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#Malaysia begins Islamic stock lending

Malaysia’s stock exchange (BMSC) has launched a framework for Islamic stock lending. The introduction of Islamic stock lending aims to provide a Shariah-compliant alternative to the securities borrowing and lending negotiated transaction framework (ISSBNT). According to Bursa Malaysia, Islamic stock lending will provide a more facilitative trading environment and improve trading liquidity. Any person approved by BMSC to be an approved supplier may enter sell its own securities. An approved user is required to have a minimum of RM 50 million (USD 12.2 million) in shareholders funds. Initially, close attention will be given to extending Islamic exchange traded funds in particular, as well as enhancing levels of liquidity.

Iran Gov’t to Issue #Sukuk Worth $6b Next Year

The Irani government will issue 260 trillion rials ($6 billion) worth of sukuk in the next fiscal year, starting March 21, 2018. Proceeds will be used to fund the government's incomplete projects. Managing Director of Central Securities Depository, Gholamreza Aboutorabi, said the projected debt issuance was 30% higher compared to what was forecast for the current year.

Experts call for strategy to use #fintech in Islamic finance

Islamic banks have been urged to adopt a strategy to make effective use of financial technology. At a seminar held recently, Ahmed Ali Siddiqui, director of Centre for Excellence in Islamic Finance at IBA, said there has to be a strategy for Islamic finance in the digital world. According to fintech expert Ashar Nazim, Pakistan is doing well in Islamic finance, but the country's finance industry has to adapt to fintech. Market Link Executive Director Ishan Kanji said that using fintech will support the agricultural sector by providing easy access of loans and facilities to farmers. He stressed on the need to tap into the informal economy, which is twice the size of formal economy in Pakistan. At the seminar Hasan Bilgrami, CEO of BankIslami, shared the success story of BankIslami being the first bank in Pakistan to use biometric technology.

Realising SDGs through Islamic finance

According to Sultan Nazrin Muizzuddin Shah, Islamic finance has a variety of social finance tools which can be used to increase funds and mobilise donations from a diverse range of sources. Through zakat, sadaqah and waqf, Islamic finance enshrines sustainability, responsibility and generosity. The International Federation of Red Cross and Red Crescent Societies (IFRC) is now looking to the tools of Islamic finance for humanitarian funding. The United Nations’s Sustainable Development Goals (SDGs) are also concerned with protecting the planet and conserving the environment. Malaysia has paved the way for green sukuk and this may become the catalyst for further responsible investments all over the world.

#Tax neutrality for Islamic Finance needs refinement

For countries wanting to enable Islamic finance within their borders, a key requirement is tax legislation to provide for tax neutrality. Without a waiver, Islamic finance would incur costs that would render it prohibitive. While the debt like contracts of Islamic finance, contracts such as Ijarah, Murabaha, Bai Bithamin Ajil (BBA), Salam and the like dominate Islamic finance, the risk sharing contracts like Mudarabah and Musyarakah remain unused. Yet, it is the risk sharing contracts that truly provide the value added of Islamic finance. Removing the tax impediment to risk sharing contracts can help rejuvenate both Islamic banking and capital markets. The biggest advantage to the movement away from debt to risk sharing at the micro level is the macro level benefit of reduced vulnerability.

#Workshop on enhancing poor’s capability, financial #inclusion begins

An international workshop on "Enhancing the poor’s capability and financial inclusion from Islamic perspective" took place in Islamabad, Pakistan. On the first day, experts discussed the role of Islamic micro-finance in socio-economic development and economic empowerment of women. President of the International Islamic University Islamabad (IIUI), Dr Ahmed Yousif said Islamic financial institutions would have to play their role as objectives of value orientation. He called upon the Muslim world to stay united and include Islamic teachings in the economic system. Dr Atiq-uz-Zafar, director general of the International Institute of Islamic Economics of the IIUI, said that the session of the workshop would also include detailed research papers of the experts. The workshop will conclude today at Faisal Mosque campus.

Amity Foundation Participates in Faith in Finance Meeting in Zug, Switzerland

Financial investors of more than 30 different faiths attended the Faith in Finance meeting in Zug, Switzerland. Qiu Zhonghui, General-Secretary of the Amity Foundation also joined the the talk on religious investment funds. At the Faith in Finance meeting, Elliott Harris, UN Assistant Secretary-General stressed that investment in the field of sustainable development will play an important role in the 2030 Agenda of the UN. The United Nations estimates that religious institutional funds make up around US$10 trillion of the world's invested funds. Participants set out their own Guidelines on what they will invest in, noting that a good proportion of the money should be invested in environmental and sustainable development. Delegates agreed to set up a platform for cooperation and investment service under the sustainable framework of the Agenda 2030.

Thomson Reuters and the ICD just released its study on Islamic Finance, find out what it says

Thomson Reuters and the Islamic Corporation for the Development of the Private Sector (ICD) released the Islamic Finance Development Report and Indicator (IFDI) at the World Islamic Banking Conference 2017 held in Bahrain. The report studied key trends across five indicators: Quantitative Development, Knowledge, Governance, Corporate Social Responsibility and Awareness. The IFDI global average value recovered to 9.9 in 2017 from 8.8 in 2016. This reflected improved performances in each area. Malaysia, Bahrain and the UAE lead the IFDI country rankings for the fifth consecutive year, while the GCC remains the leading regional hub for the industry. The report also highlights how Islamic finance can help countries adapt to difficult economic conditions.

Muslim countries should tap into #green #sukuk market, says CIMB Islamic

According to CIMB Islamic Bank CEO Rafe Haneef, Muslim countries and customers with such affinity should tap into the green sukuk market, given the estimated US$45 trillion demand for such assets. He added that green sukuk, was very much part and parcel of shariah compliance, which should be halal and sustainable. In the context of global sukuk, the total size per year is about US$45 billion to US$50 billion, so green bonds are already five times the size of sukuk. RAM Rating Services deputy CEO Promod Dass said there was US$3 trillion worth of green investment needs in Asean from 2015 to 2030. Maybank Group global banking head Datuk Muzaffar Hisham opined Malaysia was in the right direction of participating in the green sukuk sector. He added that appetite for green investment was growing, the only question remaining was how to accelerate it.

Islamic finance seen adapting to new economic conditions

The Islamic Finance Development Report and Indicator (IFDI) 2017 was presented at the 24th World Islamic Banking conference 2017 held from December 4 to 6 in Bahrain. The report was commissioned by the Islamic Corporation for the Development of the Private Sector (ICD) and put together by business intelligence provider Thomson Reuters. The report uses five indicators to measure the development of the $2.2tn Islamic finance industry, which are quantitative development, knowledge, governance, corporate social responsibility and awareness. This year, Malaysia, Bahrain and the UAE kept leading the IFDI country rankings for the fifth consecutive year, while the GCC remains the leading regional hub for the industry. Oman remained unchanged on rank four, while Saudi Arabia dropped two notches to rank seven, and Jordan, Qatar and Indonesia fell one notch each to ranks nine, ten and eleven. The big newcomer is the small Southeast Asian sultanate of Brunei, which made a jump from rank 14 to rank 9.

Moody's, global #sukuk issuance to top $ 95 billion in 2017

According to Moody's Investors Service, the global sukuk market will continue to rebound from a sharp drop in volumes in 2015. Analysts estimate that total sukuk issuance will reach around $95 billion by the end of this year, after more than $85 billion in 2016, including more than $50 billion of sukuk issuance by sovereigns. Moody's Vice-President Christian de Guzman expects that sovereign sukuk issuance volumes will continue to grow in 2018 as governments look to diversify their financing mix and satisfy the liquidity needs of Islamic retail banks. Sovereigns issued more than $40 billion of sukuk in the first eight months of the year. This represents a 50% increase compared to the same period last year. In 2017, market growth was driven by Saudi Arabia with a total issuance of $17 billion. Other countries with large fiscal deficits, such as Oman and Bahrain, will also contribute to the market's expansion.

Source: 

http://www.ansamed.info/ansamed/en/news/sections/economics/2017/12/11/moodys-global-sukuk-issuance-to-top-$-95-billion-in-2017_b2f9d1b9-3864-4cd5-bdcc-470d2947670a.html

Bursa #Malaysia launches Islamic Securities Selling and Buying Negotiated Transaction

Bursa Malaysia launched the first Shariah-compliant alternative to the Securities Borrowing and Lending Negotiated Transaction (SBLNT) framework, called Islamic Securities Selling and Buying Negotiated Transaction (ISSBNT). The new ISSBNT framework is based on the SBLNT model and is expected to provide a more facilitative trading environment for securities. Bursa Malaysia CEO Datuk Seri Tajuddin Atan said market participants would now have an alternative avenue which is compliant with Shariah principles. The model was chosen because it is more widely used by the market due to its flexibility. Tajuddin noted that ISSBNT is expected to bring an uplift of around 5 to 10% growth in funds transaction in the next 12 months.

Trustbank Amanah, the first Islamic Bank in #Suriname and region, to play an important role in the development of entrepreneurship and economic growth

Islamic banking has made its entry in Suriname with the approval of the Central Bank of Suriname for Islamic products and services in the banking sector. The official opening of Trustbank Amanah, the first Islamic Bank in Suriname, took place on Thursday 7th of December 2017. Trustbank Amanah aims to develop, support and encourage Small and Medium Enterprises (SMEs) in accordance with Islamic Finance principles. After the official launch of Trustbank Amanah, a Memorandum of Understanding (MoU) was signed with the Ministry of Trade, Industry and Tourism and the Association for Surinamese Business (VSB) to stimulate, support and develop local SMEs.

#Indonesia Hampers #Fintech in Using #Cryptocurrencies

From January 1, Indonesia is introducing a ban on crypto coins as payment options. The Indonesian government wants to ban forms of payment processing and make payment processing available only by owning a banking license. Such moves show how governments could crack down on crypto coins, while being generally accepting of fintech payment systems, even going as far as licensing them. Indonesia recognizes fintech firms as those providing payment systems, market support, investment management or risk management, P2P lending, financing providers and other financial services. All new fintech products in Indonesia would be tested in a sandbox environment before receiving a license.

The new #sukuk way for efficient construction financing

#Malaysian real estate developer SkyWorld is raising some RM50mil under tranche one of the RM600mil sukuk musharakah programme for its SkyAwani Residence development in Kuala Lumpur. The novel sukuk transaction is the first securitisation of progress billings combined with affordable housing. RAM Ratings Services has assigned a preliminary AA3/stable rating for the sukuk, while Danajamin Nasional is guaranteeing the support facilities. Developed, arranged and advised by NewParadigm Capital Markets, the project has achieved 100% sales. According to NewParadigm executive director Danny Kwan, the primary objective of this financial programme is to monetise the unbilled sales upfront rather than later. It provides for more efficient cashflow management for the residential developer.

US Dollar #Sukuk Market’s New Chinese Entrant

Chinese state-owned bank the Industrial and Commercial Bank of China (ICBC) has become the first Chinese bank to help arrange a dollar based sukuk. ICBC helped arrange Pakistan’s recent $1 billion 5 year Sukuk. Pakistan raised over $8 billion for its dual issuance of sukuk and a conventional Eurobond of $1.5 billion. China is building stronger trade ties with Asian countries under its "One Belt, One Road" strategy to rebuild Silk Road trade links with Asia and Europe. Additionally, the China–Pakistan Economic Corridor (CPEC) is a collection of infrastructure projects that are currently under construction throughout Pakistan. The value of CPEC projects is worth $62 billion and provides China with a vital route to the Arabian Sea for trade routes to the Middle East, Africa and Europe.

Reviving 'waqf' institutions in #Indonesia

Waqf have played an important role in the social and economic development of Muslim societies. However, many waqf properties in Indonesia suffer from abuse and neglect. Chairman of the Indonesian Waqf Board (BWI) Mohammad Nuh urged the transformation of the great potential of waqf into a real force to support the national economy. Current development of waqf is hindered by five core issues: misperception, legislation, governance, professionalism and the availability of funding. Important issues such as the provisions of a survey or census on waqf and tax incentives are lacking in the current legislation. A survey on waqf is crucial in mapping the current problems and status of waqf assets. In Indonesia waqf institutions are largely not bankable and hardly have a channel to financial institutions in financing the development of their properties. The newly appointed Indonesian waqf board may revive waqf institutions by identifying priorities, careful implementation and better administration.

Iranian Banks’ Incomes, Expenses Projected for 2018-19

The total projected income of eight Iranian state-owned banks has been put at 845.2 trillion rials ($20.09 billion) for the fiscal 2018-19. These banks include Bank Melli Iran, Bank Sepah, Bank Keshavarzi (AgriBank), Bank of Industry and Mine, Export Development Bank of Iran, Post Bank of Iran, Tose'e Ta'avon Bank (Cooperatives Development Bank) and Bank Maskan. The expenses of these banks have been predicted to match their incomes at 820.2 trillion rials ($19.49 billion). President Rouhani submitted the budget on Sunday for the next fiscal year that begins on March 21, 2018. The bill also cements the authority held by the Ministry of Economic Affairs and Finance to issue official guarantees. All projects belonging to the private sector, cooperatives and non-government public entities that meet the criteria will be able to employ foreign funds.

#Fintech Is The New Oil In The Middle East And North Africa

In the Middle East and North Africa (MENA), the financial technology sector is coming of age. According to the State of Fintech report, fintech startups in the region have raised over $100 million over the past decade and investment is predicted to double by 2020. Disclosed investment in fintech had jumped 100% to over $35 million by October 2017. The number of fintech startups also increased from 46 in 2013 to 105 in 2015. It is estimated that it will more than double again to 250 by 2020. Despite the ubiquity of smartphones and internet connectivity, 86% of the adult population in the region is unbanked, while three in four GCC bank customers are ready to switch banks for a better digital experience. According to Abdulaziz Fahad Al Jouf, CEO of PayTabs, fintech could become as great a force in the Middle East as oil. In this environment, the region’s financial institutions are compelled to keep pace with the rapidly evolving fintech industry.

Ratings scheme planned for #Islamic #endowments

Islamic institutions in Bahrain and Malaysia are developing a ratings scheme for Islamic endowments, or awqaf. The Bahrain-based Islamic International Rating Agency and the Malaysia-based International Institute of Islamic Waqf (IIIW) hope that greater accountability in the management of awqaf can help integrate them into Islamic financial markets. This could mobilize idle assets which are estimated to be valued between $100 billion and $1 trillion across the globe. Awqaf operate social projects such as hospitals, mosques and schools with donations received from Muslims. Most Awqaf do not disclose financial figures, but their underperformance is believed to be considerable since they have traditionally been run by administrators rather than investment managers.

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