Searching for change

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
22nd October 2014 (Volume 11 Issue 42)
Searching for change The constant evolution of the Islamic finance industry is one of its most exciting characteristics, although it does not always come easily and is sometimes achieved at the expense of others. This week we address the concerns of the asset management industry in our cover story, looking at why the international players are holding back – and the opportunities this could offer the local market. Our IFN reports take a look at the current uncertainty in the global oil industry and its effects on Islamic finance; the latest private placement rating product from Moody’s and its impact on Shariah compliant issuance; as well as growth opportunities in the GCC. Our analyses cover Bangladesh and securitization while our IFN Correspondent reports cover Nigeria, Egypt, Tunisia as well as private equity & venture capital. We bring you special reports on Bai ‘Inah resolutions in Malaysia by M Mahbubi Ali and Dr Marjan Muhammad of ISRA; Islamic finance in Libya by Omar Vella of Malta Institute of Management; and credit-linked notes by Hussain Kureishi and Septya Nukhsia from OCBC Al Amin and BNP Paribas Investment Partners, respectively. IFN features this week dive deep into Islamic wealth management in Singapore by Thomas Woods from Islamic Bank of Asia; the growth of Islamic derivatives by World Bank’s Michael Bennett and Akinchan Jain; and Takaful developments in the GCC and Malaysia by Kevin Willis of S&P. As October merges into November and the pace of the year picks up towards the close, we wish all our readers a productive week and hope our action-packed issue assists you in any and all of your endeavors. Cover Story Appetite for assets: Why aren’t there more managers in the Middle East? Plenty has been said about the slow growth of the Islamic asset management industry — much of it indeed in these pages. Yet while we have explored many of the factors inhibiting asset growth and investor demand, one aspect that has perhaps been ignored for too long is the supply side of the equation. IFN Reports • Building on Sri Lanka’s growth story: Amana Candor Shariah Income Fund • IFN Global Trendswatch • IFN Weekly Poll: If the Islamic asset management industry were to have one dedicated ‘center’, which would be most suited? • IFN Dealogic roundup • Oil uncertainty: a launchpad for Islamic finance? • Unpublished private placement ratings — too early to tell • On a Wing and a Prayer: Breaking down barriers • New Islamic bank for Tunisia • Islamic finance landing opportunities in aviation world • Qatar, Saudi Arabia and UAE spearhead growth opportunities in the GCC • Solid micro and macroeconomic environment pushes Al Samaha Islamic Fund to the top • Sovereign Sukuk: Back to Asia • Meezan Bank concludes HSBC Pakistan acquisition, targets high net worth customer base • Positive third quarter results for Saudi banks IFN Country Correspondents • Completion of repayment of Qatari loans by Egypt in November • Slow growth in Nigeria’s Islamic finance industry • Tunisia looking to debut Sukuk by the end of 2014 IFN Sector Correspondent • Islamic PE and VC: Under-represented but improving IFN Country Analysis • Growing market: Islamic finance in Bangladesh IFN Sector Analysis • Reviving the Islamic securitization market Shariah Pronouncement An Islamic brokerage company has raised the following query seeking Shariah guidance; Pursuant to the initial public offering (IPO), a new company has been established with an aim to carry out Shariah compliant business activities as stated in the company documents made public, including the offering circular Case Study South Africa’s maiden Sukuk: A well-received Islamic paper Priced on the 24th September 2014, South Africa’s sovereign Sukuk was issued at US$500 million at a coupon rate of 3.9%, representing a spread of 180bps above the corresponding benchmark rate. Special Reports Resolutions on Bai ‘Inah in Malaysia: An evolution Bai ‘Inah is an arrangement that consists of a cash sale of an asset followed by a subsequent sale back of it by the buyer to the initial seller for a deferred payment at a higher price or vice versa. M MAHBUBI ALI and DR MARJAN MUHAMMAD explore the evolutions of this controversial contract. Libya: Prospects for a sovereign issuance The Central Bank of Libya’s proposal to issue Sukuk in order to tap the liquidity of commercial banks has been received with mixed feelings by the local and international business community. OMAR VELLA discusses both sides of the issue. Credit-linked notes The Islamic finance industry is evolving, and new structure are emerging. HUSSAIN KURESHI and SEPTYA MUKHSIA introduce some ideas that we should perhaps consider as alternatives to the usual line up. Features Singapore as a hub for Islamic wealth management According to an annual survey conducted by the Monetary Authority of Singapore (MAS), the city-state’s central bank and regulatory authority, the impressive growth of assets managed by financial institutions in Singapore shows no sign of abating... The growth of Islamic derivatives The reputation of financial derivatives suffered greatly during the financial crisis. Legitimate criticism of abuses — such as the deceptive marketing of many credit default swap-backed synthetic securitizations of sub-prime mortgages — led to an avalanche of public condemnation of this entire area of finance... GCC’s low insurance penetration gives Malaysia a head start in Islamic insurance Although the Gulf region is the world’s largest market for Takaful, the sector has yet to truly flourish in any of the six GCC states. The poor performance of the GCC market inevitably invites comparisons with Malaysia, the world’s other large Takaful market...  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: Siti Amilia Amir Amzah Direct Line: +603 2162 7800 ext 27