V12i24: Islamic finance in Europe: Dark horse or damp squib?

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
17th June 2015 (Volume 12 Issue 24)
Out with the old, in with the new? Islamic finance is an interesting dichotomy, with its feet firmly planted in centuries-old concepts while its modern-day growth and innovation often place it at the very forefront of global financial market development. This week we look at its placement, positioning and progress in Europe – another compelling contradiction between the old and the new, and a region whose roots may be buried in the mists of antiquity but whose position on the global stage cannot be underestimated. Islamic finance may have in the past struggled to gain much traction in the wider region but, as we learn in our cover story, that may all be about to change. Change is an essential component of growth, and Islamic finance is an industry that exemplifies this edict. In our IFN reports this week, we bring you a wide variety of analysis – from Securities Commission Malaysia’s new framework for wholesale products to education and Iraq; while our IFN correspondents update you on the happenings in the UAE, Turkey and Hong Kong as well as in private equity and venture capital. Our features come to you from Bank Islami Pakistan, Universiti Tun Razak and Markfield Institute of Higher Education as well as Takaful Re, while our special reports cover the new qualified foreign investor rules for Tadawul by Simmons & Simmons and ESG finance by ISRA as well as a discourse on Riba from FAAIF. Change may be essential but so are the immutable traditions of faith and observance. As Ramadan approaches and we move into a period of reflection, contemplation and self-accountability, IFN wishes all our readers a rewarding month of fasting. Cover Story Islamic finance in Europe: Dark horse or damp squib? Europe already has over 44 million Muslims, with over 58 million expected by 2050. But so far the continent has seen slow growth and while nations such as the UK and Luxembourg have reached out to the market, outside of the real estate sector momentum has yet to gain pace. Some claim demand is lagging, while others suggest that supply is the issue. With Muslims expected to account for 10% of Europe’s total population by 2050 the market is clearly growing — how then, LAUREN MCAUGHTRY asks, can the industry successfully meet its unique regional requirements? IFN Reports • Recognizing the maturity of the Islamic capital markets — SC implements LOLA • Sindh Province to raise US$200 million in Sukuk as part of state budget • IDB creating a benchmark in the supranational market • Europe reaffirms commitment to Islamic finance • S&P Dow Jones debuts multi-asset Islamic indices • Sovereign Sukuk: Asia for the win • IFN Weekly Poll: Does a sovereign rating downgrade affect funding abilities of banks in the country? IFN Country Correspondents • Recent Islamic finance developments in the UAE • Hong Kong stamps its mark in the Asian Islamic finance space • Turkiye Finans CEO quits after corruption rumors IFN Sector Correspondent • Mobile financial technology in Islamic finance IFN Country Analysis • Iraq — Opportunities abound despite limiting legislation IFN Sector Analysis • Education in Islamic finance: A matter of quality and awareness Shariah Pronouncement A corporate entity, which is a customer of an Islamic bank, had deposited an amount in a term deposit account for a period of three years on the basis of Mudarabah Case Study Malaysia’s first global developed Shariah equities fund RHB Islamic International Asset Management (RHBIIAM) last week launched Malaysia’s first Islamic retail fund targeting global developed markets. The RHB Islamic Global Developed Fund aims to provide investors with long-term capital growth by investing 70-98% of the net asset value in Shariah compliant equities issued by companies listed on the stock exchanges of developed markets. Speaking to Sharizad Juma’at, the acting principal officer of RHBIIAM, NABILAH ANNUAR has the exclusive. Special Reports ESG finance: A Maqasid viewpoint The Islamic finance industry has sustained impressive growth; however, it is not free from criticism that could be essentially instrumental in ensuring that its sustainability remains intact and that it serves the higher objectives of Shariah (Maqasid Shariah). King & Spalding: A global islamic finance and investment practice (in every sense) King & Spalding has a long and venerable history in the industry, and was the first law firm to launch a dedicated Islamic finance and investment practice group way back in 1995. A discourse on Riba Lending money is not prohibited in the Bible. What is prohibited is charging abusively high interest. This is because high-interest loans tend to prey on the most under-resourced people in society. New qualified foreign investor rules for Saudi Arabia’s stock exchange In this article, AHMED BUTT AND SAMIR SAFAR-ALY provide an overview of the new qualified foreign investor rules and the challenges that lie ahead for prospective qualified foreign investors and assessing authorized persons. Features Islamic finance is a far-fetched dream in Thailand There are ample opportunities in Thailand when it comes to Shariah compliant asset creation. Immense agriculture sector scope, massive infrastructure developments, real estate developments and manufacturing concerns are the needs of Islamic financial asset creation opportunities. Islamic finance curriculum development in British higher education: Challenges and prospects The UK is one of the leading countries in exporting its education. This is constantly being monitored in order to maintain quality assurance control. Quality talent in Islamic finance industry: Challenges and the way forward The growth of Islamic finance (IF) in the past decade has been marvelous. As the industry expands into untapped markets, there is a need to develop talented human capital who understand the industry and its underlying Shariah principles to support this growth. Challenges facing the re-Takaful industry Most of the current existing re-Takaful companies were established during the recent 10 years in line with the establishment-boom of Takaful operators in the GCC and ASEAN.  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