Protecting the future

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
18th March 2015 (Volume 12 Issue 11)
Protecting the future Islamic finance is based upon the moral and ethical principles of the Shariah, and one of its most fundamental precepts is the concept of stewardship: not only in terms of protecting and growing wealth for the next generation, but protecting and caring for the world which they will inherit. What could be closer to home, then, than the concept of social responsible investing – in particular, the growing popularity of climate change bonds and green Sukuk and their importance in today’s environmentally vulnerable world. Our cover story this week explores this issue, and looks at the potential that these instruments could hold – and their very real power to change the course of history for the better. Our IFN reports explore the development of the global sovereign Sukuk market and explore Gulf Finance Corporation’s plans in Saudi Arabia; while our IFN correspondents take you on a journey to Afghanistan, Hong Kong, Brunei, Saudi Arabia and Iran. Our special reports come from International Tax Associates and Quantum Property on Islamic finance in Ukraine, and Millennium Capital on the discrepancies of Shariah finance. We also have an Islamic market update by S&P, who also provided a special write-up on PETRONAS’s landmark Sukuk transaction. We have not only a duty but a responsibility – both to ourselves and to our children – to pass on to them a world that is safe, secure and sustainable. This week, we urge our readers to take a quiet moment to reflect on the importance of this goal, and how we can all work together to achieve it. Cover Story The grass is always greener? Environmental Sukuk take the stage The UAE could issue the world’s first ‘green Sukuk’ as early as next month, as the Gulf takes the lead in the renewable energy race with two potential issuances this quarter. Drawing on the confluence of socially responsible investing (SRI) and Shariah principles, the move represents yet another step towards mainstream market influence for Islamic finance. LAUREN MCAUGHTRY looks at what we can expect from this new facet of the SRI trend. Column Daud speaks In moving Islamic finance to the next level, a closer cooperation between academia and industry will be required, in my view. You have often heard me both write and speak on the subject of EPL (education, perception and liquidity) but you may not have heard Andrew Sheng comment frequently on the fact that we have “19th century institutions, with a 20th century mindset, tackling 21st century problems!”. IFN Reports • Exciting Islamic finance opportunities ahead for Japan • Indonesia ramps up Sukuk effort • A new benchmark for Shariah compliant REITs of Asia Pacific • Gulf Finance of Saudi Arabia: Big plans ahead • Turkey’s G20 chairmanship creates opportunities for global Islamic banking community • South Korea — making inroads into Islamic finance • Sovereign Sukuk: A potential shift towards green energy • IFN Weekly Poll: Do oil prices have an effect on Sukuk issuance? • IFN Global Trendswatch IFN Country Correspondents • Hong Kong: Raising the bar • Afghanistan: Making good progress • Inflation protected Sukuk Musharakah • Islamic finance provides silver lining in the current economic challenge • Developments in the registration of movables for secured lenders in the Kingdom of Saudi Arabia IFN Country Analysis • Country analysis: Offshore centers IFN Sector Analysis • Infrastructure financing: A palpable interest in Islamic finance Shariah Pronouncement Can an Islamic bank obtain cash deposit as security for a customer’s financial obligation towards the bank under various financing facilities extended by the bank to the customer? Special Reports PETRONAS Global Sukuk Standard & Poor’s Rating Services (S&P) has recently assigned a rating to a landmark Sukuk transaction issued by PETRONAS Global Sukuk, a special purpose company incorporated in Labuan, and sponsored by Petroliam National (PETRONAS), the national integrated oil and gas company of Malaysia. The transaction was rated at the foreign currency rating of its sponsor because it was issued in US dollar and complies with the five conditions of S&P’s Sukuk rating criteria Much ado about Islamic finance Much has been written about Islamic finance since the 2008 global financial crisis. Many practitioners and academics felt Islamic finance offered the solutions to the problems of the global financial system. Islamic finance in Ukraine: A new reality While the country is going through difficult times of reforms and transition, Islamic finance appears to have become an interesting and promising industry with significant potential for further development. In the absence of prohibitive local restrictions and state authorities demonstrating flexibility, Islamic finance has good prospects for development in Ukraine. S&P Dow Jones Quarterly Islamic Market Review All major S&P Dow Jones Shariah compliant benchmarks outperformed their conventional counterparts through the first two months of 2015 as financials – which are underrepresented in Islamic indices – have been a sector laggard, and information technology and health care – which tend to be overweight in Islamic indices – have outperformed the broader 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