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GCC’s alternative equity funding set to grow

A major type of alternative equity investment is through venture capital (VC) and private equity (PE), which represent an ownership stake in a private company. With the assistance of VC and PE, some companies may grow and become public companies through initial public offerings (IPOs). In 2017, the UAE and Saudi Arabia led IPO activity in the GCC, with five listings in the UAE, four in Saudi Arabia, three in Oman and one in Qatar. Much of the activity has been in the region's relatively new Real Estate Investment Trust (REIT) market. IPO activity in the region has been focused mainly on large state-owned enterprises, while public equity markets are still classified as ‘frontier’ and ‘emerging’. Throughout the region there is a growing ecosystem of economic free zones, business incubators, co-working spaces, conferences and awards for start-up companies. There is no doubt that the level of VC and PE activity will continue to grow in the region just as the public markets will continue to evolve.

Sovereigns and new issuers underpin #sukuk issuances

According to Moody’s Investors Service, sukuk issuance grew 17% in 2017 to reach US$100 billion, underpinned by large sovereign transactions from the Gulf Cooperation Council (GCC) region. At the same time, new issuers came into the market last year, including some corporates from China and France. The sukuk market activity is also supported by specialized multilateral entities, such as quasi-sovereigns, central banks and supranationals, including the Islamic Development Bank, the International Liquidity Management Corporation and many others.

Orabank #Togo benefits from Islamic Development Bank’s support to SMEs

Oragroup received €40 million from the Islamic Corporation for the Development of the Private Sector (ICD). The funds which will be dispatched to various subsidiaries of the group such as Orabank Togo, will mainly be used to support small and medium enterprises (SMEs). According to Binta Touré Ndoye, Managing Director of Oragroup, this financing will help the region by creating jobs, accelerating industrialization and local processing, creating value, redistributing wealth, fighting poverty and contributing to the emergence of the middle class.

Venture capital in Islamic finance: A crucial concept

Venture capital was of limited significance in the Muslim world until the recent past. Things came into gear when Malaysia in 2016 launched the world’s first Islamic venture capital fund endowed with $100mn to provide seed financing for startup companies and entrepreneurs. A company financed by Islamic venture capital cannot have conventional debt on its books or use debt in any way for expansion. In a first step, a startup seeking Islamic venture capital needs to be checked very thoroughly. Next, suitable Shariah-compliant financing models need to be chosen. The three common structures used in Islamic venture capital are mudaraba, musharaka and wakala. A fourth concept is shirka, where two or more partners invest a certain amount of capital in a start-up and share the benefits on a pre-agreed basis. The investing parties are equally involved in any decision to change the strategy of the company, even after the disbursement of funds.

Bidaya Home Finance Issues Plans for Selling Islamic #Sukuk Bonds

Bidaya Home Finance revealed plans to sell Islamic sukuk bonds worth 500 million SAR. Bidaya Home Finance hired the services of Ashmore Investment Saudi Arabia to arrange the program.

ICD Committed to Private Sector in #Cote d’Ivoire Through Direct Investments

The Islamic Corporation for the Development of the Private Sector (ICD) hosted a delegation from Cote d’Ivoire composed of 40 entrepreneurs, the Ambassador of Cote d’Ivoire in Saudi Arabia, the President of Chamber of Commerce of Cote d’Ivoire and the Vice president of the Confederation of Corporation of Cote d’Ivoire. The B2B Meeting was an opportunity to exchange on the opportunities of doing business in Cote d’Ivoire. ICD re-emphasized its commitment to support the private sector in Cote d’Ivoire through Direct Investments, Investments in dedicated Funds and through Line of Financing to financial institutions.

#Tunisia: buyer of Zitouna bank and #Takaful will be known in July 2018

The sale of Zitouna bank and Takaful continues and is expected to end in July 2018, by which time we should know the identity of the final buyer. The bank had posted a net banking income of 101.748 MD, an operating profit of 19.411 MD and a net profit of 12.630 MD at the end of the 2016. For its part, the Zitouna Takaful posted a net profit of 2.490 MD in the same year. The company will have more than doubled its result compared to 1.054 MD in 2015. This, in connection with the high level of imports which have been on an upward trend in recent years, reaching 12.8 billion dinars in 2017.

Gatehouse Bank launches Shariah-compliant case management platform

Gatehouse Bank has launched a Shariah-compliant home finance platform, enabling intermediaries to process home finance and buy-to-let applications quicker. The platform is developed by financial services software provider BEP Systems and uses cloud-based mobile-ready technology. Gatehouse Bank CEO Charles Haresnape is delighted to partner with BEP Systems. The bank currently offers buy-to-let finance and plans to roll out Shariah-compliant home owner finance through selected brokers in the near future.

Food Security’s Social Network

The number of chronically undernourished people in the world is rising. In 2016, the number of people without enough to eat increased to 815 million, up from 777 million the year before. Ending global hunger is not just about breeding drought-resistant corn, it is also about having a plan for when that corn fails anyway. It is as much about reimagining social networks as it is about deciding what goes into the ground. It is crucial to invest in new technologies that enable farmers to connect with information and institutions that can decrease uncertainty and mitigate risk. With access to data, markets and financial services, farmers can plant, fertilize, harvest and sell products more effectively. For example, in Egypt, Sudan, and Ethiopia, local extension services are delivering real-time weather data to vegetable farmers via SMS. In West Africa, private companies such as Ignitia are expanding the accuracy and precision of SMS weather alerts to remote farmers.

'#Turkey can play a leading role in Islamic finance'

According to Abdelilah Belatik, secretary-general of the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey can play a leading role in Islamic finance. Belatik sees Turkey as a bridge between the Muslim world and the West. He said through Turkey's support Islamic finance was discussed among G20 countries, which was a milestone. Belatik added that Turkey had a key role to play in raising awareness about Islamic finance. CIBAFI expects the volume of the sector to reach $4 trillion by the end of 2020.

#Nigeria: Muslim Scholars Highlight Benefits of Islamic Financing to Economic Growth

Reputable Muslim scholars participated at Forum For Islamic Education & Welfare in Nigeria. The President of MUSWEN, Alhaji Sakariyau Babalola said the adoption of the Islamic financial system was growing in the country. Central Bank of Nigeria expert Dr. Bashir Umar said that Islamic finance was the way to finance infrastructure projects and had an integrated cooperative model which can eradicate poverty and enhance economic empowerment. He noted that financial inclusion was the key element to achieve inclusive development needed for sustainable growth in the country. Umar added that the presence of Islamic banking in the country has brought the unserved and undeserved members of the society into the formal financial sector.

Gassner's picture

Geneva, CH: Islamic Finance Apero: Please vote and fix the best date

If you are in Geneva, please feel free to join the "networking Apero in Geneva for people working related to or interested in Islamic finance."

In fact over years I made the acquaintance of a number of professionals, but we rarely come together.

Please check the time scheduler, and vote for the best suitable date for you; multiple votes possible:

http://www.propoodle.net/index.php/propoodle/vote?key=K31RHmxuWhKAMDJCpq...

As there are no sponsors, this is private, including everybody's food & beverage.

Once we have the number of participants the venue will be finalised. Tentatively I think about the Brasserie Quai de l'Ile.

If interest is there I am happy to repeat the Islamic Finance Apero and look into formalising it further.

Additionally, there is large Islamic finance summit coming up, also in 26-27 April 2018 in Zurich: http://rfi-summit.org/ - plan to be there on the first day at least.

Expanding Finance to the Agri/Food, Healthcare, Sustainable Cities & Education Sectors

The organizers of the Responsible Finance & Investment Summit have announced the judging panel for the "Support Disruption for Good" Challenge. The judging panel will select one winner in each category, against transparent criteria of each entrant’s relevance to the Priority Sectors (agri/food, healthcare, sustainable cities and education).

The judges, who serve in their personal capacity, are:
• Dr. Mohammed Kroessin, Head of Islamic Microfinance, IRW
• Rachel Zedeck, Director, Climate Smart Agri & Impact Investment Strategies at Peterson and Control Union
• AlDana Banihashem, General Manager, Al Naser Engineering
• Conrad Young, MBA, Managing Director, Food Forward Ltd
• Dr. Farid Khan, Executive Chairman, Simply Capital Partners
• Dr. Natalie Schoon, Principal Consultant, Formabb Ltd
• Julian Osborne, Head of Operations, Swiss Finance + Technology Association
• Boris Battistini, Partner, Metellus AG

Source: 

Shariah compliant finance is now nearly half of GCC banking market: Moody's

According to Moody’s, Islamic banking has grown in a decade from less than a third of the GCC banking market to account for 45% of the sector. Moody's senior analyst Nitish Bhojnagarwala said that growth in the Islamic finance sector would continue to outstrip that of conventional assets in coming years. In his view, growth will be supported by governments looking for diversification, as well as by continued demand for Islamic products from individuals. Another growth factor will be Islamic insurers' penetration into Southeast Asia and North Africa. Annual sukuk issuances have more than doubled to $100 billion from $42 billion from 2008 until September 2017. Moody's expects a similar level of activity in 2018.

#Bahrain Counts on #Fintech, #Saudi Ties to Revive Indebted Economy

Bahrain FinTech Bay is part of the kingdom's drive to revive its reputation as the Middle East's top banking and business center. After the plunge of oil prices in 2014, state revenues fell, credit ratings fell and debt soared. Large debts still pose a risk as interest rates rise, but Bahrain is starting to see initial signs of recovery. PayTabs, a Saudi company specializing in online payment solutions, will set up a base in Bahrain FinTech Bay in May. Tap Payments, a mobile payment company founded in Kuwait, moved to Fintech Bay last month. CEO Ali Abulhasan said Bahrain had regulatory advantages when compared to other Gulf Cooperation Countries. Foreign investment from 71 companies was $733 million last year, up from $281 million and 40 companies in 2016. This contributed to an average annual GDP growth of more than 3.5%. Central bank governor Rasheed Mohammed al-Maraj said that growth could accelerate further, as strong oil prices have bounced to around $65 a barrel from below $50 in mid-2017.

ADIB funds GBP19 million acquisition of Bristol's The Hub

Abu Dhabi Islamic Bank (ADIB) has arranged an Islamic financing transaction to fund the acquisition of The Hub, located at the Aztec West Business Park, Bristol. The transaction is worth GBP19.35 million and is arranged on behalf of a private Saudi-based client. The Hub is a regional UK office for Atkins, a multinational design, engineering and project management consultancy. The building has been awarded a BREEAM excellent rating, as overall carbon emissions are more than a third lower than expected for a building of its size. ADIB opened its office at One Hyde Park in London in May 2012 and was the first UAE-based bank providing Islamic financial services to be licenced to operate in the UK, being one of the six banks that are fully Shari'ah-compliant.

Baft to create industry #benchmark for Islamic trade finance

The Bankers Association for Finance and Trade (Baft) and International Islamic Financial Market (IIFM) are creating an industry standard for buying and selling Islamic trade-related risk. The two parties have announced they have signed a memorandum of understanding to create a so-called master risk participation agreement. The industry already has such a standard, which was introduced 10 years ago and became the industry benchmark for such trade finance transactions. Baft president Tod Burwell said the association aims to repeat that success in the Islamic trade finance space, where standardisation is much needed. The Islamic risk participation agreement will incorporate considerations for funded and unfunded risk participations in trade assets within a Sharia-compliant framework. IIFM chairman Khalid Hamad said the cooperation with Baft would contribute to increasing the trade finance business on a Sharia-compliant basis.

Islamic finance set to extend growth, says Moody’s

According to Moody's Investors Service, the growth of the Islamic finance sector will continue to outstrip that of conventional assets across core Islamic finance markets. Islamic banking penetration in the Gulf Cooperation Council (GCC) increased to 45% of the total banking market, as of September 2017 from 31% in 2008. Moody's Senior Analyst Nitish Bhojnagarwala, said the Islamic finance sector would be supported by governments, as well as by continued demand for Islamic products from individuals. Another growth factor will be Islamic insurers' penetration into Southeast Asia and North Africa. Sukuk issuances grew 17% in 2017 to $100 billion, driven largely by GCC sovereigns. A similar level of issuance is expected in 2018, although the recent recovery in oil prices could lower financing needs for some sovereigns. Corporate and asset-backed sukuk activity was muted in 2017 because of more attractive conventional market opportunities and Moody's expects the same for 2018.

Islamic finance is key to closing sub-Saharan infrastructure gap

The infrastructure gap is nowhere more pronounced than in sub-Saharan Africa. The Boston Consulting Group/Africa Finance Corporation report of May 2017 states that the sub-Saharan Africa infrastructure gap amounts to about $100bn in yearly infrastructure investment. Islamic finance is fundamentally aligned with economic and social development, poverty alleviation and advancement towards the UN sustainable development goals. The asset-based approach of Islamic finance is in line with traditional infrastructure-financing models that involve the procurement or construction of a tangible asset. In the past decade, Islamic finance has been growing steadily in sub-Saharan Africa. South Africa was the first African sovereign to issue sukuk, followed by Senegal, Ivory Coast, Togo and Nigeria. Most Islamic funding for infrastructure development is flowing through governmental channels. In sub-Saharan Africa large infrastructure investment is still mainly the preserve of the public sector and public-private partnerships are still in their infancy.

Africa: Will #Fintech Grow Financial Inclusion?

Financial technology investors are calling for policies that promote development to achieve the World Bank target of universal financial access by 2020. Financial experts who attended the Africa Payments Innovation Summit in Nairobi said digital disruption could increase the continent's banked population. The emergence of mobile money services over the past decade has contributed to financial inclusion in Africa. According to the mobile operators association GSMA, there were 277 million registered mobile money accounts in sub-Saharan Africa at the end of 2016. But despite the progress, at least 85% of transactions in the region are still in cash. There is a mistrust between banks and telcos about whose customer they are serving, who owns the infrastructure, and the loading of additional costs on transactions between the two. Central Bank of Kenya Governor Patrick Njoroge warned innovators against getting carried away by technology.

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