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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.

#Bahrain to launch compulsory risk regime for Islamic banks

The Central Bank of Bahrain (CBB) will publish a consultation on a proposed risk assessment framework for Islamic banks in the first quarter of 2018. Khalid Hamad Abdul-Rahman Hamad, director of banking supervision at CBB, said the bank was planning to issue a very detailed risk management toolkit to improve risk management practices taken by Islamic banks. Under the proposed new rules, banks are required to have proper reserves, be it profit equalisation reserves or investment risk reserves. Whenever banks are investing, they must have a pre-plan regarding how much of bank assets will be funded by unrestricted investment accounts and how much will be invested from funds.

Islamic #funds, asset management sector poised for growth

A report by Malaysia International Islamic Financial Center shows that the Islamic fund and wealth management sector is expected to grow significantly. The report notes that Malaysia and Saudi Arabia have the largest market share of the global Islamic funds and wealth management industry, together holding more than 67%. Saudi Arabia contributed a 35.6%-share of $25.2bn and 209 Islamic funds at end of the first quarter of 2017, while Malaysia has the most number of Islamic funds globally with 388 funds managing a total AuM of $22.6bn. The growth of the sector stems from the fact that global fund and asset managers increasingly notice the potential of this sector. Since it is now also accessible to institutional investors, as well as non-Muslim investors, they began using it as a new way to diversify investments. In a projection by Thomson Reuters, the global Islamic funds and asset management industry remains poised for growth and should increase in volume by more than 8% to $77bn by 2019.

GFH in $150m deal to sell assets to global private schools operator

Gulf Finance House (GFH) has struck a $150 million deal to sell part of its educational assets to a global private schools operator called Inspired. Inspired runs private schools in Europe, Africa, Latin America and Australia. Hisham Al-Rayes, CEO of GFH, said Inspired’s network and experience would add significant value to the schools. This way, both students and teachers will take part in exchange programs and benefit from the latest programs to enhance the level of education. Inspired has schools in Italy, the UK, Switzerland, Belgium, South Africa, Kenya, Australia, Colombia and Peru. GFH’s businesses include asset management, wealth management, commercial banking and real estate development.

First Shariah-compliant commodity ETF launched by Affin Hwang AM

Affin Hwang Asset Management (Affin Hwang AM) has launched its first Shariah-compliant exchange traded fund (ETF) with investment results that closely track the performance of gold prices. The new TradePlus Shariah Gold Tracker will invest a minimum of 95% of its net asset value in physical gold bars purchased from the London Bullion Market Association (LBMA). The remaining balance is invested in Islamic money market instruments and Islamic deposits for liquidity purposes. Affin Hwang AM managing director Teng Chee Wai said the fund provides an efficient entry point to gain exposure to gold by tracking the LBMA Gold Price AM index. Certified by advisory firm Amanie Advisors, each unit of the fund is physically-backed in a secure vault. Investors are provided with an option for physical redemption, for a minimum redemption unit block of 500,000 units, which is equivalent to an estimated 5kg of gold.

Save the date - UKIFC & ISRA Thematic Workshop 2018, in association with K&L Gates

Note: Workshop 21 February 2018 9.30 am - 4.15 pm, free upon registration.

How Ethical is Islamic Finance?

The Islamic Finance Council UK (UKIFC) and the International Shari’ah Research Academy for Islamic Finance (ISRA), in association with K&L Gates invite you to an event addressing the ethical credentials of Islamic Finance, featuring the Shari’a Scholar debate.

Event Themes

The event will cover several key themes including:
• The Shari’a Scholar Debate - Is Islamic finance following the spirit of the law or just the letter?
• Is Islamic Finance an ethical alternative - what social impact has it made in the past 20 years?
• With $40trn in SRI funds under management, is the Islamic Finance sector branded optimally?
• By focusing on the banking model, has Islamic Finance restricted its ability to provide more ethical and socially responsible solutions?
• Malaysia and UK innovation case studies – value-based intermediation and interfaith shared values framework
Speakers will include:
• Lord Sheikh, Co-Chair, All-Party Parliamentary Group on Islamic Finance
• Dr Akram Laldin, Executive Director, ISRA
• Stella Cox, Managing Director, DDCAP

MIDEAST DEBT - #Sukuk documents seek to reassure investors after Dana Gas scare

Sukuk issuers are changing the language in documentation for new issues to reassure investors after Dana Gas refused to redeem $700 million of maturing sukuk. Dana Gas said it would not repay sukuk maturing in October because changes in the interpretation of Islamic finance had made the bonds unlawful in the UAE. Issuers are now amending their documentation to preclude the use of this argument. According to Mohamed Damak, global head of Islamic finance at Standard & Poor's, clauses seeking to reduce sharia compliance risk have become normal in the global industry, but the complexity of sukuk makes it difficult to remove the risk entirely. According to Mohammed Khnifer, senior associate at the Islamic Development Bank, sukuk holders and issuers will now rely more on English law and avoid local laws with dollar-denominated issuance.

#Qatar International Islamic Bank eyes dollar benchmark #sukuk in Feb - sources

Qatar International Islamic Bank (QIIB) plans to issue a U.S. dollar-denominated benchmark sukuk in February. Benchmark deals are generally upwards of $500 million. One of the sources said the transaction could go up to $700 million in size. The sukuk issuance would be QIIB’s first debt sale under a $2 billion sukuk programme the bank established in October. The sukuk programme is arranged by QNB Capital, Citigroup and Standard Chartered.

Islamic finance assets will grow 72% to $3.78trn

The total size of the global Islamic finance assets is projected to grow by nearly 72% to $3.78 trillion (Dh13.87 trillion) by 2022 from $2.2 trillion (Dh8 trillion) last year. According to the Islamic Finance Development Report, Malaysia topped followed by Bahrain, the UAE, Oman, Pakistan, Kuwait, Saudi Arabia, Jordan and Brunei in terms of industry growth. The report studied key trends across five indicators: quantitative development, knowledge, governance, corporate social responsibility and awareness. Khaled Al Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector, said Islamic finance was still tiny in comparison with the global financial industry, but the industry's rapid development suggested it would continue to grow.

VBI to take Islamic finance to next level of growth

#Malaysia is introducing value-based intermediation (VBI) to take its Islamic finance industry to the next level of growth. As a first step, Maybank Islamic initiated the pilot launch of its rent-to-own (RTO) home scheme, called HouzKEY, targeted at properties priced under RM1 million. For now, the product is limited to the bank’s employees but should become available to the public early next year. The bank is aiming for a portfolio size of RM1 billion within the first year. According to experts, this is just the beginning of more RTO schemes to come as several other Islamic banks are expected to launch their own versions. BIMB Holdings group CEO Malkit Singh Maan says the bank is hoping to launch its RTO product for affordable homes in the first quarter of next year. Other VBI products that banks may offer in the future are green technology financing and green sukuk.

#Takaful #Malaysia forms partnership with Ambank Islamic

Syarikat Takaful Malaysia said it has formed a partnership with AmBank Islamic and will market its general takaful products across the country. The takaful operator said that general takaful products for motor, fire/house and personal accident will be distributed across Ambank Islamic's distribution channels. The two companies will also promote new general takaful solutions tailored to Ambank Islamic's customers. Takaful Malaysia group CEO Datuk Sri Mohamed Hassan Kamil said he was delighted to bring the group's general takaful solutions to serve the evolving needs of AmBank Islamic customers.

CDNS to set up Islamic window for savings products

#Pakistan's Central Directorate of National Savings (CDNS) will set up an Islamic window Rafa National Savings to handle the transactions of sharia-compliant saving products. The government has appointed the Dubai-based sharia advisory firm Dar Al Sharia to replicate Islamic financial model for the conventional national savings certificates. Currently, the state-owned CDNS is finalising rules and governance structure for sharia-compliant products. However, the country’s savings-to-GDP ratio of 13.1% is still lowest in the region and attractive financial solutions are needed to foster savings.

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