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WWF calls on Asean banks’ 'proactivity' in addressing environmental risks

According to the World Wide Fund For Nature (WWF), banks belonging to the Association of Southeast Asian Nations (Asean) need to shore up regulatory safeguards to address the environmental and climate crisis. WWF’s Head of Asia Sustainable Finance Jeanne Stampe called on Asean banks to be more "proactive" in addressing environmental issues. In Malaysia, Singapore, Thailand and Vietnam, WWF found out financial regulators and banking associations expect banks to develop environmental policies on environmentally or socially sensitive sectors. But WWF said 43% of the banks assessed in these four countries mention having such policies in place, while only 15% disclose these policies. In light of this, WWF recommended regulators to provide more prescriptive guidance to enhance resilience and attractiveness of the finance industry.

#Turkey, #Malaysia, #Qatar can pioneer in Islamic finance

Ready to be taken to the next level, the burgeoning sector of Islamic finance is ready to take root in new regions through Turkey, Malaysia and Qatar. According to Yousuf Al-Jaida, CEO of the Qatar Financial Centre, Malaysia could act as a gateway for Islamic finance into Asia, with Turkey into Europe and Qatar the Middle East and Africa. He stressed that Malaysia was ready with its legal framework to facilitate the sector, while Qatar and Turkey need to step up and do more for the sector. Al-Jaida said these three countries could form a large platform to share experience, technology and knowledge. He is optimistic and sees a bright future, as Islamic finance is now growing at an even quicker pace than conventional finance.

Putting Children At The Center Of Africa-China Poverty Reduction Agenda

According to UNICEF, investing in children is the fundamental solution to end child poverty and inequality and set the foundation for sustainable and inclusive economic growth. The statement was made during the Africa-China Poverty Reduction and Development Conference at the 10th Forum on China-Africa Cooperation (FOCAC). The 10th FOCAC Africa-China Poverty Reduction and Development Conference, co-hosted by China’s State Council Leading Group Office of Poverty Alleviation and Development (LGOP) and the Uganda Ministry of Agriculture, Animal Industry and Fisheries, had the theme of "Partnership for Transformation in Africa". Delegates expressed the urgent need to invest in social policies and infrastructures which combat child poverty in Africa, where around three out of every four children are affected by multi-dimensional poverty.

Time for #Malaysia to lead Islamic social finance endeavours

According to the State of the Islamic Economy Report 2018/19, Malaysia has been the leader of the Islamic economy ecosystem for five consecutive years. In addition to Malaysia’s impressive performance as the front-runner in the commercial sector of Islamic finance, perhaps it is time for the country to gear itself up to also lead the revitalisation of Islamic social finance instruments. These instruments could play a vital role in reducing poverty and addressing challenging socio-economic problems such as education, unemployment, malnutrition and health issues. In Malaysia, the utilisation of philanthropic Islamic social finance instruments such as zakat and waqf seems to be restricted because of regulatory hurdles. The concept of sadaqah seems to be underutilised, although there is a huge potential in it. A product called Sadaqa House, initiated by Bank Islam Malaysia Berhad (BIMB), is an example of its application.

Green investments, financing gain traction in #Indonesia despite lack of investor awareness

The "green is the new black" sustainability trend has reached the financial world as investors are slowly turning to invest in environment, social and governance (ESG)-compliant assets in Indonesia. Rising awareness of the mounting environmental and social problems has prompted global investors to invest in sustainable assets that comply with ESG standards. Although this type of investment has been gaining popularity in the developed markets for the past several years, Indonesia seems slow in adopting the trend. For BNP Paribas Asset Management Indonesia, sustainable mutual funds only accounted for 4% of its total assets as of September 2019. The fund manager currently offers three ESG-compliant mutual fund products to its clients that adhere to sustainable and responsible investment.

SC launches new roadmap to drive sustainable investments

The domestic capital market is expected to play a critical role in helping Malaysia meet the estimated RM45 billion required to finance its long-term sustainable development goals. Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Syed Jaffar Albar said climate change poses physical and financial risks to companies. The change to more sustainable practices requires investments in new technologies and funding which carries risks with indeterminate outcomes. Malaysia alone is projected to require RM45 billion in the next five years. Therefore, the SC released the sustainable and responsible investment (SRI) roadmap to establish the country as a regional SRI centre. The roadmap identified 20 strategic recommendations based on the SC’s five i-Strategy: the widening of the range of SRI instruments, increasing the SRI investor base, building a strong SRI issuer base, instilling a strong internal government culture and designing information architecture.

#Indonesia’s Alami wants to prove Islamic finance can be profitable

Alami started as an aggregator platform in 2018. The firm later obtained a registration from the Indonesian Financial Services Authority (OJK) in May 2019, and since then, the startup has channeled nearly 70 billion rupiah (US$4.96 million) to more than 50 SMEs. Founder Dima Djani hopes to dispense a total of 80 billion rupiah (US$5.6 million) by the end of this year, and he targets to triple the number next year. From fundraising to business operations, Alami is committed to complying with all sharia principles and values. In the near future, Alami plans to reactivate its aggregator platform, and the firm is also currently exploring opportunities to add individual loan services in collaboration with sharia banks.

Waqf, zakat mechanism can make houses more affordable: Amiruddin

The Malaysian government is currently looking into various avenues in Islamic finance which can be used to make houses more affordable. Deputy Finance Minister Datuk Amiruddin Hamzah said that one state in the northern region is currently conducting a waqf housing scheme for the people. He said this at the sidelines of the inaugural International Centre for Education in Islamic Finance (INCEIF). INCEIF president Datuk Azmi Omar said that there are a lot of waqf land that can be used to develop affordable housing. The cost to develop the houses can be lower, however, the houses will be under a long-term lease. On another matter, Amiruddin said that the digital banking framework is set to push the country forward in the digital banking landscape.

Sharia committee wants to quadruple Islamic bank assets by 2024, will partner with #Malaysia

Indonesia's sharia financial committee hopes to quadruple the nation's sharia bank assets over the next five years. The comittee's executive director Ventje Rahardjo said that the goal was to reach Rp. 2 quadrillion (US$142.2 billion) in sharia bank assets by 2024. The committee plans to widen its coverage of Islamic finance to the Islamic economy in general. Therefore, the name of the committee will be changed to the National Committee for Sharia Economy (KNES) to better reflect its responsibility to oversee the development of the halal value chain. Ventje added that Indonesia and Malaysia would work together to create a regional halal standard. The committee also plans to digitize sharia financial services, including a digital zakat platform and a sharia-compliant e-wallet.

#China-#Bahrain venture fund targets Middle East tech market

China’s MSA Capital and Al Salam Bank-Bahrain launched a $50 million venture capital fund to invest in sectors such as e-commerce and financial technology in the Middle East. The fund also plans to target big data, artificial intelligence, cloud computing, and logistics and networking systems. The $50 million MEC Ventures was raised from seed money, Chinese entrepreneurs and institutional investors and family offices from Gulf Cooperation Council countries. MSA Capital has existing investments in Chinese entrepreneurs who have taken the Chinese model into the MENA region.

Global Food and Water Security Alerts

Chinese Premier Li Keqiang suggested that China needs to divert more water to its arid north. He said that local government bonds should be tilted towards water infrastructure to increase per capita water supplies, which are about a quarter of the global average. Li stated that China needs to research water conservation methods to reduce water consumption. He also claimed that the South-North Water Diversion Project had improved Chinese water security. That project, however, has not been as successful as he claims.

HPB strengthens presence in #Indonesia, provides shariah-compliant IT services to Indonesian cooperatives

HeiTech Padu Bhd (HPB) has strengthened its presence in Indonesia with the establishment of PT Desa Tech Nusantara to provide a shariah compliant cooperative Baitulmal Wat Tamwil (BMT) system. HPB executive vice president Salmi Nadia Mohd Hilmey said the project serves all cooperative members and the unbanked across Indonesia with multiple transactional items. A memorandum of understanding (MOU) signing ceremony was held to formalise the collaboration. BMT is a single scalable system in the cooperative ecosystem and has the potential to grow exponentially. Indonesia stands at the top of the Asia Pacific region in terms of unbanked population, as three-quarters of its 250 million people are still outside of conventional financial systems.

Huge Shariah-compliant fintech potential in #Indonesia

For the first time in many years, Indonesia overtook Malaysia in an Islamic finance ranking. According to the Global Islamic Finance Report (GIFR) 2019, Indonesia ranked No 1 in IFCI 2019, overtaking Malaysia that has dominated the index since 2011. Malaysia may have had early mover advantages with a top-down approach in its positioning as a global hub for Islamic finance. Indonesia has shown a great penchant for creativity. Known for being creative and amplified by the market size, Indonesia has the potential to vault ahead in the near future. Indonesia has already unveiled its Islamic Economic Master Plan 2019-2024. Two out of four main strategies are directly benefitting Islamic finance and Islamic fintech. These strategies strengthen the Islamic financial sector and the digital economy.

Institutionalizing Islamic banking practices

The Philippines's new Republic Act (RA) 11439 or the "Act Providing for the Regulation and Organization of Islamic Banks" allows the Bangko Sentral ng Pilipinas to follow its regulatory mandate for supervision over the operations of Islamic banks, and to issue the implementing rules and regulations on Islamic banking. Currently, the country has only one Islamic bank, Al Amanah Islamic Investment Bank of the Philippines. According to BSP Governor Benjamin E. Diokno, the BSP looks forward to seeing greater participation in Islamic financing by both domestic and foreign banks. This is expected to widen opportunities for Muslim Filipinos in accessing banking products and services.

The 1st IFSB Innovation Forum: Revitalising creativity and sustaining competitive value

The Islamic Financial Services Board (IFSB) Innovation Forum was inaugurated in Jakarta to showcase innovative Islamic finance products and services with a strong impact on financial inclusion, economic growth and sustainable development. The forum took place on 12 November 2019 along with the 14th IFSB Summit at the Jakarta Convention Center, Jakarta, Indonesia. The IFSB Innovation Forum is a new biennial event to enhance knowledge about latest technological developments. It provides a platform for regulators, policy makers, Islamic Financial Institutions, start-ups and FinTechs, academic and research institutions, financial services providers, legal practitioners, Shariah advisors and other stakeholders to cultivate innovative thinking and dialogue.

IILM reissues $600mln #sukuk; GCC banks act as primary dealers

Malaysia-based International Islamic Liquidity Management Corporation (IILM) has reissued A-1 short term sukuk worth $600 million in two series. The reissuance came in the form of $300 million with 1-month tenor at a profit rate of 1.85% and $300 million with 3-month tenor at a profit rate of 1.91%. Primary dealers include Abu Dhabi Islamic Bank, First Abu Dhabi Bank, Barwa Bank, Boubyan Bank, Kuwait Finance House and Qatar Islamic Bank. The non-GCC banks that participated in the reissuance include Maybank Islamic, Standard Chartered Bank, Al Baraka Turk and CIMB Bank. The demand for the 1-month and 3-month Sukuk series reached a bid-to-cover ratio of 208%, and 255%, respectively.

#Philippines plans to allow banks to set up Islamic banking units

Bangko Sentral ng Pilipinas (BSP) is leaning toward allowing local lenders to set up Islamic banking subsidiaries, as it steps up efforts to promote Shariah-compliant finance in the country. According to the central bank's Deputy Governor Chuchi Fonacier, the BSP is pushing for an open approach where conventional banks can operate Islamic banking windows or to establish subsidiary Islamic banks. Operating fully fledged subsidiaries would allow lenders to offer a wider range of Shariah-compliant services than through a window, which remains part of the parent bank. Fonacier added that foreign Shariah-compliant banks would also be allowed to operate locally. The BSP wants to issue the implementing rules for the new law before the end of the year.

Algorand Foundation announces Sharia certification for Islamic financial markets inclusivity

The Algorand Foundation, the organization that oversees the Algorand blockchain platform, announced that the network is certified for Sharia compliant financing. The foundation enlisted the Shariya Review Bureau (SRB) as an independent Sharia Advisor to ensure the network complies with the critical procedures of Sharia compliant financing. Algorand’s ecosystem has been growing substantially since launching in June of 2019. With the Sharia certification, Algorand is open to Islamic institutions using the platform for economic exchange and beyond. The Algorand Foundation is providing the trusted infrastructure needed to support the growth of a borderless economy. With research led by Dr. Tal Rabin, the Algorand Foundation is incorporated in the Republic of Singapore.

#Malaysia remains key source of Islamic debt papers

According to Fitch Ratings, Malaysia remains the main sukuk issuer this year besides countries from the Gulf Cooperation Council (GCC) region. The increase in Malaysia’s sukuk market is largely driven by Bank Negara Malaysia (BNM) and contributed by local currency corporate issuance. Notable corporate deals included energy service firm Serba Dinamik’s US$300 million (RM1.25 bilion) sukuk, the first dollar high-yield sukuk offering in the Asia-Pacific region. The Malaysian market shows how as the Shariah-compliant investor base grows, the cost of sukuk issuance becomes more competitive relative to conventional bonds. Fitch believes that global volumes normalised rather than declined last year after hitting record levels in 2017. Moving forward, Fitch believes macro-economic and geopolitical conditions will affect sukuk issuance. GCC debt markets are relatively developing but individual sovereign funding decisions can profoundly affect total supply.

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