The 12th International Conference on Islamic Economics and Finance (ICIEF) was held in Istanbul this month. It was organized by Istanbul Sabahattin Zaim University, Islamic Research and Education Institute (IRTI) and the Islamic Development Bank (IDB). Because of the pandemic the conference committee decided to organize it virtually. 14 eminent personalities and Islamic finance experts shared their thoughts on the future of Islamic economics and finance. Altogether, 132 papers out of some 472 submissions from 40 different countries were selected for presentation. Some papers focused on implementing a circular economic model that facilitates environment-friendly production and consumption. The circular economy concept is very much aligned with the concept of sustainable development and may support achieving the United Nations' SDGs by 2030. Presenters repeatedly underscored that the Islamic financial system can be a major driver in the transformation toward a circular economy.
The fifth International Albaraka Calligraphy Competition Exhibition meets art lovers on Instagram. Albaraka Türk continues to boost its success in culture and art events as well as in participation banking. The fifth edition of the bank’s International Calligraphy Competition Exhibition was postponed due to the coronavirus pandemic and later went online on Instagram. The works in the competition have been decorated with illumination and included in the collection. The exhibition has been given a new form with unique content and presented to art lovers on Albaraka Sanat's official Instagram account ( https://www.instagram.com/albarakasanat/) with over 70 stories in total.
Turkey saw $102 million worth of angel investments come into the country in 2019, a 66% year-on-year increase, amid efforts to improve venture capital and angel investment fields in the country. Turkey is the fourth largest angel investment country in Europe with 141 angel investors. The two-day congress on angel investment hosts hundreds of participants from 92 countries and 132 international speakers in 24 panels. As part of the WBAF's World Congress 2020, agreements were signed with the Mali government, the Mexican Foreign Affairs Ministry, the Royal Academy of Science International Trust, the Antalya OIS and the Antalya Technopark, the Three Cultures Foundation, the World Free Zones Association, the World Association of Women Entrepreneurs and Bahrain Entrepreneurs Organization.
The Islamic Development Bank (IsDB), the Islamic Solidarity Fund for Development (ISFD) and the United Nations Development Program (UNDP) have organised a two-day meeting in Istanbul. Several managers from organizer institutions are giving speeches on many issues such as saving children, poverty in Africa, socio-economic issues, Islamic and alternative finance, innovation and blockchain opportunities and partnership with the private sector. Gerd Trogemann, the manager of UNDP's Istanbul Regional Hub, stressed that all partners have to work together for bringing solutions to development challenges. The partners should go beyond organizational borders and build networks and platforms of partnerships, as each partner has different levels of reach, approaches and solutions.
The International Fuat Sezgin Islamic Science History Symposium will be organized in Instanbul from June 13 to June 15 with the theme of "Fuat Sezgin's Scientific Heritage." Various Islamic science history experts from all over the world will discuss both their works and the contributions of Fuat Sezgin to the world of science. Sezgin was one of the most respected historians of Islamic science and the recipient of the Presidential Culture and Art Grand Prize before his death last year at the age of 94. Studying Islamic sciences and Arabic at Istanbul University, Sezgin was expelled from the university after the 1960 military coup and worked in Germany as a visiting professor at the University of Frankfurt. In 1982, Sezgin founded the Institute for the Arabic-Islamic Sciences and established a museum showcasing over 800 copies of scientific tools. A similar museum named the Museum for the History of Science and Technology in Islam was opened in Istanbul in 2008 in Gülhane Park.
For Turkey's bankers and businesspeople it has been impossible to explain the high volatility in the exchange rate over the past few weeks. The fundamentals of the Turkish economy are solid and macroeconomic indicators fail to account for the recent slide in the Turkish lira, which dropped by more than 40% since the beginning of this year. These fluctuations are seen as manipulations on the Turkish lira and economy, as part of an economic war waged against Turkey by U.S. President Donald Trump. The U.S. dollar tumbled nearly 5% against the Turkish lira on Tuesday. European shares rebounded Tuesday as the Turkish currency firmed. The Central Bank introduced measures on the Turkish lira and the foreign exchange market (FX) liquidity management. The bank said it would provide all the liquidity needed by banks and closely monitor markets and prices, while raising collateral FX deposit limits for lenders' lira transactions from 7.2 billion euros ($8.2 billion) to 20 billion euros.
According to Abdelilah Belatik, secretary general of the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey's potential for Islamic banks is very big. Turkey has three participation banks, Al Baraka, Kuwait Turk, and Turkiye Finans, which are operating overseas already. Turkey's Banking Regulation and Supervision Agency (BDDK) started developing comprehensive regulations for participation banks. Belatik said countries like Bahrain and Malaysia have developed their entire system of infrastructure for Islamic finance, which is very important for the development of the industry. This year, CIBAFI chose Turkey to host its annual Global Forum. The Forum is focusing on how the industry will fulfill its obligations while remaining competitive and relevant within global financial markets.
The Islamic Development Bank (IsDB) is working on finalizing a four-year partnership strategy plan with Turkey. Walid Abdelwahab said the IDB aims to invest in various sectors that will fuel growth, such as infrastructure, energy, transportation and education. He said the bank aims to support value chain development in Turkey to enable the country to become more competitive through linking it with global value chains. He added that the bank appreciates Turkey's experience with high-speed railways. IsDB is preparing a documentary on this topic for other member countries of the Group that are interested in this technology.
Turkey's Aegean province of Izmir will host an Islamic Development Bank Group (IDB) event between 26-27 April. The announcement was made by Turk Eximbank CEO Adnan Yildirim, who said that Turkey aims to boost trade relations with the IDB's 57 member countries. He added that Turk Eximbank wants to raise Islamic countries' 10% share of world trade to 20%. Turkey's current trade with IDB member countries is around $45 billion and the bank hopes to raise it to $100 billion within 10 years. Turk Eximbank aims to double its support to companies in IDB member countries. The lender ranks second globally after South Korea's Eximbank in terms of financing exports.
Halk Real Estate Investment Trust (REIT) has issued Turkey's first sukuk with a nominal value of TL 100 million ($26.12 million) through Halkinvest. The return of the 87-day lease certificate will be realized at 13.25% at the end of the maturity period. Halk REIT General Manager Feyzullah Yetgin said that the widespread use of real estate-based financial products would make a great contribution to the real potential of the sector. Halkinvest General Manager Serdar Sürer said that the lease certificate issuance transaction executed on behalf of Halk REIT was their 60th capital market issuance transaction this year. He also said that they would continue to add value to their business partners with products based on the real economy.
The Participation banks achieved a profit of approx. $223.29 million in the first half of 2017 with an increase of 36 % compared to the same period the year before. According to information put together by the non-consolidated financial statements of Albaraka Türk, Kuveyt Türk, Türkiye Finans Participation Bank, Vak?f Participation and Ziraat Participation, the total assets of participation banks increased by 7.7 % compared to the end of last year, exceeding $41.52 billion. In the first half, the net profit of the sector increased by 36 %.
Among the participation banks, Kuveyt Türk achieved the highest net profit in the first half, followed by Türkiye Finans Participation Bank, Albaraka Türk, Ziraat Participation and Vak?f Participation. By the end of June, Kuveyt Türk was the leader of the sector, followed by Türkiye Finans Participation Bank and Albaraka Turk.
Speaking to Anadolu Agency regarding the first half results and expectations of the participation banks, Melik?ah Utku, chairman of the Participation Banks' Association of Turkey (PBAT), stressed that the participation banking sector is in a significant development process and has serious potential in Turkey.
Turkey's Deputy Prime Minister in charge of the economy Mehmet Simsek announced that they have established the infrastructure of the interest-free insurance system. He noted that there have been no separate regulations for Islamic insurance or insurers so far, adding that the regulation is of great importance. He suggested that many questions in the framework of Islamic insurance will be answered with the new regulation. Simsek informed that in addition to serving interest-sensitive citizens, the system will also attract capital from the Gulf countries to Turkey. The system is based on the UK model, which is seen as an opportunity for Turkey as well. The Deputy Prime Minister also pointed out that one of the most important opportunities that the system brings to citizens is the balance return.
The Islamic Development Bank (IDB) plans to take at least a 10% stake in Turkey's state-run stock exchange, Borsa Instanbul. Abdulhakim Elwaer, IDB's director of cooperation, said negotiations are expected to finalize in two to three months as part of wider efforts to develop Islamic finance in Turkey. Elwaer emphasized the bank's wish to help develop Turkey as a global Islamic financial center. IDB and Borsa Istanbul signed a cooperation agreement in November, with discussions currently ongoing to decide on a specific size and time frame. The bourse has a share capital of 423 million lira ($115.6 million), implying a value of 42.3 million lira for a 10% stake. Elwaer added that a gold trading platform is also in discussion, although the equity stake remains the bank's biggest priority.
The first act of business by the Turkish Sovereign Wealth Fund (SWF) will be the issuance of securities, while it will also focus on Islamic finance products in securitization. The fund will contact local and foreign investors for securitization over the next few months. Even though the Treasury announced that the transferred asset size was approximately worth $160 billion with an equity size of $35 billion last Friday, an endeavor is currently underway concerning the valuation and auditing of the transferred assets by the fund. According to a Turkish daily, Dünya, the fund is exploring various types of instrument models, especially in Islamic finance. For this reason, the issuance of sukuk is a major focus of the agenda for the fund.
In #Turkey the insured participation funds at the Bank Asya are being paid to the rights holders through the state-owned Vakif Participation Bank. On May 29, 2015, the Banking Supervisory and Regulatory Authority (BDDK) ruled for a complete takeover by the Savings Deposit Insurance Fund (TMSF) of all Bank Asya shares. According to yesterday's announcement, up to TL 100,000 ($28,247) of the total of insured participation funds at the Asya Participation Bank have been paid to the right holders in Turkish liras. The banks operating permit has been abolished. It was put on sale by the Fund Board, but did not receive any offers despite the extension of the bidding period.
The International Islamic Trade Finance Corporation (ITFC) has signed an agreement with Turkey's Small and Medium Industry Development Organization (KOSGEB) to support SMEs. The group plans to provide $1 billion for Turkish companies. The Memorandum of Understanding (MoU) was signed by ITFC CEO Hani Salem Sonbol and KOSGEB President Recep Bicer. The MoU also examines the possibility of providing Islamic Trade Finance solutions to SMEs in Turkey. The suggested cooperation program includes developing joint programs for capacity building activities for SMEs in Turkey and Reverse Linkage Programs for transferring KOSGEB's know-how to other OIC member countries.
An unknown group of people have purposefully leaked new allegations surrounding the Turkey-based bank Kuveyt-Turk. A press release published on Nov. 19 claimed that US Senator Dick Durbin would hold hearings to investigate two key banking institutions in Kuwait and whether they helped fund terrorism. The press release read that Durbin would target Kuwait Finance House and its subsidiary in Turkey, the Kuveyt-Turk participation bank. A spokesman at Senator Durbin's office flatly denied the report and said it was completely false. The fake report has surfaced amidst an ongoing court case in California against the two banks on the terror funding charges. Kuveyt-Turk's lawyers dismissed the charges by saying the allegations have no merit because banks are not responsible for the allegations. President Recep Tayyip Erdogan said the allegations over Kuveyt-Turk and Kuwait Finance House were proof of Western double standards.
Istanbul's Sabahattin Zaim University established the International Research Center for Islamic Economics and Finance (IRCIEF) in order to produce relevant research to guide policy design and implementations. It also organizes workshops and training programs to provide society with opportunities toward a better understanding of Islamic economics. According to IRCIEF director Prof. Dr. Arif Ersoy, the center will also intensify its research activities on finding new solutions for the problems encountered by SMEs, who are the main consumers of Islamic banks. IRCIEF offers graduate studies on Islamic Economics and Finance, furthermore post graduate studies on Islamic Economics and Law in Arabic. For next year the center is planning to open the programs in English as well.
Istanbul Sabahattin Zaim University (IZU) is opening its International Research Center for Islamic Economics and Finance (IRCIEF) on Oct. 28. The IZU hopes to become a center for academic studies in the field. Launched by Kuwait, Turk and Albaraka Turk participation banks, the International Research Center for Islamic Economics and Finance will offer market-based education to its students. By offering courses in Turkish and Arabic, the IZU will enable Turkish and foreign students to be specialized in the field. University rector and professor Mehmet Bulut said the center will train equipped students in undergraduate, postgraduate and doctorate programs. He promised that students will be educated in this center with the understanding of making Turkey stronger and noting that the accomplished projects will be carried out in collaboration with the participation banks.
Deputy Prime minister in Charge of the Economy Mehmet Simsek said the size of the Islamic banking sector globally was projected to grow to $3.5 trillion in the next five years and Turkey aimed to manage a sizeable portion of this huge sector. He said the government was committed to help the sector thrive in Turkey. Furthermore, he indicated that the total size of assets of participation banks reached $183.93 billion by the end of 2015. Pointing out that the participation banks' share in the overall banking sector was 5.1%, he stressed the goal set by the representative of the sector was to attain 15% by 2025. The Turkish Treasury elaborated on the action plan called "Strengthening Interest-free Finance and Participation Banking" as a component of the Istanbul International Financial Center (IFC Istanbul) program. It was decided that the board would work on the issues raised at the meeting to develop the interest-free finance sector.