Banks in the United Kingdom and the United States are not accepting transactions made through the Islami Bank Bangladesh Limited after allegations surfaced about its alleged funding of militant groups across the globe. The matter came to light when a team of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) met the central bank Governor. According to BGMEA, banks in the United Kingdom and the United States are not accepting export bills and documents through the Islami Bank Bangladesh. Apparel sector’s apex body has requested Bangladesh Bank Governor Atiur Rahman to resolve the issue, saying many of its members were facing troubles. The bank posted a clarification on its website and denied the charges.
Nicholas Kaiser, chairman of Saturna Capital Corp., has been managing the shariah-compliant Amana Funds which target Muslim investors in the U.S. since 1994. Mr. Káiser can't invest in companies that derive a significant part of their business from activities unacceptable to the principles of Shariah law. Another challenge is managing his cash because earning interest is prohibited. He currently holds 4.3% of the fund's assets in cash. The fund has a 10-year average annual return of 12.2%. It now has $2.2 billion in assets, and Mr. Kaiser estimates that only about 10% to 12% of investors in it are Muslim.
Creditors of bankrupt Arcapita say the investment bank should not be allowed to foot the legal bills of lawyers from Linklaters and Freshfields who ran a failed initial public offering last year of Arcapita's real estate assets. Arcapita has so far paid $1.5 million in professional fees associated with the IPO, but last month submitted court papers looking to pay another $6.8 million to Linklaters, $1.1 million for Freshfields Bruckhaus Deringer, and $2.76 million to KPMG, which served as auditor on the IPO effort. However, Arcapita's creditors argue that the IPO's failure prevented anyone from benefiting from the professionals' work. A hearing on the matter, initially scheduled for March 18, was postponed until April 30.
London-based Gatehouse Bank plc (Gatehouse) has completed the acquisition of a 163,000 sq ft, state of the art office building in Salt Lake City, Utah. The deal is expected to return a stable and healthy yield over the investment period. The property is 100% leased to theGeneral Services Administration (GSA) for a fixed term of 20 years. The Class-A office building has been built specifically to meet the critical security requirements of the tenant. Gatehouse Bank was assisted by Arch Street Capital Advisors and sister company GSH in this transaction.
The real-estate arm of Qinvest, the Qatari investment bank will focus on the United States and its home market and avoid Europe this year. This is because competition makes the European market tougher. With targeted returns of up to 6 percent and over, the bank's plan is to focus on assets in U.S. retail - such as single-tenant units on New York City's Fifth Avenue - and in the less liquid and less crowded Qatari market. Qinvest is in the process of taking over Egyptian investment bank EFG Hermes , though regulators have yet to approve the deal.
Tide Natural Gas Storage I LP, which paid $515 million for natural gas assets from a subsidiary of Bahrain's bankrupt Arcapita Bank BSC, asked a New York bankruptcy court Monday to appoint a trustee of the subsidiary's bankruptcy because of conflicts of interest. Tide asked to convert Arcapita subsidiary Falcon Gas Storage Co. Inc.'s bankruptcy from Chapter 11 to Chapter 7 and for the court to appoint a trustee because Arcapita reorganization's plan will give the Bahraini bank and its creditors too much power.
Nearly 300 asset managers, water infrastructure and energy sector executives attended the event ‘Water: Emerging Risks and Opportunities' in New York to learn about opportunities for investing in water and the growing water demands of the United States’ booming unconventional energy sector. The event was sponsored by Goldman Sachs, GE and the World Resources Institute. On the other hand, the Interfaith Center for Corporate Responsibility convened a roundtable on the obligations of companies to respect the human right to water. Seventy religious investors, major water-intensive companies, and grassroots activists came together to tackle the question of what companies can and should do to ensure their operations “do no harm” to water supplies of local communities. Investors at the Goldman event very well may be driving the green technologies that can help the industrial companies at the ICCR session clean up their acts. But the problem for companies is that in most places, water is so cheap that investing in these solutions can sometimes be hard to justify on a traditional ROI basis, if not on a moral one.
Middle Eastern business leaders gathered to discuss "Economies of Freedom: Reshaping the Future of the MENA region" at the second annual Wharton MENA Business Conference on Feb. 16, which was held in Philadelphia. Iraqi entrepreneur Shwan Taha, one of the panelists at the conference, advised the young audience to invest in frontier markets in whichever sector that could serve the young generation. Joe Saddi, who heads Booz & Company added that logistics is a big opportunity. The general recommendation for young US MBA students was to invest their time and business strengths into an uncertain environment instead of worrying about the unemployment statistics from MENA countries.
London-based Gatehouse Bank has completed the acquisition of a 163,000 sq ft, state of the art office building in Salt Lake City, Utah, which is 100% leased to the General Services Administration (GSA) for a fixed term of 20 years.
The deal is expected to return a stable and healthy yield over the investment period. Gatehouse Bank was assisted by Arch Street Capital Advisors and sister company GSH in this transaction.
According to a new Deloitte report, an organization's environmental, social and governance (ESG) performance can directly and indirectly impact its market valuation. The report highlights that short-term ESG issues and events, including human rights issues, product recalls, boycotts and protests often trigger the strongest and most immediate impact on stock prices. However, there is less convincing evidence that ESG performance leads to higher stock returns over the long-term. Deloitte's report highlights how and why ESG performance is expected to continue to be a consideration in financial valuation and several reasons risks may play an increasingly important role on performance.
Bank of Whittier, a community bank in Los Angeles, offers Shariah-compliant products and is one of few institutions specialized in Islamic finance in the United States. The bank, whose staffers speak more than a dozen languages, markets itself to observant Muslim entrepreneurs. Deals are structured so that the bank buys into the venture with the entrepreneur, who runs the company and buys the bank out, with payments structured so that the bank is compensated for its investment. Profits and losses are shared; the overall cost tracks with a traditional loan repayment at a standard interest rate.
Texas-based Jafari No-Interest Credit Union, designed for Shia Muslims, will cover costs with fees instead of interest. The current blueprint is to charge members a $3 monthly fee while the credit union tries to keep costs down. However, additional fees may also be charged to members in order to cover operating expenses and build capital.
In order to allow Brazilian farmers to sell their crops between harvests and therefore achieve higher return, Abu Dhabi Equity Partners (Adep) provides inventory finance to them. In return, Adep takes title of the soft commodity. The Abu Dhabi firm has struck deals with Brazilian growers to provide financing worth $100 million for the first half of this year. Despite the risks in form of natural disasters the business has been widely welcomed by Adep founder Muneef Tarmoom's investors.
The Canadian life insurer InSun Life Financial c. (SLF) has forged an alliance with Khazanah Nasional Berhad (Khazanah) to jointly acquire 98% of CIMB Aviva Assurance Berhad, and CIMB Aviva Takaful Berhad. The remaining 2%will be retained by CIMB Group. The bancassurance agreement will cover a span of 20 years and will cost C$586 million. Through this transaction, SLF will be able to expand its international operations in Asia.
The Institute of International Finance (IIF) warns that rich-country central banks may end their stimulus measures for emerging markets and warned investors to be prepared. Although there are few indications that the world's central banks are about to change course soon, the risk for reversal of rates needs to be discussed in order to avoid a “boom-bust cycle”.
Civil proceedings against former UM Financial CEO Omar Kalair and his associates have come to a close since prospects for recovery of expropriated money are limited even in case of a favorable judgment. However, the Royal Canadian Mounted Police and Office of the Superintendent of Bankruptcy are still investigating the events which may lead to criminal charges against Kalair and others.
Abu Dhabi Equity Partners (ADEP) closes first Sharia-compliant agricultural inventory finance transaction in Brazil. The investment deal is a combination of a mix of asset backed financing, capital and profit protection from Global investment bank, five to ten times US Dollar deposit yield pick-up, and global trading houses as counterparties. According to the Managing Partner of the company - Mr. Muneef O. Tarmoom - the combination of "back-to-basics" physical asset backed financing and Global 'A' rated banks' capital and profit protection features enables ADEP to originate financing opportunities with a yeald 5 to 10 times larger than current US Dollar murabaha rates. The company's landmark Brazilian agri-based inventory transaction shall serve to finance a leading sugar and ethanol producer in the state of Mato Grosso do Sul.
A Gulf investment bank has provided sharia-compliant funding worth millions of dollars for a Brazilian sugar and ethanol maker. The deal is an example of how smaller firms can be considered new investment possibilities for the wealthy Islamic lenders of the Gulf region. The deal is brokered by Abu Dhabi Equity Partners and will ensure financial means for an unnamed chemical alcohol producer in the Brazilian state of Mato Grosso do Sul. This will be at the same time a three-month investment opportunity for the lending company.
Islamic finance had another great year. Many of its market segments progressed, like for example the Sukuk market gaining more maturity. Despite the ongoing debt crisis a good sign of hope and happiness.
Nevertheless we are - as an industry - still not satisfied with the achievements. Islamic finance shall grow stronger in terms of social impact and in terms of substance:
Hence, please allow me to re-iterate my call for participating in international initiatives beyond just our own industry to learn and spread knowledge and experience:
Calling Islamic financial institutions to become member of the United Nations Finance Initiative
Inshallah we see more Islamic financial institutions taking a lead in SRI, Social Impact Investing and other approaches while contributing with Islamic finance knowdledge to the conventional industry. The time is now; and there are signs that Malaysia aims for a lead:
Building a Healthy & Sustainable Social Impact Bond (SIB) Market is the name of new report by Godeke Consulting that was supported by the Rockeffeller Foundation. The aim of the report is to explore the landscape of potential SIB investors in order to clarify the ways in which a sustainable market can be built up. Beside that, the report provides a look at social and environmental conditions and current economical issues.