Connecting to the wider economy

5 days to go Home Contact Us Subscribe Advertise Events Training REDmoneyGroup Connecting to the wider economy It can be tempting to view Islamic finance as existing within a bubble, but in fact its very foundations require it to connect with all elements of the economy – from manufacturing, to industry, to the service sector, to tourism. Continuing with our focus on the Halal markets, this week our cover story takes on the tough topic of Halal hospitality, looking in detail at the growth in Shariah compliant hotels across the Gulf and what this means for Islamic investors. In our IFN reports this week we once again bring you an array of analysis from around the world: including a look at securitization progress in the GCC, opportunities for Dubai Investments in Africa and Asia, the slow progress of Shariah compliant SME financing, new markets for AmMetLife Takaful, the worrying state of the Turkish property market and exciting opportunities for Islamic investors in Iran. And of course, our weekly sovereign Sukuk race update brings you the best of a very eventful week! Our analysis this week looks at Islamic finance in Australia and New Zealand as well as new developments in the Islamic equity capital markets. We also bring you correspondent reports from Australia and a sector report looking at progress in private equity deals; a case study on the recent Sukuk from the Investment Corporation of Dubai; and a book excerpt from the new Islamic Finance Handbook published by REDmoney Group and Wiley. Majid Pireh of the Securities & Exchange Commission in Iran contributes a special report on brokerage ratings in Iran’s capital market and Hamid Harasani looks at the controversial issue of Shariah compliant wills in the UK. Our features cover Shariah-based retirement planning by Faris Azimullah from Deloitte, and innovations in Islamic index-based livestock insurance by Andrew Mude of the International Livestock Research Institute. Cover Story Demand for dry: The Gulf says hello to Halal hospitality Bricks and mortar are a standard favorite for Islamic investors; but the hotel business has always been a tricky beast due to its exposure to impermissible revenue from Haram activities such as alcohol sales. A slew of recent new ‘Shariah compliant’ hotel launches has highlighted an exciting trend in the hospitality sector: but where is the demand really coming from - and just how Islamic are they? This week we take you on a comprehensive journey into the heart of Halal hospitality. (Click to read full report) Column: Daud speaks Shariah Pronouncement: Company A has approached an Islamic bank seeking finance to import steel and other building materials from various suppliers (Click to read full report) IFN Reports: South Africa: Our Sukuk race winner? Looking beyond the chaos: Can Turkish real estate recover? Iran offers tentative opportunities for Islamic investors Dubai Investments sees opportunities in Asia and Africa SME financing — slowly but surely Islamic securitization in the GCC set to pick up pace New markets for AmMetLife Takaful? IFN Country Correspondent: Australia: Investment in social responsibility to counter Shariah compliant needs IFN Sector Correspondent: Private equity and venture capital: Club deals ebb while growth equity flows IFN Country Analysis: Islamic finance down under: Opportunities in Australia and New Zealand IFN Sector Analysis: The flip side: Islamic finance equity capital markets Special Reports: Brokerage firm rating in the capital market of the Islamic Republic of Iran Will Shariah compliant wills create a dual legal system in the UK? Case Study: Investment Corporation of Dubai Sukuk debut 2014 (Click to read full report) Features: Shariah based retirement planning — expanding the range New Zealand has seen its array of Islamic offerings grow, but the sector remains a tiny part of the wider financial industry. Nevertheless as demand grows new products are coming to market, particularly in the fund management and retirement scheme sector... (Click to read full report) Index-based livestock insurance: Protecting living assets from severe drought Over the past several years, the International Livestock Research Institute (ILRI) headquartered in Nairobi, Kenya, in collaboration with a suite of partners, has pursued substantial research into a development program aimed at designing, developing and implementing index-based insurance products to protect livestock keepers in the arid and semi-arid lands (ASALs) of the Horn of Africa from drought-related asset losses. ANDREW MUDE discusses its implications... (Click to read full report) Book Excerpt: Introduction to The Islamic Finance Handbook: A practitioner’s guide to the global markets The subprime crisis that peaked in 2008 has pushed the world economy into the deepest recession since the end of World War II. As doubts mount over the proper functioning of the conventional banking and finance industry during the crisis, growing attention is being given to Islamic banking and finance. Headed by Iran, Saudi Arabia, and Malaysia, Islamic finance has penetrated more than 65 countries around the globe... (Click to read full report) DEALS Central Bank of Bahrain monthly Sukuk issue oversubscribed by 378% Saudi Telecom due to issue SAR500 million (US$133.29 million) Sukuk program at the end of May Investment Corporation of Dubai raises Sukuk value to US$700 million following strong demand IDB eyes May 2015 benchmark-sized Sukuk issuance in line with plans to come to market every year Turkish real estate investment trust to enter Sukuk market with US$100 million offering next month South Africa expected to launch maiden sovereign Sukuk worth US$500 million on the 1st June IILM to issue US$490 million short-term Sukuk on the 22nd May 2014 Sovereign US$140 million Sukuk issuance confirmed for September, according to Tunisia’s finance minister Bank Negara Malaysia releases May issuance plan RHB Islamic Bank’s RM500 million (US$154.66 million) Sukuk Murabahah receives overwhelming demand at a bid-to-cover ratio of 7.5 times Al Baraka Banking Group engages South African and Pakistani authorities to discuss Sukuk issuance plans Dar Al Arkan Real Estate Development Company initiates launch of Sukuk program by meeting international investors today Kwantas SPV fully settles RM155 million (US$48.2 million) nominal value Sukuk Ijarah Banque Saudi Fransi to meet investors with regards to SAR2 billion Sukuk (US533.16 million) at the end of May, according to news report Putrajaya Holdings’ Sukuk Murabahah and Musharakah due and payable next week NEWS Cabinet finally approves introduction of Islamic banking in Uganda Tajikistan to pass Islamic banking law by the end of June Financial Investment Bank implements iMAL Islamic core banking system Securities and Exchange Commission of Pakistan proposes tax exemption for companies issuing Sukuk in the 2014-15 budget Dubai Islamic Bank Pakistan launches consumer durable finance product enabling customers to purchase electronic and household items Bank Islam Malaysia aims to increase branch network to 150 by 2015 Basel III-compliant Sukuk, a catalyst for the global Sukuk market Affin Research maintains buy call on Shariah compliant Alam Maritim shares Hong Kong could be Islamic financial market leader for renminibi, according to Bank Negara Malaysia representative IMF calls for Arab countries to end costly subsidies Up to 1 million jobs will be created by 2020 as a result of the upward growth trend of the Islamic financial sector, according to BIBF Islamic microfinance industry now boasts over 2 million clients with Sudan and Pakistan commanding largest clientele base, according to training center Taiwanese Mega Financial Holdings in talks with Abu Dhabi’s Aabar Investments to buy into RHB Bank, according to local reports IDB continues supporting development projects across member and non-member countries by approving US$671 million-worth of project funding Confidence growing in the Asian dollar-denominated Sukuk market as yields fall Stocks of Dubai Islamic Bank and Qatar Islamic Bank selected by MSCI for emerging markets index UAE-based Lulu Group signs agreement with Malaysia’s Federal Land Development Authority to open five Halal-only hypermarkets IIFM to introduce Sukuk templates to reconcile disputes between Shariah scholars Non-oil growth in Bahrain to exceed 4% in 2014 according to economist Dubai Islamic Bank confirms that it will acquire 25% stake in Indonesia’s Bank Panin Syariah with a view to increase shareholding to 40% Sustainability of Islamic investment industry’s growth depends on industry’s ability to build scale and expand geographic reach, says Central Bank of Bahrain executive director IFSB and IRTI issue mid-term review report for the 10-Year Framework and Strategies for the Islamic Financial Services Industry Global Islamic banking assets projected to surpass US$3.4 trillion by 2018, according to EY London’s understanding of Islamic finance recognized as an asset by industry experts Bahrain Islamic Bank selects EXUS as new software provider Emirates Islamic expands network branch with the inauguration of new branch in Dubai’s Al Barsha Mall Dubai Financial Market implements new trading session structure ahead of MSCI upgrade Jeddah Economic Co considers Sukuk as funding for SAR14 billion (US$3.73 billion) Kingdom City project IDB and World Bank provide financing for US$2.2 billion water and wastewater project in Iran Gulf Finance House dispels rumors of weak financial position said to be driving down share prices Ooredoo procures US$498 million-worth of Murabahah financing facilities from Barwa Bank, Masraf Al Rayan and Qatar Islamic Bank FGB launches fast track career development program for UAE national employees Bank Sohar announces plans for a private placement convertible bond of OMR70 million (US$181.34 million) to boost Tier 1 capital ACWA Power picks Banque Saudi Fransi as arranger for its impending IPO Bahrain Development Bank plans to grow financing portfolio while focusing on supporting industrial, educational, medical care and food production sectors Possible S&P downgrade of Ras Al Khaimah’s credit rating unlikely to affect performance of its US$500 million Sukuk due to strong backing from central government, say experts Infrastructure project financing to provide an opportunity for Qatar’s banks Regulators to introduce a Shariah compliant deposit insurance framework as part of the modernization of Qatar’s financial sector Government infrastructure spending to drive long-term growth in Saudi Arabia, according to Emirates NBD Wealth Management GFH Capital intends to continue investing in education sector following acquisition of Dubai-based US curriculum school valued at US$34 million Islamic Financial Services Board to release updated framework next week SHUAA Capital added to the MSCI Emerging Markets Small Cap Index Dana Gas announces details of capital share increase Emirates Islamic promotes initiative to support UAE SMEs New Jahra governor asks Kuwait Finance House to expand operations Kuwait’s Capital Market Authority eases requirements for listing joint-stock companies in an effort to enhance market and arrest suspicious dealings Alizz Islamic Bank seeks regulatory approval to tap lucrative portfolio of personal financing Emirates REIT concludes AED118.2 million (US$32.17 million) Dubai Marina mall acquisition Maisarah Islamic Banking signs US$43.05 million Shariah compliant financing deal with Taameer Investment to finance hotel project Mulkia Investments hires Shariyah Review Bureau as Shariah advisor in line with its broader Islamic funds transformation strategy Sharjah Islamic Bank enters MoU with University of Sharjah to ease tuition payment process for students Central Bank of Bahrain prepares to issue rules for Shariah compliance advisory firms ADIB Securities extends the reach of its Shariah compliant trading platform by becoming equity member of NASDAQ Dubai Emirates Islamic partners with Takaful Emarat to offer Indian and Pakistani expatriates free Takaful coverage on remittances to home countries Gulf Finance House aims to complete capital reduction by the end of the second quarter Qatar and the UAE will be noticed on their move to the emerging markets index, according to Fidelity Worldwide UAE approves bylaws, paving the way for the launch of Al Etihad Credit Bureau Amlak Finance resumes mortgage financing business after suspension in 2008 Bank of London and The Middle East reports first quarter profit before tax of GBP2.9 million (US$4.88 million) Union National Bank beats analysts’ predictions with first quarter net profit increase of 3.5% Dar Al Takaful’s first quarter financial results show significant improvement in profitability with total earnings for the period at AED2.06 million (US$560,750) DAMAC Real Estate announces 79% surge in net profit for first quarter Al Baraka Bank Tunis announces a 25% increase in income for 2013 Gulf Finance House realizes slump in year-on-year net profit for the first quarter of 2014 Ithmaar Bank reports almost 50% increase in first quarter net profit First quarter net profit of KWD5 million (US$17.75 million) for Kuwait International Bank Abu Dhabi National Energy Company reports 158% surge in net profit for the first quarter Abu Dhabi National Takaful announces a 4% gain in net profit for the first three months of the year First quarter net profit soars by 69% for United Gulf Bank Al Salam Bank-Bahrain registers higher first quarter net profit at US$10.79 million Venture Capital Bank marks nine-month period ended the 31st March with lower net profit at US$5.3 million Dana Gas reports 32% drop in net profit for first quarter of 2014 EFG-Hermes’ first quarter net profit almost triples at EGP119 million (US$16.48 million) Methaq Takaful reports first quarter loss of US$1.29 million Affin Holdings record lower profits for the first quarter despite appreciation in Islamic banking income TAKAFUL UBL Fund Managers introduces new Islamic fund Government-initiated KiwiSaver to launch Shariah compliant fund option this month Union National Bank reports a 16.11% return for its Shariah compliant Al Samaha Fund Investment firms including Shariah compliant Tadhamon Capital form Bahrain’s first asset managers association ASSET MANAGEMENT Family Takaful highlighted as a critical target for Malaysia’s Economic Transformation Program MetLife International Holdings plans to expand into Muslim markets outside of Malaysia using Takaful expertise gained via partnership with AMMB Holdings Capital Market Authority fines Ahli Takaful for failing to announce appointment of board member to the public Securities and Exchange Commission of Pakistan issues requirements for Takaful windows Qatar Rail project to aid in the Takaful industry’s human capital development RATINGS Fitch upgrades rating for Qatar International Islamic Bank to ‘A’ Potential revision in adjusted valuation of properties drives down outlook on Menara ABS’ Sukuk tranches to negative Pakistan Credit Rating Agency affords Dawood Family Takaful ‘A-’ rating based on strong capacity to meet contractual obligations Pak-Qatar Family Takaful maintains grip on ‘A’ rating with an upgraded positive outlook Moody’s affirms Qatar Islamic Insurance Company rating of ‘Baa2’ RAM assigns stable sovereign ratings to Kuwait MARC affirms Westports Malaysia Sukuk at ‘AA+IS’ Cagamas MBS secures ‘AAAID’ rating for RM2.05 billion (US$634.09 million) Sukuk Musharakah based on low defaults and healthy repayments RAM reaffirms Thailand’s global and ASEAN scale ratings based on sound financial stability and strong external position amid political turmoil Cagamas MBS’ RM2.11 billion (US$656.18 million) Sukuk Musharakah receives ‘AAAIS’ rating by MARC MARC withdraws ‘AA-ID’ rating on Maju Expressway’s RM550 million (US$171.04 million) Islamic facility at issuer’s request MOVES Bahrain Bourse names Shaikh Khalifa Ebrahim Al Khalifa as new CEO Oman Arab Bank appoints Abdul Qader Al Bulushi to lead Islamic banking operations Arab Banking Corporation announces the appointment of new group chief financial officer Gulf Bond and Sukuk Association names Mohammed Albensaleh as chairman of newly launched Saudi Arabian chapter Barwa Real Estate names Ahmad Abdulla Ali Al-Abdulla as acting group CEO National Bank of Oman receives regulatory approval to appoint Ahmed Al Musalmi as new CEO