GLOBAL: It has been an
interesting and busy past week in the realm of Islamic finance as exciting
Sukuk deals were announced, new regulations passed, pioneering products
developed, management boards reshuffled and Islamic financial markets
opening up to greater global integration and cooperation.
We saw successful Sukuk issuances from Indonesia and the emirate of Ras Al
Khaimah but perhaps the most interesting deal revealed is from Malaysia’s
CIMB Group Holdings which according to Bloomberg is looking to raise RM1
billion (US$275.27 million) via collateralized Sukuk this quarter – the
first for an Islamic bank anywhere in the world. Due to the controversy
surrounding collateralized debts, CIMB Islamic is reportedly opting to
offer the deal on a private placement basis to investors who are comfortable
with such instruments.
This week we also learned that Senegal is keen to tap the Islamic markets
again and it is seeking the expertise of the IDB for its sophomore Sukuk
issuance, according to Reuters. Senegal is not the only country the IDB is
extending assistance to as the multilateral organization also made a
commitment to strengthen ties with Gambia and to explore opportunities with
Azerbaijan. The Shariah lender also agreed to establish a joint venture
private equity firm with Indonesia’s Pertamina Pension Fund, a subsidiary
of state-owned oil and gas company Pertamina, also one of the biggest
companies in the world with annual sales revenues of about US$70 billion.
Two countries are making steady progress in the area of Islamic finance
regulations. Kazakhstan according to Reuters has approved Islamic finance
law and is expected to follow up with a new draft law on Sukuk with the
intentions of offering one next year. In Pakistan, banking institutions
received a new Shariah governance framework, to come into effect in July
while the non-banking financial sector is gearing up for a new
comprehensive roadmap which is currently being developed by the Securities
and Exchange Commission of Pakistan (SECP). IFN learned from the SECP that
the framework is expected to be introduced in the next three months, with a
new re-constituted Shariah board to be established (See IFN Report Vol 12
Issue 14: ‘Emulating the Malaysian success story – Pakistan surges
forward’).
The world welcomed the first Islamic Southeast Asia underlying
exchange-traded fund (ETF) on Wednesday – a much needed boost in the
deepening of the nascent and small Shariah ETF universe. Launched by
Malaysia’s i-VCAP Management, CEO Mahdzir Othman confirmed with IFN that
the firm recently received regulatory approval for another Shariah
compliant regional ETF, which i-VCAP plans to roll out next year.
Following the preliminary deal struck last week that could lead to the
termination of economic sanctions on Iran by major world powers, Iran looks
ready to play a bigger role in the mainstream international scene (it
joined China’s Asian Infrastructure Investment Bank as a founding member),
with several countries eager to strike partnerships with the Middle Eastern
nation including Azerbaijan and Turkey – both promising Islamic financial
markets themselves. As the world’s largest Shariah finance market, the
opening up of Iran’s economy could usher in major opportunities for the
industry.
In people news, Standard Chartered continues to be the talk of the industry
as it sees key executives departing. This includes: Afaq Khan (CEO of
Standard Chartered Saadiq), Mohsin Nathani (CEO of UAE operations),
Viswanathan Shankar (CEO of Europe, Middle East, Africa and Americas),
Wasim Saifi (the head of Standard Chartered Saadiq in Malaysia who left in
October) and Hassan Jarrar (CEO of Bahrain business) who according to
Bloomberg will be leading Bahrain Islamic Bank.
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