Central Asia

Muslim demography: Promoting high-net-worth individuals in Pakistan

Every fourth person on the planet is Muslim. However, the vast majority of them happen to be among the poorest in the world. However, there is a growing middle class in the Muslim world, including Pakistan, of which the upper sub-segment called the ‘mass affluent’ may potentially be relevant to wealth creation and subsequently to the business of wealth management. Muslim high-net-worth individuals (HNWI) hold an estimated $3.35 trillion, which is less than 30% of the total Islamic wealth. The remaining 70% is held by Muslim businesses, Islamic financial institutions, the mass affluent, and by the governments in the OIC block.

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Short European fixed-income trade. A loss of a lifetime?

Bill Gross, well known fixed income fund manager twittered (https://twitter.com/januscapital/status/590519759797530624) and moved markets with his idea to sell German sovereign bonds short (selling without having them) to buy them back later cheaper. He called it "The Short of a lifetime"; the only issue would be the "timing"...

Interest rates will be once raising again but will short seller stay solvent long enough to benefit? The German economy is doing fine, but other EURO zone countries do not perform as well and need low interest rates for a prolonged period of time. Japan has so far not convincingly ended their easy money policy.

Iranian Companies Plan Sukuk Sales

About 180 companies are considering Islamic bond sales in 2016 after a decade of international sanctions, according to Hossein Saeedi, a senior financial analyst at the corporate finance division of Tehran-based Amin Investment Bank. The companies have already started planning to design specific financial instruments to attract foreign investors to come to the Iranian market, Saeedi said. If the sanctions are lifted, they are looking for aggressive sukuk financing. Iran is home to the world’s biggest Islamic banking industry but market instability and currency fluctuation have been among the impediments to growth.

EasyPaisa: Incentivizing Mobile Wallet Usage in Pakistan

Despite a robust mobile money market, six years after the launch of the first branchless banking product, the number of active, registered mobile money accounts in Pakistan stands at only 0.4% of the population. The percentage of users of mobile money products, however, is 7%, which means that the majority of the customers prefer to transact over-the-counter via an agent. However, true financial inclusion only results when customers open their own mobile money accounts. It is only then that customers can avail of more advanced financial products such as insurance, savings, and credit. Hence, mobile money accounts are an important indicator for financial inclusion.

Malaysia and Saudi facing Iran’s rising finance power

With the easing of economic sanctions against Iran, the country is expected to unleash its enormous potential of Islamic finance and enter the global stage with new Shariah-compliant products at a size that could threaten the dominance of Malaysia and Saudi Arabia in the sector. Iranian banks represent the world’s largest financial system based on Shariah law. However, due to the sanctions, the country has so far only marginally participated in the global Islamic finance sector and thus did not benefit from the rapid global growth of Islamic finance in the recent past. The entire banking system in Iran is Shariah-compliant, and there are no conventional banks to compete with.

Islamic Development Bank may send MDPS to Azerbaijan

The Islamic Development Bank (IDB) plans to expand its cooperation with Azerbaijan in respond to the request of the national government. In this regard the bank may send the MDPS to the country. The material is distributed only on private subscription conditions. If you are interested in it please contact the Marketing Service of Fineko Agency.

Restructuring: SECP chief backs Islamic financing

Securities and Exchange Commission of Pakistan (SECP) Chairman Zafar Hijazi said on Wednesday the regulator is looking to enhance Shariah compliance in the capital markets by restructuring and reorganising the Islamic capital market. Speaking at the fourth Islamic Finance Expo and Conference as chief guest, Hijazi discussed in detail the roadmap for the promotion of Islamic finance in Pakistan. He added that the SECP is centralising the Shariah-related capital market activities besides improving the regulatory framework for Takaful, Modarabas, Islamic mutual funds, Islamic pension funds and Islamic real estate investment trusts (REITs).

Azerbaijan’s Islamic banking skills to drive Russian Islamic finance development

Russia hopes to learn from the experience of Azerbaijan in the field of Islamic banking, said Sergey Drobyshevsky, the scientific director of the Gaidar Institute for Economic Policy in Baku. He said the presence of IBA Moscow, a Russian subsidiary of the International Bank of Azerbaijan, must contribute to this. Drobyshevsky believes it will be easier for the Azerbaijani banks and businessmen to work in Russia than the Malaysian specialists of that sphere. Behnam Gurbanzada, the director of Islamic banking at the IBA, earlier called Russia a "promising" platform to further the development of Islamic finance.

We are clear market leaders in home financing: Pervez Said, Managing Director, House Building Finance Company

Pervez Said is no stranger to adversity. In his 33 year-long career, he has worked with 10 different organizations, having served as chief executive at four different institutions. He is considered to be the pioneer of Islamic banking in Pakistan due to his instrumental role at the State Bank of Pakistan in the formative years of Islamic banking. But his current stint at the House Building Finance Company may well be the biggest challenge he has taken on yet. You can find excerpts from a recent interview in which Said discussed the housing crisis in Pakistan and the role HBFCL is playing in alleviating it following the article link.

Upcoming 12th IFSB Summit Gathers Momentum as Council Approves Adoption of Core Principles for Islamic Finance Regulation

The Islamic Financial Services Board (IFSB), the prudential and supervisory standard-setting body for the estimated US2.3 trillion global Islamic finance industry, convenes its 12th Annual Summit on 19 - 21 May 2015 at the Rixos Almaty in Kazakhstan. The Summit, which is hosted by the National Bank of Kazakhstan, could not have a more pertinent theme: 'Core Principles for Islamic Finance: Integrating with the Global Regulatory Framework.' Indeed, the Council of the IFSB at its 26th Meeting, held in Jakarta, Indonesia in early April, approved the adoption of a new Standard on Core Principles for Islamic Finance Regulation (CPIFR)(Banking Segment), known as IFSB-17.

Oil products' insurance: scope of investigations expanded to two more companies

The Federal Investigation Agency (FIA) has expanded the scope of its investigations to two more insurance companies and detained three persons in a case that involves a huge embezzlement on account of oil products' insurance. FIA has taken into custody three persons and has also identified two more persons. The insurance companies had entered in a deal with one of the biggest oil refineries in 2002 to insure oil consignments imported in Pakistan. In this deal, insurance companies had earned a commission Rs 152.39 million at a total premium of Rs 950.23 million and these companies in order to conceal this earned amount withdrew the same through various cheques of 170 fake agents.

Kazakhstan approves new laws

Kazakhstan's parliament approved new Islamic finance laws yesterday, moving a step closer to launching the oil-producing nation's first sovereign Islamic bond - possibly early next year. The lower house of the legislature passed a bill introducing new definitions, such as Islamic insurance, Islamic leasing and "murabaha", an acceptable form of credit sale under Sharia. The Finance Ministry is expected to propose a new draft law on sukuk very soon. Kazakhstan's first Islamic bond was a 240 million Malaysian ringgit ($73m), five-year sukuk issued by state-owned Development Bank of Kazakhstan in 2012.

President Ilham Aliyev met with the President of the Islamic Development Bank Group VIDEO

President of the Republic of Azerbaijan Ilham Aliyev has met with President of the Islamic Development Bank Group Ahmad Mohamed Ali in Jeddah. They expressed their satisfaction with the cooperation between Azerbaijan and the Islamic Development Bank. It was noted that the ongoing development processes in Azerbaijan gave a push to the expansion of the bilateral relations. Azerbaijan and the IDB cooperate in the fields of oil and gas, power industry, water supply, road construction, implementation of infrastructure projects, agriculture and industry, and investment making. The parties exchanged views over the issue of involving other partners in the bilateral cooperation.

Islamic capital market: SECP envisages roadmap for restructuring, reorganisation

The Securities and Exchange Commission of Pakistan (SECP) has envisaged a roadmap for restructuring and reorganising the Islamic capital market. The initiative aims at the promotion of Shariah compliance in the capital market of Pakistan. The roadmap entails centralisation of the Shariah-related capital market activities, introduction of uniform Shariah Regulation for the takaful, modarabas, Islamic mutual funds, Islamic pension funds, Islamic REITs, other Islamic financial institutions (other than banking), Shariah compliant (Non-financial) Companies, Islamic products and instruments.

HSBC's Islamic banking unit plans sukuk sale in Malaysia

The Malaysian Islamic banking section of HSBC Holdings has tapped the Islamic bonds (sukuk) market last Friday, as part of a S$1.1 billion sukuk programme. According to Reuters, the bank planned to raise up to 500 million ringgit worth of sukuk, using an agency-based structure known as 'wakala'.
The transaction ist he first issuance of sukuk by HSBC Amanah Malaysia Berhad since October and September 2012. HSBC Amanah has appointed HSBC as lead arranger with Hong Leong Islamic Bank and Maybank Investment Bank as joint lead managers for the sale.

SBP: Islamic Finance industry reaches $ 1.8tr in 40 years

In an opening ceremony Finance Minister Ishaq Dar expressed his pleasure to the State Bank of Pakistan which has been supportive to such initiatives like the Centre of Excellence in Islamic Finance Education (CEIFE) which strengthens the efforts to increase Islamic banking and finance.
The Islamic finance industry had reached US$ 1.8 trillion in the last 40 years according to SBP Governor Ashraf Mahmood Wathra. According to experts, the Shariah compliant assets globally are expected to grow up to 20% annually and financial assets will probably reach US$5 trillion by 2020. Pakistan, by the end of 2018, would have reached an overall share of Islamic Banking of 15%, currently 10%.

The 12th IFSB Summit will be held in Rixos Almaty, Kazakhstan

The 12th IFSB Summit will be hosted by The National Bank of Kazakhstan. The theme of this year’s Summit is «Core Principles for Islamic Finance: Integrating with the Global Regulatory Framework». The 12th IFSB Summit will focus on the major development in the supervision and monitoring approach to the Islamic financial services industry. In particular, various sessions in the Summit will address the role of the Core Principles in enhancing the regulatory consistency and resilience of the Islamic financial services industry as well as enabling the necessary frameworks and pre-conditions for the assessment of regulatory and supervisory regimes.

Iranian banks on shaky ground

The Central Bank of Iran (CBI) and CEOs of commercial banks reached an agreement that the institutions should not offer a deposit rate of more than 22%. The CBI has focused on restricting the monetary base and raising profit rates on participatory loans to curb inflation over the past 18 months. The policy has been a successful attempt as inflation dropped from 34.7% in the year up to March 20, 2013, to 15.8% in the year up to Feb. 20, 2015. However, Abbas Kamrei, a board member of Bank Melli, the largest state-run commercial bank, criticized CBI's interest rate policy as incorrect. He urged CBI officials to take into account the public expectations from banks.

Creating awareness: The ownership and control of Islamic banks in Pakistan

There are five Islamic banks operating in Pakistan. The significant shares of paid-up capital actually comes from the high net worth families and institutions in the Middle East, especially the six countries comprising the Gulf Cooperation Council (GCC). There are six countries - Kuwait, Saudi Arabia, UAE, Bahrain, UK and Singapore - from where individuals and institutions have invested in the five fully-fledged Islamic banks in Pakistan. Almost all of these banks are advised by the graduates of Darul Uloom Karachi, Jamiatul Uloom Islamia Binnori Town Karachi and Jamiatul Rasheed Karachi – well-known religious seminaries of Deobandi school of thought.

Azerbaijan's top bank attracts $150 mln Islamic loan

Warba Bank has announced that it successfully arranged $150 million Shariah-compliant one - year receivable backed syndicated financing facility for the International Bank of Azerbaijan. The Bank reported that it participated with a stake of $20 million in this transaction along with J.P. Morgan Bank, Citigroup, Barwa Bank, Al Hilal Bank, Noor Bank and Dubai Islamic Bank. he IBA concluded last year with $526 million sharia compliant assets compared to the Islamic Banking assets at the level of $220 million at the beginning of 2014. Behnam Gurbanzade, Director of the Islamic Banking Department of the IBA, recently said that the Bank is planning to increase the amount of Islamic financing in Azerbaijan in 2015.

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