One step forward…

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
21st January 2015 (Volume 12 Issue 03)
One step forward… The traditional follow-up to that phrase is “two steps back” and while that is in no way the case for the wider Islamic finance industry, it can sometimes seem as if the more progress is made, the further there is to go. However, even when the road ahead seems long and steep, it is worth remembering the constant strength and enthusiasm that can be derived from the global support network of players and providers dedicated to pushing forward the industry. We take a look at this today in our cover story on the slow growth of Shariah funds in Luxembourg – something that on the surface might seem disappointing but in fact could simply represent a boom waiting to happen after all the hard work that has been poured into the sector. Equally, while forecasts for 2015 have not all been rosy – with reports from players such as S&P warning of headwinds in the capital markets, oil prices continuing to fall and interest rates expected to rise – these have had a reassuringly limited impact on the industry. Our IFN reports this week look at the exciting new possibilities for the sovereign Sukuk pipeline – which could in turn spark a corresponding rush for corporate issuance. We also explore the surge in interest for global service provider and structuring services on the back of the rising profile for Islamic issuance; as well as bring you a comprehensive look at the latest activity on the retail front as Islamic banks lead the way in smart technology and virtual services; and an overview of exciting new ETF activity on the Islamic front. Our correspondents this week are on India, Turkey, Brunei, Kenya and regulatory issues while our in-house analyses cover SMEs and entrepreneurship as well as the markets of the UK and Ireland. Special reports come from Raleena Thassim Junkeer of Research Intelligence Unit on perceptions and attitudes on Islamic finance in Sri Lanka, and Sarah Walker and Tom Childs from King & Spalding on arbitration of Islamic finance disputes while our features focus on pensions and Takaful. With the year stretching out ahead it might seem as if there is still a long way to go – but perhaps the best way to approach the journey is not “one step forward” but simply “one step at a time…” Cover Story Luxembourg landscape positive, but Islamic funds slow to grow Luxembourg saw a strong year for Islamic finance in 2014, with the launch of its first sovereign Sukuk and its success as a listing location for multiple major issuances including the debut deals from Hong Kong and South Africa. Coming up on the inside to challenge the UK as Europe’s leading location for Islamic finance, the country may be smaller as an overall financial center but has done a sterling job of playing to its own strengths — especially on the funds and domiciliation side. However, as we move into 2015, has this determination really translated into visible action? Column Daud speaks A very Happy New Year to you all and welcome to 2015! As I mentioned in last month’s article, there will be many challenges ahead in the coming months, but many of the issues that we have to tackle will remain the same. IFN Reports • IFN Weekly Poll: After many years of near stagnation in the Brunei Islamic financial sector, will 2015 witness a resurgence? • Corporate service providers show interest as Sukuk sets sail for another strong year • Banking the smart way • Islamic ETFs on an upward trajectory as markets realize their potential • IFN Global Trendswatch • IDB eyes Morocco’s private and public sectors • European expats hold lower expectations for Islamic banks • Sovereign Sukuk: Markets picking up • Musharakah gaining popularity among Pakistani Islamic banking institutions • Industry says goodbye to Islamic megabank, again • It may not be smooth sailing for the global Sukuk market this year IFN Country Correspondents • Shariah investments gaining popularity in India • Turkish inflation lower than expected • Ease of doing business in Brunei • Kenya continues to face Islamic finance challenges IFN Sector Correspondent • Islamic finance industry continues to grow IFN Country Analysis • UK & Ireland: Race to the top IFN Sector Analysis • SMEs and entrepreneurship: Gaining traction and support from the industry Shariah Pronouncement A company issues Sukuk Mudarabah utilizing funds from investors on a continuing basis. Case Study World’s first rated perpetual Sukuk: MAHB Making a mark in history at the close of 2014, Malaysia Airport Holdings (MAHB) successfully auctioned its RM1 billion (US$280.39 million) perpetual Sukuk Musharakah offering on the 15th December 2014. Special Reports A detailed look at Sri Lankan Muslims’ confidence levels in Islamic finance Seeing the importance of building up confidence in Islamic finance, a survey was conducted to comprehend how Muslims in Sri Lanka perceive Islamic finance. The results show that Sri Lankan Muslims’ confidence in the Islamic financial system is not as high as it could be. Arbitration of Islamic finance disputes – Part 1 In the first installment of a special series, SARAH WALKER and TOM CHILDS walk us through the development of arbitration in Islamic finance disputes, discussing the basics of Islamic finance and the concept of Shariah risk in Islamic finance transactions. Features The growth of Takaful retirement products – the next step? With greater awareness on health-related issues, medical advancement and increasing access to a better quality of life, most countries globally are observing increasing life expectancies among its population in recent years. FARZANA ISMAIL studies the Takaful retirement market and suggests ways to overcome the challenges in developing suitable products. The role of micro-Takaful in Egypt and Africa Micro-Takaful is the Shariah compliant Takaful scheme for low-income earners. Generally, micro-insurance is viewed just like other normal insurance on a small scale for low-income earners.  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