Gateway to growth

76 days to go Home Contact Us Subscribe Advertise Events Training REDmoneyGroup Gateway to growth The Islamic finance industry has seen interest from external investors and new markets grow exponentially in recent years, and nowhere is this more apparent than in the entry of non-Muslim sovereigns to the Islamic debt capital markets. Last week saw the landmark debut issuance from the UK, while Luxembourg and Hong Kong are expected to follow hot on its heels. This week we focus on the key role that sovereigns play in driving forward the industry: and the new markets and products that are driving the industry towards the mainstream of global financial markets. Our cover story builds on the resounding success of last week’s IFN Europe Forum 2014 to explore the advantages and opportunities in Luxembourg as an Islamic funds platform, and the efforts the jurisdiction has made to establish itself as a gateway to Europe for Islamic investors. Accompanying this we have an exclusive interview with Pierre Gramegna, the minister of finance for Luxembourg, who gives IFN a unique insight into his plans for the Grand-Duchy. Our IFN reports explore the shift in sovereign investment strategies; the ongoing tenor mismatch that inhibits structural funding; the burgeoning Takaful market in the Philippines; the Sukuk opportunities in African markets; the growing popularity of Islamic agricultural investment opportunities; and new names in African Islamic finance. Our sector analysis explores the situation in Egypt, while our country analysis looks at regulatory issues and our IFN Correspondents this week cover Bahrain, Oman, Turkey and the UAE as well as a look at the private equity sector for Islamic finance; while our case study is on the recent Hong Leong Islamic Bank Sukuk. We also bring you a special report on Islamic credit cards from Chowdhury Shahed Akbar of Southeast Bank, an Egypt feature from Dr Shahinaz Latif of the Egyptian Financial Supervisory Authority, a sector feature on the new DFM Sukuk standard from Ayman Khaleq and Amanjit Fagura of Morgan Lewis, and an ethical asset management feature from Dr Dominic Selwood of Arabesque Asset Management. Cover Story Crossover culture: A new home for Islamic finance in Europe Luxembourg is no stranger to Islamic finance, and the Grand-Duchy has long been on the map as a Shariah compliant fund domicile and Sukuk issuance center. But as the country strives to diversify its financial services sector, it has stepped up its efforts to make a concerted play towards attracting the Islamic market. And with its prowess as a global financial hub, an accommodating framework and respected reputation, Luxembourg offers an exciting opportunity for Shariah compliant offerings to cross-pollinate with conventional channels. Could this represent not just a new gateway into Europe, but the long-awaited bridge into the mainstream market?... (Click to read full report) Interview: Pierre Gramegna, minister of finance for Luxembourg Shariah Pronouncement: In view of repeated requests from various customers, an Islamic bank has sought Shariah guidance in order to assess whether it can introduce an overdraft facility to its valued customers for certain required periods against an agreed fee (Click to read full report) IFN Reports: The UK wins the race with its hotly anticipated debut sovereign Sukuk issuance 12 times oversubscribed as it finally prices on the 25th June Sovereigns shift towards alternative investments and emerging markets Tenor mismatch remains a structural difficulty for Islamic banks New names in African Islamic finance Growing in strength and appeal — Islamic agricultural investment opportunities Sukuk: From the UK to wider Africa Exploring the Takaful market in the Philippines IFN Country Correspondents: First Energy Bank: Searching for growth Takaful — progressing its way into the Oman market Demand for Kuveyt Turk’s Sukuk issuance exceed expectations Dubai as the global capital for Sukuk IFN Sector Correspondent: Growth equity’s timely rise in the Muslim belt IFN Country Analysis: A new start for Islamic finance in Egypt? IFN Sector Analysis: Changes to the regulatory landscape Special Report: Islamic credit cards: Narrowing the gap Case Study: Another first for Malaysia: HLISB’s subordinated Sukuk Ijarah program (Click to read full report) Features: Takaful market grows in Egypt Egypt has made some progress towards Islamic banking and non-banking activities in different degrees with the latter outperforming the former. PROFESSOR DR SHAHINAZ LATIF explores the progress of a pivotal economic non-banking sector — the Islamic insurance sector... (Click to read full report) The new DFM Sukuk standard: A move towards standardization As Dubai implements a raft of new legislation surrounding its financial markets, AYMAN KHALEQ and AMANJIT FAGURA outline the new Sukuk standardization that the emirate recently implemented as part of its ambitions to establish itself as the global Islamic hub... (Click to read full report) Ethical asset management: The investment method of the future The most fundamental and important activity in a healthy economic system is the recirculation of wealth. Therefore, one of the foremost priorities of any financial services industry is a functioning asset management sector that contributes to the overall financial wellbeing. DR DOMINIC SELWOOD discusses the importance of rethinking priorities to move towards principle-based investing... (Click to read full report) DEALS Bank Muamalat Malaysia plans Sukuk issuance of up to RM2 billion (US$622.19 million) Cagamas concludes pricing of its US$500 million variable Islamic medium-term notes Bank Negara Malaysia releases Sukuk issuance plans for the first half of July K-Electric board approves issue of Sukuk worth up to PKR22 billion (US$221.39 million) Kuveyt Türk issues US$500 million Sukuk in Malaysia Fawaz Abdulaziz Alhokair Company brings to local market a SAR500 million (US$133.29 million) five-year Sukuk facility Kenya considers issuing Sukuk to broaden the republic’s investor base and diversify its debt offerings Libyan central bank proposes using Sukuk to tap liquidity of commercial banks to plug potential budget deficit Pakistani finance minister confirms that bid evaluation for US$1 billion Sukuk will begin soon State Bank of Pakistan to distribute 9.98% rental coupon for three-year GIS-9 Sukuk on the 26th December WCT Holdings issues Islamic commercial papers worth RM100 million (US$31.14 million) under RM300 million (US$93.43 million) program Senegal joins the Islamic debt capital markets with debut sovereign Sukuk worth XOF100 billion (US$207.4 million) Dogus Varlik Kiralama applies to Capital Markets Board to issue Turkey’s first corporate Sukuk Bumi Armada to launch first tranche of RM1.5 billion (US$465.3 million) Sukuk in 2016 Turkiye Finans to issue first tranche of RM3 billion (US$930.59 million) Sukuk program this Al Hilal Bank’s US$500 million perpetual Sukuk to be priced within 5.5-5.63% range National Petrochemical Company raises SAR1.2 billion (US$314.13 million) from debut Sukuk sale NEWS First house of Morocco’s parliament unanimously approves Islamic finance bill IDB approves financing of SAR2.82 billion (US$751.75 million) for development projects in Egypt Industry participants urge Ghanaian government to raise much-needed funds for development through Sukuk Isiolo County welcomes first Shariah compliant Sacco aimed at assisting women and youth enterprise development Bank of Khartoum exploring options to aid small-scale farmers in Sudan via Islamic microfinance tools Jaiz Bank donates relief materials worth NGN10 million (US$60,813.20) to victims of the Boko Haram insurgency Bank of Khartoum upgrades Islamic core banking system to iMAL 13.2 Nigeria to incorporate Sukuk in its strategic framework through 2017 Ontario-based AGInvest Properties in the process of introducing Shariah compliant crop real estate investment opportunities 90 North Real Estate Partners expands to the US, opens office in Chicago Indonesian Islamic banking assets showing declining growth as compared to last year, but still exhibiting double-digit growth, according to Financial Services Authority’s head of Islamic banking Islami Bank Bangladesh launches the country’s first Shariah based credit card IFSB to issue liquidity guidelines highlighting the utilization of Sukuk as a management tool by the end of the year Bank Muamalat Malaysia to promote financing products among business associations as it targets to double SME financing portfolio within the next two years Bank Negara Malaysia issues concept papers on Ijarah and Istisnah, seeking stakeholder feedback and comments Sindh Bank launches inaugural Islamic branch with plans to open up another four within the next three months Finance minister of Khyber-Pakhtunkhwa confirms that an Islamic microfinance bank is underway Indonesian banks to promote Islamic banking services during Ramadan to attract new customers Indonesia’s chairman of Financial Services Authority is optimistic that the Takaful segment will flourish under current arrangements despite it being a relatively small market IFN Europe 2014 a resounding success as Luxembourg minister of finance uses keynote speech to express clear support of Islamic finance Islamic Bank of Britain shifts focus to commercial banking as it attempts to rake in profits Gatehouse Bank concludes its first real estate financing deal worth GBP11.7 million (US$19.86 million) Malta promotes its compatibility for Islamic finance investment, slated to launch Islamic finance guide next year Arabesque Asset Management receives regulatory approval for UCITS funds, planning to unite ECG and Islamic principles in their suite of funds UK Shariah compliant student financing scheme to be based on the concept of Takaful and expected to be introduced in 2016 at the earliest IDB approves US$447.6 million in financing for new development projects as the bank celebrates its 40th anniversary IDB expands data landscape of AidFlows by becoming a member of the joint World Bank-OECD website Islamic Trade Finance Corporation keen to initiate an enhanced partnership with Pakistan The IDB and the UAE renew their partnership agreement ICD and Pelaburan Mara sign shareholders agreement for new Ijarah leasing company in Malaysia ICD signs strategic partnership with OPEC Fund for International Development Abraaj Group assess options over K-Electric stake Bangladeshi Ministry of Commerce to finalize customs and tax arrangements with Iran as part of joint agreement to bolster mutual cooperation IDB to establish networking platform to promote development of innovation across IDB member countries Acquisition talks between Investcorp and Roberto Cavalli fall through due to failure in agreeing on price Kingdom Holding Company and PineBridge Investments Middle East sign agreement for African joint venture platform ICD signs agreements with Sierra Leone and banks in Uzbekistan on the sidelines of the IDB 39th annual meeting Equities and real estate continue to be key asset classes for GCC insurers, according to Moody’s Abu Dhabi Islamic Bank opens new branch in Dubai Borse Dubai agrees refinance of US$500 million loan with Dubai Islamic Bank Bank Nizwa and Meethaq highlight facilities to donate Zakat during Ramadan Jazeera Airways Group secures US$70.5 million Shariah compliant financing facility from Ahli United Bank Meethaq and the SEZAD promote Islamic finance opportunities in Duqm to Indian investors Jordan Islamic Bank organizes blood donation campaign Qatar Islamic Bank extends banking hours of twelve branches during Ramadan Etihad Etisalat Company procures Shariah compliant financing facility from Export Development Canada to finance acquisition of telecom equipments Sharjah Islamic Bank makes AED9 million (US$2.45 million) contribution in cash and kind to Sharjah City for Humanitarian Services Bank Dhofar board of directors approves subordinated loan of US$75 million to support bank’s Tier II capital Al Tamimi & Company opens office in Bahrain Maisarah Islamic Banking teams up with Dar Al Atta to drive used clothes donation campaign Ministry of Awqaf and Religious Affairs rolls out Zakat campaign in association with Bank Nizwa and Meethaq Islamic Banking IDB considers collaborating with Bill and Melinda Gates Foundation and looks to priorities and challenges for its next stage of development Qatar International Islamic Bank launches Shariah compliant Ferrari credit card Saudi Arabia charts 36.4% growth in Sukuk issue value during 2013, according to National Commercial Bank New e-services for Kuwait Finance House customers Arcapita concludes US$450 million sale of medical device firm Investcorp signs US$400 million revolving credit facility with 14 banks ISFIN expands network with Raphael & Associes as exclusive Lebanese partner Foreign direct investment into the Gulf region decreases overall by 9% due to regional tensions, according to report Barwa Bank Group announces 28% increase in net profits for the first quarter of 2014 SME Bank on course for conversion to fully-fledged Shariah-based financing institution in 2015 ICIEC announces 9% growth in business insurance provided to members, totalling US$3.3 billion for 2014 TAKAFUL Dr Senthilverl sells 9% stake in Amana Takaful to Amana Holdings and requests to remain on board Islamic trade finance is providing a boost for re-Takaful in the Gulf according to industry player Arab Orient Takaful expects to close 2013/14 year with EGP240 million (US$32.88 million) in premiums 1Malaysia People’s Group Takaful Insurance pays out RM20.37 million (US$6.22 million) in claims for the six-month period until the 25th June 2014 Amãna Takaful to distribute 15% surplus to non-claimant policyholders Takaful Ikhlas confirms Hibah payment for eligible policyholders ASSET MANAGEMENT Banco do Brasil’s collaborates with Islamic Bank of Asia to debut Islamic fund by October IDB introduces largest private equity fund dedicated to its member countries CIMB-Principal Islamic Asset Management to step up internationalization strategy to boost assets under management to US$5 billion within the next three years Italy’s Allfunds Bank to launch office in Singapore with plans of increasing Shariah compliant offerings SEDCO Capital signs strategic partnership with FALCOM Financial Services to manage Shariah compliant equities fund Issues with asset transfer delay the launching of a central bank-managed fund designed to absorb liquidity of Pakistani Islamic banks Investors of Shamil Bosphorus Modaraba fund may have their entire capital returned as fund is unlikely to achieve investment objectives, says manager Public Mutual’s PB Islamic Bond Fund receives highest gross distribution among other 12 funds for the financial year ended the 30th June 2014 RATINGS Tanjung Bin Energy Issuer’s US$1.02 billion Sukuk rating reaffirmed at ‘AA3/Stable’ by RAM MNRB Retakaful affirmed at ‘BBB+’ by RAM RAM reaffirms ratings for Al Bayan Holding Company and the group’s RM1 billion (US$311.1 million) Sukuk Bank Sohar receives ‘BBB+’ long-term issuer default rating from Fitch Bank Internasional Indonesia’s proposed Sukuk rated ‘AAA (ind)’ by Fitch MARC assigns ‘MARC-1ID/MARC-1’ ratings to ‘AAA’-rated Bank Pembangunan Malaysia’s Islamic debt program Aquasar Capital’s proposed RM1.5 billion (US$465.3 million) Sukuk gains ‘AAA’ rating from RAM High probability of support from parent company elevates Kapar Energy Venture’s Islamic securities rating up two notches Lafarge Malaysia maintains ‘AA2/Stable/P1’ rating on its RM350 million (US$108.57 million) Islamic securities program DIP Sukuk boosts Dubai Investments Park Development Company’s liquidity and rating RAM maintains ratings for OCBC Bank (Malaysia) and the bank’s RM200 million (US$62.28 million) Islamic subordinated bonds RAM reaffirms HSBC Amanah Malaysia and its Sukuk program at ‘AAA’ Sharjah Islamic Bank receives issuer and financial strength ratings from Moody’s MOVES Foot Anstey appoints Fara Mohammad as director of Islamic finance National Bonds Corporation appoints Shaikh Dr Abdul Sattar Abu Guddah as head of Shariah board National Bank of Abu Dhabi names Gary Dugan chief investment officer Jadwa Investment appoints Saad Al-Saif as new managing director Daniel Cooper joins 90 North as head of North American operations Al Tamimi & Company appoints Foutoun Hajjar to lead Bahraini office EY names Ahmed Al Esry as managing partner of Muscat office