GLOBAL: Several exciting
deals and developments transpired over the week across multiple sectors
including Sukuk and financing, banking as well as regulations and
governance, bringing sweet promises for the industry.
Let’s begin in the regulatory landscape: Last week, the Afghan parliament
deliberated on the country’s proposed Islamic banking law as part of its
approval process. IFN Correspondent for Afghanistan Dr Alam Khan Hamdard
confirmed that the parliament will meet again to discuss the legislation in
further detail and that it has sought for formal written information and
clarification on certain related issues from the central bank.
In the UAE, Dubai will soon be home to a new Islamic Management and
Governance Center under a joint initiative by the Institute of Corporate
Governance (a unit of the Dubai International Financial Center) and the
Department of Economic Development. While over in Abu Dhabi, its
international financial center (Abu Dhabi Global Market) has released draft
financial legislation for market consultation.
In Oman, the apex bank reaffirmed its commitment to Shariah banking by
introducing an independent Islamic Banking Department to oversee the
sector, a move viewed positively by the market. “Effective regulation and
supervision of Islamic banks achieved through a dedicated unit is positive
for the sector as it should strengthen early detection of risks and support
growth,” said Fitch Ratings. This development comes at a time when two
Islamic banking window operators – Bank Sohar and Bank Dhofar – are taking
a step further in their merger plans by proceeding with due diligence under
a non-binding MoU.
Oman’s banking sector isn’t the only one which received a boost this week
as Malaysia (whose negative outlook has been upgraded to stable by Fitch
this week) also leaped forward with a new player to the game.
Government-owned Agrobank, which accounted for one-third of the country’s
food processing financing market share in 2014, has finally completed its
transformation into a fully-fledged Islamic bank since making clear of its
intentions to do so in 2008, bringing the number of Islamic banks in
Malaysia to 17.
In the funding space, Qatar Islamic Bank paved the way for Basel III Tier 1
Sukuk issuance for the State with its debut QAR2 billion (US$548.54
million) paper, following a similar transaction by Saudi Arabia’s National
Commercial Bank last month. Both facilities were the first for the
respective countries and signal the growing trend of Basel III-compliant
Shariah bonds in the region.
Sydney-based Shariah compliant Crescent Wealth’s foray into the commercial
real estate business marks a likely inflection point for Islamic finance
development in Australia. The AU$31 million (US$23.84 million) deal was
part-funded by National Australia Bank, one of the largest banks in the
country, with its new Wakalah instrument – a product IFN Correspondent for
Australia, Chaaban Omran described as being the first of its kind for an
Australian bank.
Saudi Arabia’s industrial gases project by Arabian Company for Water and
Power Development – the largest of its type in the world – is also the
first industrial gases project to be financed exclusively on a Shariah
compliant basis. According to King & Spalding, advisor to the
transaction, the project is being financed by a US$1.7 billion debt package
from a consortium of 10 banks.
Rounding off with key industry player movements: The UAE’s Commercial Bank
International named Mamoon Abdel Kader as its new head of Islamic banking;
Pakistan’s state-backed Bank of Khyber which offers Shariah financial
products saw its now previous chairman Dr Hammad Uwais Agha replaced by Dr
Ihsanul Haq; while Bahrain’s Investcorp – manager of multiple Islamic funds
– announced major shakeups in management including a new executive chairman
(Mohammed Al Ardhi) following the retirement of Nemir Kirdar (now made
board chairman) from the position and as CEO. The firm also promoted Rishi
Kapoor (previously chief financial officer) to co-CEO with Mohammed
Al-Shroogi; with Tony Robinson assuming Rishi’s previous role.
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