Shareholders of Kuwait Finance House (KFH) have approved issue of sukuk and other sharia-compliant financial instruments.
On March 15 Abu Dhabi Islamic Bank appointed Khamis Buharoun as acting CEO. The appointment of acting CEO Khamis Buharoun is in context of CEO Tirad Marouf Al Mahmoud's medical leave.
Abu Dhabi Islamic Bank (ADIB) is considering to make a U.S. dollar-denominated sukuk issue over the next few months. The Islamic lender would join a number of Gulf Cooperation Council banks raising debt internationally through both Islamic and conventional bonds to improve their liquidity. Bahrain-based Gulf International Bank was the first regional lender to raise debt internationally this year with a $500 million bond sale in January. It was followed by a $1 billion sukuk sale by Dubai Islamic Bank, a $500 million conventional bond by Ahli Bank Qatar and a $500 million bond by the United Arab Emirates’ Bank of Sharjah.
Algeria plans to raise money from an interest-free local bond in order to offset the huge fall in its energy earnings. The North African OPEC member has already cut public spending, introduced new taxes and reduced government subsidies on fuel. Finance Minister Hadji Baba Ammi said the new bond would not bear interest, which may help attract a greater number of Algerian buyers. The minister said bondholders would receive a share in projects that the issue would finance as an incentive. The government launched its first local bond last April, but it was harshly criticised by the religious community. While neighbours Morocco and Tunisia are developing laws for Islamic finance, Islamic banks and sukuk bonds, Algeria still has no legal framework for such operations.
Qatar International Islamic Bank approves capital increase of a newly established morocco-based Umnia Bank to 600 million moroccan dirhams.
Turkish participation bank Kuveyt Turk has received regulatory approval to raise 2 billion lira ($555.8 million) via sukuk, as it expands its domestic footprint while winding-down its Dubai unit. Kuveyt Turk, 62% owned by Kuwait Finance House , would sell the lira-denominated sukuk to qualified investors through its asset-leasing company, KT Kira Sertifikalari Varlik Kiralama, according to a regulatory filing. No timeframe or tenor were given for a potential deal. New funding could help the bank's plans to expand its branch network to 400 offices this year from a current 385. The bank increased its net profit by 22% and total assets by 15% in 2016. In December, however, the bank said it would terminate all activities of its wholly-owned subsidiary in Dubai, as it had not established a commercial advantage. It will continue to service the Gulf region via its branch in Bahrain, while concentrating on its operations in Turkey and Germany.
Halic Leasing is expanding its sharia-compliant business portfolio to tap demand from small businesses. This is a sign that Turkey's Islamic finance market is growing beyond traditional banking services. According to Halic's General Manager Gokcen Sahin, the company is building a portfolio of leased assets and is targeting new business of around $25 million by the end of the year. Halic also aims to attract further investments from Islamic mutual funds while expanding into construction equipment later this year. The plans come after the firm's new shareholders injected fresh capital at the end of last year and set up a sharia committee to ensure its products conform to Islamic principles. Gokcen Sahid added that with a good quality portfolio, Halic may also consider raising funds via sukuk in the future.
Dubai Islamic Bank will meet fixed income investors in London on Feb. 6 ahead of a potential sukuk issuance. A five-year benchmark issue, which usually means upwards of $500 million, might follow. The lender has appointed Bank ABC, Dubai Islamic Bank, Emirates NBD, HSBC, KFH Capital, Maybank Investment Bank Berhard, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank as joint lead managers and bookrunners.
Turkey's privately-owned Aktif Bank has received regulatory approval to sell up to $120 million via sukuk. Turkey has seen steady issuance of sukuk from the government and the country's Islamic banks, but corporate issuance remains rare. Aktif Bank will sell the sukuk through its asset leasing company, Aktif Bank Sukuk Varlk Kiralama. Companies can sell sukuk directly by setting up their own asset leasing companies, but the process can be onerous for smaller firms. The government has previously granted tax exemptions for lease-based sukuk, but in August it extended those incentives to all other types of sukuk contracts.
#Singapore's Sabana Shariah Compliant Industrial Real Estate Investment Trust (REIT) clarifies the article published by Straits Times titled "Angry investors want REIT manager kicked out". Sabana REIT stated that the closing price of its unit was 37 cents on 24 Jan 2017. Sabana REIT clarified that the manager's fee structure is in line with market practice in Singapore's REIT sector. All acquisitions were approved by board of directors in accordance with property funds appendix and sgx-st listing manual.
Africa Finance Corp (AFC), a pan-African multilateral institution based in Nigeria, is likely to make a debut U.S. dollar sukuk issue by early February. If AFC makes a final decision to go ahead with the proposed debt sale over coming days, the sukuk will be issued in two or three weeks through a private sale. The sukuk would be structured with a murabaha format and use Nasdaq Dubai's platform for murabaha transactions. Mohamed Damak, global head of Islamic finance at S&P Global Ratings, said more sukuk issuance will come from Africa-based issuers over the next few years as borrowers seek to expand their investor bases. Another reason for issuers in Africa is that sometimes sukuk can be cheaper than conventional bonds, especially when it attracts significant interest from the market.
Dubai Islamic Bank (DIB) sold its stake in Jordan Dubai Islamic Bank. DIB held 20.8% in Jordan Dubai Islamic Bank through a 40% shareholding in MESC Investments. MESC Investments had completed the sale of its stake in Jordan Dubai Islamic Bank to Jordan-based Bank Al Etihad and Etihad Islamic Investment Company. The value of the sale was not disclosed.
Iran's central bank will take chairmanship of the Islamic Financial Services Board (IFSB) for the year 2017. Shut out of the global system by sanctions, Iranian banks are eager to resume business with foreign lenders with deals ranging from funding infrastructure to insuring foreign trade. The IFSB Council said late on Wednesday it had appointed Iran's central bank governor Valiollah Seif as chairman, with Bangladesh Bank governor Fazle Kabir as deputy chairman. Iran's entire banking system follows Islamic principles, there are 34 Islamic banks that held total assets of 14,451 trillion rials ($448 billion) as of March. This represents around a third of total Islamic banking assets globally, although Iran's version of Islamic finance can differ with what is observed in other Muslim-majority countries.
Djibouti expects to see new entrants in its Islamic finance sector and the government plans to work on a framework to allow the use of Sukuk, or Islamic bonds, to fund infrastructure projects, its central bank governor said.
Djibouti, a country of less than a million people located on the Horn of Africa, is a relative newcomer to Islamic finance, having introduced sector-specific legislation in 2011, but authorities hope it can increase banking penetration in rural areas while also attracting foreign investment.
The government has established a national Sharia board to help oversee the sector, appointing five members to the independent body last week, central bank governor Ahmed Osman said in an interview.
The move could help Islamic finance by improving consumer perception of the industry and providing greater clarity on contracts which follow religious principles such as bans on interest and gambling. The government is in discussions with the Saudi-based Islamic Development Bank to secure a technical mission to help establish a framework to issue sukuk.
Islamic banks are gradually embracing socially responsible finance, from renewable energy to microfinance efforts, helping unlock new funding sources for environmentally-friendly projects, an industry survey shows. The two sectors have developed separately from each other, but green projects could benefit from tapping Islamic banks in countries like the United Arab Emirates and Malaysia, where they now hold a quarter of total banking assets.
Around two-thirds of financing in Saudi Arabia follows Islamic principles, which forbid investing in gambling, tobacco and alcohol. This resembles the screening methodology used by ethical funds in Western markets. Green finance is increasingly important for Islamic banks seeking to differentiate themselves from their conventional peers, the Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) said in a report.
Reconciling accounting standards and religious principles is challenging the Islamic banks and their regulators as they adapt to new international book-keeping rules due to come into force in 2018. The new rules, known as IFRS 9, will leave their mark on all major products used by Islamic banks - from simple savings accounts to Islamic bonds - and impact their bottom-lines. Banks around the globe are gearing up to implement IFRS 9 from January 2018, posing a particular challenge for many Islamic finance contracts as they change the way financial assets are classified and measured, requiring lenders to book expected losses in advance. The problem for most Islamic financial products is that their accounting treatment can often diverge from the actual economic substance of a transaction, a key concept behind IFRS 9. This has prompted the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) to set up a working group to look at ways to revise its rules
Saudi Investment Bank closed a 500 million riyals ($133.3 million) Tier 1 sukuk sale on Monday. The subordinated Islamic bond was sold privately. The debt transaction will boost the bank's capital base and its capital adequacy ratio, in addition to diversifying the Saudi bank's funding sources and its maturity profile. The joint lead managers of the transaction were Alistithmar for Financial Securities and Brokerage and J.P. Morgan Saudi Arabia.
Italian money manager Azimut Holding will jointly manage its Islamic bonds fund with Maybank Asset Management Group to cater to growing demand for hard currency sukuk products. The partnership will allow the fund to penetrate new markets including Malaysia and Singapore, where Maybank Asset Management already operates. Azimut launched its global sukuk fund in 2013 which has over $130 million in assets. Maybank Asset Management launched a U.S. dollar-denominated sukuk fund of its own in 2014. Sukuk funds remain tiny compared to their conventional fixed-income counterparts, but the sukuk market has widened in recent years thanks to an increasing number of issuers and investors.
Kenya plans to develop Islamic finance through a wide-ranging taxation review and the establishment of a national sharia board. The country wants to build up the industry as part of a long-term plan to turn Nairobi into an international financial centre. The initiatives are being led by the Islamic Finance Project Management Office (PMO), a body setup recently to coordinate efforts among Kenya's regulatory agencies. According to finance consultant Farrukh Raza, the PMO has submitted an initial set of policy amendments focused on taxation of sharia-compliant products. A second batch of policy amendments will be presented by the end of this year, covering banking, insurance, pensions and capital market products. Kenya's National Treasury has said it is looking at the possibility of a debut sale of sukuk, although it has yet to finalize details for such an issuance.
Warba Bank has received approval from the central bank of Kuwait to issue up to $250 million of sukuk. The bank will take a final decision on the issuance and its timing after obtaining remaining regulatory approvals. The funding would be used to boost Warba's Tier 1 capital. Warba Bank is an Islamic lender established in 2010.