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Bank Muamalat to grow revenue from Islamic pawnbroking

Bank Muamalat Malaysia aims to grow its revenue from Islamic pawnbroking (Ar-Rahnu) by up to RM50million. The bank's second pawnbroking campaign was launched on June 20 and will run for 10 months until March next year. Bank Muamalat consumer banking division head Zury Rahimee Zainal Abiden said the bank aims to tap the interest of up to 50,000 people in comparison to only 27,000 during the previous campaign period. Throughout this campaign, Bank Muamalat is offering a one kilogramme gold wafer as the main prize, 100 gramme gold wafer for the second prize and 50 gramme gold wafer for the third prize. Bank Muamalat is also offering a prize of a gold wafer on a monthly basis for more than 200 selected customers throughout this campaign period. From the first campaign the bank recorded up to RM26.9million of revenue from the gold business with an average of 2,700 new accounts every months. Bank Muamalat has more than 1.2 million customers and this segment of the business contributed 8% to the group earnings.

Experts meet on Islamic finance

Experts from the private and public sectors are meeting today in Lagos to discuss the progress of Islamic finance in Nigeria. The inaugural edition of the IFN Nigeria Forum "Harnessing the Islamic Finance Sector for Infrastructure Development and Economic Growth" takes place on June 18th. The IFN Nigeria Forum 2019 features a mix of panel sessions, onstage interviews and interactive sessions on a number of themes in Islamic finance, including Corporate Financing and Capital Raising in Nigeria. Speakers include Director-General, Debt Management Office of Nigeria, Ms Patience Oniha; Acting Director-General, National Pension Commission, Hajia Aisha Dahir-Umar; Divisional Head, Trading Business, NSE, Mr Jude Chiemeka; Managing Director, Lotus Capital, Hajara Adeola; Partner, Udo Udoma & Belo Osagie, Adeola Sunmola, and Head, Debt Capital Markets, FBNQuest Merchant Bank, Oluseun Olatidoye.

Saudi Arabian issuers boost #sukuk in first five months of 2019

According to S&P Global Ratings, the sukuk market enjoyed a strong start to the year but it may not last. S&P Global Ratings Head of Islamic Finance, Mohamed Damak said high levels of liquidity in Indonesia, Turkey's efforts to tap all available financing sources, and the return of Qatari and Saudi Arabian issuers to the market have boosted issuance of sukuk 17.6% in the first five months of 2019. S&P expects the total Sukuk issuance will average $105 billion-$115 billion this year, assuming the Brent oil price stabilizes at $55 per barrel. This follows a mild performance in 2018 when issuance dropped to $114.8 billion, a 5% decline compared with 2017; US dollar Sukuk alone fell by 15% year on year. Tightening liquidity conditions, high geopolitical risks in the Middle East, and challenges inherent to sukuk issuance will likely dampen sukuk market performance in 2019.

Sharjah Islamic Bank mandates banks for capital boosting #sukuk

United Arab Emirates’ Sharjah Islamic Bank has hired banks to arrange investor meetings ahead of an issuance of U.S. dollar-denominated sukuk. Citi, HSBC and Standard Chartered have been hired to coordinate the deal, and they are bookrunners along with Abu Dhabi Islamic Bank, Bank ABC, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, and KFH Capital. The planned sukuk deal will boost the bank’s Tier 1 core capital.

Dubai developer The First Group to issue $135mln #sukuk

Dubai-based real estate developer The First Group plans to issue $135 million in sukuk. The developer has appointed investment bank Shuaa Capital to arrange the planned transaction. The First Group specialises in hotel investments. It has completed 11 projects in the UAE to date and has seven hospitality developments under construction. This issuance is one of few debt issues in the pipeline in the Gulf region after business slowed sharply during the holy month of Ramadan, which ended last week.

College launches degrees in Islamic finance

Dundee’s Al-Maktoum College of Higher Education is collaborating with the University of Dundee to offer qualifications in MSc Islamic Finance, MSc Islamic Banking and Finance and MSc Islamic Banking, Finance and International Business. Dr Salah Alhammadi, assistant professor in Islamic economics at Al-Maktoum College, said Islamic finance has been adopted in Muslim majority countries as well as non-Muslim countries. The London Stock Exchange recently claimed that the UK is leading western countries in Islamic Finance. Designed for students who have completed an undergraduate degree and are now looking to specialise, the programmes are suitable for those with a background in finance and business but also anyone new to the subject.

Dubai issues new financial centre insolvency law after Abraaj collapse

Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum issued a new insolvency law for companies operating in the Dubai International Financial Centre (DIFC). The new law has been issued following the collapse of Dubai-based private equity firm Abraaj. The firm had a row with some investors over the use of money in a $1 billion healthcare fund. The new law introduces a "new debtor in possession bankruptcy regime" for debtors that have filed for bankruptcy but still hold assets. Abraaj, its founder Arif Naqvi and a former executive are being investigated by the U.S. Securities and Exchange Commission on U.S. charges that they defrauded investors.

#UAE's Sharjah Islamic Bank readies capital-boosting dollar #sukuk

Sharjah Islamic Bank is expected to issue U.S. dollar-denominated sukuk by the end of June to boost its Tier 1 core capital. The bank's board approved earlier this year the issuance of sharia-compliant Tier 1 instruments for up to 2.8 billion dirhams ($762 million). Last year, Sharjah Islamic raised $500 million in sukuk with HSBC and Standard Chartered as global coordinators, attracting around $950 million in orders. A few other Gulf issuers are also expected to tap the international debt markets over the coming weeks, taking advantage of cheaper funding costs after a drop in yields on the benchmark U.S. Treasury rates.

#Russia's Sberbank to Acquire Stake in Islamic Charity Platform PayZakat

Russia's state-controlled Sberbank will acquire 25% of the PayZakat platform that collects charity for Muslims in need. PayZakat is a start-up that won Sberbank’s first Sber#Up corporate accelerator competition for its own employees, and the bank sees global and universal potential for the platform. The PayZakat platform allows its users to calculate their contribution amount, and channel it to the charity of their choice. Chat bots integrated into social networks help with the process and provide status updates on the contribution. Sberbank is at the forefront of Russian digital development and is preparing to launch its Sber digital ecosystem in the short- to medium-term.

Why a second #merger wave may hit #UAE lenders

According to Bloomberg Intelligence, banks in the United Arab Emirates may go through a second wave of consolidation as lenders seek to improve profitability. Bloomberg analyst Edmond Christou said the absence of common shareholders and a lack of cross-Emirate deals have so far hindered transactions. Abu Dhabi Islamic Bank and Commercial Bank International are among lenders that have under-performed in some areas and could benefit from commercially driven mergers. Most bank mergers in the UAE have so far been driven by common shareholders, making it easier for deals to be completed. Dubai Islamic Bank approved a plan this week to proceed with the acquisition of smaller rival Noor Bank, both of which are controlled by Dubai’s main holding company.

OPINION: #Sukuk bonds becoming increasingly mainstream

According to Dino Kronfol, CIO at Franklin Templeton Investments, the future is bright for investing in sukuk. He is confident that sukuk could provide the stability that mitigates an uncertain global economy, particularly as more risk management tools become increasingly integrated into sukuk products. Governments and financial institutions are the biggest sukuk issuers globally, so their role in terms of pushing for market growth and development will remain vital. Asia has seen the volume of sukuk issuances decline 4% on average over the past five years. Kronfol thinks this trend should reverse as issuances come from new sources and attract more investors. Already, the number of sukuk issuers is expanding: Nigeria, Pakistan, Hong Kong, Turkey and Indonesia have become more significant in recent years. One further possibility could be Chinese issuers looking to diversify their sources of funding.

US startup PayJoy unlocks smartphone loans for Asia's unbanked

American startup PayJoy makes it easier for people without a bank account or credit profile to purchase a smartphone on installment. The phones and loans are provided by third parties. What PayJoy provides is proprietary software that locks the phone if payments are not made on time, making the device unusable. Once the missed installments are paid, the phone is unlocked and can be used as normal. According to PayJoy, its technology can do more than just put smartphones in users' hands. Customers' payment histories are reported back to local credit bureaus, which serves to build up credit profiles. PayJoy aims to expand in emerging markets such as Asia, particularly in India and Indonesia. In most markets, PayJoy partners up with local mobile makers, distributors and lending institutions. The company then takes a cut from every loan originated using its technology, a business model that lowers costs as well as risks for PayJoy.

Scientific heritage of Fuat Sezgin to be appreciated at symposium

The International Fuat Sezgin Islamic Science History Symposium will be organized in Instanbul from June 13 to June 15 with the theme of "Fuat Sezgin's Scientific Heritage." Various Islamic science history experts from all over the world will discuss both their works and the contributions of Fuat Sezgin to the world of science. Sezgin was one of the most respected historians of Islamic science and the recipient of the Presidential Culture and Art Grand Prize before his death last year at the age of 94. Studying Islamic sciences and Arabic at Istanbul University, Sezgin was expelled from the university after the 1960 military coup and worked in Germany as a visiting professor at the University of Frankfurt. In 1982, Sezgin founded the Institute for the Arabic-Islamic Sciences and established a museum showcasing over 800 copies of scientific tools. A similar museum named the Museum for the History of Science and Technology in Islam was opened in Istanbul in 2008 in Gülhane Park.

For $83,000, Harvard teaches rich kids how to do good (and make money)

In collaboration with the World Economic Forum, Harvard University and the University of Zurich have launched a course called "Impact Investing for the Next Generation". In this context, that generation means the heirs to some of capitalism's greatest fortunes. Participants had to pass an interview before paying up to $US12,000 ($17,240) for a week of classes in the US and Switzerland, not including airfares and board.

What is a sharia-compliant investment and how should I save for a rainy day?

A shariah-compliant unit trust fund is a collective investment scheme that requires all investments in the fund to adhere to Islamic law or shariah requirements. These requirements are underpinned by Islam’s prohibition on charging interest and the avoidance of companies with more than 30% debt or investments that engage in activities that are deemed to cause social harm, for example gambling, alcohol and weapons manufacturing. Sharia-compliant equity unit trusts typically invest in equities that comply with the above requirements. In addition, sharia-compliant balanced funds provide a shariah-compliant retirement or pension fund investment that invests in shariah-compliant equities as well as sukuks. Most shariah-compliant equity and balanced funds invest in both local and global equities.

Faith-Based Finance

What caused the global financial crisis? And how can the United States avoid a repeat? Those questions have sparked endless discussions among economists, policymakers, financiers, and voters over the last decade. The crisis not only entailed the worst financial shock and recession in the United States since 1929; it also shook the country’s global reputation for financial competence. Numerous explanations have been offered: the U.S. Federal Reserve kept interest rates too low, Asia’s savings glut drove up the U.S. housing market, the banks had captured regulators and politicians in Washington, mortgage lenders made foolish loans, the credit-rating agencies willfully downplayed risks.

HSBC #Malaysia launches ESG Islamic structured product

HSBC has launched its first environmental, social and governance (ESG) Islamic structured product in Malaysia. The product offered by HSBC Amanah provides customers the opportunity to invest in a product that matches their values when it comes to environmental and social causes. It pays fixed coupon of 3.90% per annum (three years tenor) and 4.50% per annum (four years tenor) in the first two years of the investment. Payout at the end of third and fourth year is subject to Hang Seng Corporate Sustainability Index performance. Hang Seng Corporate Sustainability Index tracks the performances of Hong Kong listed companies that excel in corporate sustainability. The CEO of HSBC Amanah Malaysia Arsalaan Ahmed said the introduction of the ESG Islamic Structured Product clearly demonstrates HSBC’s pioneering strength in Islamic finance, particularly with regard to product innovation.

WATCH: Islamic finance institutions serve a crucial role for BRI

The crucial role of Islamic finance in financing China’s Belt and Road Initiative (BRI) pays homage to the Silk Road and symbiotic relationship between China and the Islamic world prior the 15th Century. Rightfully so, as BRI is the 21st Century’s New Silk Road. Introduced in 2013 by Chinese President Xi Jinping, BRI consists of overland roads and railway systems – The Belt – and maritime highways – The Road. It allows the seamless and efficient transportation of people, natural resources, products, and capital to flow to and from mainland China. The sheer magnitude of BRI finds itself in its financing. A crucial role exists for Islamic financial institutions due to the emerging market of the Middle East, Africa, and South-Asia (MEASA). Jiang Xiheng, Vice President at the China Center for International Knowledge on Development (CIKD), stated the importance of having the United Arab Emirates as a partner in BRI.

Dubai Islamic Bank board approves plan to acquire Noor Bank

Dubai Islamic Bank (DIB)’s board has approved its acquisition of lender Noor Bank to create one of the largest Islamic banks in the world with combined assets of nearly Dhs275bn. Following the completion of the deal, Noor Bank’s operations will be integrated and consolidated within DIB. The new size and scale will allow DIB to expedite its strategy to expand across the far east, sub-continent, and east Africa with Dubai as the hub. The UAE is seeing a wave of consolidations in the market as banks seek to increase capital due to slowing economic growth. Three of Abu Dhabi’s banks are currently in the midst of a merger. That follows the combination of National Bank of Abu Dhabi and First Gulf Bank in 2017 to create a lender with $175bn of assets.

Doris Duke Foundation for Islamic Art Awards $2.4 Million in Grants

New York's Doris Duke Foundation for Islamic Art has announced fifteen grants totaling $2.49 million in support of arts and media projects dedicated to strengthening relationships between U.S. Muslim and non-Muslim communities. The grants are part of the foundation's Building Bridges 2018-2019 Program, which supports theatrical and literary programming, documentary films, hands-on workshops, and a "jingle truck" created by a Pakistani truck-art painter that will tour elementary schools. Senior program officer Zeyba Rahman said the projects proposed by grantees offer an inspired, inventive, arts-based approach to deepen connections between Muslims and their neighbors in the U.S. For a complete list of Building Bridges Grant Program awardees, see the DDCF website.

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