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#Britain plans new #sukuk deal; Brexit may boost Islamic finance

Britain plans to reissue Islamic bonds in 2019 in a sign the country’s exit from the European Union may accelerate plans to develop the Islamic finance industry. In 2014, Britain became the first Western country to issue sukuk, raising £200mil (RM1.125bil). A spokesperson of the Treasury assured that the UK was committed to ensuring the future success of the sector. Brexit could threaten London’s dominance as a financial centre. A Reuters survey showed around 10,000 finance jobs may shift out of Britain or be created overseas in the next few years because of Brexit, with Frankfurt and Paris benefiting most. According to Bilal Khan, partner at Islamic finance consultancy Dome Advisory, Brexit has increased the government’s interest in Islamic finance. Because of Brexit, the UK is keen to build economic links with non-EU countries. He said a second sovereign sukuk issue by Britain might be expanded to raise as much as £1bil.

Bank Negara: Islamic finance will focus on quality growth

#Malaysia is second only to Saudi Arabia in terms of Islamic banking in the world. Of the US$71 billion Syariah-compliant asset funds managed, 33% are in Malaysia. The country’s central bank, Bank Negara Malaysia (BNM) continues to raise awareness of Malaysia as an international Islamic financial centre. According to BNM assistant governor Marzunisham Omar, the next area of focus is quality growth. The 16 Islamic banks and 11 takaful operators are seeing value-returns by embarking on initiatives through Value-Based Intermediation (VBI). VBI is a business strategy by Islamic financial institutions, driven by a desire to create value rather than focus on short-term objectives. VBI is a business strategy of the institution to drive growth and sustain growth. It is a collaborative effort by the central bank together with Islamic banking institutions. Today nine Islamic banks are already involved and the central bank is working to develop a value-based scorecard to measure the success of banking institutions.

#Islamic #banks and #Takaful sectors likely to witness more #mergers

The merger of National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE last year had triggered a number of unconfirmed reports of bank mergers across the GCC. However, most of these reports were denied by bank managements. While bankers and analysts say the time is ripe for more bank mergers, they expect more merger deals to happen in the Islamic banking and Takaful industry. A proposed merger of Kuwait Finance House and Ahli United Bank is expected to result in second biggest Islamic Bank in the GCC after Al Rajhi Bank. The merger of Qatari banks Masraf Al Rayan, Barwa Bank and International Bank of Qatar is progressing and is expected to complete by end of the year. Some countries have only a small number of local banks, which limits competition. This means that profitability has remained solid and is therefore less likely to be a driver for M&A. Another stumbling block is the ownership structure of GCC banks, well established local private shareholders often control sizeable stakes and foreign banks only hold minority stakes.

Here’s How #Oman Is Helping Young Omanis Become Future Investors

At the beginning of the new school year, Meethaq Islamic Bank along with the Ministry of Education and Injaz Oman has started a financial literacy program called Little Investor. It covers over 4,000 students in Muscat, Batinah, and Dhofar. The aim of the initiative is to broaden the early financial education among Oman’s kids, to help them create healthy savings habits and to motivate them to develop their entrepreneurial skills. As an example of a successful public-private partnership, the initiative aims to unite the nation and make the people give back to their country. The four pillars of the program include financial literacy, sustainable tourism, green environment and enriched lifestyle. Injaz Oman is a non-profit organization working towards improving young people's leadership and entrepreneurial skills. Meethaq Bank confirmed it would stick to its social responsibility initiatives and would keep investing in the sustainable development of Oman.

Rasmala Trade Finance #Fund surpasses $100 million

Rasmala Investment Bank Limited (RIBL) announced that assets under management in the Rasmala Trade Finance Fund have recently surpassed $100 million. The Fund specialises in providing short-term structured and/or asset-backed liquidity and has delivered 34 consecutive months of positive returns generating an annualised return of 4.5% for investors since inception. The Fund has seen interest from regional and international institutional investors as well as family offices, corporates, and high net worth investors. The Fund provides a regulated Shari'ah compliant investment vehicle to diversify international asset allocation. David Marshall, Head of Products at Rasmala, said the team worked hard on expanding the Fund’s asset base while matching inflows with investment opportunities. He promised to remain focused on tailoring products that offer clients real alternatives.

QINVEST bullish on #Turkey, bets on EM equities

Qatar’s QInvest is set to reinforce its presence in Turkey. Head of Asset Management at QInvest, Dr Ataf Ahmed is seeing huge opportunities in various asset classes in Turkey. In 2016, QInvest acquired ERGO Portfoy, rebranded as QInvestPortfoy and became a leading asset management group in Turkey. The company is also seeing opportunities within Emerging Markets (EM) equities, despite the inherent volatility of the asset class. Inflation is coming in under control and there are a number of positive surprises in economic growth. There is also exposure to broader EM within some of the global funds and mandates, however this represents approximately 10% of total assets across all QInvest funds. In the GCC region businesses have adjusted to low oil prices. According to Ahmed, GCC nations are reinforcing their plans to diversify the economies, moving into sectors like finance, trade and tourism.

Felda to issue #sukuk before year-end

In #Malaysia the Federal Land Development Authority (Felda) will issue a RM2 billion long-term sukuk before the end of the year. Chairman Tan Sri Shahrir Abdul Samad added that apart from the sukuk, Felda is also finalising the sale of their hotel in London. Three years ago, Felda Investment acquired Grand Plaza Hotel in the upmarket Kensington area and this hotel became a status symbol for Felda. Shahrir likened the hotel sale to monetising non-core assets of Felda. Earlier in the year, Felda also made some money when it sold its 2% stake in Malayan Banking to the bank for RM280 million. The chairman also noted that sentiment among the settlers had improved considerably. Of the original 112,635 settlers, Shahrir said 94,956, or 84%, had continued to sell their fruits to Felda mills.

Turkey to issue gold-backed bonds and #sukuk from Oct 2

Starting from October 2, Turkey will issue gold-backed bonds and sukuk to attract into the economy gold savings held by households. According to the Turkish treasury, the maturity of the bond and sukuk will be 728 days, with a 6-month interest of 1.20%, index-linked to gold prices.

#Nigeria's 100-bln-naira debut sovereign #sukuk oversubscribed by 5.8 pct -debt office

Nigeria’s government launched a 100-billion-naira debut sovereign sukuk on the domestic market. According to the Debt Management Office, the sukuk was oversubscribed by 5.8%. The bond is structured as a lease and guaranteed by the government of Nigeria. The seven-year Islamic bond fetched 105.87 billion naira in subscription from retail and institutional investors.

#Saudi #insurers soar after decision to allow women to drive

Investors in Saudi Arabia are betting insurance stocks will be key beneficiaries from allowing women to drive. An index composed of 33 insurance stocks rose the most in three months. The Company for Cooperative Insurance, or Tawuniya, increased the most in seven months, other beneficiaries include Al Rajhi Takaful and Walla. The announcement to allow women to drive is one of the most dramatic moves in the government’s bid to open up society. Accroding to Jaap Meijer, head of research at Arqaam Capital, the number of cars in Saudi Arabia is likely to increase at least 20% in the next ten years as a result of the decision. He added that the increase is expected to be gradual. Net loss ratios on female drivers is likely to be lower than for men, as empirical evidence suggests that women are in fact safer drivers than men.

#Islamic #finance climbs higher on UNDP agenda

The 72nd session of the UN General Assembly was held from September 19 to 25 in New York. The event was co-organised by the Islamic Development Bank (IDB) and the UN Development Programme (UNDP). It emphasised that the successful implementation of the SDG (Global Goals) require a significant amount of financial resources. The UNDP once more mentioned Islamic finance and how it could be tapped as a scalable funding source for global development. According to Magdy Martínez-Soliman, UN assistant secretary general, the gap in SDG financing is currently estimated at $2.5tn every year. He noted that official development assistance alone is not an adequate source of financing, but Islamic finance could effectively come to the rescue. As a key driver, the IDB has established the Global Islamic Finance and Impact Investing Platform (GIFIIP) to create the framework of the investing ecosystem. The GIFIIP’s role is also the matchmaking between Islamic finance investors and other players, such as business incubators, development organisations and inclusive business ventures seeking capital.

BisB denies reported #Sukuk issuance plans

Bahrain Islamic Bank (BISB) has issued a statement denying its reported intention to issue a Sukuk. The statement, signed by BisB CEO Hassan Amin Al Jarrar, said that the bank would not consider such an approach, at least not within the coming 12 to 18 months. The report about the bank was published Tuesday 19 September 2017 in AlBilad’s press release. The bank affirmed the rest of the report, namely, the rise of the bitcoin industry, applying the value added tax, and the bank’s preparedness towards digital and mobile payments.

#Sukuk market great hope may never recover from Dana

Dana Gas is an independent natural gas supplier based in Sharjah. Its dispute with investors is now making its way not only through UAE courts, but through English courts as well. Dana’s gone so far down the road to avoid its debt repayments that the affair could easily scare international investors away from the sector. The fallout can be seen in the new issue market. While sovereign sales are carrying on, the broader corporate and financials market in the Middle East has been awaiting resolution of this dispute. In June Dana claimed that its $700mn outstanding sukuk were non-compliant with Shariah law and the money it paid out to holders of the bonds should be returned. Bondholders objected and suggested an immediate payment of half of the $700mn face amount outstanding and the due date for the balance extended for three years. The case is now disputed in Sharjah and London, where it stays until October 12, to allow court proceedings in Sharjah to conclude.

New round of GCC bank #mergers in the offing

GCC's banking sector is expected to see a new round of mergers and acquisitions (M&A) in the wake of the latest such move initiated by Kuwait Finance House and Ahli United Bank of Bahrain. According to U Capital, at least five M&A deals are in various stages of discussion. The new round of M&A follows the merger between National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in the UAE, resulting in creation of the regions second biggest bank. Combined assets of four top conventional banks in the region stand at $621 billion whereas the assets of entire Islamic banks in GCC stand at $563 billion as of second quarter 2017. According to banking sources, Masraf Al Rayan, International Bank of Qatar and Barwa Bank are in the due diligence phase. The three-way merger is expected to create the largest Islamic bank in Qatar. Saudi British Bank and Alawwal Bank are also said to be discussing a potential merger that would create the third-largest bank in Saudi Arabia.

The $101 Million syndicated #Murabahah financing facility for #Bahrain Islamic Bank closed

Bahrain Islamic Bank (BISB) has successfully closed a debut $101 million one-year Syndicated Murabahah Financing Facility. The Facility will be used for general funding purposes. Initially it was launched for $50 million and following strong interest BISB decided to utilise the significant over-subscription to increase the Facility size to $101 million. A total of eight banks from the GCC and Europe participated in this transaction. They include Bank ABC Islamic, Boubyan Bank, Dubai Islamic Bank, Emirates Islamic, Sharjah Islamic Bank, National Bank of Ras Al Khaimah, The Islamic Corporation for the Development of the Private Sector, Federated Project and Trade Finance Tender Fund, and Federated Project and Trade Finance Core Fund. Sole Bookrunner and Coordinator was the Bahrain-based Bank ABC, which expressed its delight with the closure of the transaction and wished Bahrain Islamic Bank continued growth in the future.

Abu Dhabi Islamic Bank joins local #fintech hub

Abu Dhabi Global Market (ADGM) marked a new partnership with Abu Dhabi Islamic Bank (ADIB) to promote the growth and development of the FinTech ecosystem in the UAE. The Memorandum of Understanding (MoU) was signed by Sagheer Mufti, CEO at ADIB, and Richard Teng, CEO of the Financial Services Regulatory Authority of ADGM. ADIB and ADGM participate in joint innovation projects on digital and mobile payments, blockchain and distributed ledgers and artificial intelligence. Both entities will also seek to develop local FinTech entrepreneurship through mentorship and knowledge transfer across incubation, accelerator, academic and internship programmes. ADIB continues to integrate pioneering FinTech solutions into its banking services. The bank has partnered with Fidor to launch the region’s first community-based digital bank. This year, ADIB launched its new generation of digital branch called ADIB Express and has revamped its internet banking platform to enable an intuitive online banking experience.

Bondholders push back on Dana Gas #sukuk invalidation claims in London court

Dana Gas sought to have US$700 million worth of Islamic bonds declared unlawful so it could avoid repaying its investors. The bondholder group, led by Blackrock, demanded in court that Dana Gas repays millions of pounds, or hand over stock in a subsidiary that runs its operations in Egypt. It also wanted the court to ban Dana Gas from issuing any new sukuk. The courtroom battle is notable for the absence of Dana Gas, which has been prevented from taking part because of an injunction in the UAE. Any prospect of an early conclusion has been disputed by Dana Gas, which has claimed that litigation could continue in the UAE and could last up to ten years. The trial in London, which is expected to last up to two weeks, is due to hear evidence from the former general counsel of Dana Gas.

Creditors tell High Court that Dana Gas #sukuk get-out is "absurd"

According to creditors, Dana's claim that it does not have to pay back its Islamic bonds because they are no longer sharia-compliant is "absurd" as repayment under such a scenario is covered in the original paperwork. United Arab Emirates energy producer Dana Gas said in June that its $700 million sukuk were unlawful and began proceedings to have this confirmed in British and UAE courts. The case could set a precedent for other sukuk issuers to refuse to redeem their debt obligations. Legal representatives for the creditors have asked the court to dismiss the Dana Gas claim and asked for permission to serve an exercise notice so they would be able to take action. Dana Gas and Deutsche Bank were not in court because of a last minute injunction obtained from a UAE court preventing them from taking part. Judge Leggatt said he would adjourn the trial until Oct. 12 to see if the Sharjah court in the UAE would lift the injunction preventing Dana Gas and Deutsche from participating in the UK proceedings.

#Sukuk: Borrowing for development without fear of interests

#Nigeria's Federal Government successfully concluded the issuance of N100billion sukuk on Friday, but the issuance has divided the country along religious lines. The Christian Association of Nigeria (CAN) described the issuance as a subtle attempt by the Federal Government to Islamise Nigeria. Therefore, the body called on the government to abrogate the laws and framework behind the sukuk. But in its reaction, the Nigerian Supreme Council for Islamic Affairs (NSCIA), accused CAN of Islamophobia. NSCIA then appealed to CAN to tread the path of honour and refrain from statements causing disaffection and promoting disharmony that may lead to conflict in the country. According to Dr. Benedict Nwafor of the University of Lagos, for Nigeria sukuk is an opportunity for raising funds without raising the nation’s debt profile. Nwafor is of view that sukuk certificates can transfer state-owned projects to sukuk holders in case of default. He added that the government has to sort out clearly the scenario for a default and needs to educate the public on the benefits of sukuk.

Social Islami Bank buys into IDB's #realestate #fund

#Bangladesh-based Social Islami Bank (SIBL) is set to invest $2 million in a real estate-focused private equity fund managed by the Islamic Development Bank. The fund is called the Awqaf Properties Investment Fund (APIF) and aims to invest in Awqaf real estate property that is socially, economically and financially viable in member countries of the IDB. SIBL's managing director, Amm Farhad, said the bank was investing in the project not for commercial reasons but for social welfare. In Bangladesh, APIF will start off with the construction of two towers, a multipurpose building and a university in Chittagong, with a total investment of $100 million. The bank will represent Bangladesh in the managerial committee of APIF, which has 8 IDB member countries in the board: Saudi Arabia, Kuwait, Egypt, Iran, Bahrain, Jordan, Palestine and Malaysia.

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