IslamicFinance.de

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.

Bangko Sentral ng Pilipinas (BSP) is leaning toward allowing local lenders to set up Islamic banking subsidiaries, as it steps up efforts to promote Shariah-compliant finance in the country. According to the central bank's Deputy Governor Chuchi Fonacier, the BSP is pushing for an open approach where conventional banks can operate Islamic banking windows or to establish subsidiary Islamic banks. Operating fully fledged subsidiaries would allow lenders to offer a wider range of Shariah-compliant services than through a window, which remains part of the parent bank. Fonacier added that foreign Shariah-compliant banks would also be allowed to operate locally. The BSP wants to issue the implementing rules for the new law before the end of the year.

Indonesian startup Alami has closed an undisclosed pre-seed round led by fintech investor tryb. The company’s peer-to-peer (P2P) platform recently obtained a P2P registration from the country’s Financial Services Authority and is set to soon expand its business into the Shariah-compliant P2P financing space. The fresh funds will be used for product development and market expansion. Indonesia has the largest Muslim population in the world, but the country's Shariah finance sector has historically lagged behind other markets with large Muslim populations. Alami CEO Dima Djani said tryb’s South-East Asian fintech expertise provides strong validation of its business model and key support for its growth plans.

#Malaysia-based firm HelloGold has received a Syariah-compliant certification for its gold-backed cryptocurrency and plans to launch its online gold platform in Thailand. HelloGold's chief marketing officer Manuel Ho said the cryptocurrency product was named GOLDX and received certification from Amanie Advisors. GOLDX involves the issuance of a token backed by physical gold stored in a Singapore vault and transactions must be completed within a defined time period. Over the past year, the firm has also rolled out a mobile app in Malaysia that is based on blockchain. The mobile app, which allows users to buy and sell physical investment grade gold, was also certified by Amanie Advisors. Manuel Ho added that HelloGold would expand its gold platform into Thailand in coming months, while potentially adding a third market by the end of the year.

Emirates airlines has mandated eight banks to manage a sukuk sale to raise about US$1 billion. Mandated banks include HSBC, Standard Chartered, Citigroup, BNP Paribas, Emirates NBD, Dubai Islamic Bank, Abu Dhabi Islamic Bank and Noor Bank. Emirates will join a list of regional issuers seeking funding before expected increases in US interest rates push up borrowing costs. Emirates typically raises financing each year from a combination of commercial loans, operating leases and export credit agency backed facilities. It last sold a bond in 2015, when it raised US$913 million from a 10-year sukuk to pay for four Airbus A380-800s. Emirates signed a deal last week for 36 additional Airbus SE A380 aircraft, handling the aircraft manufacturer the first orders for the model in more than two years.

The Pan-Borneo Highway in East Malaysia, a jumbo project estimated to cost 27 bin ringgit ($9.16 bn), is finally starting to take shape as the federal government prepares to launch initial funding to start the construction. The selected group of banks includes the four top Malaysian lenders: CIMB, AmInvestment Bank, Maybank and RHB. About 60 per cent of the project will eventually be funded with proceeds from ringgit-denominated Islamic bonds to be issued through federal government funding vehicle DanaInfra Nasional. The first batch of bonds, wrapped with a federal government guarantee, is expected to raise around 10 billion ringgit. The launch is timed for August or September.

Indonesia's Islamic bond yields have fallen faster than Malaysia's in the past three months, as the nation's higher-yielding notes do better at attracting foreign investors. Yields on rupiah sukuk due 2019 slid 37 basis points in the period, compared with 24 basis points for equivalent paper in Malaysia. Indonesia's three-year Islamic bonds pay 7.16%, while those in Malaysia yield 3.26%. Indonesian bonds are the best performers in South-east Asia this year after the government passed a tax amnesty bill on undeclared income held overseas. Bank Negara Malaysia lowered borrowing costs for oil, as well as its projection for consumer prices to 2%-3% in 2016, from 2.5%-3.5 %. Currently both nation's currencies are seeing a revival.

The Islamic Development Bank (IDB) will elect a new president next week in Jakarta, replacing long-serving president Ahmad Mohamed Ali. Saudi Arabia, the IDB's largest shareholder, has nominated Bandar Hajjar for the post. His candidacy was also endorsed by the outgoing IDB president. The new president will have big shoes to fill: Mr Ali tripled the bank's authorised capital to US$150 bn in 2013 and last year up-sized its sukuk issuance programme to US$25 bn.

Malaysia plans to sell as much as US$1.5 billion of global Islamic bonds, less than a month after Indonesia's sukuk attracted bids of more than three times the offered amount. The marketing of the notes started on Monday and they will likely have maturities of 10 and 30 years. The proceeds will be used to refinance US$1.2 billion of Shariah-compliant debt coming due in July. Malaysia's sale coincides with a rebound in the ringgit, which has rallied more than 10 per cent this year. A pick up in Brent crude is also brightening the outlook for the oil exporter's finances, just as sentiment is improving after an indebted state investment company sold off assets.

Indonesia's central bank has issued a regulation that allows the use of Islamic foreign exchange hedging tools by banks. The regulation, backed by rulings by Indonesia's National Sharia Board, specified that both Islamic and conventional banks can now offer deferred sale of foreign exchange under a muwa'adah scheme, or under a promise from both sides of a transaction. Such a transaction has to have an underlying real need, which could be export and import payments, Islamic bonds transaction in foreign currencies or hajj payments, among others. It will not be tradable and will have to be fully settled upon maturity or cancellation. The new rules will help Islamic banking and sharia-compliant customers to mitigate market risks.

The number of family offices in Asia and the Middle East will more than double to about 400 over the next eight years as the ranks of wealthy individuals swell, Michael Prahl of Insead business school said. Driven by the region's economic expansion, the number of wealthy individuals is expected to rise 40 percent by 2023. Family offices manage assets as well as provide tax, legal, accounting and philanthropy services to the wealthy. In the average Asian family office, just three investment professionals manage about US$400 million of assets, according to Insead. That compares with five to six professionals managing between US$300 million and US$1 billion in Europe or the US.