IslamicFinance.de

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.

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.

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 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.

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 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.

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.

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.

Al Madina Insurance anticipates a robust growth in takaful insurance business in Oman, if the trend in neighbouring countries is any indication. Al Madina expects the market to grow between OMR60 million to OMR70 million in worst case scenario and OMR150 million to OMR180 million in best case scenario in the next three to five years, the company's chief executive officer Gautam Datta said. He added his company did not change the premium, after converting it into an Islamic insurance company from January this year. Referring to re-insurance, he said Al Madina has a re-insurance programme of over 55 per cent and is planning to expand its retail and personal lines portfolio.

In principle, Islamic banks act as financial brokers between the investors (depositors) and companies or individuals seeking finance solutions that are sharia compliant; sharing the profit/loss. One of the most important principles of Islamic banking is to play an active role in achieving social development. Islamic banks should be able to provide financing solutions for the different investment and commercial projects in a way different from the traditional commercial banks. However, Islamic banking institutions in the world in general and GCC in particular face many challenges on the foremost of which is the inability to attract leaders and manpower specialised in Islamic banking. They are therefore required to provide high quality and intensive training for their staff.

Islamic banking in Oman is growing at a slower pace than expected and requires new legislation and stronger public awareness of the industry to flourish, Bank Nizwa CEO Jamil El Jaroudi said. He added that there is also a skills shortage in the Omani market. The legal and regulatory framework in Oman supports the launch of the Islamic banking industry but further development of legislature is needed for the sector to mature. Bank Nizwa, Oman's first independent Islamic bank, started operations in January 2013 and raised OMR 60 million in an initial public offering of 40% of its shares in May 2013. Jaroudi said the bank had no plans to issue new sukuk, or Islamic bonds. He said the bank planned to launch Internet banking services and other shariah-compliant products.

The Omani Ministry of Awqaf and Religious Affairs held a seminar for Waqaf agents, in cooperation with Meethaq for Islamic banking at the Institute of Sharia Sciences. The seminar aims to recall the importance of Waqaf in contemporary life, the call to revive the Waqaf Sunnah in modern methods and strengthening the spirit of cooperation and partnership between the Ministry of Awqaf and Religious Affairs, Waqaf agents and other entities. Many working papers were presented in the seminar. The first paper which was presented highlighted the efforts of the ministry to organise Waqaf work, types and importance of Waqaf, the memorandum of understanding with Meethaq for Islamic banking and the management techniques to develop the Waqaf fund, among others.

Experts at the seminar of ‘Developing a sustainable Islamic banking industry in Oman’ have said that the demographic changes in the country and the rising employment level will bring a ‘huge potential’ for growth in the financial sector. Islamic banks will need to play an effective role in order to have their share of the cash. When it comes to the regulation of Islamic finance, particularly in liquidity and treasury management, Oman is one of the most advanced countries. However, the lack of a global Islamic capital market, particularly an Islamic interbank market, and the shortage of short-term, long-term, or highly tradable investments which will bring the capital risk, are the main issues concerning the development of Islamic banking.

Jamal Darwiche, acting CEO of alizz islamic bank, has resigned from his position for personal reasons. The bank said that the board is engaged in filling this role permanently, but added that Saif al Yarubi will take on this responsibility during the interim period. Before joining alizz islamic bank in July 2012, Darwiche held the position of chief operating officer and general manager of retail banking at Masraf Al Rayan Bank in Qatar. Saif al Yarubi was appointed as chief financial officer at alizz islamic bank in September 2013. He joined alizz islamic bank after serving five years as finance director at Investment Corporation of Dubai (ICD).

Oman's Bank Nizwa has partnered with the Ministry of Endowment and Religious affairs to create a seamless opportunity for customers to pay their Zakat. Customers can now easily transfer the required amount from their accounts into the allocated Ministry of Religious Affairs account at Bank Nizwa . They can also deposit cash directly into this account. Customers who regularly wish to transfer Zakat can set up a standing order. Bank Nizwa customers who choose to pay their Zakat through the afore mentioned Bank Account are assured of a waiver of fees on all standing orders linked to this account. There are also fee waivers on internal, local and International transfers associated with this account.

This month, Oman's insurer Al Madina Takaful converted itself from a conventional insurer to a takaful company. It changed its conventional insurance clients to takaful policies after a customer education process, reportedly without client exits or other problems. In the next two years, the firm plans to add up to seven new branches to its network of three, and distribute products via Islamic banks, a practice known as bancatakaful. Two new firms could soon follow in Al Madina's footsteps: Takaful Oman Insurance and Oman United Insurance. However, their entry could crowd the market further and add to pressure on profitability. The Capital Market Authority (CMA) has yet to publish its final rules on takaful, while an insurance law is still in the draft stage.

Al Madina Investment (Al Madina) has organized an event to celebrate the issuance of the first sukuk in Oman. Al Madina acted as the Principal Advisor, Joint Lead Arranger and Joint Lead Manager for the OMR50 million Sukuk Al Ijarah issued by Modern Sukuk on behalf of Tilal Development Company (TDC). The proceeds from the sukuk will be utilized for the expansion of TDC's flagship project - the Tilal Complex. In the event, Al Madina honors the stakeholders and also the participants in the sukuk by presenting them with an award for their contribution to successful issuance of the sukuk.

Takaful Oman Insurance, one of Oman's first takaful insurance providers and still under formation, has announced its initial public offering (IPO). The promoters are offering 40mn shares, each priced at 102bz - with a par value of 100bz and 2bz of issue expense. The IPO, which opened for subscription on October 30, will close on November 28. Takaful Oman is promoted by ONIC Holding, National Investment Funds Co ( Nifco ), Oman Investment Corporation (OIC); National Bank of Oman, Blue Door Investment Services LLC, bank muscat, and T'azur Takaful insurance company, one of the top five takaful companies in Kuwait.

Omani real estate developer Tilal Development Co has sold the country's first Islamic bond, a 50 million rial ($130 million) sukuk. Tilal's five-year sukuk, offering a profit rate of 5 percent and based on an ijara structure was privately placed with investors, arranger Al Madina Investment said. About 95 percent of the sukuk, rated BBB+ by Cyprus-based Capital Intelligence, was placed with local investors including pension firms and banks. Tilal, 40 percent-owned by sovereign wealth fund Qatar Investment Authority, will use proceeds from its sukuk to expand the Tilal Complex in Muscat, a flagship project which includes the Muscat Grand Mall as well as residential and office space.

Oman’s Al Madina Insurance Co (AMIC) plans to list its shares on the local bourse as part of its transformation into a takaful firm. AMIC plans to issue 66.67 million shares with a face value of 0.1 rial per share, equating to 40 percent of its total post-IPO capital. The offer will take place this year depending on approval from Oman’s Capital Market Authority (CMA). It was unclear how much money AMIC planned to raise. Oman decided in 2011 to introduce Islamic finance; its draft takaful regulations require local Islamic insurers to be public companies, and AMIC said it expected to become one of the first takaful companies on the market.