To focus on cash preservation, the company reduced its operational and capital spending in the first quarter.

The Central Bank of #Oman and the Capital Market Authority allow Islamic financial institutions to follow the standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). AAIOFI’s financial accounting standards differ from International Financial Reporting Standards (IFRS). The differences between AAOIFI and IFRS standards have necessitated specific tax provisions for Islamic Finance Transactions (IFTs). To achieve this, a new chapter has been inserted in the income tax law of 2009. The chapter provides a framework to determine the tax liabilities of parties to an IFT. According to the new tax chapter, income includes any sum received in lieu of interest. The tax provisions also clarify that any partnerships designed solely to comply with Sharia will be disregarded. The latest tax law states that the financial statements can be prepared based on IFRS or any other similar standards approved by the Secretary General of Taxation (SGT). Institutions who have prepared their financial statements based on AAOIFI standards will have to reconcile their tax returns with the SGT.

The government of Tunisia is preparing its first ever issuance of a sukuk with the Tunisian stock exchange, Bourse de Tunis and Nasdaq Dubai. Preparation work will consider commercial, legal and regulatory issues, including sharia-compliance aspects. This January finance minister Lamia Zribi said that Tunisia needs about $2.85 billion in external funding in 2017 and plans to issue a sukuk of $500 million to cover its budget deficit. Then in February the North African country issued a €850 million bond with a seven-year maturity.

Fintech has become a buzzword in the Islamic finance industry. Fintech has the potential to play a major role, primarily to improve processes and cost effectiveness while maintaining Sharia compliance. The need for more agile and simpler financial services, the growing usage of mobile devices and the shift towards technological and mobile financial services could underpin growth in the industry. However, there are also challenges. The principal challenge could be the regulatory environment. Regulatory limitations and concerns could hinder the ability of Islamic finance institutions to forge ahead. Fintech has its own cost and integration requirements to consider as well. This could push fintech to the backburner, which in time could turn into a significant hindrance to growth. Regulators and institutions have a significant challenge ahead in balancing the use of new technology to provide better services while controlling new operational risks.