Observation, evaluation, reincarnation...

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3rd September 2014 (Volume 11 Issue 35)
Observation, evaluation, reincarnation... As you may notice, this week brings a sea change to the standard IFN format as we revamp our much-loved newsletter to retain all the same features and content that make it so popular, but with a whole new look, layout and format. With a quantity of additional content and a sleek new design and logo, we hope that you enjoy this new version of an old favorite. Continuing with the theme of new beginnings, our cover story this week looks at the exciting new potential in the project finance market in Kuwait, as the country seeks to establish itself as a regional trade and finance hub and overhauls its legislation to allow Islamic banks ample opportunity to participate. Our IFN reports this week include a conversation with one of the godfathers of Islamic finance, Iqbal Khan; along with a look at SRI investment in Africa and our weekly sovereign Sukuk review as well as a multitude of additional daily content. Our sector analysis covers stockbroking and trading while our IFN Correspondents come to you this week from Malaysia, Turkey and Bangladesh as well as looking at the sectors of corporate governance and Takaful. We are also pleased to be able to offer an exclusive advance preview of the S&P Dow Jones quarterly Islamic index update for August 2014. We give you sector reports this week on global real estate from Philip Churchill of 90 North and on Middle Eastern property investment in France from Jean-Philippe Besse of Parisian Real Estate Advisor; while the Fundsupermart Research Team look at whether Islamic equity funds really are more resilient in our asset management story. Country features come from Imruz Kamil of Richard Pieris Arpico Finance looking at growth potential for Islamic finance in Sri Lanka; and Chaaban Omran of Quordoba Investment on the slow growth of Islamic investment in Australia. Special reports come from Mabroor Mahmood offering a response to Shariah scholar concerns over the Biniog Sathi model; and Dennis Cos of Risk Reward giving us a look at the challenges of risk management. With the Global Islamic Finance Forum 2014 in full swing this week we also bring you the full keynote speech from Dr Zeti Akhtar Aziz, the governor of Bank Negara Malaysia. With the industry gathering together to network, negotiate and celebrate its continued growth: now is the perfect time to launch our latest incarnation: and we hope all our readers enjoy the new IFN. Cover Story A new dawn: Kuwaiti construction finally captures Shariah compliance The Kuwaiti construction sector is booming, with a recent study from Ventures Middle East anticipating 5.7% growth in 2014, and contracts expected to reach almost US$17.5 billion by the end of the year. With the market rejuvenated by a US$15.8 billion injection in state spending, recent changes to legislation are finally allowing Shariah compliant banks to take part in the action — and it couldn’t come at a better time. GIFF 2014 Keynote Address Into the next chapter: Transformative changes to strengthen industry linkage with the real economy Keynote address by the governor of Bank Negara Malaysia Dr Zeti Akhtar Aziz, at the Global Islamic Finance Forum 2014. IFN Reports • All new IFN — fresh look, unique content, robust platform • Uyoun Al-Raed Commercial Company secures SAR1.97 billion (US$525.22 million) real estate Murabahah financing • SC introduces Sukuk framework to facilitate SRI initiatives • Sovereign Sukuk update: Hong Kong delivers its promise • Asset management: Weakest link, biggest opportunity • Malaysia strengthens global economic linkages with new Islamic finance initiatives • Finally the two meet: Islamic finance and socially responsible investing IFN Country Correspondents • State bank Ziraat ends acquisition talks with Bank Asya • Islamic microfinance advancing rapidly in Bangladesh • Malaysian apex court disallowed pre-judgment interest IFN Sector Correspondents • Corporate governance issues in syndicated finance • Takaful in France IFN Sector Analysis • Islamic trading and stockbroking: An area in need of innovation Shariah Pronouncement A group of conventional and Islamic participating banks entered into a syndication to provide financing for a large project through an Islamic facility to be provided through an Islamic bank acting as an investment agent Case Study Khazanah Nasional’s RM1.5 billion (US$475.4 billion) IMTN Malaysian sovereign wealth fund Khazanah Nasional issued RM1.5 billion (US$475.4 million) in Islamic medium-term notes (IMTN) on the 28th August 2014. The Sukuk were issued by an SPV, Rantau Abang Capital, under its RM7 billion (US$2.22 billion) IMTN program. Exclusive S&P Dow Jones Islamic Update: August 2014 Islamic indices outperforming conventional benchmarks in 2014 Asia Pacific and emerging markets rebound after weakness in 2013 GCC markets power higher despite volatility Shariah-compliant benchmarks have outperformed conventional indices in 2014 as financials. Special Report Shariah concerns on Biniog Sathi Model A number of Shariah concerns were raised in response to the Biniog Sathi model published in IFN (Vol.11 issue.31) under the title ‘Zakat and Islamic financing – a revolutionary new model? Features Potential for additional growth for Islamic finance in Sri Lanka The growth potential for Islamic finance has not gone unnoticed by regulators. The Central Bank of Sri Lanka (CBSL) is closely monitoring activities of Islamic financial institution in Sri Lanka and this move has been seen as an encouragement for the future prospects of Islamic banking in Sri Lanka. The French real estate market: A new boom in Europe? Despite sluggish growth and a turbulent economic environment, the European real estate market has recorded an important increase of the investments: 28% up from last year. In this context, the French real estate market, in particular, showed an incredible resilience and seems to be immune to the crisis affecting both economy and politics. Global real estate – What’s left for 2014? The summer holidays for most are now over and thoughts are turning to business for the last third of the year. Whilst the holiday season is inevitably quieter, there are still many investors asking what is in the pipeline and how they can deploy their capital before the end of the year. Islamic finance and investment in Australia – Slowly slowly The Australian market for Shariah compliant investment may have been slow to take off, but CHAABAN OMRAN discusses the newest developments that suggest this could be a market to watch in the coming years Risk management in crisis – What are the challenges? How long has there been an industry called enterprise risk management? What does it really do? Here we are in 2014 and still the question can be posed. Do you think that it adds value? Do you believe your board really understands its role? Are Islamic equity funds more resilient? There is a longstanding perception that Shariah compliant investments are less volatile and more stable than conventional financial products. The FUNDSUPERMART RESEARCH TEAM this week uses data analysis to explore the common myth that Islamic equity funds are more resilient.  CONTACTS Editorial: Sasikala Thiagaraja Direct Line: +603 2163 7800 ext 34 Finance: Faizah Hassan Direct Line: +603 2162 7800 ext 26 Sales: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Steve Stubbs Direct Line: +603 2162 7800 ext 55 Subscriptions: Dubai: Mithun Gangolli Direct Line: +971 4 427 3638 Kuala Lumpur: Nurazwa Rabuni Direct Line: +603 2162 7800 ext 68