IslamicFinance.de mission is to support the Islamic finance, banking and takaful industry with news abstracts, opinions, a free encyclopedia, a Twitter page and networking.

IdealRatings and FTSE Russell launch the FTSE IdealRatings #Sukuk Index

IdealRatings Inc. launched the FTSE IdealRatings Sukuk Index incorporating IdealRatings’ Sukuk Shariah compliance screening methodology into the existing FTSE Sukuk Index methodology. The FTSE IdealRatings Sukuk Index tracks the performance of US Dollar-denominated, investment-grade Sukuk that are issued in the global markets. The screening of Shariah compliance for global Sukuk is based on the authentic methodology developed by IdealRatings. The methodology incorporates more than 150 Shariah standards to assign a pass / fail score based on a pre-determined threshold, and Sukuk must pass any mandatory standards set by IdealRatings.

GCC Islamic asset managers stay resilient

According to Moody's Investors Service, net inflows into some large Islamic funds in the GCC countries have remained positive despite weaker markets and lower oil prices. The ratings agency said it expects growth in Islamic assets under management to slow between 2% and 4% this year. According to the Global Islamic Finance Markets Report, Shariah-compliant assets represent a significant portion of total banking assets of the GCC. While in the Middle East and North African region, Islamic banking assets represent 14% of total banking assets, in the GCC this market share crossed the 25% threshold. Globally, Islamic finance assets are expected to grow at a compound annual growth rate of 5.5% to hit $3.4 trillion during the next five years. Malaysia and Saudi Arabia are the largest Islamic financial service in the world, accounting for almost two-thirds of Islamic assets under management between them.

Arab #Philanthropic Support To Digitalization: Is COVID-19 A Turning Point?

COVID-19 has disrupted the status quo in a number of ways. Firstly, Arab philanthropy has stepped up support to digital solutions in online learning, healthcare and mental well-being and income generation. Educate–Me, a social enterprise and investee of Alfanar Foundation runs a community school and organizes curricula training for teachers in Cairo. The crisis triggered Educate-Me to conduct a mapping exercise of existing digital capabilities of communities and based on the findings it has created a simple and workable system. Alfanar Foundation has also acted on the crisis through the “Survive and Thrive Campaign” by stepping up marketing and fundraising efforts aimed to support its social enterprise investees in Lebanon. Embracing the idea that technology can potentially play a more enabling role in microfinance is another immediate effect of the COVID-19 crisis. It is important to give philanthropic support to innovation in new technologies and digital solutions for social problem-solving, which has been largely untapped in Arab countries.

Five members ousted from UN-backed responsible investment list

Five investors have been removed from the United Nations-backed Principles for Responsible Investment (PRI), in the first such move by the group for those failing to meet its minimum requirements. The delistings follow criticism in recent years that the PRI was not doing enough to ensure members lived up to the principles, including to embed environmental, social and governance-related issues in their investment decision-making. The new standards require members to have a responsible investment policy covering at least half of all managed assets, staff responsible for implementing it and senior-level oversight. The PRI said it now plans to toughen membership requirements further and will launch a consultation at a meeting on Oct 21.

Saudi Arabia fortifies position as largest Islamic finance market

Moody's expects Islamic financing in Saudi Arabia to reach around 80% of system-wide loans in the next 12-18 months, up from 78% of loans in 2019 and 70% in 2013. Moody’s noted that corporates and households are increasingly using Islamic products amid the economic challenges posed by low oil prices and the coronavirus crisis. Saudi Arabia had a total of $339 billion in Islamic finance assets as of March 2020, leaving Malaysia in a distant second place with $145 billion. Increasing government Sukuk issuance supported by more lenient entry rules and deepening capital markets could boost foreign investment. Mergers and acquisitions across the region are also accelerating the shift to Islamic finance.

Sukuk to 'widely contribute to development activities'

The government of Bangladesh is going to introduce Sukuk in the country, said Prof. Shibli Rubayat Ul Islalm, chairman of Bangladesh Securities and Exchange Commission. He believes that sukuk, once introduced, will widely contribute to various development-oriented activities of Bangladesh. Prof. Shibli made the remarks while speaking at the closing ceremony of a 'Workshop on Issuance and Management of Sukuk in Bangladesh'. The four-day workshop was jointly organised by the Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) and the International Shariah Research Academy for Islamic Finance (ISRA), Malaysia.

Masumi Hamahira: How the Bitcoin #blockchain will benefit Islamic Finance world

Bitcoin’s blockchain is an open network protocol that can replace today’s internet, and offers benefits specific to the Islamic Finance industry. Bitcoin Association ambassador for Malaysia Masumi Hamahira said Bitcoin’s blockchain offered every benefit today’s Internet does, while making ownership sequences or various assets far more efficient to manage and prove. Hamahira is an Advisor for the Islamic Finance department at Japan’s MUFG Bank. Hamahira said that Bitcoin could assist in the sukuk market by managing settlement in different currencies on one platform, rather than the current variety of platforms used. Proving a record of ownership sequence and helping to combat money-laundering across borders provides a particular appeal to the Islamic Finance industry.

#Sukuk issuances jumped to $ 162 billion

The global sukuk market witnessed record issuances in 2019, recording $ 162 billion, an increase of 31% over 2018. Participants of the fourth session of the virtual webinar series of the World Islamic Economic Summit discussed the Global Islamic Economy Report for 2019/2020. According to the report, the assets of Islamic finance worldwide reached $ 2.5 trillion in 2018. Sukuk constituted 4% of these assets, and in the same year the UAE ranked fourth among the top 10 markets for Islamic finance assets in the world, with a value of $ 238 billion. The webinar session focused on discussing emerging trends in the sukuk market and future outlooks for the sector. The participants agreed that the sukuk market had performed well last year, and moderator Mohiuddin Kronfol indicated that the lack of updated data contributed to complicating the process of issuing sovereign and institutional sukuk.

$ 73.5 billion in Sukuk on “Nasdaq Dubai”

The value of new sukuk listings on Nasdaq Dubai since the beginning of 2020 until mid-September reached $ 11.4 billion, an increase of 55% over the value of sukuk listed in the same period last year. The total value of the sukuk listed in Dubai (between Nasdaq Dubai and the Dubai Financial Market) currently stands at $ 73.49 billion, making the emirate one of the largest sukuk listing centers in the world. The sukuk issuers on Nasdaq Dubai this year varied between Emirati and foreign countries, including Sharjah Islamic Bank, Dubai Islamic Bank, Dubai World Ports, GFH (from Bahrain), Dar Al Arkan (from Saudi Arabia), the Indonesian government, and the Islamic Development Bank.

Dubai Islamic Economy Development Centre hosts #webinar on Sukuk market

The Dubai Islamic Economy Development Centre (DIEDC), in collaboration with the Dubai Chamber of Commerce and Industry and Refinitiv hosted the fourth session of the GIES Virtual Series webinar that examined the opportunities and challenges in the sukuk market. Moderator Tahir Mahmood, Head of Business Development at Nasdaq Dubai, discussed the emerging trends in the sukuk market and examined various outlooks for the sector. During the session, panellists agreed that the sukuk market has done well over the past year. The fifth session of the GIES Virtual Series, titled ‘The New Age of Digital Retail in light of the Pandemic', is scheduled for Tuesday, 13 October at 11am (UAE time).

First actively managed sharia-compliant ETF to list in London

The world’s first actively managed sharia-compliant exchange traded fund will start trading In London. The Almalia Sanlam Active Sharia Global Equity ETF is the result of a partnership between Almalia, a London-based Islamic finance specialist and Sanlam Investments, the UK arm of the Johannesburg-listed financial services company. Amanie Advisors, an Islamic finance consultancy, will oversee the investment screening process. The new ETF, which will carry an annual total expense ratio of 99 basis points, will also be cross-listed in Germany and Italy in October. The fund will be run by a team led by Pieter Fourie, Sanlam’s global head of equities.

QIIB becomes first Islamic bank in #Qatar to launch card for domestic work

QIIB has launched a card for domestic workers, which provides flexible and easy solutions for both workers and employers, and complies with the standards required and set by various government agencies. The employer can transfer the salary of the domestic worker directly to the card via QIIB mobile banking application or Internet banking. The card is also a secure and certified record of all monthly salary payments for domestic workers, and can be used in all ATMs and points of sale. The cardholder can also use it to pay for utility bills, make online purchases and transfer money to their home country.

There is a future in fintech for SMEs

Malaysia has over one million SMEs (small and medium enterprises) making up 98% of total businesses. The majority are micro SMEs, of which 21% are owned by women. One industry in which Malaysian SMEs could become a world pioneer is Islamic fintech. Islamic finance is now entrenched in Malaysia, accounting for 32% of financing to customers. Yet, according to the IMF, Islamic fintech is still in its infancy. In Malaysia, the growth of Islamic fintech can impact development in rural areas among Malays, offering this community a unique financial-inclusion opportunity.

Fintech Lenders in #Indonesia to Support Government with Disbursing Loans to SMEs as Part of COVID Relief Effort

Asosiasi Fintech Pendanaan Bersama Indonesia (AFPI), which is an association of 156 Fintech lenders, is reportedly planning to work cooperatively with the Indonesian government to distribute funds that are meant to offset the economic problems and challenges created due to COVID-19. As of September 2020, the Indonesian government has issued 25% of the planned IDR 695 trillion (appr. $46.8 billion) it has set aside for COVID-related financial relief for local businesses. Most of the AFPI members offer peer-to-peer (P2P) lending services. As of June 2020, there were 161 licensed or registered P2P lenders operating in Indonesia. The nation’s P2P lending platforms have managed to help around 20.6 million borrowers by connecting them with 539,460 lenders.

Big Four firms release ESG reporting metrics with World Economic Forum

The Big Four accounting firms have developed a set of metrics for companies to use for environmental, social and governance reporting internationally. The ESG metrics are organized around four pillars of principles of governance, planet, people and prosperity. The metrics and disclosures aim to align the existing standards to enable companies to collectively report nonfinancial disclosures. The metrics and disclosures were developed in collaboration with the Big Four firms: Deloitte, EY, KPMG and PwC and come after a consultation process with representatives from corporations, investors, standard-setters, NGOs and international organizations.

Saudi-based Islamic investment firm acquires West Michigan properties in joint venture

The American Brennan Investment Group established a joint venture equity partnership with Saudi Arabia-based investment firm Arbah Capital to acquire 557,000 square feet of light industrial and flex space in Michigan, Minnesota, Illinois and Iowa. The portfolio includes a mix of tenants in the automotive, manufacturing and the telecommunications industries. Global real estate services firm JLL Capital Markets connected Brennan and Arbah, as well as helped the newly formed joint venture equity partnership secure $22.9 million in debt financing via a 5-year floating-rate loan with Wintrust Bank.

Alizz Islamic Bank completes merger process with Al Yusr Islamic Banking

Alizz Islamic Bank has completed all processes related to the integration of Al Yusr Islamic Banking. This includes the integration and transferring of customers, services, employees, assets, and liabilities from the Al Yusr Islamic Banking window to Alizz Islamic Bank’s operating system. This merger has led to the formation of a larger Islamic banking entity that can effectively compete in the market. Alizz Islamic Bank now has a wider network of 17 branches in various governorates of the Sultanate. In addition to expanding the digital services, customers will have access to an award-winning mobile banking application. Alizz Islamic Bank is a wholly-owned and fully licensed Islamic banking subsidy of Oman Arab Bank, which is part of the extensive Arab Bank Plc network.

Islamic finance to show low to mid single-digit growth in 2020-2021: S&P

According to S&P Global Ratings, the global Islamic finance industry will show low-to-mid single-digit growth in 2020-2021 after 11.4% in 2019. The COVID-19 pandemic will halt growth at GCC Islamic and conventional banks in 2020 as they focus on preserving asset quality rather than business expansion. Shariah-compliant banks are likely to see a greater effect on asset quality indicators since they typically have a higher proportion of exposure to real estate and cannot charge late payment fees. S&P projects the volume of sukuk issuance will reach $100 billion in 2020 compared with $162 billion in 2019. Corporates will also not support a rise in sukuk this year as they hold on to cash, cut capital expenditure and turn to bank financing.

#Sukuk market to lag 2019 performance on lower corporate issuance

The Islamic bond market has seen some improvement in recent months but its overall performance in 2020 will remain weaker than last year, pulled back by a lack of issuance from corporate borrowers and central banks. According to Mohamed Damak, global head of Islamic Finance at S&P Global Ratings, the sukuk market will be down compared to 2019. Although sovereigns, banks and multilateral lenders may issue more sukuk in foreign currencies, corporate borrowers have remained on the sidelines as they try to hold onto cash and reduce capital expenditure. Sukuk issuance volumes had fallen 27% on an annual basis in the first six months of this year. S&P expects overall issuance of Islamic bonds to reach around $100 billion (Dh367bn) for 2020, which will be about 40% lower than the $162bn recorded in 2019.

#Saudi fintech surges even as coronavirus bites private sector

Saudi Arabia is seeing a faster adoption of technology at a time when the coronavirus pandemic has weighed heavy on the private sector. The FSD programme, which was launched three years ago, has achieved 90% of its targets and the coronavirus pandemic has led to a surge in the fintech sector, said Faisal al Sharif, director general of the Financial Sector Development (FSD) program. The FSD’s targets for Saudi Arabian Monetary Authority (SAMA) issuing fintech licences was three by end of 2020 but today there are eight such licences. Similarly, the target for cashless transactions was 28% e-transactions by end of this year, but today they make up almost 37% of the total.

Syndicate content