Pakistan

Tunisia and Pakistan join the sukuk rush

Countries including Pakistan, Tunisia and South Africa are drawing up plans to issue government bonds that comply with Islamic law as they seek to take advantage of strong investor demand for emerging market sovereign debt. Tunisia is working with the Islamic Development Bank to issue a 1bn dinar ($580m) sukuk this year, while Jordan has instructed a committee to look into the possibility of issuing sukuk next year. Governments in South Africa and the Philippines also say they are considering raising money through the sale of Islamic debt.

Shariah compliant: EFU insurance moves onto Takaful business

Pakistan’s second largest life insurance company informed members of the Karachi Stock Exchange (KSE) on Friday that it intends to enter the window Takaful business. The board of directors of EFU Life Assurance has approved changes in its memorandum of association under Takaful Rules 2012 to launch Takaful. The Securities and Exchange Commission of Pakistan (SECP) replaced Takaful Rules 2005 with Takaful 2012 two years ago, which allowed conventional insurance companies to set up Islamic windows to conduct shariah-compliant business. EFU Life Assurance is not the only company that has shown interest in setting up Islamic window operations. Jubilee Life, the largest player in the life segment in terms of gross premiums, is also eyeing the Shariah-compliant business after the implementation of Takaful Rules 2012.

Mufti Muhammad Hassaan Kaleem joins Dubai Islamic Bank as Sharia head

Dubai Islamic Bank Pakistan (DIBPL) has appointed Mufti Muhammad Hassaan Kaleem as the Bank’s new country Head of Shari’a. Mufti Hassaan has also been appointed a member of the Bank’s Shari’a Board by the Board of Directors of DIBPL, subject to approval of State Bank of Pakistan. Mufti Hassaan has vast experience in matters of Shari’a teachings and advisory and has been teaching various courses in Islamic Studies and Arabic at Darl-ul-Uloom Karachi for the last 17 years. He is a member of several institutions and boards, including Dar-ul-Ifta, JamiaDarul-ul-Uloom Karachi, Chairman Shari’a Board of Securities & Exchange Commission of Pakistan (SECP) and others.

Pakistan central bank plan to boost Islamic banking

State Bank of Pakistan’s (SBP) five-year strategic plan will drive strong asset growth in the Islamic finance sector, given the high domestic demand for Islamic banking. SBP’s plan targets a 15 per cent share of banking system assets for the sector by 2018, up from around 10 per cent as of December 2013. The National Bank of Pakistan will convert around 6 per cent of conventional branches into Islamic-banking branches over the next two years. Although the sector is expanding rapidly, the Islamic operations of the top five banks — National Bank of Pakistan, Habib Bank, MCB Bank, Allied Bank, and United Bank are small and currently account for less than 2 per cent of their assets on average. Moreover, rapid growth in the sector is likely to weaken asset quality.

EFU to launch shariah-compliant products

EFU insurance group will offer shariah-compliant insurance products in Pakistan through its general and life units. Both EFU Life Assurance and EFU General Insurance plan to open takaful windows. The plans come two months after regulators cleared the way for conventional firms to offer Islamic products, part of regulatory effort to increase insurance penetration in Pakistan. EFU General had Rs13.9 billion ($140.8 million) in written premiums in 2013, representing roughly a quarter of the industry’s total. EFU Life has a branch network of over 150 branches around the country. A source at one of the units said the takaful windows could be operational in two to three months.

Pakistan's EFU insurance group to launch sharia-compliant products

EFU Life Assurance and EFU General Insurance, Pakistan's largest private insurance group, will offer sharia-compliant insurance products through takaful windows. The plans come two months after regulators cleared the way for conventional firms to offer Islamic products, part of regulatory effort to increase insurance penetration in Pakistan. Company officials declined to comment on their plans but a source at one of the units said the takaful windows could be operational in two to three months. The Securities Commission had earlier said it had received five applications for takaful windows and expected as many as half of all conventional insurers in Pakistan to eventually apply for a licence.

ICD hoping to advise on $1bn Pakistan sukuk

The Islamic Corporation for the Development of the Private Sector (ICD) hopes to advise on the mandate for Pakistan's $1 billion Islamic bond. ICD and Karachi-based Burj Bank, 33.9 per cent owned by ICD, have applied to be advisers on the sovereign deal, meeting Pakistan's finance ministry earlier this week. A ministry statement also said that it would review the applications starting next week. The ICD has further initiatives in the pipeline. Among others, ICD signed separate agreements to help develop Islamic leasing businesses in Malaysia and Uzbekistan, as well as extending $5 million in financing to support SME lending in the former soviet state.

Pakistan to sell Islamic bons worth 49.5 billion rupees

Pakistan's central bank will sell 49.5 billion rupees ($503.8 million) of Islamic bonds, the country's first such issuance in 15 months, with pricing to be set on Wednesday. The sukuk will inject a much-needed liquidity management tool for the domestic Islamic banking industry. The appetite for local currency sukuk has grown with Islamic banks posting double-digit asset growth, but the government has been unable to match demand, constraining the sector's financing and investment capability. The government has not indicated whether it would issue more local currency sukuk this year, although the finance ministry has said it was considering issuing dollar-denominated sukuk.

Pakistan insurers agree with regulator to allow takaful windows

A legal dispute between Pakistani insurance firms and regulators has been resolved after the country's five takaful firms had challenged the new takaful rules introduced in 2012. Under the agreement, insurers will have to allocate 50 million rupees ($506,100) in capital to their window operations, from no capitalisation requirement in the original rules. The takaful rules will be applicable after a three-month period and the regulator would also amend them to allow takaful firms to co-insure risks alongside conventional players, which the initial rules had forbidden. Takaful's share of the total insurance market is estimated at less than 3 percent. The regulator has now received five applications for takaful windows and expects as many as half of all conventional insurers to eventually apply for a licence.

Pakistan, DIB discuss sukuk

Pakistan's Minister for Finance Muhammad Ishaq Dar held a meeting with officials from Dubai Islamic Bank ( DIB ) in Dubai where they discussed prospects of another sukuk issuance and hiring an advisor for transparent sukuk transaction. Following the success of Euro Bond wherein Pakistan raised $2 billion from capital market recently, the minister said government intends to tap the sukuk market to increase its foreign exchange reserves. Pakistan plans to sell $1 billion dollar-denominated sukuk which will be marketed at the end of the third or in the fourth quarter of 2014. Dar said Pakistan government would soon release an advertisement in international and local press to hire financial advisor for sukuk transaction through a transparent and competitive process.

Pakistan plans $1bn sukuk to boost reserves

Pakistan plans to sell more than $1bn of Islamic bonds after its first overseas debt sale in seven years boosted reserves. The dollar-denominated notes will be marketed at the end of the third or in the fourth quarter of 2014, Finance Minister Ishaq Dar said. Investor interest will determine the size of the offering which will be “much more” than $1bn and managers are yet to be appointed, he added. Dar said he expects investors from the Middle East, South Asia, Europe and the US. A successful conclusion to review talks with the IMF – which began in Dubai this week and will probably end on May 10 – will hopefully result in good pricing on the debt, he added. The sale is part of Prime Minister Nawaz Sharif’s plan to attract investment and overhaul the economy to meet conditions on a $6.6bn IMF loan.

SBP evolves 5-year strategy to promote Islamic banking

Deputy Governor, State Bank of Pakistan, Saeed Ahmed has said that the SBP has evolved a comprehensive five-year strategy to promote Islamic mode of banking in the country. The SBP would strive to get 20 percent market share during this period which is 10 percent at the moment, he added. Moreover, the SBP is in regular contact with the Institution of Business Administration (IBA) in Karachi for the establishment of Centre of Excellence on Islamic Banking. He said as soon as the first centre will be established, three more such centres would also be established in Lahore, Islamabad and Karachi respectively. Besides, a lot of attention is focused on solutions, which are not far from the Islamic financing where system allows fairness of return, sharing of risk and reducing income inequalities.

Pak-Qatar Takaful Group posts strong 2013 results

Pak-Qatar Takaful Group recorded a strong growth with a combined turnover of Rs5.5bn ($54m) for the year ended December 31, 2013. The Group made a profit of Rs74m ($0.7m) during the year. Pak-Qatar Takaful Group, which comprises of Family Takaful and General Takaful, reviewed and approved the financial statements of Pak-Qatar Family Takaful and Pak-Qatar General Takaful for the year during the group's board meeting held recently in Doha. The company's paid-up capital is in excess of Rs710m, with credit rating of 'A' (Stable Outlook) by JCR-VIS Credit Rating Co Ltd.Pak-Qatar Family is recipient of several domestic and international awards and nominations.

Pakistan's MCB drops plans to buy Islamic bank, to set up own unit

Pakistan's MCB Bank Ltd will set up a wholly owned Islamic banking subsidiary while dropping plans to take a stake in Islamic lender Burj Bank. Last month, MCB started due diligence on taking a 55 percent stake in unlisted Burj, which held assets worth 53.3 billion rupees ($547 million) as of December, but it said it would not proceed for commercial reasons. The move comes amid increased activity in Pakistan's Islamic banking sector, with regulators stepping up development efforts and lenders expanding operations. MCB currently operates the country's sixth-largest Islamic window with 28 branches. It will reportedly spin off its Islamic window into a separate subsidiary with 10 billion rupees in paid-up capital, using its existing Islamic banking branches to form the new entity.

Withdrawal: Islamic insurers agree to out-of-court settlement

After waging a legal battle with the regulator as well as conventional insurers for almost two years, Islamic insurance companies have finally agreed to an out-of-court settlement of the longstanding dispute over controversial Takaful Rules 2012. General and family Takaful companies will withdraw their constitutional petition against the SECP, 23 insurance companies and the federation of Pakistan within this week, thus allowing conventional insurers to run Shariah-compliant insurance business through parallel window operations. The SECP is said to have agreed to the Takaful players’ suggestion that conventional insurance companies should be required to maintain separate capital accounts for the two lines of business.

Pakistan mulls $5.6b sukuk sales this year

Pakistan looks set to end a year-long drought in sovereign sukuk issuance to support its goal of doubling Sharia-compliant banks' market share by 2020. The government may offer as much as Rs542 billion ($5.6 billion) of local-currency sukuk in 2014, including notes backed by a highway and an airport. That compares to one sale of Rs43 billion in 2013. Lenders including MCB Bank and National Bank of Pakistan, are converting branches to respond to rising demand for banking that complies with the religion's ban on interest, which now has a market share of 10 per cent. The Rs323 billion of sovereign sukuk outstanding is less than a third of the amount of Sharia-compliant bank assets.

Source: 

http://www.timesofoman.com/News/32476/Article-Pakistan-mulls-$5%206b-sukuk-sales-this-year

Zaver Petroleum Corp: Al Baraka Bank arranges Rs three billion Islamic transaction

Al Baraka Bank Pakistan Ltd is the lead advisor and arranger of Rs 3 billion first Musharaka based Islamic transaction to Zaver Petroleum Corporation Limited. The signing ceremony took place in Islamabad. Present at the occasion were Saddruddin Hashwani, Chairman Hashoo Group, CEO Al Baraka Pakistan, Shafqaat Ahmed and representatives of the Zaver Group, Al Baraka and member banks of the consortium; United Bank, Askari Bank, Bank of Punjab, Dubai Islamic Bank and Burj Bank. This is Al Baraka's first step in providing value added services to major players in the oil and gas sector and more such transactions are expected in the future.

Burj Bank acquisition: SBP allows MCB to commence due diligence

The State Bank of Pakistan (SBP) has allowed MCB Bank to commence due diligence of Burj Bank Limited for proposed acquisition of its 55 percent share. The management of MCB Bank disclosed to its shareholders that the central bank has given an approval to the bank for conducting a detailed due diligence of the bank to invest in new and existing shares along with additional investment by Islamic Corporation for Development of Private Sector. MCB Bank is conducting due diligence of Burj Bank Limited from March 18, 2014. Burj Bank is operating with 75 branches countrywide, but it is facing some financial complications and failed to meet SBP's minimum capital requirement of Rs 10 billion by end-2013.

No deal: ‘SBP has blocked sale of Meezan Bank’

Kuwait’s Noor Financial Investment Company said the proposed sale of its stake in Karachi-based Meezan Bank had been blocked by Pakistan’s central bank, which felt the prospective buyer had not met its standards for suitability. Little is known about the prospective buyer, identified only as Vision Financial Holdings Limited in a separate filing by Meezan Bank. Noor Financial said the prospective buyer would continue to seek approval from the regulator, with the offer set to expire on April 15, 2014. However, ownership of Meezan Bank may be a sensitive issue for regulators as they seek to develop Islamic banking in the country. Last December, Noor Financial said it planned to sell its 49.1% stake in Meezan for $190 million and expected to book a $24 million profit.

Summit Bank introduces Islamic banking

Pakistani lender Summit Bank Limited has inaugurated its first Islamic banking branch in Karachi and announced that it will transform all operations into Shariah mode in next three years. Hussain Lawai, President and CEO Summit Bank, said the bank's investors have injected Rs 1 billion fresh equity for Shariah-based operations. The management has decided to make efforts for conversion of branches from conventional to Islamic mode, instead of opening new branches. As per the roadmap in the first phase Summit Bank Islamic branches will be set up in four major cities - Karachi, Lahore, Faisalabad and Islamabad - during this year, he added. The bank set a target of 30 percent growth for Shariah business and as per its estimates it will be over 20 percent during this year.

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