Oman

Final approval for takaful law expected soon; industry constitutes 6% in total business

A final approval for the draft takaful or Islamic insurance regulation, which was cleared by the State Council in February, is expected soon. The draft Takaful Insurance Law, which was prepared by the insurance regulator, Capital Market Authority (CMA), is expected to give the much-needed impetus to the development of the Islamic financial sector. The law, which was drafted with the assistance of a consultant in line with the principles of the Islamic Financial services Board, was circulated among all related parties, especially insurance firms for their feedback, before seeking approval from various entities like the Ministerial Council and the Ministry of Legal Affairs.

Sohar Islamic SME financing grows in popularity

In line with the government's initiatives to boost the Small and Medium Enterprises (SME) sector in the Sultanate, Sohar Islamic, Bank Sohar's dedicated Islamic Banking Window, continues to support the sector with its SME line of services. The bank provides financing up to 90 per cent at competitive profit rates for a maximum tenure reaching up to 5 years allowing SMEs to invest in construction equipment, machinery and commercial vehicles. The product is underpinned by simple application and approval process, thus ensuring quick turnaround time (TAT), tie ups with major dealers of equipment and commercial vehicles, collateral-free financing (financed asset constitutes the primary security), and less documentation. In addition to the SME finance, Sohar Islamic has banking solutions that cover retail and corporate financing needs.

Ahli Bank’s ‘Al Hilal MENA Fund’ posts 12 per cent return

Al Hilal MENA Fund (AHMF); Sharia Compliant, open-ended fund, managed by ahlibank asset management has posted commendable returns of 12 per cent year to date, as on April 30, 2015. Al Hilal MENA Fund is the first and only Sharia Compliant fund sponsored and managed by a bank in Oman. The fund invests across listed equities and sukuks issued and tradable within the GCC region. The current investments represent geographical coverage spanning Oman, Qatar, United Arab Emirates (UAE) and Saudi Arabia. The diversified sector exposure constitutes investments into petrochemicals, fertilizer producers, industrial chemicals, oil and gas exploration, Islamic banking, takaful, real estate, telecom, consumer discretionary and industrial manufacturing.

Oman announces OMR200 million debut sovereign sukuk issue

Oman government on Sunday officially announced the much-awaited maiden sovereign Sukuk issue of OMR200 million. The sovereign Sukuk issue will be through a private placement and will open for subscription soon. It will be marketed primarily to Islamic financial institutions, and sophisticated investors with a minimum subscription amount of OMR500,000, said Tahir Salim Al Amry, who heads the Sukuk committee. The sovereign Sukuk is primarily aimed at addressing the need of the nascent but fast growing Islamic financial sector in Oman. The Sukuk will serve as a domestic investment and liquidity management instrument to Islamic financial institutions in the country, he added.

Bank Muscat shareholders approve RO 500 million sukuk programme

Bank Muscat's shareholders have approved the Board's recommendation for the setting up of a RO 500 million (or its equivalent in US Dollar currency) Meethaq Sukuk Programme for the issuance of sukuk in various tranches in the domestic and international markets through public subscription or private placement. The Sukuk tranches under the Meethaq Sukuk Programme will be in different amounts, maturities, and profit rates, issued on different dates with varying terms and conditions of subscription. All Sukuk will be issued within five years. Approval was also given to the Board's recommendations to issue convertible bonds.

Omani Shari’ah authority holds first meeting

The High Sharia Supervisory Authority held its inaugural meeting at the Central Bank of Oman HQ in Muscat with Sheikh Dr Kahlan bin Nabhan Al Kharoosi, Sheikh Dr Abdullatif bin Mahmood Al Mahmood, Dr Said Bouheraoua, Ahmed Suhaimi bin Yahya and Dr Yaqoob bin Mohammed Al Waily in attendance. The formation of the High Sharia Supervisory Authority is considered pivotal to the CBO's efforts to introduce Islamic banking to Oman in a way that is likely to match demand. Both standalone Islamic banks as well as Shari’ah compliant windows are allows in Oman, unlike neighbouring Qatar.

Islamic banking not expensive, says Bank Nizwa CEO

Oman's Bank Nizwa has launched a pioneering educational platform entitled 'Islamic Finance Knowledge Series', which aims to raise the community's awareness about Islamic banking across Oman. Jamil El Jaroudi, the bank's chief executive officer, noted that the new initiative is seeking to address the misconceptions about the concept of Islamic banking. El Jaroudi said that one mistaken belief is that it is more expensive to obtain financing from an Islamic bank than a conventional bank, which is not necessarily true. The sessions of the series will be delivered to both the public and private sector individuals, as well as college and university students.

Nod for Takaful Insurance draft

Oman's State Council yesterday approved the draft Takaful Insurance Law referred to it by the Council of Ministers and the report which was prepared by Majlis Ash'shura and the State Council Economic Committee concerning that law. Out of 58 articles, 46 articles have been ratified in compliance with the views expressed by the government and the Majlis Ash'shura, although some articles were not agreed upon. The law ensures the formation of a non-conventional mechanism in the insurance system. It's expected to contribute significantly in stimulating the economy by attracting investors and encouraging consumers who are interested in Islamic insurance system.

Bank Nizwa’s sharia supervisory board assesses opportunities to extend Islamic financing products

Oman's Bank Nizwa recently held its 11th Sharia Supervisory Board meeting to discuss proposals for additional Sharia compliant financing solutions to meet the growing needs of the Bank’s individual and corporate customers. Dr. Jamil El Jaroudi, CEO of Bank Nizwa said the regular meetings allow the Bank to assess the performance of current products and services while also identifying the best approach for launching new propositions. The Board’s decisions are guided by the Islamic Banking Regulatory framework issued by the Central Bank of Oman, as well as the Sharia standards issued by the Auditing and Accounting Organization for Islamic Financial Institutions in Oman.

CMA organises major forum on governance of family businesses

The Capital Market Authority (CMA), represented by the Oman Centre for Corporate Governance and Sustainability, in cooperation with the Pearl Initiative, organised a seminar on 'Governance of Family Businesses and the Separation of Ownership from Management and Succession Planning'. The seminar was aimed at airing the views of those present and fostering dialogue among the representatives of the family businesses, business experts and specialists in this regard. Speakers underlined the importance of accountability and transparency in the family and state-owned companies that seek to successfully achieve permanence and continuity.

S&P lowers Saudi and Oman outlook on low oil price

Standard and Poor's has lowered the outlook for the world's top oil exporter Saudi Arabia to stable from positive and its Gulf partner Oman to negative on sliding oil prices. However, the ratings agency affirmed the strong "AA-/A-1+" long- and short-term foreign and local currency sovereign credit ratings for Riyadh over the "strong external and fiscal positions" it has built up in the past decade when oil prices were too high. It said low oil prices will place pressure on the kingdom's gross domestic product (GDP) and per capita income because Saudi Arabia's economy is undiversified and vulnerable to a sharp and sustained decline in the oil price.

Oman Islamic Finance Report 2015: Building on a Strong Start

"The Oman Islamic Finance 2014: Building on a Strong Start" is written and produced by Thomson Reuters, Islamic Research and Training Institute (IRTI), and the General Council for Islamic Banks and Financial Institutions (CIBAFI). The report provides substantive due diligence on the opportunities for Islamic financial services in Oman.

Senior officials of Alizz islamic bank visit Al Noor Association

Alizz islamic bank has begun its local community engagement in Dakhliyah governorate with generous support towards Al Noor Association in Burkat al Mooz. Salaam bin Said al Shaksy, chief executive officer of alizz islamic bank and other senior executives from the bank planned a surprise visit to the association after the successful launch of alizz islamic bank’s official launch of Nizwa Branch in Firq. The association serves the interest of blind and visually impaired in social, economic, welfare, education, health, training, placement and teaching of brail. The centre in Burkat al Mooz represents interests of the blind covering the Dakhliyah region.

Alizz Islamic Bank's growth plans on track

As the bank will be soon marking its first year of operations, Alizz Islamic Bank's performance has been in line that of other Islamic banks operating in Oman. Alizz Islamic Bank last week signed an MoU with Pride Home and Max Electronics (Home Centre & Emax) for personal asset finance (goods murabaha) services. As a result of this MoU, Alizz Islamic Bank will be a preferred Islamic banking financier for personal asset finance, encompassing both home furniture buyers and electronic retail and corporate buyers. All account holders will be entitled to home finance at Home Centre and Emax at an interest rate of 5.25 per cent, on purchase of good worth over RO 1,000. Besides, the bank also plans to have agreements with hospitals and travel agencies and this is the first step in this direction.

New MSM Sharia Index to come into effect today

The new sample of the Muscat Securities Market (MSM) Sharia Compliant Index, which includes 32 MSM listed companies, will start operations on Sunday. MSM will revise the sample each three months to include companies that are compliant with regulations and exclude companies that are not compliant. Analysts said that the Islamic indicators will attract new category of investors as they meet the needs of investors who prefer to have reliable reference that help them in identifying the investments that meet the requirements of the Islamic Sharia. This in turn will contribute to the development and growth of the Islamic finance market.

Oman to issue 500 million rials of bonds, sukuk in early 2015 -banker

Oman is expected to issue 500 million rials ($1.3 billion) worth of conventional and Islamic sovereign debt early next year, and aims to choose the arranging banks in October. Last month, the finance ministry received applications from banks to arrange the issuance, with plans to raise 300 million rials via conventional bonds and 200 million rials with sukuk, said Jamil Al Jaroudi, chief executive of Bank Nizwa. The issuance would be in local currency and would apparently be separate from an international, U.S. dollar-denominated sovereign bond issue which Oman has said it may conduct. It is expected to be in the market in the first quarter of 2015.

Sohar Islamic introduce construction & housing finance

Bank Sohar’s Islamic banking Window – Sohar Islamic has now introduced dedicated Construction Financing in Oman. The Construction Finance product provides an Islamic finance solution for anyone looking to build a new residential property or purchase under construction property. This is a complement to its existing Islamic Home Finance Program which offers Shari’ah compliant financing for ready real estate property. The Construction Finance program comes within a flexible framework catering to the financing needs of customers with financing up to 80% of the price within a financing period reaching up to 25 years. In addition, preferential profit rates are provided to customers for the 1st and 2nd year along with the facility to takeover. If required, installment deferment options are also available.

The first Omani CEO of full-fledged Islamic bank

The Board of Directors of Alizz Islamic Bank has announced the appointment of Salaam Said al Shaksy as the Chief Executive Officer of the bank. Al Shaksy comes with over 22 years’ experience in retail as well as wholesale banking. He previously held the position of CEO in several local and international banks and financial institutions such as National Bank of Oman, Dubai Bank and Dubai Islamic Investment Group. Currently, Al Shaksy is Chairman of Oman’s Investment Stabilization Fund. He is also a member of the Board of Directors; member of the Board of Executive Committee and Chairman of the Tender Committee of Al Rafd Fund (Oman’s Government funded SME fund); and a Board Member of the College of Banking and Financial Studies set up and supervised by the Central Bank of Oman.

Oman's Islamic insurance law in final stages of completion: Official

Sheikh Abdullah Salem Al Salmi, executive president of the Capital Market Authority of Oman, said the Islamic insurance law is in the last stages of completion.

Sultanate’s first full-fledged Islamic insurance launched

Shaikh Abdulmalik bin Abdullah al Khalili, Minister of Justice, has officially launched the first full-fledged Islamic insurance in the country called Takaful Oman, in the presence of Sayyida Rawan Ahmed al Said, Managing Director and CEO of Takaful Oman Insurance Company, Ahmed Ali al Mamari, Acting General Manager, Directorate of Insurance Supervision, CMA, and a number of dignitaries and senior executives from various sectors at the InterContinental Muscat. Al Madina, which has a customer base of 37,000 policy holders, expects the market to grow between RO60 million to RO70 million in worst case scenario and RO150 million to RO180 million in best case scenario in the next three to five years.

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