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BisB signs #murabaha financing pact

Bahrain Islamic Bank (BisB) has signed an agreement with Bahrain Bourse for a murabaha financing framework using a Sharia-compliant lending service. The underlying asset is Ijara sukuk provided by the Central Bank of Bahrain (CBB). Adding this Murabaha service introduces a new underlying asset to the bank’s existing commodity murabaha facility structure, currently conducted via local and international brokers. This further diversifies the structure and enhances its framework given that it is actioned via a digital system which decreases the processing time exponentially.

Dubai Islamic Bank expected to sell over $200 mln in tap of 2026 #sukuk - document

Dubai Islamic Bank is expected to sell more than $200 million of its existing sukuk issuance due in 2026. The bank set final price guidance at 240-245 basis points over midswaps, tightening from initial price guidance of around 250 bps. DIB received more than $500 million in orders for the deal.

Gatehouse Bank Review – Islamic Mortgage: a deep dive

Gatehouse Bank’s Home Purchase Plan (HPP) is the cheapest option available in the home purchase space for a number of the HPP products. The structure is identical in legal form to the Al Rayan HPP. The Gatehouse HPP uses a combination of freehold and leasehold to deliver a diminishing musharakah/ijarah model. Gatehouse buys the freehold title in the house at the closing of the transaction, and it is its name that appears on the title. But the buyer gets an equitable interest in the freehold by way of the contract (Diminishing Musharaka Agreement) and also gets a leasehold alongside Gatehouse. Time passes, the Buyer continues paying rent and buying further equity in the house until eventually he owns 100%.

NBB diversifies its Murabaha service to clients by offering #Sukuk-based #Murabaha facility

The National Bank of Bahrain (NBB) announced its subscription to Bahrain Bourse’s newly introduced Murabaha service, which will be used by the Bank when transacting in Islamic Commodity Murabaha financing. NBB is one of the first banks in the Kingdom to execute a transaction using the new fully Shari’ah compliant service. The service employs Government of Bahrain Islamic Ijara Sukuk, whereby the lender in the financing transaction buys the Sukuk from the CBB and after the transfer of the ownership, sells them to the borrower, with a deferred sell as the underlying commodity.

New #UK waqf fund to start investing in real estate with eye on other asset classes

The recently established UK-based National Waqf Fund (NWF) will start investing in real estate, according to CEO and co-founder Umer Suleman. NWF will be focused on the charity and social aspects of waqf. The three main aims of NWF are to establish a central fund, manage awqaf on behalf of other organisations as well as create a virtual centre of excellence for Islamic endowments. NWF will invest in real estate and through its investment committee decide on how and where to deploy the funds. Suleman noted that the upcoming property portfolio will primarily focus on London, Birmingham and Manchester, without the exclusion of other areas. NWF aims to raise £10 million ($12.37 million) within the next 1 to 2 years. Within the next decade, Suleman hopes NWF will have around £150 million of assets under management.

DP World hires banks for perpetual Islamic bonds - document

Dubai-based port operator DP World has hired a group of banks for a potential sale of perpetual U.S. dollar-denominated sukuk. Citi, Deutsche Bank and JPMorgan will arrange investor calls in Asia, the Middle East and Europe, to be followed by the issuance of perpetual U.S. dollar-denominated Islamic bonds non-callable for 5-1/2 years. Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Crédit Agricole, Samba Financial Group, Scotiabank and Standard Chartered Bank are also working on the deal.

#Indonesia issues $2.5 bln global #sukuk including $750 mln green tranche

The government of Indonesia issued $2.5 billion in wakalah global sukuk in three tranches. The 5-year paper of $750 million was sold as a green sukuk, while the other two tranches consisted of a 10-year tenor of $1 billion, and a 30-year maturity of $750 million. The sale was welcomed by investors with an order book that reached $16.66 billion, nearly 6.7 times the target amount. This global sukuk will be listed on the Singapore Stock Exchange and NASDAQ Dubai and the settlement will be carried out on June 23, 2020, with yields of 2.30% for the 5-year tenor, 2.80% for the 10-year tenor and 3.80% for the 30-year tenor.

ESG, syariah stock indices slightly outpaced conventional counterparts on better management, lower leverage — Islamic finance heads

Environmental, social and governance (ESG) and Islamic stock indices have marginally outperformed their conventional counterparts this year, owing to their better management and lower leverage. Refinitiv head of Islamic finance Mustafa Adil said while syariah-compliant equity indices experienced identical volatility-induced declines to conventional stock indices, they had staged a better recovery so far. He added that these equities are expected to provide greater returns in the medium to long term as they are less leveraged.

Al Baraka signs #sukuk trading deal with BHB

Al Baraka Islamic Bank and Bahrain Bourse (BHB) have signed an agreement allowing the bank to buy and sell Sharia-complaint ijara sukuk through the exchange. Proceeds from the sukuk will contribute to facilitating the bank’s financing operations for its underlying clients. The agreement aims to diversify the commodities available for underlying clients when conducting a commodity-based murabaha transaction to include government-based sukuk issued by the Central Bank of Bahrain.

Potential of Islamic capital market remains promising at home and abroad – Bursa chairman

According to Bursa Malaysia chairman Tan Sri Abdul Wahid Omar, the potential of the Islamic capital market remains promising both in Malaysia and abroad. During his keynote address at the Shariah Investing Virtual Conference 2020 Abdul Wahid said that in Malaysia alone, the industry of Islamic funds had demonstrated impressive growth. As of March, syariah funds stood at RM170 billion, representing 23% of total industry assets under management (AUM). Syariah unit trust funds' net asset value (NAV) stood at RM99 billion. Abdul Wahid added that there are opportunities for further product innovation and development to provide investors with more syariah-based products.

World Bank: Islamic finance value proposition has to be clear

The World Bank said the Islamic capital market's (ICM) value proposition has to be very clear to show that its concept is more powerful than the environmental, societal and governance (ESG) investment schemes. World Bank financial sector specialist consultant Dr Mohamed Eskandar Shah said ESG's value proposition seems to be quite straight forward compared to Islamic finance. He noted that between 2007 and 2019, the ICM, measured in global shariah equities, saw a 4.3% growth a year compared to the 10.2% expansion in ESG equities. As such, Islamic finance could become a subset of ESG investing, or eventually people will brand Islamic finance in the context of ESG, rather than Islamic finance having its own identity.

#Malaysia’s Islamic finance sector to hit RM3t this year, says Bursa chairman

Malaysia’s Islamic finance sector is expected to sustain double-digit growth to reach almost RM3 trillion in 2020 under the second Capital Market Masterplan. The chairman of Bursa Malaysia, Tan Sri Abdul Wahid Omar, said the country’s Islamic funds industry has demonstrated impressive growth. The country is the third-largest market for global Islamic finance products and the world’s largest Sukuk issuer. At Bursa Malaysia 79% of the listed companies are Shariah-compliant and Shariah market capitalisation makes up 70% of the total market capitalisation of RM1.6 trillion. Over the last ten years Shariah indices consistently outperformed its conventional counterparts. Thus, Shariah-compliant investments are an attractive source of value for investors.

Dubai outlines plans to unify legal framework for Islamic finance

The CEO of Dubai Islamic Economy Development Centre (DIEDC) outlined the phases for the development of a unified legal framework for Islamic finance. Abdulla Al Awar said that once complete, the project would bring standardisation to the Islamic finance sector and reduce discrepancies in practices across the globe. The DIEDC signed an agreement with the Accounting and Auditing Organisation for Islamic Financial Institutions for the use of its standards as a reference point in building the international legal framework. The Sharia-compliant segment of Dubai’s economy contributed Dh41.8 billion to the emirate’s gross domestic product in 2018. Dubai continues to pursue its goal of becoming the top Islamic economy hub in the world.

#Turkey's Erdogan says Islamic economy can pull world 'out of crisis'

Turkey's President Recep Tayyip Erdogan said Islamic economic system is the key to getting out of crisis as global economy continues to suffer from coronavirus pandemic. President Erdogan said the loss of nearly 440,000 lives worldwide can't be attributed to Covid-19 alone, saying many countries have an economic system that protects only strong and the rich. Erdogan said Turkey is among the countries that has fought the pandemic with the least damage. Pointing out the country’s first-quarter growth of 4.5%, Erdogan said that Turkey has shown that it distinguished itself positively from other countries not only in the health sector but also in the economy, during the Covid-19 pandemic.

IsDB eager to support development projects Madinah

IsDB President Dr. Bandar Bin Hajjar stated that the bank was working on a pioneering project to establish a "Global Waqf Centre of Excellence" in Madinah, with a capital of $50 million. The aim of the center is to build a global umbrella for the Waqf sector, linking and coordinating all those interested in Waqf. The Islamic Research and Training Institute (IRTI) is preparing to launch the first initiative of the center to grant an approved certificate of Waqf specialist. IRTI is also working on the "Ish’had" platform, which is an e-platform using blockchain technology, to document and protect Waqf properties.

Hafeez for potential of Islamic finance to help developing states

Pakistan's Adviser on Finance and Revenue, Dr Abdul Hafeez Shaikh said the Covid-19 has engulfed the whole world, and the global GDP is going to contract by 3-4%. Hafeez said Islamic banking was growing at a fast pace in Pakistan and he emphasized the potential of Islamic finance to help developing countries cope with the global financial challenges. The adviser said the government established a corona relief fund and transferred cash to 16 million vulnerable families to provide them support in this difficult time.

#Saudi property firm Amlak plans first post-coronavirus Riyadh IPO

Saudi real estate financing firm Amlak International plans to float 30% of its shares in Riyadh, in what will be the exchange’s first initial public offering (IPO) since the coronavirus crisis. Amlak said the final offer price would be announced on June 30, after a book-building process starting on June 22. Saudi retailer BinDawood Holding also plans to launch an initial public offering as early as this month. The group hired Goldman Sachs, JP Morgan Chase, NCB Capital and GIB to organize the deal.

New York Online Investment Firm Gets Aramco Financing for Islamic Products

New York-based Wahed Invest has secured financing from oil giant Saudi Aramco to expand into the Middle East and make Riyadh its regional hub. The Saudi Aramco Entrepreneurship Ventures extended the funding to the online Islamic investment platform as part of a $25 million funding round. The three-year-old Wahed Invest, which has secured a license to operate in Saudi Arabia, aims to get regulatory approval in 20 more countries. It currently has licenses to operate in nine countries. The company's Islamic Exchange Traded Fund (ETF) holds investments in Apple, Johnson & Johnson, and Intel Corp. Wahed Invest is also contemplating listing its Islamic ETF on the Saudi stock exchange. Its ETF was listed on the Nasdaq last year.

Sharjah Islamic Bank hires banks for dollar #sukuk, document shows

Sharjah Islamic Bank has hired a group of banks to arrange a global investor call ahead of a potential issuance of five-year U.S. dollar-denominated sukuk. The bank hired Standard Chartered, Bank ABC, Citi, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, the Islamic Corporation for the Development of the Private Sector, KFH Capital and Mashreqbank to arrange the call.

Global high net worth (HNW) wealth will decline by $3.1 trillion in 2020: report

According to a new report released by Oliver Wyman and Morgan Stanley, Covid-19 will fundamentally change the way the Wealth Management industry in the Middle East operates. The report, called Wealth Management: After the Storm, highlights how a golden decade of growth for the Wealth Management industry has been drastically disrupted by Covid-19. Raji Souag, Partner at Oliver Wyman Middle East, sees global high net worth wealth declining by four percent, or $3.1 trillion in 2020. He believes that digitalisation and globalization will be among the immediate priorities of Wealth Management firms. Advisors will remain central to client relationships, however, they need to be supported with strong digital capabilities.

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