IslamicFinance.de

Senegal raised FCFA200bn (around $341m) from a sukuk that raised FCFA50bn more than originally planned. Sukuk Etat du Senegal offers 6% a year profit margin, paid half yearly with a two-year grace period. The asset is backed by shares in the Léopold Sedar Senghor international airport. Senegal was the first country in the West African Economic and Monetary Union’s (WAEMU) to issue sukuk, with a debt deal worth FCFA100bn back in June 2014. Ivory Coast aims to raise FCFA150bn as part of a two tranche FCFA300bn sukuk program set up last year. The transaction is expected to deliver a yield of 6.5% and have a tenor of seven years. Meantime, Togo also aims to raise FCFA150bn through a 10-year sukuk offering a 6.5% yield.

There are a growing number of transactions in the Turkish market that are financed by GCC institutions; and the Gulf States are steadily rising investors in Turkey. Among the lastest crop of deals, Qatar’s QInvest has provided a five year $30m murabaha mezzanine finance facility for Turkish private equity firm Crescent Capital to fund its acquisition of a 100% stake in Akocak HPP, an operational 81 MW hydro-electric power plant in Turkey. QInvest has structured and invested in the transaction. The deal also shows that traditional project finance structures are giving way to alternative financing structures, with Islamic finance showing potential for further growth in the funding of capital goods projects.

With a relative paucity of attractively priced assets available to long-term investors, European institutional investors are diverting their focus and resources to alternative assets, according to Mercer’s 2015 European Asset Allocation survey. The findings also show that the use of passive management of equity and bond holdings increased, suggesting that European investors increasingly prefer to seek returns from manager skill within alternative and unconstrained mandates, while harvesting cheap beta in core equity and bond portfolios. Mercer’s survey also found an increased focus on environmental, social, and governance (ESG) factors within the investment process amongst participating funds.

For the second year in a row, Bahrain has been named the Gulf Cooperation Council (GCC) countries leading Islamic finance market and second out of 92 countries worldwide, according to the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI). Bahrain was also ranked as having the best governance in Islamic finance in the world, with the report praising the well-established regulatory framework covering all sectors, and high levels of disclosure. The IFDI is a measure of five components (including quantitative development, governance, corporate social responsibility, knowledge and awareness).

SWIFT, in collaboration with The Association of Islamic Banking Institutions Malaysia (AIBIM) and the Malaysian Islamic financial community, say they will launch a new rulebook for the usage of SWIFT MT messages for Islamic finance. The SWIFT Islamic Finance Rulebook will be available to the Message User Group (MUG) by the end of 2014. The rulebook will provide greater clarity around SWIFT MT message usage based on Islamic principles in order to enable straight-through processing (STP), thereby improving efficiency as well as reducing risk and cost. It will provide a platform for exchanging Islamic finance messages and further promote the usage of message standards.