Partner with Us

The World’s Leading Islamic Finance News Provider

(All Cap) Islamic fi nance Kuwaiti Singaporean Women and 1000 stalwarts banking under fi rm turns to the Words: Where 950 gather in fi re...6 Middle East as are all the 900 924.00 Kuala Lumpur Islamic fi nance women in 850 1.7% 908.62 to recognize in home market standard-sett ing 800 W T F S S M T and celebrate stalls...9 and rule-

Powered by: IdealRatings® industry’s making?...11 ﬁ nest...5 COVER STORY 24th February 2016 (Volume 13 Issue 8) Italy: A new destination for the Islamic debt capital market

Bank lending in Italy is under intense access to cheap funding and constraining markets were a closed book for many pressure, with traditional lines of their own abilities to lend in their turn. Italian corporates. Debt fi nancing in corporate credit contracting to the point Banca Monte Dei Paschi di Siena, Italy’s Italy has been historically stringent, where fi rms are desperately seeking third-largest bank, has lost around 78% with strict constraints on bond issues alternative forms of funding. Although in value over the past year, while its from non-listed companies – designed so far Islamic fi nance has made few biggest bank Unicredit is down 41%. to prevent tax avoidance, but with the inroads into the Italian market, a new According to Italy’s banking association, eff ect of rendering bond issuance far initiative to introduce Islamic bonds Associazione Bancaria Italiana (ABI), too expensive for most smaller fi rms using existing legislation could open in December 2015 bank loans totaled to consider. However, in 2012 the up a whole new asset class for Islamic EUR793.5 billion (US$878.57 billion) and government introduced the ‘mini-bond’ investors. LAUREN MCAUGHTRY made up 88% – but have fallen by EUR24 scheme specifi cally to assist the middle explains the market and explores the billion (US$26.57 billion) over the past market and especially SMEs to access opportunity. two years. capital and reduce reliance on banks.

Under pressure With concerns over the provision for The program relaxed requirements Italian banks have had a tough few bad loans and the increasing regulatory for bond issuance by companies with years, and 2016 is proving to be no burden including rising capital more than 10 employees and with an exception. The OECD in its latest forecast requirements for Basel III, corporate annual turnover of over EUR2 million specifi cally notes that bank credit lending in Italy has plummeted and small (US$2.21 million). Providing access to remains constrained due to the large and businesses are struggling to access long- securitization for unlisted companies still rising amount of non-performing term funds. Yet with consumption on the and off ering att ractive tax breaks to loans, hampering investment growth. up, business confi dence increasing and a institutional investors, the scheme The banking sector is under serious tentative economic recovery upgrading is designed to boost issuance and pressure as concerns over bad growth forecasts for 2016, companies are encourage capital market participation. loans (which at EUR360 billion searching for new ways in which (US$398.6 billion) account to expand – and seeking new Contrary to their name, mini-bonds are for around 18% of total bank alternatives to the traditional structured like any other bond and have lending) send share prices bank lending channels. Could no limit as to size – with issuances of up plummeting and bank bond Islamic fi nancing be one of these to EUR600 million (US$664.33 million) sales soaring. In the year options? The Italian mini-bond already in the market – but are tailored ended September 2015, nervous market might have the answer. to the needs of smaller companies. In Italian savers sold over February 2013, Borsa Italiano launched EUR75 billion (US$83.04 Capital market the ExtraMOT Pro Platform specifi cally billion) in bank bonds, potential to cater to these deals. “The new sharply reducing banks’ Up until recently the capital continued on page 3 Opening doors to PARTNERPARTNER WITHWITH USUS new opportunities

Contact for more information: François-Xavier Chenhalls-Walker Email: [email protected] IFN RAPIDS

Volume 13 Issue 8 Kenya preparing to put Cahya Mata Sarawak’s DEALS Islamic fi nance law in place proposed Sukuk wins ‘AA3/ IFN Rapids ...... 2 Ooredoo mulls fundraising by year-end Stable’ rating IFN Reports: options to refi nance existing Malta maintains ‘A’ rating • Islamic fi nance stalwarts gather in Kuala Lumpur facility, including issuing ASSET with a stable outlook Islamic debt in 2016 to recognize and celebrate industry’s fi nest • Kuwaiti Oman’s ratings lowered to Sunway Treasury Sukuk MANAGEMENT banking under fi re • Sovereign Sukuk: Emerging from ‘BBB-/A-3’ auctions RM100 million Employees Provident Fund a sleepy week • Education is key to human capital Bahrain’s ratings (US$23.94 million) short- declares dividend rate of downgraded to ‘BB/B’ on development in Islamic fi nance • Singaporean fi rm term Sukuk 6.4% for 2015; exposure lower oil price assumption turns to the Middle East as Islamic fi nance in home Malaysia plans second to Shariah investments exceeds 40% of total assets Kuwait’s ratings affi rmed at market stalls • IFN Global Trendswatch • Turkish dollar-denominated Sukuk ‘AA/A-1+’ despite lower oil issuance; invites banks to UBL Fund Managers rolls PE fi rm powers up energy investment using Islamic price assumptions submit proposals out Al-Ameen Islamic fi nance • Malaysia leveraging on rise of fi ntech to Government of Indonesia Active Allocation Plan- S&P downgrades ratings enhance risk-sharing in Shariah fi nance and spur to raise up to IDR30 trillion IV, signs distribution on Saudi Arabia to ‘A-/A-2’ agreement with Samba Islamic cross-border activities ...... 5 (US$2.22 billion) via retail as oil price plunges further Bank Sukuk issuance to plug National Takaful Company budget defi cit Manulife Aset Manajemen sees ratings slide as Women in Islamic Finance: International Islamic Indonesia launches US underwriting performance Women and Words – Where are all the women in Liquidity Management dollar off shore Shariah weakens mutual funds under new standard-sett ing and rule-making? ...... 11 Corporation completes sale RAM assigns preliminary of US$1.34 billion short- regulations IFN Analysis: ratings on Abu Dhabi term Sukuk Schroder Investment Islamic Bank’s proposed France: Falling further ...... 12 Syarikat Prasarana Management Indonesia Sukuk; maintains ‘AAA/ Risk management ...... 13 issues RM3 billion launches Shariah compliant Stable/P1’ ratings on bank global mutual fund Case Study: (US$718.06 million) Sukuk; S&P downgrades Ivory Coast’s maiden Sukuk: A landmark deal for the oversubscribed 2.6 times Kazakhstan’s ratings to West African nation ...... 14 Vallianz Holdings taps TAKAFUL ‘BBB-/A-3’ Saudi Arabian market with Columns: Takaful sector expands S&P revises outlook on Al issuance of SAR1 billion 6.2% in 2015 outperforming Khaleej Takaful Group Thinking big ...... 15 (US$266.53 million) Sukuk conventional insurance to positive; affi rms ‘BBB’ The blunt end ...... 16 Central Bank of Bahrain’s growth, says Fitch ratings IFN Country Correspondents: Sukuk Salam fully subscribed Malaysia ...... 17 RATINGS MOVES Special Report: Khazanah Nasional begins S&P revises outlook Yasir Qadri named as CEO book-building process of its The money trick ...... 18 on Bank Islam Brunei of UBL Fund Managers US dollar Sukuk Darussalam to negative Country Feature: Emirates REIT’s executive Qatar Islamic Bank may RAM downgrades Golden Afghanistan issues regulations for Islamic deputy chairman expands issue Sukuk for acquisition Assets International role following departure of banking but challenges remain ...... 19 purpose, says chairman Finance’s Islamic notes senior executive offi cer Sector Feature: rating David Morley to retire as Emerging risks can benefi t from risk NEWS Perdana Petroleum plans senior partner of Allen participation ...... 21 Ecobank targeting Muslim to issue Sukuk Murabahah & Overy in April; global population with Islamic worth RM650 million managing partner Wim Islamic Finance news ...... 22 savings account via (US$154.47 million); wins Dejonghe succeeds Morley Deal Tracker ...... 30 preliminary rating of Cameroonian subsidiary Christine Lagarde to head ‘AAA(fg)/Stable’ REDmoney Indexes ...... 31 Nigeria inaugurates IMF for another fi ve years Qatar secures stable ‘AA/A- Eurekahedge data ...... 33 committ ee for its fi rst Jamal Al Kishi to head 1+’ ratings Performance League Tables ...... 35 sovereign Sukuk Deutsche Bank’s business Events Diary...... 39 Guyana to join the IDB by S&P confi rms Kuwait’s in the Middle East and mid-2016; IDB plans offi ce ratings at ‘AA/A-1+’ Africa Company Index ...... 40 in CARICOM country S&P lowers Brazil’s rating Subscription Form ...... 40 to ‘BB’

Disclaimer: IFN invites leading practitioners and academics to contribute short reports each week. Whilst we have used our best endeavors and eﬀ orts to ensure the accuracy of the contents we do not hold out or represent that the respective opinions are accurate and therefore shall not be held responsible for any inaccuracies. Contents and copyright remain with REDmoney.

Italy: A new destination for the Islamic debt capital market Continued from page 1 segment was born to off er to corporate Chart 1: Loans by sector of economic activity and, in particular to SMEs, a national market fl exible and cost eff ective in Y-o-y % changes which to take opportunities and tax 8 benefi ts arising from the new regulatory ȱȱȱȬęȱ framework (Decree-Law No. 83/2012),” 6 ȱȱ explained Borsa Italiana. “The regulatory 4 infrastructure of the new segment provides corporates with a fi rst access to 2 capital markets easily and effi cient. The only listing requirements are publishing 0 the annual fi nancial statements for the past two years, the last of which audited -2 and providing an admission document in -4 Italian or in English with some essential information.” -6

“The mini-bond initiatives are part of -8 a plan to boost the competitiveness of 2011 2012 2013 2014 2015 the country,” said Philippe Pellegrin, a senior country offi cer for Italy at Source: OECD Credit Agricole CIB, to GlobalCapital. “The initiatives help to simplify the year,” Padovani added without ruling regulatory framework and to sustain this out if everything is in place. access to credit for Italian smaller and The initiatives medium-sized companies.” An easily help to The existing mini-bond legislation accessible compromise halfway between off ers what should be a relatively easy bank fi nancing and a public bond, by simplify the way of introducing Islamic products January 2014 around EUR3 billion to the market in a simple and cost- (US$3.32 billion) had been listed on the regulatory eff ective manner. “The mini-bonds ExtraMOT Pro platform through around are already in the legislation so we 30 instruments, although many of these framework and to wouldn’t need to amend the legal or were in fact from larger businesses tax structure,” explained Padovani. seeking an easy way of raising capital, sustain access to “There is a particular type of mini-bond many owned by private equity fi rms. which is already based on a risk and However, since then increasing numbers credit for Italian profi t-sharing principle, and there are of smaller fi rms have also been issuing, provisions which allow it to provide for in bond sizes of between EUR2-20 million smaller and remuneration based on the profi ts of the (US$2.21-22.14 million). Since January issuer. This could be a good entry point 2014, over 80 bonds have been listed on medium-sized to combine a ‘normal’ mini-bond with the platform – and estimates suggest Islamic contracts such as commodity that up to 35,000 Italian SMEs (with a companies Murabahah, or even Musharakah or turnover of between EUR5-250 million Mudarabah, to make a product suitable (US$5.54-276.8 million)) could potentially for Shariah compliant investors.” be interested in tapping the debt capital market. Italy’s mini-bond legislation does the existing Italian legal framework indeed have specifi c provisions for Islamic opportunity to introduce Islamic products to the profi t-participating bonds, containing So how can Shariah compliant investors market,” confi rmed Stefano Padovani, a participation clause which allows access this burgeoning sector? a partner and head of banking them to link the return of the bond to Italian law fi rm Nctm Studio and fi nance at Nctm, speaking the profi t of the issuer. These bonds Legale is currently working on to IFN. “Since the beginning must have a maturity of at least three the adaptation of existing mini- of this year, we have been years, and contain a fi xed income bond legislation to include Islamic working on this with SRB with component in addition to the profi t- contracts, and this month hired a view to have the product related component. “It is important to the Shariyah Review Bureau (SRB) certifi ed as soon as note that, should the issuer of the bond to develop and certify a possible. We would carry out Shariah compliant business and Shariah compliant product. welcome if the offi cial the regulation of such [a] bond contain “We started focusing on the product would be the abovementioned participation mini-bond as a potential launched, all being clause… such [a] bond would be Shariah way to take benefi t of well, at IFN Europe this continued on page 4

Italy: A new destination for the Islamic debt capital market Continued from page 3 compliant. Indeed, the asset would Chart Ř: Conęence an rivate consmtion are recoverin provide a return based on a risk-sharing principle rather than on interest, which Index 2010=100 Y-o-y % changes in particular in the present negative 115 3 interest environment would be a very ȱę minor component,” announced Nctm in 110 ȱę 2 ȱ a client research note last year. “Proﬁ t- participating mini-bonds may be very 105 1 att ractive from a tax point of view. 100 0 Therefore, the Italian mini-bonds market could be very att ractive for investors 95 -1 looking at Shariah compliant assets issued by Italian SMEs as an alternative 90 -2 form of investment to sovereign or large corporate bonds; and dedicated funds 85 -3 could be developed.” 80 -4

75 -5 There has 2010 2011 2012 2013 2014 2015 2016 2017 Source: OECD been a lot of projects related to the wider banking investors underwriting units of the fund, interest from the and retail market, but here the lead time and has already met with a positive could be longer due to constraints and reception from potential investors in Italian government complexities at a regulatory level. the Gulf region. “We see that there “We found that there is a lot of research, is certainly an interest,” confi rmed to improve access including from regulators such as the Padovani, who is traveling to Malaysia Bank of Italy and CONSOB (the Italian this month for further investor meetings. for SMEs to the debt Securities Commission), but nothing has “There are some Italian companies – really happened yet,” noted Padovani. particularly in the food and fashion capital market, and “On the other hand, there has been a lot business – that would certainly be of interest from the Italian government eligible for this kind of capital-raising.” in this area we think to improve access for SMEs to the debt capital market, and in this area Italian fi rms are increasingly desperate there is certainly a we think there is certainly a space for for funding and with bank loans Islamic fi nance. Italian SMEs are looking contracting, alternative types of debt space for Islamic for capital and we think there would are becoming a necessity. This month, also be interest from Islamic investors Italian dairy fi rm 4 Madonne Caseifi cio ϔinance looking to enter the Italian market – they dell’Emilia took to the capital markets are already buying property here and with a bond issuance backed by wheels investing conventionally. So a product of Parmesan cheese, for example – such as this could off er great potential, successfully raising EUR6 million Capital appetite and I think on the capital markets side (US$6.64 million) under a mini-bond Nctm fi rst started this process over two there could be real appetite.” structure. years ago when it joined ISFIN, a global network of professional fi rms working in Funding progress With strong government support, a fi rm Islamic fi nance, and has been exploring The fi rm has already spoken to asset foundation in the real economy, a real the potential for Islamic fi nance in Italy management fi rms to sound out interest asset basis and existing legislation easily for some time. The fi rm has already in sett ing up funds to invest in Islamic adaptable to Shariah compliant done some work on other Islamic mini-bond issuance with Islamic structures, could Italy be the next big market for Islamic investors in Europe?

Leaders in Financial, Technical and Product Training for the Islamic Financial Services Industry.

For more details. Contact us: www.islamicﬁ nancetraining.com Tel: +603 2162 7800 Fax: +603 2162 7810 Emai: [email protected]

Islamic ϐinance stalwarts gather in Kuala Lumpur to recognize and celebrate industry’s ϐinest

Distinguished leaders of the Islamic ﬁ nance industry, numbering 240, gathered in Kuala Lumpur on the 22nd February 2016 to recognize and celebrate the outstanding achievements of the industry’s ﬁ nest in 2015 at the prestigious Islamic Finance news Awards dinner. VINEETA TAN reports.

Marked by volatility, tumbling commodity prices, geopolitical tension and a global growth slowdown, 2015 has been a turbulent year for fi nancial market participants – and the Islamic fi nancial fraternity has not been insulated. Yet, as the IFN Awards – widely recognized as the global benchmark of excellence for the Shariah fi nance industry – have shown, the sector has again proved its resilience and tenacity in the face of challenging economic conditions.

“2015 was exciting, nerve-wrecking, awards: Best Islamic Bank in Malaysia, not only Malaysia but Islamic fi nancial challenging – and the Islamic fi nance Best Islamic Trustee, Best Private markets worldwide. As Dr Zeti prepares industry, a vital cog in the global wheel, Equity House, Musharakah DOTY and to depart Bank Negara, we extend has certainly not been immune,” said Mudarabah DOTY; Khazanah Nasional our most sincere respect, admiration Andrew Morgan, the managing director which took home four awards for its and gratitude for her enduring and and publisher of REDmoney Group, the groundbreaking Ihsan Malaysian RM100 pioneering role in supporting the parent company of IFN. “But volatility million (US$23.82 million) Wakalah Bi industry.” means opportunity – and as these awards Al-Istithmar Sukuk, namely the coveted demonstrate, there is not only plenty of DOTY, Most Innovative DOTY, Social Industry stalwarts from key Islamic opportunity but plenty of players with Impact DOTY and Malaysia DOTY; fi nancial markets across the Middle the drive, expertise and capability to Meezan Bank which took home three East and Asia were present including capitalize on that.” awards for Best Islamic Retail Bank, Best Khazanah Nasional executive director Islamic Bank in Pakistan and Pakistan and CFO Mohd Izani Ghani, Danajamin A total of 30 awards from the IFN DOTY. For the complete list of winners, Nasional CEO Mohamed Nazri Omar, Deals of the Year (DOTY), IFN Best please click here. Employees Provident Fund deputy CEO Banks, IFN Service Providers and IFN Mohamad Nasir Abdul Latif, Franklin Islamic Investor Awards were awarded. “Malaysia continues to be a pioneer in Templeton GSC Asset Management Receiving phenomenal responses Islamic fi nance and an example to all CEO Sandeep Singh, CIMB Islamic CEO for each award category in terms of new markets att empting to access the Rafe Haneef, Bank of Tokyo-Mitsubishi new sectors, fresh faces, innovative industry,” noted Morgan. “Much of this (Malaysia) president and CEO Naoki transactions and pioneering pillars, is down to the insightful, astute and Nishida, PruBSN Takaful CEO Aman some of the biggest winners of the night intelligent leadership of our central bank Chowla, and Dar Al Sharia CEO Sohail include CIMB Group which bagged fi ve governor: who for 16 years has guided Zubairi.

Kuwaiti banking under ϐire

A new report from Fitch Ratings the high level of real estate exposure anticipates tough conditions for Islamic could cause problems in the future as the banks in Kuwait this year as oil prices Kuwait could sector prepares for deterioration, which remain low and banks readjust their could have a signifi cant impact on bank outlook to international markets. But be more earnings already aff ected by a slowdown with government spending still high in deposits and credit. and banks posting respectable profi ts, vulnerable to market LAUREN MCAUGHTRY suggests downturns than “More ominously, Kuwaiti banks are that the clouds are yet to close in on now highly vulnerable to concentration Kuwait’s fi nancial sector. other GCC countries, risk,” cautioned BCA. Around 62% of all bank credit in Kuwait is currently Fitch Ratings this week predicted especially because directed to consumer and home loans, that tougher operating conditions in according to BCA, while the IMF Kuwait and the wider GCC region 80% of the Kuwaiti estimates that around 40% of total bank would translate into slower growth collateral is tied to real estate – meaning for Islamic banks this year. The Islamic bourse is made up that in a property downturn, the sector Banks Dashboard noted that the focus could face serious problems. of the fi ve Kuwaiti Islamic banks (which of ϔinancials, which account for 39% of total market share in So far however, this gloomy outlook has Kuwait) are shifting their focus to higher- are currently not been refl ected in results. National growth markets for Islamic fi nance. Bank of Kuwait saw net income grow by struggling 11.7% in the fi rst nine months of 2015, “Fitch believes that Islamic fi nancing while Kuwait Finance House saw profi ts growth will moderate in 2016 due to a at conventional peers, mainly due to rise 17.3% for the year. Warba Bank, one sharper-than-expected fall in oil prices their high real estate exposure. “While of the fastest-growing Islamic banks in and the resulting impact on the economy it is positive that the banks have been the country, saw net gains soar by 770% and business environment,” noted Mahin reducing legacy problem loans over as of December 2015 to reach KWD4.1 Dissanayake, a director at Fitch Ratings. the last three years, these trends could million (US$13.67 million). “The sector is, however, expected reverse due to slowing domestic and to remain profi table despite weaker regional economies,” warned Mahin. Fitch-rated Islamic banks’ long-term operating income and higher impairment issuer default ratings are all at ‘A+’ charges. We expect margins to remain Recently published data from BCA with a stable outlook, backed by the healthy due to the Islamic banks’ low- Research also suggests that Kuwait probability of support from the Kuwaiti cost funding structures.” could be more vulnerable to market authorities if required. However, the downturns than other GCC countries, banks’ viability ratings remain sensitive Islamic banks in Kuwait also have especially because 80% of the Kuwaiti to weaker asset quality and increased risk impaired fi nancing/gross fi nancing bourse is made up of fi nancials, which appetite, particularly from international ratios that are historically weaker than are currently struggling. It warns that expansion. ISLAMIC FINANCE QUALIFICATION 17th - 19th April 2016, Dubai

Highlights: • Key Islamic Finance Principles • How Islamic and Conventional Finance Differ • Structuring Rules for Islamic Financial Products • Sukuk & Islamic Securitization • Islamic Asset & Fund Management • Takaful • Financial Statements for Islamic Banks • Corporate Governance for Islamic Finance

www.REDmoneytraining.com [email protected]

Sovereign Sukuk: Emerging from a sleepy week

After a period of relative inactivity, the global sovereign Sukuk market was Upcoming sovereign Sukuk buzzing this week, notes VINEETA Country Amount Expected date TAN. Malaysia TBA March 2016 Indonesia (retail Sukuk) IDR25-30 trillion 10th March 2016 Determined to boost its Shariah fi nancial Indonesia Up to US$2 billion March 2016 industry and simultaneously plug Iran IRR60 trillion 2016 its budget defi cits, the Indonesian Nigeria TBA May 2016 government launched a retail Sukuk Emirate of Sharjah TBA First quarter of 2016 th program on the 19 February targeting Jordan JOD150 million TBA its enormous population. To be off ered Indonesia TBA 2016 th until the 4 March, the fi nance ministry Pakistan TBA Second quarter of 2016 expects to raise IDR25-30 trillion Egypt TBA 2015/16 fi scal year (US$1.86-2.23 billion) from the sale. Kazakhstan TBA 2016 Kenya TBA 2016 The government on the 19th February also privately placed IDR1.5 trillion (US$111.6 South Africa TBA 2016 million)-worth of Sukuk in nominal Turkey TRY1.8 billion February 2016 value at a yield of 8.05% underpinned Bangladesh TBA TBA by projects outlined in the 2016 State Hong Kong US$500 million to US$1 billion TBA Budget. It is also confi rmed that a Ningxia Hui Autonomous Region US$1.5 billion TBA Shariah securities auction will be held on Senegal TBA TBA the 26th February with the aim of raising Niger XOF150 billion TBA IDR4 trillion (US$297.6 million) from Luxembourg TBA TBA institutional players. Tunisia US$500 million TBA UAE TBA TBA According to Bloomberg, the Indonesian Shandong Province CNY30 billion TBA and Malaysian government will both Sindh Province US$200 million TBA issue a dollar Sukuk in March. The Kuwait TBA TBA Malaysian government has reportedly requested banks to submit proposals. paper, which will mature on the 25th and Exchange Commission (SEC), a May 2016, is 1.98%. On the other hand, committ ee has been set up by the SEC In Bahrain, the government issued its Nigeria is moving steadily toward and Debt Management Offi ce to study monthly Sukuk Salam which was fully its long-planned inaugural sovereign potential modalities for the program, subscribed. The expected return on Sukuk issuance. Although the facility according to the Republic’s state-run the BHD43 million (US$112.51 million) has not been approved by the Securities news agency. ASSET LIABILITY MANAGEMENT & 11th - 13th April 2016 RISK-BASED PRICING FOR ISLAMIC BANKS LONDON

Highlights: • Addressing Asset Liability Management within an Islamic Banking Context • Solutions to Manage Key Risk and Liquidity Management Challenges with Islamic Banks • Identifying Risks Unique to Islamic banks due to ALM Structures • Understanding Risk-Based Pricing of Islamic Financial Instruments • Pricing Islamic Financing Receivables and Sukuk Investments

www.REDmoneytraining.com [email protected]

Education is key to human capital IFN Sector Correspondents CROSS-BORDER FINANCING development in Islamic ϐinance Fara Mohammad, director of Islamic ﬁ nance, Foot Anstey CAPITAL MARKETS: Islamic ﬁ nance in the UAE and wider for employment with 20% of Emiratis Suhail Ahmad, CEO, Hikmah Capital Corp

Gulf markets has over the years grown expressing an interest to work in the DERIVATIVES in size and sophistication, driven banking and fi nance sector. Suhaimi Zainul - Abidin, treasurer for Gulf-Asia Shariah Compliant Investment Association and advisor to 5Pillars by product innovation, regulatory GLOBAL ECONOMIC OUTLOOK enhancements and Sukuk issuances. Tariq Alrifai, expert, Islamic investment products and Education is key market trends Despite this rapid expansion, human Education is where institutions LAW (EUROPE): capital constraints remain as one of the specializing in Islamic fi nance education Ayhan Baltaci, att orney at law, Bereket & Baltaci Law Firm biggest stumbling blocks to the growth and training can play a vital role LAW (MIDDLE EAST) of this industry. NURUL ABD HALIM Bishr Shiblaq, head of Dubai offi ce, Arendt & in building the capacity of the 20% Medernach writes. interested to work in the banking and LEASING: fi nance sector. Grundy said that while Youssef Aboul-Naja, Ijarah specialist, a supranational banking institution It has been projected that there will be candidates with commercial banking MERGERS & ACQUISITIONS: a strong demand for Islamic fi nance experience and knowledge of Islamic Tushar Garg, associate, bulge bracket investment professionals in the GCC. An industry bank fi nance are in demand, an Islamic MICROFINANCE (ASIA): report revealed that Dubai will require fi nance education will also be an Dr Mahmood Ahmed, executive vice-president and director training, Islami Bank Training and Research more than 8,000 talents trained in Islamic advantage for jobseekers. Supporting Academy fi nance. While the government has been Vision 2021, the UAE has witnessed MICROFINANCE (AFRICA): supportive of its national workforce Mansour Ndiaye, director of microfi nance, Assistance and a growing investment toward human Consulting for Development by increasing their participation in the capital development where academic PRIVATE BANKING & WEALTH MANAGEMENT: banking sector, it is still vague whether Thomas Woods, product development, wealth institutions and fi nance companies work management, The Islamic Bank of Asia this initiative has helped fi ll the skills gap side by side to provide high-quality PRIVATE EQUITY & VENTURE CAPITAL: in Islamic fi nance. Islamic fi nance programs. Arshad Ahmed, partner, Elixir Capital PROJECT & INFRASTRUCTURE FINANCE Anthony Coleby, head of corporate commercial Challenges Earlier this year, Aafaq Education, a department, Said Al Shahry Law Offi ce (SASLO) REAL ESTATE Commenting on the current talent pool subsidiary of Aafaq Islamic Finance, Philip Churchill, founder partner, 90 North Real Estate in Islamic banking and fi nance in the and the University College of Bahrain Partners REAL ESTATE (MIDDLE EAST): region, Jason Grundy, the country head entered into a partnership to off er an Yahya Abdulla, head of capital markets — Middle East, of Robert Walters Middle East, speaking Executive Master’s degree in Islamic Cushman & Wakefi eld to IFN conveyed: “There are challenges fi nance whereas the Institute of REGULATORY ISSUES (ASIA) Intan Syah Ichsan , chief operating offi cer, Samuel Aset in securing talent with the combination Finance and Management, the Emirates Manajemen of sound Shariah knowledge and [a] College of Technology and Continuous REGULATORY ISSUES (MIDDLE EAST): Mohammad Abdullah Malik Dewaya, head of Shariah good understanding of traditional Education Center, an Abu Dhabi- compliance and audit, Maisarah Islamic Banking Services RETAIL BANKING: banking.” Grundy added that employers based private institution of higher Chowdhury Shahed Akbar, offi cer, Southeast Bank, would need to invest huge sums in education, collaborated to issue a joint Bangladesh. locating such candidates who are rare professional diploma in Islamic fi nance RISK MANAGEMENT: Dr Ken Baldwin, CEO, Islamic Financial Analytics fi nds in the Middle East talent pool. course. In late 2015, the Chartered SECURITIES & SECURITIZATION: Institute for Securities and Investment Nidhi Bothra, executive vice-president, Vinod Kothari As Islamic banks are facing a dearth announced that the number of Islamic Consultants of skilled talent, the push made by the Finance Qualifi cation exams taken in STOCK BROKING & TRADING: Athif Shukri, research analyst, Adl Capital government to increase the national the Arabian Peninsula has risen over STRUCTURED FINANCE: workforce in banking and fi nance to over the last 12 months, demonstrating an John Dewar, partner and head of Islamic fi nance, Milbank, 50% is expected to help in narrowing increased interest in seeking professional Tweed, Hadley & McCloy SUKUK the skills gap. However, it is a diffi cult qualifi cations in the growing Islamic Anthony Coleby, head of corporate commercial challenge to overcome as nationals fi nance industry. department, Said Al Shahry Law Offi ce (SASLO) prefer to work in the public sector which SYNDICATED FINANCE Damir Galiev, portfolio manager, AK BARS Bank provides jobs with att ractive perks Outlook TAKAFUL & RE-TAKAFUL: such as high salaries, generous benefi t Islamic fi nance should continue its Dr Sutan Emir Hidayat, assistant professor and academic packages and relatively easy work advisor for Islamic fi nance, University College of Bahrain growth momentum with the industry TAKAFUL & RE-TAKAFUL (AFRICA): among others, as revealed in a report by expected to reach US$3.24 trillion by Uwaiz Jassat, acting head of Islamic banking, Absa Islamic Banking Oxford Strategic Consulting in 2015. 2020 (according to the State of Global TAKAFUL & RE-TAKAFUL (EUROPE): Islamic Economy). As Dubai sets its Ezzedine Ghlamallah, director, Solutions Insurance and Islamic Finance in France (SAAFI) With years of accumulated wealth from vision to become the host of the global oil revenues and booming economies, TRADE FINANCE Islamic economy, there will be a surge Anthony Coleby, head of corporate commercial the working population in the Gulf in the number of new Shariah compliant department, Said Al Shahry Law Offi ce (SASLO) has grown accustomed to obtaining TREASURY PRODUCTS: institutions coming to the region to set Nafi th Al Hersh Nazzal, Islamic banking specialist, benefi ts from their governments, up Islamic fi nance practices. “Going certifi ed fi nancial and investment advisor from well-remunerated public sector forward, there will be strong demand for IFN Correspondents are experts in their respective fi elds jobs to generous social securities and and are selected by Islamic Finance news to contribute Islamic fi nance professionals,” opined designated short sector reports. For more information subsidies. Even so, 74% surveyed felt about becoming an IFN Correspondent, please contact Gundy. [email protected] that the private sector is also important

Singaporean ϐirm turns to the Middle East as Islamic ϐinance in home market stalls

As the lackluster Singaporean Islamic The young company since its achieved due to the absence of enabling fi nance market continues to brace itself establishment in 2010 has been actively regulations/incentives, a small Muslim for what market participants fear could be bolstering its presence in multiple population and a lack of meaningful an uninspiring year due to strong market continents including in Asia Pacifi c, interest from its investment and headwinds, VINEETA TAN writes that Latin America and West Africa. It corporate communities which are deeply a local fi rm has turned its att ention to anchored itself in the Middle East in entrenched in the conventional fi nancial the Middle East to capitalize on Shariah 2013 by acquiring a 50% stake in Rawabi sector. capital market opportunities as part of Off shore, with the other half being held its geographical expansion strategy and by Rawabi Holding, an established Saudi The fi ve-year Saudi riyal-denominated to att ract a wider base of funding to stay oilfi eld services provider. Tapping the facility strengthens Vallianz capability to afl oat in choppy market conditions. Sukuk market was a strategic decision on tap a pool of global investors, especially the back of a despondent off shore marine from the Middle Eastern region. “Saudi Vallianz Holdings is no stranger to the industry which has been under extreme Arabia is the ideal location to issue our Sukuk market. A provider of off shore pressures from multi-year lows in global fi rst Sukuk as the country’s fi nancial support vessels and integrated marine oil prices. institutions and investors have deep solutions to the oil and gas industry, knowledge and familiarity with the oil Vallianz in December 2013 set up a “Our ability to secure the support from and gas business in the region,” agreed US$500 million Islamic trust certifi cate major fi nancial institutions demonstrates Sheikh Abdulaziz Alturki, the group issuance program through its wholly- their confi dence in the prospects of chairman of Rawabi Company Holding. owned Labuan subsidiary, Vallianz RVOS and Vallianz despite the current Capital. This follows the establishment challenges facing the off shore and Jointly led and managed by Alinma of another Sukuk program by its marine sector,” Ling Yong Wah, CEO of Investment Company, Saudi Fransi shareholder Singapore-based Swiber Vallianz, explained. “More importantly, Capital, Saudi Hollandi Capital and GIB Holdings several months earlier. Sett ing this Sukuk has opened a new avenue for Capital, proceeds raised by this capital- its eyes on the Middle Eastern market, future funding for the group’s growing raising issuance is expected to lower the the company recently broke into the operations in the Middle East.” group’s cost of funding, improve cash GCC Islamic capital markets for the very fl ow and bolster its balance sheet due fi rst time with a SAR1 billion (US$266.54 Relatively underdeveloped, the to a reduction in overall debt level and million) Sukuk through its Saudi Singaporean Sukuk market has so far gearing, said Ling. subsidiary, Rawabi Vallianz Off shore failed to gain the traction its Middle Services (RVOS). Eastern and Malaysian counterparts have IFN Global Trendswatch

What’s going on in the world this week? acknowledgment from the two International Bank, Melli Bank and IFN brings you a selection of relevant, heavyweight sovereign producers Bank Sepah International) in January. important and downright interesting that all is not well in this price economic, global and regional events, environment,” said Helima Croft, the • Increasingly tough job market in issues and trends that have the potential chief commodities strategist of RBC ASEAN, with FT Confi dential to aff ect the Islamic fi nance industry. Capital Markets, speaking to the FT. Research (a unit of the FT) fi nding that Malaysia is suff ering the most • Increased risks face the US economy, • Iran continues to struggle with from the regional slowdown in think Federal Reserve policymakers, sanctions, with smaller traders economic growth. according to the latest central bank and investors still struggling to meeting. secure fi nance as US banks block • Jakarta, one of the best-performing international banks from transacting stock exchanges so far this year, • Euro falls to two-week low against with Iranian entities. However, latest makes changes to policy to encourage dollar after the European Central news suggests the country could have investors: including lifting foreign Bank January meeting suggests up to US$100 billion in assets it plans investment restrictions and raising monetary easing for March. to hold in foreign banks following the growth forecasts. unfreezing of its funds, in an att empt • China could be looking at negative to stave off infl ation. • S&P slashes credit ratings of multiple growth rates next year, suggests chief oil-producing nations including Saudi economist of Citigroup. • Devaluation looks increasingly Arabia, Bahrain, Brazil, Kazakhstan possible in Egypt as foreign currency and Oman. • Saudi Arabia and Russia seek hit businesses and total reserves drop tentative accord to freeze oil by US$36 billion. • Funds fl owing out of China hit production and support crude US$110 billion in January, while prices, supported by Qatar and • Bank of England reactivates licenses foreign exchange reserves fall to their Venezuela. “This is the fi rst public of three Iranian banks (Persia lowest since 2013.

Turkish PE ϐirm powers up energy investment using Islamic ϐinance

Turkey’s deep energy needs and we felt that it has great opportunities privatized while the privatization of phenomenal rise of its power sector to off er,” explained Can Guclu, the power generation assets is on track to are att racting Gulf capital – both managing director of QInvest, who also materialize within the next few years. conventional and Islamic – as the hinted that the partnership with the The government has outlined a set of Republic banks on Shariah instruments Turkish private equity fi rm is for the long targets for the energy sector which to build stronger strategic relations with term, suggesting more involvement in includes raising the total installed power the Middle East to bolster its economy the Turkish power segment in the near capacity to 120 GW (from the current 70 and infrastructure developments. future. GW), increasing the share of renewable VINEETA TAN takes a closer look. energy to 30% and commissioning Turkey’s energy demand has rose sharply nuclear power plants among others. Doha-based Islamic investment bank over the last decade parallel to its robust QInvest has made its move into the economic expansion, industrialization And as the energy-importing country’s rapidly-growing Turkish energy sector – and urbanization patt erns – driving Vision 2023 deadline looms closer, one that is projected to expand by about the expectations of total investments opportunities for the Middle East – 6% yearly until 2023 – by extending a required to meet such demand into the which has become a strategic economic US$30 million mezzanine facility into the US$110 billion range, more than double partner to Turkey, and vice versa, as Clean Energy Transition Fund, the fi rst the amount invested in the last decade, trade volume between Turkey and energy-focused private equity fund in according to the country’s investment the GCC reached US$16 billion in Turkey, launched by Istanbul’s Crescent support and promotion agency. 2014 – to capitalize on the country’s Capital. The fi ve-year Murabahah aggressive energy expansion mode instrument will be used by Crescent to The government is cognizant of the fact has also increased manifold. This, and acquire full ownership of Akocak HPP, that it alone cannot bear the escalating Turkey’s strong political will to advance an operational 81 MW hydroelectric energy costs and has spent the last three its participation fi nance market, creates power plant. decades moulding its power sector to compelling new opportunities for Islamic be fully competitive by handing it to investors in the Middle East. “We have been analyzing the Turkish private players. Presently, the power energy sector for some time now as distribution market has been completely

Malaysia leveraging on rise of ϐintech to enhance risk-sharing in Shariah ϐinance and spur Islamic cross-border activities

VINEETA TAN writes that the behind the development of the IAP. It is revealed that several proposals Malaysian government hopes to narrow Although a fundamental pillar of Islamic are currently being fi nalized by the the prevailing gap of the risk-transfer fi nance, risk-sharing and equity-based sponsoring banks prior to potential regime in the Islamic fi nancial system Islamic contracts are not used as widely listing on the platform starting March by leveraging the burgeoning fi ntech and the IAP, according to Bank Negara 2016. More Islamic banks are also movement to enhance the utilization of Malaysia governor Dr Zeti Akhtar Aziz, expected to join the platform which risk-sharing contracts in the market. signifi es a fundamental shift toward currently consists of Affi n Islamic, risk-sharing and could potentially spur Bank Islam, Bank Muamalat, Maybank Announced by prime minister Najib more public-private partnerships across Islamic, Bank Rakyat and Bank Simpanan Razak during his unveiling of the 2015 diff erent industries which would create a Nasional. Budget, a subsidiary of a consortium of more balanced growth for the nation. Malaysian Islamic banks (IAP Integrated) this week launched the Investment Equally as signifi cant is that the new Account Platform (IAP), a multi-bank funding vehicle holds the potential to online Shariah compliant platform facilitate greater Islamic cross-border inspired by the concept of crowdfunding transactions as IAP Integrated plans to to facilitate direct investment by bring the platform to an international investors into viable projects – the fi rst of level – culminating in a multicurrency its kind in the Islamic fi nancial world. investment platform, an increasingly urgent need as ASEAN nations become “Through IAP, we plan to create a more integrated economically. conducive marketplace to match investors ranging from low to high- Targeting investors both at the retail risk appetites, and entrepreneurs with and institutional level, Mohamed Izam various funding needs,” said Mohamed said the IAP projects to fund RM200-300 Izam Mohamed Yusof, CEO of Raeed million (US$47.88-71.82 million)-worth Holdings, the consortium of the six banks of ventures over the next three years.

Women and Words: Where are all the women in standard-setting and rule-making?

By Laura Elder by evaluating the qualifi cations, and then example, one division head at a Doha- the personality of each applicant. based Islamic bank referred to her Women’s expertise is almost completely previous international training at HSBC unrepresented in the emerging In terms of gender, the ruling family has as “like a school for me”. Originally international governance and standard- consistently sought to promote women’s from Egypt, she was able to garner her sett ing institutions of Islamic fi nance participation in the workforce. But while position at HSBC due to her degree from such as AAOIFI and the IFSB. And seeking to increase women’s workforce the UK. While this is but one example, industry insiders in Islamic fi nancial participation, the government argues it is worth noting that at the bank where services often claim that the reason for that there is a “culturally conditioned she is employed, 60% of the employees women’s absence from these bodies is underestimation of the scope and ability were hired away from HSBC, from that that there are not yet enough women [of women at work] overall (Qatar General ‘school’ where her expertise was formed. with the relevant qualifi cations and Secretariat for Development Planning Restricted access to the imprimatur experience. As international governance 2011:175).” According to their argument, of overseas education disadvantages institutions and standards emerge, the result of this cultural conservatism women across fi nancial services in Doha. however, it is worth noting an unspoken is a concentration of women in ‘social For example, according to the Ministry aspect of qualifi cations within the services’, ie education, administration, and of Foreign Aff airs, at the end of 2013, industry: cosmopolitan education and clerical work. In 2009, for example, only there were only 205 women working at training. 3% of Qatari women in the workforce held national and foreign banks in Qatar. And leadership positions and that fi gure has currently, there are only three women in From bankers to regulators to held steady between 2-4% for more than senior management positions at Islamic scholars, Islamic fi nancial services ten years (Qatar General Secretariat for banks and regulators in Doha and of (like conventional fi nancial services) Development Planning 2011:175). Indeed, these three, two are directly related to the particularly value training in London the government concludes that: “Although ruling family. As further evidence, none and other cosmopolitan bastions of women have higher educational att ainment of the ex-patriot managers in Islamic fi nancial power. If industry initiatives to levels than men, there appears to be a ‘glass fi nance working in Doha are women. train a new generation of scholars and ceiling’ in employment and promotion for On the other hand, local analysts point practitioners do not acknowledge these women (2011:175).” In order to promote to the overwhelmingly lopsided gender often unstated aspects of qualifi cations, women’s representation in Islamic fi nancial representation in activism – in Qatar and then these initiatives risk replicating the services and other key industries, the the GCC more broadly women are prime problems of the past. government plans to promote women’s movers in social activism. Many argue civil society organizations. that this is a direct result of the gendered Qatar’s initiatives promoting women’s ‘opportunity structure’ of restricting recruitment and retention in Islamic But these initiatives are women to the local university fi nance provide an instructive case unlikely to alter the glass systems. study of how women’s progress from ceiling as long as the fi erce the classroom to the boardroom is localization of women’s The Islamic fi nancial services mediated by access to cosmopolitan education continues. Like industry must fi nd ways to training. The ruling Al-Thani family many countries across the link international educational has promulgated ‘Qatarization’ as GCC, Qatari women form initiatives and standards to the solution to the country’s reliance the majority of students these local realities. Otherwise, on expatriate labor, eg currently the in local higher educational when asked, “Where are government estimates that only 1 in 10 institutions in Qatar but their all the women?” in 10 years, members of the workforce is Qatari. dominance is the result of uneven industry insiders will still be Qatarization requires increasing the access to overseas education. referring to a perceived lack of number of Qataris working in key sectors Qatari men are privileged with qualifi cations. across the economy but especially in money and mobility to study joint ventures and the crucial petroleum overseas while study within Laura Elder is a cultural and fi nance sectors. And the program is country continues to be seen as anthropologist and teaches in enforced through hiring quotas, eg the more culturally appropriate for the Department of Global Studies target for the natural gas industry has Qatari women. at Saint Mary’s College in Notre a quota of 50% Qatari nationals. Within Dame. Her primary research interests fi nancial services, managers explained to The consequence of this gendering are global political economy, Islam me that when hiring, their fi rst criteria of mobility is quite severe within and gender. She can be contacted at must be the Qatarization quota, followed the fi nancial services sector. For [email protected].

France: Falling further

Home to Europe’s largest Muslim population (7.5% of its 66 million-strong population, according to Pew Research Center), France’s Islamic ﬁ nance growth story seems like a success waiting to happen, yet development has been limited. The country’s strong secular stance has been a large obstacle to the industry and the Islamic extremist assaults on the country in 2015 have made things even more challenging. VINEETA TAN provides an overview of the French Shariah ﬁ nancial landscape.

Economic overview in the next decade, possibly registering a Just as 2014 was a diffi cult year for France, fi ve-fold growth as compared to the previ- While Islamic so was 2015 if not tougher, due to the ous decade. terrorist att acks unleashed on the country, ϔinance could which have claimed many lives, instituted Banking a state of emergency and hit its economy Islamic banking in France remains dismal be an avenue hard. These have made economic recov- with the likes of BNP Paribas and Societe ery hard and analysts project real GDP Generale (SocGen) being more active in for the country to growth to reach 1.1% in 2015 and 2016. the Islamic fi nance scene overseas, rather than in the domestic market. Chaabi tap petrodollars, The Republic’s public fi nances have been Bank is the only Islamic banking window under pressure due to high spending and operator in France, off ering a deposit ac- the nation may lower-than expected growth pushing pub- count service and a real estate product. lic debt up to 98% of GDP in 2015 (from have reservations 68%) and may touch 100% in 2016, accord- SocGen’s proposed RM1 billion ing to the Central Intelligence Agency. (US$238.23 million) Sukuk, which had toward taking that Despite structural reforms and medium- been delayed since July 2014, has not term policies to moderate public spend- materialized; however, the French bank path considering its ing and boost business competitiveness, in 2015 affi rmed that it will continue to complicated political, OECD is of the opinion that narrowing strengthen its Islamic fi nance capabili- the country’s budget defi cit gap would be ties and presence. The proposed multi- religious and social signifi cantly less ambitious than originally currency Islamic medium-term note intended: with the 3% defi cit threshold program was assigned a ‘AAA(s)/Stable’ dynamics only likely after 2017, not 2015 as hoped. rating by RAM Ratings and features back- to-back Shariah compliant contracts with With growth tepid, unemployment rate its wholly-owned subsidiaries: Societe skyrocketing, productivity low and Generale Bank and Trust (the obligor) and it is also keen to diversify and expand its taxes high (and re-elections looming), ALEF (the issuer). product suite to include current accounts president Francois Hollande in February and fi nancing solutions for vehicles and 2016 announced a EUR2 billion (US$2.21 Takaful equipments. billion) plan to turn its economy around, With its existing law compatible with an economy he claimed to be in a “state of the demands of Takaful insurance with Islamic funds emergency”. The plan includes subsidiz- no need for further amendments, France Latest fi gures from the European Central ing job creation and temporarily remov- is presented with the unique advantage Bank (2013) indicate that there are six Sha- ing 500,000 unemployed people from the to further its Islamic insurance industry. riah compliant funds in France with total welfare rolls. However thus far, only Family Takaful assets under management of US$147.2 mil- solutions are available to French consum- lion, relatively evenly distributed between Real estate ers — Salam by Swiss Life and Amane money market (47%) and equity (53%). Real estate continues to be the spring- Exclusive Life from VITIS LIFE. board for Islamic fi nance in France. With Conclusion Paris being one of the most lucrative NoorAssur, a fi nancial advisory spe- The development of Islamic fi nance in property markets (up to 4.1% initial yields cializing in Shariah compliant savings, France has for years lagged in compari- for offi ces in the Paris Central Business investment and Takaful products, in 2015 son to its other European peers despite district and 3.9% for best retail location launched its inaugural physical agency its favorable demographic advantage almost double that of London’s Mayfair near the Parisian city (See IFN Company – and this has worsened as anti-Muslim (2-2.75%)) and the more preferred destina- Focus Vol 12 Issue 39: ‘NoorAssur – The sentiments grow on the back of the tion among Middle Eastern investors, French Islamic fi nance start-up ready to two deadly extremist att acks which left industry players continue to highlight blaze the trail’). The fi rm, which began the nation on edge. And while Islamic French real estate as the avenue for its operations on a pure digital platform fi nance could be an avenue for the coun- Islamic fi nance to take off from. According in 2012, has plans to expand its agency try to tap petrodollars, the nation may to the CBRE, Europe accounted for a ma- network by another 20 in 2016 across have reservations toward taking that jority of Middle East real estate outfl ows France including Toulouse, Marseille and path considering its complicate political, (80% average) over the last 10 years, with Lyon. NoorAssur also confi rmed with IFN religious and social dynamics, although Paris commanding a 15% share. CBRE that it is seeking to raise capital through its att ractive real estate market may con- expects Paris to account for a larger chunk institutional and private investors — but tinue to att ract Halal investments.

Risk management

Risk management is crucial for Islamic fi nance, particularly and uniquely given the risk and return-sharing principles that govern the industry. While in theory off ering lower risk exposure due to its fi rm principles and basis in the real economy, Islamic transactions and institutions nevertheless face real and unique risks that require a robust and comprehensive management process. LAUREN MCAUGHTRY gives an update on the latest events in the Shariah compliant risk management arena.

National regulation Institutions and Islamic Collective In- ence, sponsored by the Dubai Financial The Central Bank of Jordan this month vestment Schemes) (GN-6). The guid- Market (DFM) in collaboration with the issued a new set of regulations gov- ance note aims to complement global Association of Certifi ed Fraud Examin- erning Islamic banking, known as the liquidity standards such as the liquidity ers. “DFM employs the most advanced Corporate Governance for Islamic Banks coverage ratio and net stable funding systems and technologies of surveil- Instructions No.61 of 2015, as part of ratio as well as other developments lance, audit and risk management and a major overhaul by the central bank on liquidity risk management for the we were encouraged to participate in aimed at improving and streamlining Islamic fi nancial services industry. this signifi cant event, which takes place corporate governance. The new rules outside the US for the fi rst time, to include limitations on board member International highlight Dubai’s leading position as a compensation, and requires the creation The United Nations Industrial Develop- global center of excellence,” said DFM of subcommitt ees to ensure compliance ment Organization, the International chairman Essa Kazim. and correct risk management proce- Trade Center and the International dures. Islamic banks are also required to Organization for Standardization (ISO) Takaful submit all their companies, subsidiaries in January 2016 launched a handbook Chaucer, a specialist team underwriting and affi liates to both internal and exter- to help SMEs bett er manage potential a global war and terrorism and political nal audits, to allow for greater examina- risks. The new publication is called violence account with almost a quarter tion, control, and accountability. ‘ISO 31000: Risk management’ and is of its business emanating from MENA, designed to assist SMEs to improve is backing London’s Cobalt in off ering Standard-setting the identifi cation of opportunities and Lloyd’s fi rst-ever Shariah compliant In April 2015, the IFSB introduced new threats, and eff ectively allocate resourc- political violence product to meet a wid- guidelines on liquidity management, es for risk treatment. ening demand and supply gap in the with the adoption of a new Guidance market as escalating social unrest and Note on Quantitative Measures for Events rising geopolitical turmoil in the MENA Liquidity Risk Management in Institu- The Financial Audit Department of region become increasingly vital compo- tions Off ering Islamic Financial Services the Dubai Government in February nents in the risk management strategies (Excluding Islamic Insurance (Takaful) hosted the Middle East Fraud Confer- of Muslim investors.

www.REDmoneytraining.com [email protected]

FINANCIAL MODELS FOR ISLAMIC BANKING INSTITUTIONS 3rd – 5thth AprilApril 2016, Jeddah

Highlights: • Key Differences in How Islamic Banks do Financial Modelling • Financial Modelling of Islamic Banking Funding Sources • Key Financial Modelling Aspects of Various Islamic Banking Activities • Financial Modelling of Embedded Options in Islamic Banking Products • Modelling for Islamic Investment and Corporate Finance Activities

Ivory Coast’s maiden Sukuk: Ivory Coast Sukuk SIZE: CFA150 billion (US$253.34 A landmark deal for the West million) African nation

Ivory Coast on the 28th December 2015 to have replicated that of the Sukuk debuted its Sukuk issuance worth issued by the government of Senegal. CFA150 billion (US$253.34 million), a major milestone in the West African Off ered at a profi t rate of 5.75%, 28th December 2015 nation’s eff ort to embrace Islamic proceeds from the fi ve-year Sukuk will Issuer FCTC fi nance. Speaking to Hogan Lovells, be used to fi nance the government’s the legal advisor of the landmark social and economic projects. The deal, Obligor State of the Cote d'Ivoire deal, NURUL ABD HALIM has the which was arranged by the ICD, was Size of issue CFA150 billion (US$253.34 exclusive. subscribed by investors from West million) Africa (56%), North Africa (6%) and the Mode of issue Public off ering through Middle East (38%). the management and intermediation companies This was (SGI), the management Commenting on the unique feature of and collective investment a debut the deal, the fi rm highlighted: “This in transferable securities was a debut issuance of Sukuk by the companies (SGO) and issuance of Sukuk government of Ivory Coast. As such, the heritage management it represents a major milestone in the companies (SGP), as development of that country’s push to approved by the Regional by the government Council of Public Savings encourage Islamic fi nance. It’s also only and Financial Markets of Ivory Coast. As the second African sovereign Sukuk (CREPMF). issuance to adopt a fund structure as Purpose Financing projects of such, it represents the conduit through which investors’ economic and social interests are represented.” development a major milestone Tenor 28th December 2015 – 28th The landmark deal also demonstrated December 2020 in the development the support for Islamic fi nance in Africa Issuance price CFA10,000 (US$16.89) per part as the market is set to focus more on Profi t rate 5.75% per year of that country’s infrastructure and social development. “These are sectors which lend Currency CFA francs push to encourage themselves very well to the whole ethos Maturity date 31st December 2020 of Islamic fi nance,” added the fi rm. Islamic ϔinance. It’s Lead Islamic Corporation for the manager(s) Development of the Private also only the second The transaction proceeded very Sector (ICD) smoothly with relatively few Principal Deloitt e (auditor) challenges, said the fi rm, adding that advisor(s) African sovereign updating the disclosure relating to the Bookrunner(s) ICD Sukuk issuance government was one of the hurdles; Governing law Laws of the state of the however, the fi rm maintained that it Ivory Coast to adopt a fund was not as intricate as it could have Legal Counsel to the state of the been. advisor(s)/ Ivory Coast: Cleary Gott lieb structure as the counsel Steen & Hamilton The deal was a stand-alone off ering and Lead counsel to the ICD: the maiden Sukuk issuance by the West Hogan Lovells (Middle conduit through East) African nation. Counsel to the ICD as to which investors’ matt ers of the Ivory Coast/ WAEMU: Cabinet ADKA interests are Underlying Usufruct of two building assets complexes in Abidjan, Ivory represented Coast Shariah IDB Group Shariah Utilizing the Ijarah structure, two advisor(s) Committ ee government buildings located in Structure Sukuk Ijarah Abidjan were chosen as the underlying Investor West Africa – 56%; North assets for this transaction. The structure breakdown Africa – 6%; Middle East utilized for this transaction is said – 38%

Thinking big

By Kavilash Chawla, a partner at boutique growth markets for the Islamic fi nance the follow-on eff ects of the renminbi management consulting fi rm Bâton Global industry. While discrete, country-level devaluation on Hong Kong, and our and a visiting scholar at Drake University. analysis and strategies are still neces- clients’ exposure to Hong Kong and the sary, they are no longer suffi cient. As risks associated with the Hong Kong Lately, I have been ‘thinking old’ the volatility in global equity markets in dollar – US dollar peg. rather than ‘thinking big’. Other than the fi rst quarter remind us, we live and growing grayer and a litt le balder operate in a globally connected world, 2. Price your risk: beyond quantifying every day, I am drawn back to the late and the proverbial ‘tail that wags the one’s exposure to risk, it is also impor- 1990s, and the fi rst year or two of my dog’, at least for now, is China. tant to price risk appropriately. Broadly career in New York when I worked speaking, we price risk using the capital as a research fellow with the United In terms of some practicalities on devel- asset pricing model (CAPM) to identify Nations Institute for Training and oping a China strategy: the return premium we demand, above Research. My charge, at least in theory, and beyond our cost of capital, for hold- was simple: to help country-level 1. Quantify your exposure: fi rms are ing risky assets. To price risk appro- economic representatives to the UN very good at quantifying their direct priately, current approaches to CAPM understand the causes of the emerging exposure, but not as sophisticated at premiums are eff ective in integrating markets fi nancial contagion of 1997 quantifying their indirect exposure. additional premiums for explicit risks and 1998, and help them build policy Quantifying indirect exposure requires related to an asset. Where CAPM falls responses. understanding the magnitude and dy- short is when corporations seek to price namics of the risk one’s income streams risk across the organization, and seek The fi rst quarter of 2016, at least to and asset base face from the broader to understand risk-return relationships date, looks an awful lot like the span of the organization’s across a portfolio of strategic assets fi rst quarter of 1998. Beijing activities. For example, our across countries. As the world’s second- is warning George Soros direct exposure to the largest economy, one would be hard- against att acking the ren- renminbi is limited to pressed to fi nd an economy or business minbi, there is growing our profi t and loss, and that is not impacted by what occurs in concern about the de- the revenue at risk is China. From a risk-return perspective, valuation of the Hong the percentage of total the challenge is how to measure and Kong dollar against revenue we generate price that risk across a basket of assets, the US dollar and what from China. At present, a portfolio. The key is to be able to that means for the cur- this is in the mid-teens. understand the correlation between the rency peg. And as oil Our indirect exposure, assets in the portfolio and measure their prices continue to hover however, is much greater. covariance, all weighted by the expo- around or just below the As over 80% of our rev- sure of the portfolio to the risk, in this break-even point for many enue is generated from example, China. MENA producers, questions clients who have operations are being raised about the long- and direct exposure to Hong Measuring exposure to risk and pric- term sustainability of currency Kong, the trickle-down eff ects ing risk are the keys to success within pegs between the US dollar and to our business are signifi cant. fi nancial services, and perhaps the need the GCC. The sense of deja vu is When we think about and plan for well-developed risk tools has never certainly very strong. our business development been greater. While we are still less than eff orts, and where to invest a quarter of the way through 2016, one So, what does this mean for Islam- for our future growth, we seek glaring reality is that the direction of ic fi nance? It means everyone needs to quantify our revenue at risk 2016 will be very much determined by a China strategy. The economies of from the renminbi by not only the direction and performance of China. Asia and Africa over the next three looking at our direct risk ‘Think big’ about your China strategy. to fi ve years represent the key to the renminbi, but also

REDmoney Ideal Ratings Indexes

The REDmoney Global Shariah Index Series powered by IdealRatings consists of a rich subset of global listed equities that adhere to clearly deﬁ ned and transparent Shariah guidelines deﬁ ned by Shariyah Review Bureau.

The REDmoney Shariah Indexes provides Islamic investors with an accurate and Shariah-specifi c equity performance benchmark with optimized compliance credibility due to the intensive research conducted to ensure that index constituents do not confl ict with the defi ned Shariah requirements.

The blunt end

By Mohammed Khnifer, a product structurer at a supranational banking institution as well as an AAOIFI-certiﬁ ed Shariah advisor and auditor.

Once upon a time, there was a wise man who used to go to the ocean to do his writing. He had a habit of walking on the beach before he began his work. One day, as he was walking along the shore, he looked down at the beach and saw a human fi gure moving like a dancer. He smiled to himself at the thought of someone who would dance to the day, and so, he walked faster to catch up. Moreover, there are countless beaches convener of a conference which aims to just like this one all up and down the turn up the volume on enlightenment As he got closer, he noticed that the coast. What you’re doing will not make campaigns so as to create the required fi gure was that of a young boy, and that a diff erence!” awareness to investors and operators on what he was doing was not dancing the potentials of Sukuk. at all. The boy was reaching down to At this, the young man bent down, the shore, picking up small objects, picked up yet another starfi sh, and As the conference was about to and throwing them into the ocean. He threw it into the ocean. As it met close, Ummahani had to improvise a came closer still and called out: the water, he said: “It made a memorable speech. She was pleading “Good morning! May I ask diff erence to that one.” her weakness that without the solidarity what it is that you are and genuine support of all Nigerians, doing?” The boy paused, The famous ‘starfi sh story’ she alone will not be able to make a looked up, and replied crystallizes the persistent diff erence. As Ummahani was living “Throwing starfi sh journey that are being her moment of standing ovation among into the ocean.” undertaken by a few, the audience, another powerful and silent heroes who try charismatic fi gure picked up the torch. The somewhat to make a diff erence in Chidi Izuwa of the Infrastructure startled wise man Nigeria. During the 2nd Concession Regulatory Commission asked: “I must ask, International Conference on of Nigeria reminded the audience of a then, why are you Islamic Finance held in Abuja, popular quote by the 14th Dalai Lama: throwing starfi sh they tried to send a message to “If you think you are too small to into the ocean?” To decision-makers that: “Nigerian make a diff erence, try sleeping with a this, the young boy fi nancial operators have identifi ed mosquito.” replied: “The sun is up Sukuk Islamic bonds as a major and the tide is going tool that can be used in closing the One thing for sure, those backers of out. If I don’t throw country’s gap on infrastructural the ‘Sukuk notion’ will not be silent no them in, they’ll die.” defi cit.” more. They will keep going until they see Africa’s largest economy issues its Upon hearing this, the From that conference came that maiden sovereign Sukuk. wise man commented, tiny voice in the wilderness. “But, young man, there are Having lived comfortably as a @MKhnifer miles and miles of beach lawyer, Ummahani Amin and there are starfi sh found herself becoming the all along every mile!

Are you using our unique and exclusive RESEARCH REPORT? This excellent and easy-to-use service is available only to subscribers. Generate personalized research reports based on your search criteria. A customized report can be easily generated to a PDF ﬁ le through 8 simple steps

More initiatives in Malaysia to enhance IFN Country Correspondents AFGHANISTAN: Dr Alam Khan Hamdard president, Afghanistan Islamic Finance and Consulting Co AUSTRALIA: Dr George Mickhail Islamic banking and ϐinance industry senior lecturer, School of Accounting, Economics and Finance, University of Wollongong, Australia BAHRAIN: Dr Hatim El-Tahir MALAYSIA their Hajj obligations. The product is director of Islamic Finance Knowledge Center, Deloitt e & Touche considered to be the fi rst universal BANGLADESH: Md Shamsuzzaman By Ahmad Mukarrami Ab deputy managing director, Islami Bank Bangladesh Takaful Hajj product off ered in the Mumin BELGIUM: Prof Laurent Marliere, CEO, ISFIN market. BERMUDA: Belaid A Jheengoor director of asset management, PwC BRAZIL: Fábio Figueira Bank Negara Malaysia (BNM) has partner, Veirano Advogados A consortium of six Islamic banks resumed their eff orts from 2015 BRUNEI: Dr Aimi Zulhazmi, Islamic fi nance consultant, in Malaysia recently unveiled the Draznine Advisory to further improve the existing CANADA: Jeff rey S Graham Investment Account Platform into the partner, Borden Ladner Gervais regulations for Islamic banking and market, a bank-intermediated fi nancial CHINA: Abdullah Han fi nance. Alongside the standards that partner, Al-Sadiq Consulting technology platform to cater for Shariah EGYPT: Dr Walid Hegazy have been put on hold, BNM targets managing partner, Hegazy & Associates compliant investments and fundraising FRANCE: Kader Merbouh to roll out several more standards co-head of the executive master of the Islamic fi nance, Paris- activities. The governor of BNM, Dr Dauphine University throughout the year of 2016. In HONG KONG: Amirali Bakirali Nasir Zeti Akhtar Aziz launched the platform chairman, The Law Society of Hong Kong working party on December 2015, a standard on the Islamic fi nance and in a keynote address stated that the contract of Istisnah has been issued INDIA: H Jayesh internet-based platform “…addresses founder partner, Juris Corp and will be eff ective in July 2016. INDONESIA: Farouk A Alwyni the prevailing gap in the current risk- CEO of Alwyni International Capital and the chairman This gives ample time for all Islamic of Centre for Islamic Studies in Finance Economics and transfer fi nancial regime to one that Development fi nancial institutions to ensure that IRAN: Majid Pireh now allows for fi nancial institutions Islamic fi nance expert, Securities & Exchange Organization all of their products that are based on of Iran to include a wider range of investment IRAQ: Khaled Saqqaf Istisnah will comply with the standard. partner and head of Jordan & Iraq offi ces, Al Tamimi & Co intermediation activities that emphasizes ITALY: Stefano Padovani, partner and head of Banking & risk-sharing and thus facilitates a Finance, NCTM Studio Legale Associato In the latest bancaTakaful initiatives, JAPAN: Kaoru Haraguchi stronger linkage of fi nance and the real founding att orney, Haraguchi International Law Offi ce CIMB Islamic Bank partnered with Sun JORDAN: Nafi th Al Hersh Nazzal, Islamic banking specialist, economy”. certifi ed fi nancial and investment advisor Life Takaful Malaysia to off er a Takaful KAZAKHSTAN: Timur Rustemov, deputy chairman, product linked with the Hajj program association for development of Islamic fi nance Ahmad Mukarrami Ab Mumin is the head of KENYA: Mona K Doshi called Takaful Suria. This product will senior partner, Anjarwalla & Khanna Advocates the Shariah Division at RHB Islamic. He can enable its subscribers to enjoy various KOREA: Yong-Jae Chang, partner, Lee & Ko be contacted at ahmad.mukarrami@rhbgroup. KUWAIT: Alex Saleh, partner, Al Tamimi & Co benefi ts in terms of savings, fi nancial com. LEBANON: Johnny El Hachem fl exibility and protection while fulfi lling partner – corporate, Bin Shabib & Associates LUXEMBOURG: Said Qaceme, senior manager of Advisory & Consulting, Deloitt e Tax & Consulting MALAYSIA: Ruslena Ramli head, Islamic fi nance, RAM Rating Services MALDIVES: Aishath Muneeza deputy minister, Ministry of Islamic Aff airs, Maldives MALTA: Reuben Butt igieg president, Malta Institute of Management MAURITIUS: Mohammad Akshar Maherally Director (taxation), International Financial Services MOROCCO: Ahmed Tahiri Jouti managing consultant, Al Maali Consulting Group NEW ZEALAND: Mohamed Nalar trustee and board member, Awqaf New Zealand NIGERIA: Auwalu Ado; Shariah auditor, Jaiz Bank Sukuk & Sustainability OMAN: Muhammad Abdullah Dewaya Islamic fi nance scholar PAKISTAN: Muhammad Shoaib Ibrahim managing director & CEO, First Habib Modaraba Driving the Momentum PHILIPPINES: Rafael A Morales managing partner, SyCip Salazar Hernandez & Gatmaitan QATAR:Amjad Hussain partner, K&L Gates RUSSIA: Roustam Vakhitov managing partner, International Tax Associates SAUDI ARABIA: Nabil Issa partner, King & Spalding SENEGAL: Abdoulaye Mbow Islamic fi nance advisor, Africa Islamic Finance Corporation SOUTH AFRICA: Amman Muhammad CEO, First National Bank-Islamic Finance SINGAPORE: Suhaimi Zainul-Abidin, advisor, 5Pillars SRI LANKA: Imruz Kamil head of Islamic banking, Richard Pieris Arpico Finance SWITZERLAND: Khadra Abdullahi associate, Investment banking, Faisal Private Bank SYRIA: Gabriel Oussi, general manager, Oussi Law Firm TANZANIA: Yassir Masoud head, Islamic banking, retail banking, National Bank of Commerce TURKEY: Ali Ceylan Book today to receive your 25th - 26th May partner, Baspinar & Partners UAE: Rima Mrad 10% discount.  JUMEIRAH CARLTON partner, Bin Shabib & Associates  UK: Fara Mohammad www.sukuksummit.com TOWER, LONDON director of Islamic fi nance, Foot Anstey US: Joshua Brockwell investment communications director, Azzad Asset Management Media Partner YEMEN: Moneer Saif; head of Islamic banking, CAC Bank IFN Correspondents are experts in their respective fi elds and The World’s Leading Islamic Finance News Provider are selected by Islamic Finance news to contribute designated short country reports. For more information about becoming an IFN Correspondent please contact sasikala.thiagaraja@ redmoneygroup.com

The money trick

If memory serves HUSSAIN KURESHI right, he once read a short story called the ‘Money Trick’, possibly in Grade 9, while preparing for his O Levels, and uses it in this article to provide an overview of capitalism in the world today.

SMEs street who contributes to these funds does not really benefi t in proportion By Hussain Kureshi to his contribution. Large corporations always benefi t from these funds, which The ‘Money Trick’ story was right there allow them only to grow larger, control with ‘Lie Thee Down Oddity’ and other more resources, control prices, and stories. The story taught by a professor, dominate the world’s economic system. the late Ejaz Cyprian, was a bit of a smack at capitalism. The story focused Yet, even in developed countries, on a mining town, where the owners of despite being the largest employer in the the mines also owned the local grocery economy, SMEs hardly see a penny. We store, pub, laundry mat, restaurant and are crowded out of the credit markets so on. Later, one of the owners of the and are funding our own defi cits and mines also became the town mayor. debts by allowing our savings to be The punch line to the story was that disproportionately channeled into the the workers in the mines had no other economy. employment opportunities and had been displaced from their farms and Your 401k manager is hardly going to lured into mining activities. invest in your local start-up furniture shop when you most need it, and your Working conditions were diffi cult and bank will not lend money to a new often unsafe; however, the money trick business, even if the bank has been was rather simple. The mine owner, there are no credit guarantee schemes funded directly by your own money the capitalist, paid wages to workers off ered by the governments. (look at how much money printed which these very same workers spent at during quantitative easing went into the the local grocery store, the liquor store, Developed countries and their corporates economy). the laundry mat, etc, which were also have complex, mandatory forced owned by the very same mine owners. savings plans (which are meant to be Now come countries like India and So the mine owners got all wages paid for the own good of employees), social China, who in their race for GDP growth, out in the shape of revenues from other security contributions, pension fund with populations in excess of one businesses owned in the town. At the end contributions, and so on. Every day billion each and highly dependent on of the day, the worker was always either in developed countries, roughly 1.5 agriculture, SMEs and cott age industries, in debt or always in need of work. billion people residing in the US, Japan, cannot aff ord to make the same mistakes UK, Germany, Italy, France, Norway, as their western counterparts, simply This story may have fallen into the Malaysia and South Africa go to work. It because their populations are too large, recesses of the mind, especially as I was is estimated 750 million are in the active and disenfranchising them from the intrigued by capitalist ideas in my college workforce, working eight hours a day, 22 economy will likely create social unrest. days, but having gott en older, and begun days a month, with 11% of their before- to experience the impact of corporations tax pay going into the forced savings Over the past fi ve years, since the global on my life, I feel the tinge of truth in this plans and another 10% to insurance fi nancial crisis or the Great American story. companies before the tax man takes a big Recession, it has become clear that bite. investment banks and asset management Remember, I come from a small village companies will take risks and invest town, a country with a GDP less than These forced savings are channeled billions in speculative products, the revenues of many large companies into mutual funds, asset management structures, etc, but not invest in the so my interpretation may seem a litt le companies, fund management potential of their own citizens’ human robust. However, having lived in the companies, etc. These funds are used ingenuity. SMEs have been denied US, Malaysia and recently in Spain, to purchase stocks and bonds in ‘A’- capital, which has been bet on capital I seem to have some idea of how this rated entities, either corporate or markets and exchanges all over the money trick works today. As a banker sovereign, and other investments are world, and yet no one, or not enough (and as an individual, I have always made in commodities, gold, real estate, people, are crying foul. The money trick had a weak spot for the underdog; and alternative assets. Interestingly, lives on. The mine owner went global I lacked the killer instinct of a Wall households, which are the major and the mines shifted to even cheaper Street wolf, so to speak), and SMEs and contributors to these funds, receive no sources of labor. small businesses in terms of clients are indirect or direct investment from these underdogs. They rarely get funded in funds and small businesses and cott age Hussain Kureshi is CEO of Millennia Global Pakistan, and to my surprise rarely get industries do not qualify as investable Research House. He can be contacted at funded in developed countries too, if asset classes. The average man on the [email protected].

Afghanistan issues regulations for Islamic banking but challenges remain

Considerable eﬀ orts have been made by Da Afghanistan Bank (DAB), the central bank of Afghanistan, for the issuance of a new regulatory framework structure for all ﬁ nancial institutions and banks in Afghanistan. ZULFIQAR ALI KHAN writes.

AFGHANISTAN operations into a fully-fl edged Islamic central bank to ensure fi t and proper bank, which is a good development step criteria for Shariah board members. By Zulfi qar Ali Khan toward promoting the Islamic banking system in the country as it will help the Many challenges exist, such as the On the 12th August 2015, the president growth of Islamic banking. lack of human resources and a lack of of Afghanistan approved the new promotion of Islamic banking parallel banking law Act which included an In February 2016, DAB circulated a lett er to conventional, supervision of Shariah Islamic banking chapter. Similarly, to all local and foreign banks to ensure compliance, a lack of capital and stock DAB has also issued many regulations that their Islamic banking operation market, etc. These could be resolved with for fully-fl edged and Islamic banking comply with the new regulations and strong support from the government and window operations. product guides issued. The deadline the central bank. for compliance was three months’ time. The major developments on issuance Some of the Afghan banks have already Furthermore, DAB will need to put regulations are as follows: introduced products for both assets and in place a comprehensive Shariah • Regulation on licensing to Islamic liability segments and they will now compliance mechanism and a strong banks/windows need to follow the new product guides Islamic banking supervision team to • Regulation on Islamic banking and review their existing procedures to ensure that all the banks are carrying liquidity management cater to the evolving needs as per DAB’s out their operations according to the • Regulation on capital adequacy instructions. Some of these initiatives existing legal framework and keeping • Regulation on asset classifi cation include: Shariah compliance manuals the trust and confi dence of investors in • Regulation on profi t distribution and procedures and establishing a Islamic fi nancial institutions. • Regulation on large exposures, and Shariah board with approval from the • Regulation on enforcement actions.

Some mandatory regulations have also been issued such as: • The national Shariah governance framework for Islamic banks/ window/units • Procedures for Islamic banking • Shariah review manual www.trx.my • Shariah compliance manual [email protected] • Shariah Board members assessment manual • Liability and asset product guides to promote Islamic banking and ﬁ nancial services in the market, and • Exploring measures to strengthen the regulatory framework on ﬁ nancial institutions operating Islamic banking window services and products.

Both DAB and banks face the challenge of ensuring compliance to the issued regulations on Islamic banking operations. While major local banks are The world’s best businesses are facing a lack of human capital, especially in the areas of Islamic banking and joining us at Tun Razak Exchange ﬁ nance, the licensing and examination of Islamic banks will remain major A 70-acre landmark development in the heart of Kuala Lumpur, challenges for the central bank. In the the Tun Razak Exchange is Malaysia’s first dedicated meantime, DAB has issued an Islamic financial district, poised to attract the brightest businesses, banking license to a local conventional minds and talents to converge, connect and prosper. bank in Afghanistan to convert its

Continued

Local donor Harakat has provided US$1.2 million in funds to the central bank for technical assistance, drafting regulations and product items for all Islamic banking windows. Harakat is an independent, non-proﬁ t, Afghan- managed organization that aims to improve Afghanistan’s business environment. They provide grant funds to the private sector, government and civil society to implement activities to reduce or remove barriers that currently make it diﬃ cult to do business in Afghanistan.

Both DAB and banks face the challenge of ensuring Asia Forum compliance to the 6th & 7th April 2016 Shangri-La, Jakarta issued regulations on Islamic banking Known throughout the industry as the premier Islamic finance event in the region the forumconsistently brings together the most influential market players and provides a platform to discuss the very latest issues affecting operations Islamic finance in the region. As major Asian economies begin to seriously assess the prospects of Islamic capital raising the IFN Asia Forum will continue to deliver on its promise: to provide delegates with prospects, opportunities and current trends in mature and new

Islamic finance markets in Asia. The event will draw participation from speakers and delegates from Malaysia, A survey conducted by Harakat showed Indonesia, Hong Kong, Japan Pakistan, Brunei, the Philippines, the Maldives and Sri Lanka amongst others. a high demand for Islamic banking and fi nance by private sector fi rms where 94% of the respondents are willing to REGISTER FREE NOW at use Islamic banking while in terms www.REDmoneyevents.com of awareness, 58% said they were not aware of it. The survey proved that a lack of access to an Islamic fi nancing and banking system is the biggest challenge LEAD PARTNERS MULTILATERAL STRATEGIC PARTNER ASSOCIATE PARTNERS for Afghanistan.

On the 14th October 2015, DAB with technical and fi nancial assistance EXECUTIVE PARTNERS from Harakat-Afghanistan Investment Climate Organization completed the placement of a regulatory and institutional foundation for Islamic banking in the country to increase access to fi nancing for SMEs, for both investors and individuals. As a result, this would BREAKOUT SESSION SPONSOR BADGE & LANYARDS SPONSOR LEAD MEDIA PARTNER increase investment, create jobs and generate revenue for the government. INFORMATION PARTNER RESEARCH PARTNER MEDIA PARTNER Zulfi qar Ali Khan is the head of Islamic banking at Afghanistan International Bank. He can be contacted at zulfi qarali.khan@aib. W: www.redmoneyevents.com | E: [email protected] | T: 603 2162 7800 ext. 43 | Twitter : #IfnAsia16 af/[email protected].

Emerging risks can beneϐit from risk participation

The world is becoming a riskier place but as RICHARD BISHOP explains, the combination of London’s experience and the principles of Shariah compliant insurance can deliver att ractive and eﬀ ective solutions.

RISK MANAGEMENT addressing emerging risks and has the immediate advantage of engaging with By Richard Bishop The cyber the policyholder on the issue of risk management and claims control. The biggest batt le for the global insurance insurance market remains how it meets It is in the interest of the client that these the challenges posed by ever-emerging industry is showing new risks are reduced and unnecessary risks. As an industry, we need to claims are not made. For example, it is remain relevant to our clients and to real innovation and in everyone’s best interests to engage do so we have to provide products that in the use of claims arbitration rather meet their current and future needs. demonstrates the than litigation to sett le disputes around coverage, with clients working with their Wherever you are in the world you ability of insurers insurers to ensure both parties bett er face emerging risk. The continued understand the nature of risks where globalization of the business world and to develop policies the exposure is new to all. Solutions to the interdependency of the economies of managing new risk exposures rarely individual nations on international trade to cover modern, come from the courtroom. has seen risks that in the past would have been viewed as a regional problem complex risks. Due Ask any risk manager, CEO or CFO, become a truly global issue. to the growing anywhere in the world and they will say that they would far rather not have a Politically, the world is now a far riskier claim than have to undergo an insurance place than it has ever been and events importance of this payment to mitigate the loss they have in the Middle East, for instance have suff ered. Adopting a participation impacted on Europe, North Africa, the risk class, quality approach to insurance delivers a greater US and Russia. International fi rms which emphasis from both sides on how trade with or have a physical presence in standardized risk management can be a continual the region are now looking for political approach as both sides know it is in their risk/violence insurance, a point that has exposure data is best interests. not been missed by underwriters. critical for increased There is a clear appetite from the London The one emerging risk class that has levels of insurance market to engage with the Islamic doubtless been dominating the debate economies across the world where many in recent months is that of cyber. There coverage and better emerging risks have become prevalent has been a signifi cant demand for cyber due to the speed of progress and cover but the industry’s response has risk modeling development in these territories. been guarded due to the lack of claims history and concerns over the level of The formation of the Islamic Insurance exposure that may result from a cyber both sides of the policy. He said: “The Association of London is tangible proof incident. cyber insurance industry is showing that London is looking at how it can real innovation and demonstrates the engage with these economies to provide Here is a case in point where the ability of insurers to develop policies to relevant insurance covers to meet their London market has sought to lead cover modern, complex risks. Due to the needs. The opportunity is there with the the way. Lloyd’s recently collaborated growing importance of this risk class, potential to deliver benefi ts to businesses with modeling fi rms AIR Worldwide quality standardized exposure data is across the world whether they are (AIR) and RMS and the Cambridge critical for increased levels of insurance Islamic or not. Center of Risk Studies to come up with coverage and bett er risk modeling.” a standard for data in order to provide The benefi ts of an open and rigorous the underwriter, broker and client with London has long been known for its approach to risk management in a basis in terms of the information they innovation and the wider market has partnership between the underwriter can expect. to take full advantage of the expertise and the policyholder cannot be that is in the London market for the underestimated in this ever-riskier Tom Bolt, Lloyd’s director of good of all. The participation element world. performance management, has stated of the Shariah compliant model, where publicly that this initiative is a clear the policyholder has the opportunity to Richard Bishop is CEO of Cobalt example of how the industry can react share in the success of the underwriting Underwriting. He can be contacted at to the needs of clients while ensuring of a product, provides a range of [email protected]. that the products deliver benefi ts to benefi ts that come to the fore when

Indonesia is turning to retail investors (IILM) has auctioned a US$1.34 billion DEALS in its upcoming sale of Sukuk as it seeks three-month tenor Sukuk at an average to raise between IDR25 trillion (US$1.85 yield of 1.04%, according to a statement. Ooredoo seeking funds via billion) to IDR30 trillion (US$2.22 billion) The additional new issuance of US$350 bonds and loans to plug the 2016 Budget shortfall of million in this series brings the total QATAR: Ooredoo is seeking over US$1.5 IDR273.2 trillion (US$20.19 billion). amount of the IILM’s cumulative Sukuk billion through bonds and loans in to US$2.2 billion from US$1.85 billion. 2016 and is in talks with banks over the According to a statement, the Sukuk Eleven primary dealers participated in matt er, according to Reuters. program bearing a coupon of 8.3% was the US$1.34 billion Sukuk off ering. As launched on the 19th February and will at February 2016, the IILM Sukuk that th Quoting unnamed sources, the be off ered until the 4 March 2016. Bank have been issued and reissued amount to telecommunications fi rm is looking to Rakyat Indonesia, Bank Mandiri and US$15.38 billion. raise funds to refi nance the existing Bank Negara Indonesia are among the 26 US$1 billion revolving credit facility agents named to sell the Sukuk. Prasarana’s Sukuk (RCF) maturing in March 2017 and is oversubscribed exploring options in Islamic fi nancing or The government of Indonesia on the th conventional RCF and in the US dollar or 19 February also issued sovereign MALAYSIA: Syarikat Prasarana a combination of currencies. Sukuk worth IDR1.5 trillion (US$109.66 Malaysia (Prasarana) has issued a RM3 million) in nominal value via private billion (US$718.06 million) Sukuk facility Ooredoo is also planning a benchmark- placement at a yield of 8.05%, according oversubscribed by 2.6 times. According sized bond issuance and is open to to an announcement on the Ministry of to The Malaysian Insider, the off er issuing in Islamic and/or conventional Finance’s website. The Sukuk, maturing received orders of up to RM7.9 billion th formats, in dollars or a combination of on the 25 January 2019, utilize the Ijarah (US$1.89 billion). currencies. structure with state-owned assets and projects in the State Budget 2016 as the Prasarana’s CEO Azmi Abdul Aziz underlying assets. was quoted as saying the Sukuk off er STSSB issues ICP received interest from 54 local fi nancial MALAYSIA: Sunway Treasury Sukuk Separately, the Indonesian government institutions, ranging from major players (STSSB) issued its 57th series of Islamic also announced on the Ministry of to small fund managers. The public commercial papers worth RM100 Finance’s website that it conducted a transport provider is also planning to million (US$23.94 million) via tender sovereign Sukuk auction on the 23rd open the Sukuk off er to foreign buyers in on the 18th February 2016, according February 2016 with an indicative target the near future, Azmi added. to an announcement on Bank Negara of IDR4 trillion (US$293.6 million). Malaysia’s website. The ‘MARC-1IS’- The Sukuk auctioned were the SPN-S Vallianz ϐloats Sukuk rated facility will mature on the 18th and PBS (project-based Sukuk) series GLOBAL: Singapore-based off shore March 2016. (PBS006, PBS009, PBS011, PBS012 and support vessel owner Vallianz Holdings SPN-S 10082016). Proceeds from the has issued a SAR1 billion (US$266.53 issuance will be used to fi nance the 2016 Malaysia to tap global Sukuk million) Sukuk facility via Rawabi State Budget. market again Vallianz Off shore Services, jointly led and managed by Alinma Investment, Saudi MALAYSIA: Malaysia is planning to sell The government of Indonesia is expected Fransi Capital, Saudi Hollandi Capital and a benchmark-sized dollar-denominated to issue its Shariah compliant notes in GIB Capital in Saudi Arabia. Sukuk for a second consecutive year and March 2016, reported Bloomberg quoting has invited banks to submit proposals Scenaider Siahaan, a director at the According to a press release, the Sukuk for the planned issuance, reported Ministry of Finance’s budget fi nancing has a fi xed term of fi ve years, with certain Bloomberg quoting unnamed sources. and risk management offi ce. amortized principal repayments to be made during the period, followed by Indonesia plans multiple IILM issues Sukuk a bullet repayment of the remaining Sukuk programs MALAYSIA: The International Islamic principal amount at the end of the tenor. INDONESIA: The government of Liquidity Management Corporation (see IFN Report pg 9)

DEAL TRACKER Full Deal Tracker on page 30 EXPECTED DATE COMPANY'S NAME SIZE STRUCTURE ANNOUNCEMENT DATE TBA Khazanah Nasional TBA Sukuk 23rd February 2016

TBA Cahya Mata Sarawak RM1 billion Sukuk Ijarah 22th February 2016

TBA Perdana Petroleum RM650 million Sukuk Murabahah 18th February 2016

TBA Government of Malaysia TBA Sukuk 18th February 2016

Mar-16 Government of Indonesia TBA Sukuk 17th February 2016

Second quarter of 2016 Bank Albilad SAR1-2 billion Sukuk 11th February 2016

TBA Saudi Electricity Company US$2.5 billion Sukuk 16th February 2016

CBB’s Sukuk Salam fully Khazanah commences Sukuk QIB considers Sukuk for subscribed book-building process funding acquisition BAHRAIN: The monthly issue of Sukuk MALAYSIA: Khazanah Nasional is QATAR: Qatar Islamic Bank (QIB) is Salam by the Central Bank of Bahrain marketing its US dollar Sukuk in the US considering to issue Sukuk to back (CBB) for the BHD43 million (US$112.51 Treasuries plus 190bps area, according a potential acquisition, according to million) issue, which carries a maturity to Reuters. The ﬁ ve-year Sukuk will be Reuters quoting the bank’s chairman of 91 days, has been fully subscribed. listed in Malaysia and Singapore under Sheikh Jassim Hamad Al-Thani who According to a statement, the expected English and Malaysian law. CIMB, DBS added that the bank could sell to return on the issue, which began on the and Standard Chartered are the lead international investors although it prefers 24th February 2016 and matures on the managers for the deal that was expected to issue locally. 25th May 2016, is 1.98%. to price on the 23rd February 2016.

loans at RM390 billion (US$92.68 billion) Bank, is set to off er Shariah compliant ASIA as at the end of 2015. fi nancing solutions such as Murabahah, BTN Syariah expected in 2017 diminishing Musharakah and Ijarah According to Fitch Ratings in a report, under the Prime Minister’s Youth INDONESIA: Bank Tabungan Negara the country’s Islamic fi nancing grew Business Program (PMYBP) to (BTN) will accelerate the spin-off process 16.2% in 2015, outpacing its conventional support the needs of SMEs and young of its Shariah unit, BTN Syariah, which is counterpart (5.2%). Compound annual entrepreneurs, according to a press estimated to materialize in 2017. growth for the sector since 2011 stood release. at 18.2% as compared to conventional According to Republika.co.id quoting banks’ average of 7%. BTN’s president director Maryono, Azerbaijan’s Islamic banking the bank is currently awaiting the The country’s Sukuk issuance represents regulations underway roadmap of the Ministry of State- more than half of the issuance worldwide AZERBAIJAN: Plans to introduce owned Enterprises to spin off the unit. in 2015 while its Islamic banking Islamic banking regulations in Azerbaijan Maryono also added that the bank has system’s impaired loan ratio remained are afoot, said Behnam Gurbanzada, made preparations and improvements stable at 1.2% in 2015 (conventional CEO of BEST Solutions, who is also in the framework of the Shariah unit banking system: 1.7%). The Islamic an Islamic fi nancing consultant and a transformation. Financial Services Act 2013, in Fitch’s member of the Azerbaijan CIS Islamic view, is a key development that Banking Advisory Council, adding that Indonesia scraps plan to enhances the regulatory and supervisory there is a greater focus to bring customer- merge Islamic banks framework of Malaysia’s Islamic centric real banking solutions, according fi nancial industry, adding transparency to a statement. A new model of Islamic INDONESIA: Indonesia is planning to and clarity on issues. banking is also being developed with set up a holding company by 2018 to one commercial bank reportedly set to oversee the management of four state- PDOT to drive Halal tourism become a fully-fl edged Islamic bank, owned banks: Bank Rakyat Indonesia, added Gurbanzada. Bank Mandiri, Bank Negara Indonesia PHILIPPINES: The Philippines and Bank Tabungan Negara, according to Department of Tourism (PDOT) has DealStreetAsia. launched several initiatives to develop Sri Lanka turns to Islamic its Halal tourism industry, according ϐinance The government will have a 100% to a press statement. Partnering with SRI LANKA: Sri Lanka is applying for stake in the new holding fi rm which is CrescentRating, PDOT together with membership in the IDB and is drafting expected to be one of the investment its sister brand HalalTrip, will launch a the necessary Shariah compliance companies under the Ministry of Muslim Visitor Guide and promote its regulations required for this purpose, State-owned Enterprises with the off ering via online campaigns including reported the Sunday Times of Sri Lanka others reportedly being Danareksa, using social media infl uencers in the quoting unnamed sources. Bahana Pembinaan Usaha Indonesia region. The rating agency will also and Perusahaan Pengelola Aset. accredit hotels and restaurants in major The Central Bank of Sri Lanka is Concurrently, the ministry has also cities with its rating system. This new reportedly seeking an infusion of US$1 scrapped plans of merging the Shariah drive to att ract inbound Muslim tourists billion from Saudi banks in the next units of these banks following the is expected to maximize its economic few months to bolster sagging foreign interest shown by Gulf investors to growth in the Halal tourism industry, reserves and shall consider how to develop Islamic fi nance business in the with the initial focus on developing structure Sukuk particularly in the country. services in Manila, Davao, Cebu, and context of asset-fi nancing. Boracay. Malaysia’s Islamic ϐinance The off er came during discussions a growth continues Shariah ϐinancing for SMEs delegation of Sri Lankan bankers held under PMYBP with the Saudi Arabian Monetary Agency MALAYSIA: Malaysia’s Islamic bank and other banks in assisting Colombo fi nancing increased by two percentage PAKISTAN: Barkat Islamic Banking, in various ways. It is also expected that points to reach 27% of its banking system the Islamic banking arm of Faysal

there may be a positive policy statement Ankara and Izmir during its fi rst year of encouraging banks to lower their net toward encouraging capital market operation. interest margin (NIM) as the regulator operations for Sukuk and other new is seeking to improve effi ciency in Islamic banking products. RFS taking place in March the banking sector, announced OJK’s chairman Muliaman D Hadad, as MALAYSIA: The Responsible Finance Vakiϐbank licensed to operate reported by the Jakarta Globe. Muliaman Summit (RFS) will take place in March added that incentives will be off ered to Islamic division to address the challenge of how Islamic banks that managed to lower their NIM TURKEY: State-owned Vakifb ank fi nance can help create and support under the said regulation. has received regulatory approval to a thriving middle class in emerging markets. Hosted by Bank Negara establish its Islamic division, known as DagangHalal to go public Vakif Katilim, according to Cihan News Malaysia, IFN is a media partner to the Agency. event. MALAYSIA: DagangHalal, an online Halal verifi cation service, has announced With an initial capital of TRY805 million Banks encouraged to lower that it will launch an IPO on the London (US$271.94 million), the Islamic bank will NIM Stock Exchange’s mid-cap market AIM be launched on the 26th February 2016. expected in March 2016, according to the Vakif Katilim reportedly is also planning INDONESIA: Otoritas Jasa Keuangan Business Insider. to open 30 branches throughout Istanbul, (OJK) is set to release a new regulation

commission at the moment, said SEC’s industry. According to Xinhua quoting AFRICA director-general Mounir Gwarzo. att orney-general Professor Githu Ecobank markets Islamic Muigai, stakeholders are currently IDB to gain new member being consulted to come up with a fi nal product in Cameroon draft, which is hoped to be tabled in the GUYANA: Guyana is set to become a CAMEROON: Ecobank, via its parliament in the next few months. member of the IDB by the mid of 2016, Cameroonian subsidiary, has announced announced fi nance minister Winston that it is now off ering its clients a Jordan, as reported by Caribbean United Bank plans to be fully- Mudarabah savings account, reported News Now. The IDB, which is rapidly Business in Cameroon. ϐledged Islamic bank expanding into Africa and Asia, intends EGYPT: The board of directors at United to market its product in the Caribbean Nigeria appoints committee Bank is seeking to turn the bank into and is planning to open an offi ce in a a fully-fl edged Islamic bank provided for Sukuk issuance Caribbean Community (CARICOM) that the size of its Islamic transactions, NIGERIA: The Securities and Exchange country. which currently stands at 60% of the Commission (SEC) and the Debt bank’s business, registers 80% of the Management Offi ce (DMO) have Kenyan Islamic ϐinance law in total activities of the bank, according to inaugurated a committ ee for the nation’s the ofϐing Daily News Egypt quoting the bank’s fi rst sovereign Sukuk, according to the acting chairman Farag Abdel Hamid. KENYA: Kenya is expected to introduce News Agency of Nigeria. Comprising The Central Bank of Egypt is currently Islamic fi nance law by the end of 2016 staff of the commission and DMO, the reviewing United Bank’s 2015 budget that will enable it to bett er regulate committ ee would work out modalities and is expected to launch the bank’s existing Islamic fi nancial products and for the Sukuk. However, the Sukuk IPO on the Egyptian Exchange once it also add to the diversity of the fi nancial facility has not been approved by the approves the bank’s budget.

BASEL III & IFSB REGULATIONS FOR ISLAMIC FINANCIAL INSTITUTIONS 29th – 31st March 2016, Dubai

Highlights: • Know and understand Basel I, II and III as they relate to Islamic banks • Know and understand IFSB standards for Islamic banks • Practical insights into implementation of the standards

www.REDmoneytraining.com [email protected]

rates beginning the 20th February 2016. recession, lower government spending MIDDLE EAST According to the Financial Tribune, on infrastructure projects is likely to IDB and Jordan collaborate banks have decided to cut their one-year dampen non-oil growth. Moody’s senior deposit rate from 20% to 18% while the vice-president Steven A Hess observed: JORDAN: The IDB is set to facilitate overnight deposit rate will fall below “A prolonged period of low oil prices countries aff ected by the impact of the 10%, a move welcomed by the Central could gradually erode the emirate’s fi scal Syrian crisis, including Jordan, via soft Bank of Iran (CBI). In a new move, banks buff ers if it does not maintain its prudent fi nancing and investment promotion are now required to off er regular (non- budgeting. In 2016, the emirate’s defi cit and has pledged to augment fi nancing Musharakah) loans and Musharakah will likely widen to 14% of GDP.” The to US$9 billion from US$6 billion (joint venture) loans at approximately emirate’s real GDP growth is expected to over the next three years, according 20% and 22% respectively. However, slow to 3.1% in 2016 compared to 3.4% in to Jordan Times. The IDB’s president, Musharakah loans may be off ered at 2015. Ahmad Mohamed Ali, was quoted as higher rates, provided that banks can saying that the Islamic bank will work convince the CBI about the viability and Iran to establish aircraft in coordination with the World Bank profi tability of the businesses wanting to to att ract fi nancial guarantees from borrow. leasing company donor countries to Jordan and also cited IRAN: Iran is planning to launch an deliberations with the government Abu Dhabi’s economy under international aircraft leasing company to fi nance Jordan’s oil and gas needs in the next fi scal year (beginning the 20th through the International Islamic Trade pressure March 2016) to upgrade the Republic’s Finance Corporation at a value of US$150 UAE: Abu Dhabi (rated ‘Aa2/Stable’)’s ageing air fl eet, according to Mehr News million. economic growth is likely to come Agency quoting the minister of roads and under pressure in 2016 amid cutbacks urban development, Abbas Akhoundi. MMC approves deposit rate in government spending in response Abbas also added that the company cuts to lower oil prices, said Moody’s in a will be established in cooperation with statement. While the non-oil economy foreign companies, without specifying IRAN: The Money and Credit Council and expanding oil sector have so the names of the companies or their (MCC) has approved lowering deposit far allowed Abu Dhabi to avoid a nationality.

integrated rural development project in minister of economic aff airs and fi nance, GLOBAL Cameroon. adding that the agreement would be Investcorp sells Icopal immediately presented to the parliament Concurrently, the board has approved and the cabinet for further addressing, GLOBAL: Alternative investment two technical assistance grants for reported Mehr News Agency. manager Investcorp has entered into an development projects in Pakistan and agreement for the sale of Icopal to North Sierra Leone and a third grant that will JFSC and FSRA team up American roofi ng manufacturer GAF build capacity for Tunisia’s Ministry for an enterprise value of approximately of Development, Investment and GLOBAL: The Jersey Financial Services EUR1 billion (US$1.12 billion) subject International Cooperation. Commission (JFSC) and the Financial to regulatory approvals, according to Services Regulatory Authority (FSRA) of a press release. The transaction was Under the IDB Waqf Fund, four grants Abu Dhabi Global Market have entered advised by Lazard & Co and Jeff eries totaling US$760,000 were approved, into an MoU to cooperate on supervisory International. which will contribute to education and matt ers and exchange of information to health projects for Muslim communities maintain the stability and well-being of IDB approves development in non-member countries in New the fi nancial systems in each respective capital market, according to a press project ϐinancing Zealand, Burundi, Denmark and Ethiopia. release. GLOBAL: The IDB has approved US$734.7 million in fi nancing for NCB closes Lebanon branches development projects in member Integrated Capital increases GLOBAL: Saudi Arabia’s National countries and Muslim communities in stake in GFH Commercial Bank (NCB) on the 15th non-member countries. GLOBAL: Integrated Capital, the capital February received the regulatory markets arm of Abu Dhabi Financial approval from Lebanon’s central bank, According to a press release, the Group, has increased its stake in Bahrain- Bank of Lebanon, to close two of its approvals include: US$319.7 million to based GFH Financial Group (GFH) to branches in Beirut owing to their low upgrade a national slum in Indonesia, 10% in the Dubai Financial Market, fi nancial returns. The bank noted in a US$220 million for the 400 megawatt making it the largest shareholder in GFH, statement that the closures will have no Ashuganj (East) power plant effi ciency according to a statement. impact on the bank’s current fi nancial improvement project in Bangladesh, statements. US$103 million for the Sarney Dam and Water Supply project in Iran, US$45 Special credit line for Iran million for the Kabala water supply GLOBAL: Japan has opened a special Bank Mellat improperly project Phase II in Mali and US$44.7 credit line worth US$10 billion for sanctioned million for the grass fi eld participatory Iran, announced Ali Tayebnia, Iran’s GLOBAL: Due to insuffi cient evidence,

the European Court of Justice has – an average of 0.5% of GDP across GCC government of Senegal, with Suneor, the rejected the European Council’s countries in 2016. Moody’s said in a report major player in the Senegalese groundnut contention that Iran’s Bank Mellat was that the gains would be much lower than sector, acting as the executing agency. involved in Iran’s nuclear program which the expected fi scal defi cit of 12.4% across According to a press statement, the resulted in the bank being improperly the GCC even if governments opt to link agreement is to fi nance a signifi cant part sanctioned since 2010, according to the fuel price hikes to global oil prices. of the 2015-16 groundnut campaign. Wall Street Journal. “Recent moves to reform subsidies Oman and Iran cooperate in The win for Bank Mellat follows a similar signal political willingness to address victory in the UK where it is seeking the damaging eff ect of low oil prices banking services US$4 billion-worth of damages for being on budgets. However, they fall short of GLOBAL: The Central Bank of Oman improperly sanctioned. The decision is the scale of economic and fi scal reform (CBO) and the Central Bank of Iran (CBI) reportedly not open to appeal and could required to achieve budget balance,” says are in talks to prepare the grounds for the give rise to a claim for damages. Mathias Angonin, an analyst at Moody’s. opening of Omani bank branches in Iran.

Subsidy reforms fall short of ITFC supports Senegalese According to Financial Tribune quoting the CBO’s CEO Hamood Sangour economic scale groundnut sector Hashim Al Zadjali, the bank is currently GLOBAL: Based on Moody’s forecast of GLOBAL: The International Islamic preparing the conditions for opening oil prices remaining at around US$33 per Trade Finance Corporation (ITFC) has bank branches in Tehran, adding that barrel in 2016, the GCC’s savings from signed a US$75 million syndicated Omani commercial banks will soon send increased fuel prices will likely be small Murabahah ﬁ nancing agreement with the their proposals to the CBI.

subscription, according to a press Schroders Indonesia offers ASSET statement. The fund takes exposure to Shariah mutual fund equities by investing in the Al-Ameen MANAGEMENT Islamic Dedicated Equity Fund while INDONESIA: Schroder Investment also taking exposure to income/money Management Indonesia (Schroders EPF’s Shariah investments markets by investing in the Al-Ameen Indonesia) has launched a Shariah surpass 40% Islamic Sovereign Fund and/or Al-Ameen compliant global mutual fund, Shariah MALAYSIA: For 2015, the Employees Islamic Cash Fund. Schroders Global Equity Fund (USD). Provident Fund has announced a dividend rate of 6.4% with a total The Islamic division of UBL Funds, According to Liputan6.com, Standard disbursement amounting to RM38.24 Al-Ameen Funds, has posted a growth Chartered has been selected as the billion (US$9.09 billion), according to a of 530% in the last three calendar years, distributor of the fund whereas Citi statement. The increase was in tandem from PKR5.1 billion (US$48.57 million) Indonesia is the custodian bank. with the growth in the EPF’s investment to PKR32.5 billion (US$309.54 million) assets, which stood at RM684.53 in just 36 months, serving as the major billion (US$162.67 billion) as at the 31st contributor to UBL Funds’s overall December 2015. growth, according to a press release. TAKAFUL Separately, UBL Funds has formed a Takaful outpaces strategic alliance with Samba Bank, Equities remained the main contributor conventional insurance of income at 58.81% amounting to enabling it to distribute a variety of RM26.01 billion (US$6.18 billion) while Islamic and conventional mutual funds INDONESIA: Takaful has expanded to investments in fi xed income instruments via the bank’s channels, according to a 6.2% of Indonesia’s insurance market by with the asset class comprising statement. gross writt en premiums (GWPs) as of Malaysian government securities and the end of 2015 from 2.6% as of the end equivalent and loans and bonds in total Manulife introduces new of 2010, according to Fitch in a report. Although slower than the previous year contributing 35.4% of the RM44.23 billion Shariah fund (US$10.51 billion) gross investment amid a slowdown in the country’s real income for the year. The fund’s exposure INDONESIA: Manulife Aset Manajemen GDP growth, the sector’s GWPs grew by to Shariah compliant investments Indonesia has launched US dollar- around 4.1% to IDR10.5 trillion (US$767.6 covering multiple asset classes to date denominated Shariah off shore mutual million) in 2015, outperforming the exceeds 40% of total assets. funds, the fi rst of its kind in Indonesia conventional insurance product segment following new regulations by Otoritas (1.6%). Jasa Keuangan in November 2015. UBL Funds rolls out Islamic According to the Jakarta Globe, the fund Fitch added that the mandatory spin- mutual funds will allocate between 80- off regulation is expected to stimulate PAKISTAN: UBL Fund Managers 100% of assets under its management growth and competitiveness of the (UBL Funds), via the Al-Ameen Islamic to Shariah stocks in several Asia Pacifi c Indonesian Takaful sector in the longer Financial Planning Fund, has launched countries with up to 20% to fi xed income, term. The rating agency also believes that the Al-Ameen Islamic Active Allocation Sukuk or Shariah compliant money any market consolidation is expected to Plan-IV which is currently open for markets. happen gradually.

registered a growth of 132.75% in net September 2015 period, a growth of RESULTS profi t before Zakat to SAR42.54 million 0.7% quarter-on-quarter. According to Investcorp (US$11.34 million) in 2015, driven by an a statement, net assets per share for the increase in gross and net contributions. reported quarter improved to RM3.02 GLOBAL: For the fi rst half of the 2016 (71.95 US cents) from RM2.8 (66.7 US fi nancial year, Investcorp realized a 12% According to a bourse fi ling, gross cents) a year earlier. growth in net income to US$50.9 million writt en premiums rose by 44.14% to compared to US$45.3 million recorded in SAR1.36 billion (US$362.49 million) the similar period in 2015. According to whereas net writt en premiums increased a statement, total assets stood at US$2.3 by 43.51% to SAR1.23 billion (US$327.84 st billion as of the 31 December 2015. million). MOVES UBL Funds Inovest Al Baraka Banking Group PAKISTAN: UBL Fund Managers (UBL BAHRAIN: Shariah compliant BAHRAIN: For 2015, the Al Baraka Funds) has appointed Yasir Qadri as investment company Inovest reported a Banking Group announced in a statement the new CEO, taking over from Mir consolidated net loss of US$53.7 million that its total operating income reached Muhammad Ali who was a founding for the year ended the 31st December US$1 billion for the fi rst time in 12 years, member of the fi rm and is leaving the 2015, a plunge from the US$3.8 million att ributed to the continued growth in company to pursue his own ambitions, loss registered the year before. income-generated business across all of according to a statement. its units, according to a press statement. Total revenues for the year reached US$1.8 million against US$13.3 million in As at the end of December 2015, net Emirates REIT 2014. The company noted in a statement income rose 4% year-on-year to US$286 UAE: Shariah compliant real estate that the vast diff erence in fi nancial million, total assets increased by 5%, investment trust Emirates REIT performance was due to a decision to fi nance and investments by 4%, customer Management announced in a statement provision against certain investments accounts by 2% while total equity that the role of its executive deputy and receivables on the back of a turbulent increased by 1%. chairman Sylvain Vieujot has been year. expanded to include those of the senior BiSB executive offi cer following the departure AUBK of Hannah Jeff ery. BAHRAIN: For the full year of 2015, KUWAIT: Ahli United Bank (AUBK) Bahrain Islamic Bank (BiSB) realized reported a decline in net profi ts in BHD11.2 million (US$29.72 million) in Allen & Overy 2015 to KWD42.8 million (US$142.81 net profi t, up 20% year-on-year. The bank GLOBAL: David Morley, the senior million) compared with KWD47 million noted in a statement that Islamic fi nances partner of Allen & Overy, will retire at (US$156.82 million) achieved in 2014, witnessed an increase of 16% for the the end of April and will be replaced according to Arab Times Online. Total reported period. by Wim Dejonghe – the fi rm’s global assets as of the 31st December 2015 rose to managing partner – with eff ect from st KWD3.9 billion (US$13.01 billion) from Takaful Emarat the 1 May 2016, the law fi rm said in a KWD3.6 billion (US$12.01 billion) driven statement. The appointment of the fi rm’s by an increase in fi nancing receivables to UAE: Takaful Emarat reported a growth managing partner will be announced. KWD2.68 billion (US$8.94 billion). in net profi t to AED10.21 million (US$2.78 million) in 2015, up 42% year- IMF Bank of Palestine on-year. According to a statement, total assets rose by 89% to AED439.26 million GLOBAL: Christine Lagarde has PALESTINE: For the full year of 2015, (US$119.56 million) for the reported been selected to serve as the managing Bank of Palestine recorded a 7.32% year- period. director of IMF for a second fi ve-year on-year growth in net profi t to US$43.16 term starting the 5th July 2016, the IMF million whereas total assets grew by confi rmed in a statement. 14.86% to US$2.78 billion, according to a SICO statement. BAHRAIN: For the 2015 fi nancial year, Securities & Investment Company (SICO) Deutsche Bank Emirates REIT recorded a 48% drop in net consolidated GLOBAL: Jamal Al Kishi has been profi t to BHD2.8 million (US$7.33 appointed as Deutsche Bank’s CEO of UAE: Emirates Real Estate Investment million) from BHD5.4 million (US$14.13 Middle East and Africa with immediate Trust (Emirates REIT) registered a net million) achieved in 2014. According to eff ect, replacing Ashok Aram who is profi t of US$61.5 million in 2015, up a statement, operating income for the relocating to Frankfurt as CEO of Europe, 26.7% from US$48.6 million in 2014. reported period stood at BHD8.4 million Middle East and Africa (excluding According to a statement, total assets (US$21.98 million), lower 32% year-on- Germany and the UK). stood at US$741.3 million in 2015, a year. 24.8% year-on-year growth. The bank noted in a statement that Alliance Financial Group Jamal’s appointment is subject to Al Rajhi Takaful regulatory approvals and that he will MALAYSIA: Alliance Financial Group remain as CEO of Deutsche Securities SAUDI ARABIA: Al Rajhi Company for recorded a net profi t after tax of RM135.6 Saudi Arabia and will chair the Middle Cooperative Insurance (Al Rajhi Takaful) million (US$32.3 million) for the July- East and Africa Executive Committ ee.

RATINGS BIBD’s outlook revised BRUNEI: Bank Islam Brunei Darussalam’s long-term issuer credit rating has been revised to negative from stable by S&P, who also aﬃ rmed its ‘A-‘ long-term and ‘A-2’ short-term issuer credit ratings.

According to a statement, the rating agency has lowered the bank’s long-term ASEAN regional scale rating to ‘axAA-’ from ‘axAA’ and aﬃ rmed its ‘axA-1’ short-term ASEAN regional scale rating, in line with the outlook revision.

Golden Assets’s IMTN downgraded INDONESIA: Golden Assets International Finance (Golden Assets)’s Islamic medium-term note program of up to RM5 billion (US$1.19 billion) (2012/2027) has been downgraded to ‘A1(s)’ from ‘AA3(s)’ by RAM with the negative outlook on the rating retained. China OIC Forum 22nd March 2016 According to a statement, the The Westin Beijing Financial Street, downgrade is premised on the continued Beijing deterioration of Golden Agri-Resources (GAR)’s credit metrics as a result of The new kid on the block, China has a substantial Muslim population and offers vast opportunities for investors. softer crude palm oil prices and elevated With Hong Kong’s recent sovereign issuances opening up a gateway to the market, this sleeping giant is finally debt levels. Golden Assets is a funding beginning to stir. With huge potential, we expect significant growth in years to come, and IFN is ideally placed to conduit owned by GAR. offer access to this interesting opportunity.

Perdana Petroleum’s In collaboration with the ICD, an introductory event is planned for 2016 to tackle specific requirements for the proposed Sukuk rated Chinese market including capital-raising techniques, investment opportunities, regulation, project and infrastructure finance and access to other markets. With significant international interest, IFN China Forum will be MALAYSIA: RAM has assigned a a groundbreaking introduction to Islamic opportunities in the world’s second-biggest economy. preliminary rating of ‘AAA(fg)/Stable’ on the RM650 million (US$154.47 million) fi ve-year tranche of Perdana REGISTER FREE NOW at Petroleum’s proposed RM650 million www.REDmoneyevents.com Sukuk Murabahah program (2016/2028), according to a statement. The rating is premised on an irrevocable and unconditional fi nancial guarantee extended by Danajamin Nasional (‘AAA/ Stable/P1’), which enhances the credit LEAD PARTNER profi le of the fi ve-year tranche beyond LUNCHEON SPONSOR Perdana Petroleum’s stand-alone credit strength. EXECUTIVE PARTNERS Qatar secures ‘AA/A-1+’ ratings LEAD MEDIA PARTNER INFORMATION PARTNER MULTILATERAL PARTNER QATAR: S&P has affi rmed Qatar’s long- term and short-term foreign and local currency sovereign credit ratings at ‘AA’ MEDIA PARTNERS and ‘A-1+’ respectively with a stable outlook. According to a statement, the ‘AA’ long-term issue ratings on bonds issued by Qatari Diar Finance and SoQ W: www.redmoneyevents.com | E: [email protected] | T: 603 2162 7800 ext. 43 | Twitter : #ChinaOIC16 Sukuk A have also been affi rmed.

S&P afϐirms Kuwait’s ratings ‘BBB-/A-3’ from ‘BBB+/A-2’ with a stable performance since incorporation and outlook. The rating agency noted in material erosion of its capital position. KUWAIT: The ‘AA/A-1+’ long and a statement that it has also revised its short-term foreign and local currency transfer and convertibility assessment on sovereign credit ratings on Kuwait have ADIB’s proposed Sukuk rated Oman to ‘BBB’ from ‘A-’. been affi rmed by S&P with a stable UAE: The respective preliminary outlook, according to a statement. The ‘AAA(s)’ and ‘AA1(s)’ ratings of the stable outlook refl ects the rating agency’s S&P lowers Bahrain’s ratings senior and subordinated Sukuk to be expectation that Kuwait’s overall fi scal BAHRAIN: The long and short-term issued under ADIB Sukuk Company and external balance sheets will remain foreign and local currency sovereign II’s proposed Islamic medium-term strong, backed by a signifi cant stock of credit ratings of Bahrain have been note program have been affi rmed by fi nancial assets. lowered to ‘BB/B’ from ‘BBB-/A-3’ by RAM, refl ecting Abu Dhabi Islamic S&P. According to a statement, S&P also Bank (ADIB)’s credit strength as it is the Brazil’s rating downgraded lowered the Kingdom’s long and short- obligor of the proposed Sukuk, according term foreign and local currency issuer to a statement. Concurrently, the rating BRAZIL: S&P announced in a statement credit ratings on the Central Bank of agency has also reaffi rmed the ‘AAA/ that it has lowered Brazil’s long-term Bahrain to ‘BB/B’, in line with the ratings Stable/P1’ fi nancial institution ratings foreign currency sovereign credit rating on the sovereign. The outlook on both of ADIB based on the rating agency’s to ‘BB’ from ‘BB+’ and its long-term local Bahrain and its central bank is stable. expectation of ready support from the currency sovereign credit rating to ‘BB’ government of Abu Dhabi and the from ‘BBB-‘. The ratings carry a negative UAE federal government given ADIB’s outlook. Concurrently, the rating agency S&P maintains Kuwait’s ownership structure and an established has also lowered the country’s short- ratings track record of government support. term local currency rating to ‘B’ from KUWAIT: S&P has affi rmed the ‘AA/A- ‘A-3’ while affi rming the ‘B’ short-term 1+’ long and short-term foreign and local Kazakhstan’s ratings foreign currency rating. The transfer currency sovereign credit ratings on and convertibility assessment of Brazil Kuwait with a stable outlook, according downgraded was also downgraded to ‘BBB-‘ from to a statement. Given the further decline KAZAKHSTAN: Kazakhstan’s long-term ‘BBB’. In addition, Brazil’s national scale in oil prices, S&P has revised its oil price foreign and local currency sovereign rating was also lowered to ‘brAA-’ from assumptions for 2016-19 down further. credit ratings have been downgraded ‘brAAA’ with a negative outlook. However, Kuwait has built up very large to ‘BBB-‘ from ‘BBB’ by S&P, which also fi scal and external net asset positions lowered the country’s short-term foreign CMS’s proposed Sukuk rated over many years, which will continue to and local currency ratings to ‘A-3’ from ‘AA3/Stable’ help it weather the current low oil price ‘A-2’ and the national scale rating to environment. ‘kzAA’ from ‘kzAA+’. According to a MALAYSIA: Cahya Mata Sarawak statement, the outlook on the long-term (CMS)’s proposed RM1 billion ratings is negative. (US$237.64 million) Sukuk Ijarah Saudi Arabia’s ratings program (2016/2036) has been assigned lowered KTG’s outlook positive an ‘AA3/Stable’ rating by RAM, who also SAUDI ARABIA: S&P has lowered reaffi rmed the ‘AA3/Stable/P1’ corporate Saudi Arabia’s unsolicited long and QATAR: S&P has revised its outlook credit ratings of CMS. According to a short-term foreign and local-currency on Al Khaleej Takaful Group (KTG) statement, the ratings are supported by sovereign credit ratings to ‘A-/A-2’ to positive from stable following a CMS’s strong business profi le as the sole from ‘A+/A-1’ and concurrently revised signifi cant improvement of KTG’s cement manufacturer in Sarawak. downward the transfer and convertibility operating performance in 2015, according assessment to ‘A’ from ‘AA-‘, according to a statement. The rating agency has Malta’s rating afϐirmed to a statement. The decline in oil prices, also affi rmed the ‘BBB’ long-term insurer fi nancial strength and counterparty MALTA: The ‘A’ long-term foreign and according to the rating agency, will have credit ratings on KTG. local currency issuer default ratings a marked and lasting impact on Saudi (IDRs) of Malta have been affi rmed by Arabia’s fi scal and economic indicators Fitch with a stable outlook, according given its high dependence on oil. The to a statement. Concurrently, the issue ratings carry a stable outlook. Join the most active Islamic ratings on the country’s senior unsecured finance focused group on foreign and local currency bonds have Watania’s ratings lowered Linked-In also been affi rmed at ‘A’. The rating UAE: AM Best has removed National agency has also affi rmed Malta’s short- Takaful Company (Watania) from under term foreign currency IDR at ‘F1’ and its review with negative implications and country ceiling at ‘AAA’. subsequently downgraded its fi nancial strength rating (FSR) to ‘B’ from ‘B+’ and S&P downgrades Oman’s also its issuer credit rating (ICR) to ‘bb+’ ratings from ‘bbb-‘, according to a statement. OMAN: S&P has lowered the long and Linkedin/ The outlook is stable for the FSR and short-term foreign and local currency negative for the ICR. The rating actions ISLAMICFINANCENEWS sovereign credit ratings on Oman to refl ect Watania’s weak underwriting

Expected date Company's name Size Structure Announcement Date TBA Khazanah Nasional TBA Sukuk 23rd February 2016 TBA Cahya Mata Sarawak RM1 billion Sukuk Ijarah 22th February 2016 TBA Perdana Petroleum RM650 million Sukuk Murabahah 18th February 2016 TBA Government of Malaysia TBA Sukuk 18th February 2016 Mar-16 Government of Indonesia TBA Sukuk 17th February 2016 Second quarter of 2016 Bank Albilad SAR1-2 billion Sukuk 11th February 2016 TBA Saudi Electricity Company US$2.5 billion Sukuk 16th February 2016 TBA Dubai Islamic Bank up to US$750 million Sukuk 10th February 2016 TBA Saudi Aramco TBA Sukuk 3rd February 2016 First quarter of 2016 IDB TBA Sukuk 2nd February 2016 2016 Kuwait Finance House TBA Sukuk 1st February 2016 TBA Oman Telecommunications US$130 million Sukuk 28th January 2016 May-16 Government of Nigeria TBA Sukuk 28th January 2016 March-April 2016 Government of Qatar TBA Sukuk 26th January 2016 2017 Government of Kenya TBA Sukuk 26th January 2016 Second quarter of Saudia up to SAR5 billion Sukuk 25th January 2016 2016 TBA Boubyan Bank US$250 million Sukuk 21st January 2016 TBA Emirate of Sharjah US$500 million Sukuk 21st January 2016 TBA Tenaga Nasional US$3 billion Sukuk 8th January 2016 TBA Toprak Mahsulleri Oﬁ si up to TRY600 million Sukuk 7th January 2016 TBA Government of Jordan JOD150 million Sukuk 7th January 2016 First quarter of 2016 Government of Egypt TBA Sukuk 7th December 2015 TBA Barwa Bank US$2 billion Sukuk 27th November 2015 TBA Sime Darby up to RM3 billion Sukuk 27th November 2015 TBA Samalaju Industrial Port up to RM950 million Sukuk Murabahah 27th November 2015 TBA Government of Kuwait TBA Sukuk 30th November 2015 TBA WAPDA PKR144 billion Sukuk 26th November 2015 TBA WAPDA PKR100 billion Sukuk 26th November 2015 TBA Kuveyt Turk US$400 million Sukuk 13th November 2015 TBA Widad Capital RM120 million Sukuk Murabahah 13th November 2015 TBA Hascol Petroleum PKR2 billion Sukuk 9th November 2015 TBA Emirates Airline US$500 million-US$1 Sukuk 9th November 2015 billion TBA CIMB Islamic RM5 billion Sukuk 6th November 2015 2016 Government of Indonesia IDR150 trillion Sukuk 9th October 2015 TBA MMC Corporation RM1.5 billion Sukuk Murabahah 13th October 2015 TBA Country Garden Real Estate RM1.5 billion Sukuk Murabahah 6th October 2015 First quarter of 2016 National Home Mortgage Finance PHP2 billion Sukuk 29th September 2015 Corp TBA HNA Group US$150 million Sukuk 11th September 2015 TBA Turkiye Finans TRY1.5 billion Sukuk 1st September 2015 2016 Government of Indonesia IDR12.2 trillion Sukuk 1st September 2015 By 2017 KT Bank EUR100 million Sukuk 11th June 2015 TBA TIME dotCom UP to RM1 billion Sukuk 19th August 2015 2016 Government of South Africa TBA Sukuk 13th February 2015 TBA Government of Niger XOF150 billion Sukuk 26th February 2015 TBA Government of Tunisia US$500 million Sukuk 13th January 2015 2016 Al Baraka Bank (Egypt) US$100 million Sukuk 12th August 2015 2016 Jordan Islamic Bank US$100 million Sukuk 12th August 2015

REDmoney Asia ex. Japan 6 Months REDmoney Europe 6 Months

All Cap Large Cap Medium Cap Small Cap All Cap Large Cap Medium Cap Small Cap 2500 1200

2090 1100

1680 1000

1270 900

860 800

450 700 Sep Oct Nov Dec Jan Feb Sep Oct Nov Dec Jan Feb

REDmoney GCC 6 Months REDmoney Global 6 Months

All Cap Large Cap Medium Cap Small Cap All Cap Large Cap Medium Cap Small Cap 1300 2200

1130 1896

960 1592

790 1288

620 984

450 680 Sep Oct Nov Dec Jan Feb Sep Oct Nov Dec Jan Feb

REDmoney MENA 6 Months REDmoney US 6 Months

All Cap Large Cap Medium Cap Small Cap All Cap Large Cap Medium Cap Small Cap 1150 2250

1000 1960

850 1670

700 1380

550 1090

400 800 Sep Oct Nov Dec Jan Feb Sep Oct Nov Dec Jan Feb

SAMI Halal Food Participation (All Cap) 6 months

2250

2110

1970

1830

1690

1550 Sept-2015 Oct-2015 Nov-2015 Dec-2015 Jan-2016 Feb-2016

REDmoney Global Shariah Index Series (All Cap) 6 Months REDmoney Global Shariah Index Series (Large Cap) 6 Months

REDmoney Asia ex. Japan REDmoney Global REDmoney Asia ex. Japan REDmoney Global REDmoney Europe REDmoney MENA REDmoney Europe REDmoney MENA REDmoney GCC REDmoney US REDmoney GCC REDmoney US 1400 1250

1210 1080

1020 910

830 740

640 570

450 400 Sep Oct Nov Dec Jan Feb Sep Oct Nov Dec Jan Feb

REDmoney Global Shariah Index Series (Medium Cap) 6 Months REDmoney Global Shariah Index Series (Small Cap) 6 Months

REDmoney Asia ex. Japan REDmoney Global REDmoney Asia ex. Japan REDmoney Global REDmoney Europe REDmoney MENA REDmoney Europe REDmoney MENA REDmoney GCC REDmoney US REDmoney GCC REDmoney US 2250 2450

1900 2060

1550 1670

1200 1280

850 890

500 500 Sep Oct Nov Dec Jan Feb Sep Oct Nov Dec Jan Feb

REDmoney Global Shariah

Equities are considered eligible for inclusion Utilities Basis Materials Telecomunication Services 2% 15% into the REDmoney Global Shariah Index 2% Series only if they pass a series of market Consumer Goods Services 15% related guidelines related to minimum market Technology capitalization and liquidity as well as country 14% restrictions. Energy 8% Once the index eligible universe is determined Non-Cyclical the underlying constituents are screened Consumer Goods Services 7% Financials using a set of business and ﬁ nancial Shariah 4% guidelines. Industrials Healthcare 22% 11%

IdealRatings™ is the leading provider of Shariah investment decision support tools to investors globally, including asset managers, brokers, index providers, and banks to empower them to develop, manage and monitor Shariah investment products and Shariah compliant funds. IdealRatings is headquartered in San Francisco, California. For more information about IdealRatings visit: www.idealratings.com

For further information regarding REDmoney Indexes contact: REDmoney Global Shariah Index Series Andrew Morgan Managing Director, REDmoney Group

RED Email: [email protected] Tel +603 2162 7800

Eurekahedge North America Islamic Fund Index 200 190 180 170 160 150 140 130 120 110 100

Index Values 90 80 70 60 50 Jan-04 Jan-08 Jan-12 Jan-16 Sep-02 Sep-06 Sep-10 Sep-14 Dec-99 May-01 May-05 May-09 May-13

Top 10 Monthly Returns for Developed Markets Funds Fund Fund Manager Performance Measure Fund Domicile 1 Al Rajhi Commodity Mudarabah Al Rajhi Bank 0.11 Saudi Arabia 2 Watani KD Money Market National Bank of Kuwait 0.04 Cayman Islands 3 BLME Umbrella Sicav - SIF - USD Income - Bank of London and The Middle East 0.02 Luxembourg Class B 4 Watani USD Money Market National Bank of Kuwait 0.01 Cayman Islands 5 Mashreq Al-Islami Income - Class B Mashreq Capital (DIFC) -0.35 UAE 6 EFH Global Sukuk Plus USD QInvest -0.48 Luxembourg 7 QInvest Sukuk QInvest -0.73 Cayman Islands 8 Deutsche Noor Precious Metals Securities - Class A DWS Noor Islamic Funds -1.00 Ireland 9 BLME Sharia'a Umbrella SICAV-SIF Global Sukuk Bank of London and The Middle East -1.52 Luxembourg - Class A USD 10 AmPrecious Metals AmInvestment Management -2.38 Malaysia Eurekahedge Islamic Fund Index (0.63) Based on 42.62% of funds which have reported January 2016 returns as at the 22nd February 2016 Top 10 Monthly Returns for Emerging Markets Funds Fund Fund Manager Performance Measure Fund Domicile 1 BNI-AM Dana Syariah BNI Asset Management 1.48 Indonesia 2 Danareksa Indeks Syariah Danareksa Investment Management 1.33 Indonesia 3 SI Dana Saham Syariah Batavia Prosperindo Aset Manajemen 1.27 Indonesia 4 Danareksa Syariah Berimbang Danareksa Investment Management 1.26 Indonesia 5 Libra AsnitaBond Libra Invest 1.06 Malaysia 6 Public Islamic Bond Public Mutual 0.86 Malaysia 7 AmBon Islam AmInvestment Management 0.75 Malaysia 8 Manulife Investment As-Saad MAAKL Mutual 0.75 Malaysia 9 CIMB Islamic Sukuk CIMB-Principal Asset Management 0.75 Malaysia 10 Mega Dana Obligasi Syariah Mega Capital Indonesia 0.74 Indonesia Eurekahedge Islamic Fund Index 1.03 Taking into account funds that have at least 12 months of returns as at the 22nd February 2016 Based on 57.59% of funds which have reported January 2016 returns as at the 22nd February 2016

Comprehensive data from Eurekahedge will now feature the overall top 10 global and regional funds based on a specifi c duration (yield to date, annualized returns, monthly returns), Sharpe ratio as well as delve into specifi c asset classes in the global arena – equity, fi xed income, money market, commodity, global investing (which would focus on funds investing with global mandate instead of a specifi c country or geographical region), fund of funds, real estate as well as the Sortino ratio. Each table covering the duration, region, asset class and ratio will be featured on a fi ve-week rotational basis.

Eurekahedge Islamic Fund Money Market Index over the last 5 years Eurekahedge Islamic Fund Money Market Index over the last 1 year

108 110 106 104 105 102 100 100 98

Percentage Percentage 95 96

94 90 92 90 85 Jul-15 Jul-13 Jul-11 Jan-16 Jan-15 Jun-15 Jan-16 Jan-11 Oct-15 Sep-15 Dec-15 Oct-14 Sep-12 Dec-13 Dec-11 Apr-15 Aug-15 Aug-15 Mar-15 Aug-15 Nov-15 May-15 Mar-15 Mar-13 May-14 May-12

Top 10 Global Money Market for Islamic Funds by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 Meezan Tahaﬀ uz Pension - Money Market Sub Al Meezan Investment Management 1.25 Pakistan 2 Atlas Pension Islamic - Money Market Sub Atlas Asset Management 0.90 Pakistan 3 Apex Dana Al Kanz Apex Investment Services 0.87 Malaysia 4 Public Islamic Money Market Public Mutual 0.85 Malaysia 5 PB Islamic Cash Plus Public Mutual 0.83 Malaysia 6 PB Islamic Cash Management Public Mutual 0.81 Malaysia 7 FALCOM SAR Murabaha FALCOM Financial Services 0.42 Saudi Arabia 8 Al Yusr Saudi Riyal Morabaha Saudi Hollandi Bank 0.40 Saudi Arabia 9 Al Rajhi Commodity Mudarabah - USD Al Rajhi Bank 0.31 Saudi Arabia 10 CIMB Islamic Money Market CIMB-Principal Asset Management 0.20 Malaysia Eurekahedge Islamic Fund Index 0.16 Based on 100.00% of funds which have reported January 2016 returns as at the 22nd February 2016 Top 10 Islamic Global Fixed Income Funds by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 Mega Dana Obligasi Syariah Mega Capital Indonesia 2.33 Indonesia 2 Libra AsnitaBond Libra Invest 2.25 Malaysia 3 BNI-AM Dana Syariah BNI Asset Management 2.21 Indonesia 4 MNC Dana Syariah MNC Asset Management 2.13 Indonesia 5 Meezan Islamic Income Al Meezan Investment Management 1.56 Pakistan 6 Public Islamic Bond Public Mutual 1.56 Malaysia 7 CIMB Islamic Sukuk CIMB-Principal Asset Management 1.55 Malaysia 8 PB Islamic Bond Public Mutual 1.49 Malaysia 9 AmBon Islam AmInvestment Management 1.45 Malaysia 10 Manulife Investment As-Saad MAAKL Mutual 1.38 Malaysia Eurekahedge Islamic Fund Index (1.51) Based on 66.67% of funds which have reported January 2016 returns as at the 22nd February 2016

Contact Eurekahedge To list your fund or update your fund information: [email protected] For further details on Eurekahedge: [email protected] Tel: +65 6212 0900

Disclaimer Copyright Eurekahedge 2007, All Rights Reserved. You, the user, may freely use the data for internal purposes and may reproduce the index data provided that reference to Eurekahedge is provided in your dissemination and/or reproduction. The information is provided on an “as is” basis and you assume and will bear all risk or associated costs in its use, and neither Islamic Finance news, Eurekahedge nor its aﬃ liates provide any express or implied warranty or representations as to originality, accuracy, completeness, timeliness, non-infringement, merchantability and ﬁ tness for any purpose.

Most Recent Global Sukuk Priced Issuer Nationality Instrument Market US$ (mln) Managers 17th Feb 2016 Prasarana Malaysia Malaysia Sukuk Domestic market 733 RHB Capital, Maybank, Kenanga public issue Investment Bank, CIMB Group, AmInvestment Bank 15th Feb 2016 Danga Capital Malaysia Sukuk Domestic market 360 RHB Capital, AmInvestment Bank public issue 4th Feb 2016 UMW Holdings Malaysia Sukuk Domestic 112 Standard Chartered Bank, Maybank market private placement 4th Feb 2016 Maybank Islamic Malaysia Sukuk Domestic market 238 Maybank public issue 26th Jan 2016 EKVE Malaysia Sukuk Domestic market 234 Maybank public issue 22nd Jan 2016 Cagamas Malaysia Sukuk Domestic market 111 CIMB Group public issue 21st Jan 2016 Pengurusan Air SPV Malaysia Sukuk Domestic market 399 RHB Capital, Maybank public issue 20th Jan 2016 Emirate of Sharjah UAE Sukuk Euro market 500 Bank of Sharjah, HSBC, Barclays, Dubai public issue Islamic Bank, Sharjah Islamic Bank, Commerzbank Group 11th Jan 2016 Oman Oman Sukuk Euro market 130 Standard Chartered Bank, HSBC, National Telecommunications public issue Bank of Oman, ABC Capital 21st Dec 2015 Cagamas Malaysia Sukuk Domestic market 101 Maybank public issue 15th Dec 2015 Samalaju Industrial Malaysia Sukuk Domestic market 161 CIMB Group Port public issue 14th Dec 2015 Perodua Global Malaysia Sukuk Domestic market 162 Maybank Manufacturing public issue 3rd Dec 2015 Prasarana Malaysia Malaysia Sukuk Domestic market 459 RHB Capital, Maybank, Kenanga public issue Investment Bank, CIMB Group, AmInvestment Bank 26th Nov 2015 Rantau Abang Malaysia Sukuk Domestic market 238 RHB Capital Capital public issue 24th Nov 2015 Albaraka Turk Turkey Sukuk Euro market 250 Standard Chartered Bank, Nomura, Dubai Katilim Bankasi public issue Islamic Bank, Emirates NBD, QInvest, Barwa Bank, Noor Bank 23rd Nov 2015 Jimah East Power Malaysia Sukuk Domestic market 2,100 HSBC, Maybank, CIMB Group public issue 13th Nov 2015 Cagamas Malaysia Sukuk Domestic market 114 CIMB Group public issue 12th Nov 2015 Axiata SPV2 Malaysia Sukuk Euro market 500 Deutsche Bank, CIMB Group public issue 3rd Nov 2015 MMC Corporation Malaysia Sukuk Domestic market 279 RHB Capital public issue 2nd Nov 2015 DanaInfra Nasional Malaysia Sukuk Domestic market 727 HSBC, RHB Capital, Maybank, CIMB public issue Group, AmInvestment Bank

Global Sukuk Volume by Month Global Sukuk Volume by Quarter

US$bn US$m US$bn Value (US$bn) Avg Size (US$m) US$m 8 1500 18 600 Value (US$bn) 7 16 Avg Size (US$m) 1250 500 6 14 12 5 1000 400 10 300 4 750 8 3 500 6 200 2 4 100 1 250 2 0 0 0 0 122 3 4 5 6 7 8 9 10 11 12 1 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2015 2016 2011 2012 2013 2014 2015 2016

Top 30 Issuers of Global Sukuk 12 Months Issuer Nationality Instrument Market US$ Iss Managers (mln) (%) 1 Jimah East Power Malaysia Sukuk Domestic market 2,100 6.2 HSBC, Maybank, CIMB Group public issue 2 Perusahaan Penerbit Indonesia Sukuk Euro market 2,000 5.9 JPMorgan, HSBC, Dubai Islamic Bank, CIMB Group SBSN Indonesia III public issue 3 Prasarana Malaysia Malaysia Sukuk Domestic market 1,732 5.1 RHB Capital, Kenanga Investment Bank, CIMB Group, Aﬃ n public issue Investment Bank, AmInvestment Bank, Maybank 4 DanaInfra Nasional Malaysia Sukuk Domestic market 1,670 4.9 RHB Capital, Maybank, CIMB Group, Aﬃ n Investment Bank, public issue AmInvestment Bank, HSBC 5 Malaysia Sovereign Malaysia Sukuk Euro market 1,500 4.4 Standard Chartered Bank, HSBC, CIMB Group Sukuk public issue 6 IDB Trust Services Saudi Sukuk Euro market 1,336 3.9 Saudi National Commercial Bank, Standard Chartered Bank, Arabia public issue HSBC, National Bank of Abu Dhabi, RHB Capital, Dubai Islamic Bank, Gulf International Bank, Natixis, CIMB Group 7 Petronas Global Malaysia Sukuk Euro market 1,250 3.7 JPMorgan, Deutsche Bank, Morgan Stanley, HSBC, Maybank, Sukuk public issue Mitsubishi UFJ Financial Group, CIMB Group, Citigroup, Bank of America Merrill Lynch 8 National Shipping Saudi Sukuk Domestic market 1,040 3.1 JPMorgan, HSBC, Samba Capital of Saudi Arabia Arabia public issue 9 Hong Kong Sukuk Hong Sukuk Euro market 1,000 3.0 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, 2015 Kong public issue CIMB Group 9 Government of Ras UAE Sukuk Euro market 1,000 3.0 JPMorgan, National Bank of Abu Dhabi, Citigroup, Al Hilal Bank Al Khaimah public issue 11 Pengurusan Air SPV Malaysia Sukuk Domestic market 924 2.7 Maybank, Bank Islam Malaysia, CIMB Group, RHB Capital public issue 12 Emirates Airlines UAE Sukuk Euro market 913 2.7 Standard Chartered Bank, JPMorgan, HSBC, National Bank public issue of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Citigroup, Emirates NBD 13 Danga Capital Malaysia Sukuk Domestic market 906 2.7 RHB Capital, CIMB Group, AmInvestment Bank public issue 14 Qatar Islamic Bank Qatar Sukuk Euro market 750 2.2 Standard Chartered Bank, HSBC, Citigroup, QInvest, Barwa public issue Bank, Noor Bank 14 Dubai Islamic Bank UAE Sukuk Euro market 750 2.2 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, public issue First Gulf Bank, Maybank, Dubai Islamic Bank 16 Sultanate of Oman Oman Sukuk Euro market 649 1.9 Bank Muscat public issue 17 Jana Kapital Malaysia Sukuk Domestic market 622 1.8 RHB Capital public issue 18 Rantau Abang Malaysia Sukuk Domestic market 595 1.8 CIMB Group, AmInvestment Bank, RHB Capital Capital public issue 19 Jambatan Kedua Malaysia Sukuk Domestic market 560 1.7 RHB Capital, Maybank, Kenanga Investment Bank, public issue AmInvestment Bank 20 Arab National Bank Saudi Sukuk Domestic market 533 1.6 JPMorgan, Deutsche Bank, HSBC, Arab National Bank Arabia public issue 21 Sharjah Islamic UAE Sukuk Euro market 500 1.5 Standard Chartered Bank, HSBC, Kuwait Finance House, Dubai Bank public issue Islamic Bank, Abu Dhabi Islamic Bank, Emirates NBD, Al Hilal Bank, Noor Bank 21 Noor Bank UAE Sukuk Euro market 500 1.5 Standard Chartered Bank, Dubai Islamic Bank, South Indian Bank, public issue Citigroup, Emirates NBD, Al Hilal Bank, QInvest, Barwa Bank 21 Emirate of Sharjah UAE Sukuk Euro market 500 1.5 Bank of Sharjah, HSBC, Barclays, Dubai Islamic Bank, Sharjah public issue Islamic Bank, Commerzbank Group 21 Axiata SPV2 Malaysia Sukuk Euro market 500 1.5 Deutsche Bank, CIMB Group public issue 21 Arab Petroleum Saudi Sukuk Euro market 500 1.5 Saudi National Commercial Bank, Standard Chartered Bank, Investments Arabia public issue Goldman Sachs, First Gulf Bank, Emirates NBD, Noor Bank 26 Majid Al Futt aim UAE Sukuk Euro market 499 1.5 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, Properties public issue Dubai Islamic Bank, Abu Dhabi Islamic Bank 27 Garuda Indonesia Indonesia Sukuk Euro market 496 1.5 Standard Chartered Bank, Deutsche Bank, ANZ, National Bank Global Sukuk public issue of Abu Dhabi, First Gulf Bank, Maybank, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD, Al Hilal Bank, Warba Bank, Noor Bank 28 Malaysia Building Malaysia Sukuk Domestic market 452 1.3 RHB Capital Society public issue 29 Almarai Saudi Sukuk Domestic market 427 1.3 HSBC, Samba Capital Arabia public issue 30 SABB Saudi Sukuk Domestic market 400 1.2 HSBC Arabia private placement Total 33,932 100

Top Managers of Sukuk 12 Months Sukuk Volume by Currency US$ (billion) 12 Months

Manager US$ (mln) Iss % Malaysian ringgit 15.7 1 CIMB Group 5,283 43 15.6 US dollar 14.7 2 RHB Capital 4,274 36 12.6 2.4 3 HSBC 4,258 24 12.6 Saudi riyal

4 Maybank 4,028 33 11.9 Omani rial 0.7

5 AmInvestment Bank 2,039 20 6.0 6 Standard Chartered Bank 1,885 19 5.6 Sukuk Volume by Issuer Nation US$ (billion) 12 Months

7 JPMorgan 1,483 6 4.4 Malaysia 18.9 8 Dubai Islamic Bank 1,260 11 3.7 UAE 4.7 Saudi Arabia 4.2 9 National Bank of Abu Dhabi 1,056 9 3.1 Indonesia 2.5 10 Citigroup 691 5 2.0 Hong Kong 1.0 11 Kenanga Investment Bank 661 16 2.0 Qatar 0.8 12 Bank Muscat 649 1 1.9 Oman 0.8 13 Deutsche Bank 564 4 1.7 14 Samba Capital 560 2 1.7 Global Sukuk Volume by Sector 12 Months 15 Natixis 447 2 1.3 16 Emirates NBD 440 7 1.3 17% Finance 34% 17 Al Hilal Bank 416 4 1.2 4% Government Transportation 18 Aﬃ n Investment Bank 358 4 1.1 10% Construction/Building 19 Noor Bank 348 5 1.0 Oil & Gas 14% Other 20 Abu Dhabi Islamic Bank 276 3 0.8 21% 21 First Gulf Bank 250 3 0.7 22 Hong Leong Financial Group 248 4 0.7 Global Sukuk Volume - US$ Analysis 23 QInvest 223 3 0.7 23 Barwa Bank 223 3 0.7 US$bn US$m 25 Saudi National Commercial Bank 194 2 0.6 18 600 16 Non-US$ US$ 500 26 Morgan Stanley 139 1 0.4 14 12 400 10 26 Mitsubishi UFJ Financial Group 139 1 0.4 300 8 26 Bank of America Merrill Lynch 139 1 0.4 6 200 4 100 29 Arab National Bank 133 1 0.4 2 0 0 30 Bank Islam Malaysia 129 2 0.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2011 2012 2013 2014 2015 2016 Total 33,932 126 100

Top Islamic Finance Related Project Finance Mandated Lead Top Islamic Finance Related Project Financing Legal Advisors Arrangers 12 Months Ranking 12 Months Mandated Lead Arranger US$ (million) No % Legal Advisor US$ (million) No % 1 Sumitomo Mitsui Financial Group 1,529 2 20.5 1 White & Case 3,581 2 24.5 2 HSBC 617 3 8.3 2 Salans FMC SNR Denton Group 3,354 2 22.9 3 Mitsubishi UFJ Financial Group 529 2 7.1 3 Milbank Tweed Hadley & McCloy 2,704 1 18.5 3 Mizuho Financial Group 529 2 7.1 4 Adnan Sundra & Low 1,361 1 9.3 5 Banque Saudi Fransi 528 2 7.1 4 Zaid Ibrahim & Co 1,361 1 9.3 6 National Commercial Bank 438 3 5.9 6 Chadbourne & Parke 988 2 6.7 7 Riyad Bank 417 1 5.6 7 King & Spalding 877 1 6.0 8 First Gulf Bank 414 4 5.5 8 Norton Rose Fulbright 110 1 0.8 8 Shearman & Sterling 110 1 0.8 9 Samba Capital & Investment 390 3 5.2 Management 10 Allen & Overy 100 1 0.7 10 Arab National Bank 299 2 4.0 10 Baker & McKenzie 100 1 0.7

Top Islamic Finance Related Financing Mandated Lead Arrangers Ranking 12 Months Top Islamic Finance Related Financing Deal List 12 Months Mandated Lead Arranger US$ (mln) No % Credit Date Borrower Nationality US$ (mln) 1 First Gulf Bank 1,132 14 5.8 30th Mar 2015 Saudi Aramco Saudi Arabia 9,999 2 Saudi National Commercial Bank 971 6 5.0 16th Mar 2015 Rabigh Reﬁ ning & Saudi Arabia 2,870 3 Samba Capital 940 6 4.8 Petrochemical 4 Banque Saudi Fransi 858 4 4.4 24th Jun 2015 Jazan Gas Projects Saudi Arabia 1,790 5 Abu Dhabi Islamic Bank 852 10 4.4 18th Jun 2015 Emirates National Oil UAE 1,500 6 HSBC 839 9 4.3 10th Mar 2015 Port & Free Zone World UAE 1,100 7 Mashreqbank 761 9 3.9 17th Apr 2015 Turkiye Vakiﬂ ar Bankasi Turkey 1,021 8 Emirates NBD 702 10 3.6 24th Dec 2015 Sindh Engro Coal Mining Pakistan 1,010 9 Noor Bank 567 8 2.9 Engro Powergen 10 Abu Dhabi Commercial Bank 521 5 2.7 28th Jul 2015 GEMS Education UAE 817 11 Alinma Bank 490 2 2.5 16th Aug 2015 ACWA Power International Saudi Arabia 769 12 Riyad Bank 485 2 2.5 11th Dec 2015 Cititower Malaysia 751 13 Dubai Islamic Bank 467 7 2.4 14 Standard Chartered Bank 453 7 2.3 Top Islamic Finance Related Financing by Country 12 Months 15 Arab Banking Corporation 371 6 1.9 Nationality US$ (mln) No % 16 Maybank 370 2 1.9 1 UAE 7,222 19 37.1 2 Saudi Arabia 5,245 4 26.9 17 Gulf International Bank 347 4 1.8 3 Turkey 1,912 4 9.8 18 National Bank of Abu Dhabi 344 5 1.8 4 Pakistan 1,633 4 8.4 19 CIMB Group 338 1 1.7 5 Qatar 1,200 3 6.2 20 Industrial & Commercial Bank of China 337 3 1.7 6 Malaysia 847 3 4.4 21 Barwa Bank 326 4 1.7 7 Egypt 382 2 2.0 22 Sumitomo Mitsui Financial Group 274 3 1.4 8 Kuwait 362 2 1.9 22 SG Corporate & Investment Banking 274 3 1.4 9 Cayman Islands 325 1 1.7 24 China Development Bank 267 1 1.4 10 Jordan 275 1 1.4 24 China Construction Bank 267 1 1.4 11 Italy 75 1 0.4 26 Kuwait Finance House 241 2 1.2 Top Islamic Finance Related Financing by Sector 12 Months 27 Mizuho 221 2 1.1

27 Mitsubishi UFJ Financial Group 221 2 1.1 Oil & Gas 29 Citigroup 215 4 1.1 Utility & Energy 30 Qatar Islamic Bank 208 3 1.1 Finance

Top Islamic Finance Related Financing Mandated Lead Arrangers Transportation 12 Months Bookrunner US$ (mln) No % Mining 1 Mashreqbank 1,549 6 14.7 US$ bln0 128 3 4 5 6 7 2 Abu Dhabi Islamic Bank 1,141 5 10.8 Global Islamic Financing - Years to Maturity (YTD Comparison) 3 Noor Bank 1,013 5 9.6 4 Saudi National Commercial Bank 666 1 6.3 2015 2014 4 Riyad Bank 666 1 6.3 2013 4 Alinma Bank 666 1 6.3 2012 7 Emirates NBD 519 4 4.9 2011 2010 8 Dubai Islamic Bank 376 2 3.6 2009 9 Standard Chartered Bank 354 3 3.4 2008 10 Maybank 338 1 3.2 0% 20% 40% 60% 80% 100% 0-3yrs 3-5yrs 5-7yrs 7-10yrs 10+yrs 10 CIMB Group 338 1 3.2

Are your deals listed here? If you feel that the information within these tables is inaccurate, you may contact the following directly: Shireen Farhana (Media Relations) Email: [email protected] Tel: +852 2804 1223

events training MARCH 2016 FEBRUARY 2016 IFN CIS & Russia 15th Moscow, Russia Forum 24th – 25th Islamic Trade Financing Kuala Lumpur, 22nd IFN China Forum Beijing, China Products: Key Shariah, Malaysia Structuring & Legal Issues APRIL 2016

6th – 7th IFN Asia Forum Jakarta, Indonesia MARCH 2016

21st IFN Europe Forum Luxembourg 6th – 7th Structuring Sukuk & Muscat, Oman Islamic Securitization MAY 2016 15th – 17th Structuring Islamic Trade Riyadh, Saudi Arabia IFN Project & Finance Solutions 24th Infrastructure Finance Dubai, UAE Forum

th th AUGUST 2016 15 – 17 Islamic Asset Management Kuala Lumpur, Products & Investment Malaysia 23rd IFN Iran Forum Tehran, Iran Strategies

SEPTEMBER 2016 20th – 22nd Islamic Asset Management Dubai, UAE Products & Investment 6th IFN Investor Forum Kuala Lumpur, Malaysia Strategies

28th IFN Turkey Forum Istanbul, Turkey 21st – 22nd Structuring Islamic Kuala Lumpur, Investment Accounts Malaysia OCTOBER 2016

Africa Islamic Finance 17th – 18th Abidjan, Côte d’Ivoire 29th – 31st Basel III & IFSB Dubai, UAE Forum Regulations for Islamic Financial Institutions 24th IFN Kuwait Forum Kuwait City, Kuwait

th th NOVEMBER 2016 28 – 29 Rescheduling, Kuala Lumpur, Restructuring & Recovery Malaysia IFN Saudi Arabia of Islamic Finance 28th Jeddah, Saudi Arabia Forum Facilities

Designer [email protected] Director [email protected] Deputy Publisher Geraldine Chan (Dubai oﬃ ce) Senior ProductionMohamad Rozman Besiri & Director [email protected] Group Lauren McAughtry Designer [email protected] Managing Editor [email protected] Managing Andrew Tebbutt Associate Steve Stubbs Director andrew.tebbutt @REDmoneygroup.com Editor Vineeta Tan Publisher [email protected] [email protected] Tel: +603 2162 7800 x 55 Managing Director Andrew Morgan Senior Sasikala Thiagaraja Associate Sandra Spencer & Publisher [email protected] Contributions [email protected] Publisher [email protected] Editor Tel: +9714 427 3624 Published By: Senior Copy Kenny Ng Subscriptions Faizan Haider MALAYSIA UAE Editor [email protected] Manager [email protected] Suite 22-06, 22nd Floor PO Box 126732, 3rd Floor, Tel: +603 2162 7800 x 24 Menara Tan & Tan X2 Tower, Jumeirah Lake Journalist Nurul Ashikin Abd Halim 207, Jalan Tun Razak Tower (JLT), Jumeirah Bay, [email protected] Subscriptions Dia Jabassini 50400 Kuala Lumpur, Malaysia Dubai, UAE Tel: +603 2162 7800 Tel: +971 4 427 36 23 Manager [email protected] Head of Hasnani Aspari Fax: +603 2162 7810 Fax: +971 4 431 4614 Tel: +603 2162 7800 ext 38 Production [email protected] Subscriptions Puja Nagi (Dubai Oﬃ ce) Senior ProductionNorzabidi Abdullah Account [email protected] Manager [email protected] Manager Tel: +971 4 427 3638 Senior Graphic Eumir Shazwan Kamal Bahrin Finance Faizah Hassan

DISCLAIMER All rights reserved. No part of this publication may be reproduced, duplicated or copied by any means without the prior consent of the holder of the copyright, requests for which should be addressed to the publisher. While every care is taken in the preparation of this publication, no responsibility can be accepted for any errors, however caused.

4 Madonne Caseifi cio dell’Emilia 4 Citi Indonesia 26 Maybank Islamic 10 Aafaq Education 8 Citigroup 9 Meezan Bank 5 Aafaq Islamic Finance 8 Cleary Gott lieb Steen & Hamilton 14 Melli Bank 9 AAOIFI 11, 16 Cobalt Underwriting 13, 21 Millennia Global Research House 18 Abu Dhabi Financial Group 25 CONSOB 4 Money and Credit Council 25 Abu Dhabi Global Market 25 Credit Agricole CIB 3 Moody’s 25, 26 Abu Dhabi Islamic Bank 29 CREPMF 14 National Bank of Kuwait 6 ADIB Sukuk Company II 29 Crescent Capital 10 National Commercial Bank 25 Affi n Islamic 10 CrescentRating 23 National Takaful Company (Watania) 29 Afghanistan International Bank 20 Da Afghanistan Bank 19 Nctm Studio Legale 3, 4 Ahli United Bank 27 DagangHalal 24 AIR Worldwide 21 Danajamin Nasional 5, 28 NoorAssur 12 Al Baraka Banking Group 27 Danareksa 23 OECD 1, 12 Al Khaleej Takaful Group 29 Dar Al Sharia 5 Ooredoo 22 Al Rajhi Takaful 27 DBS 23 Otoritas Jasa Keuangan 24, 26 Alinma Investment Company 9, 22 Debt Management Offi ce of Nigeria 7, 24 Perdana Petroleum 28 Allen & Overy 27 Deloitt e 14 Perusahaan Pengelola Aset 23 Alliance Financial Group 27 Deutsche Bank 27 Philippines Department of Tourism 23 AM Best 29 Dubai Financial Market 13, 25 Prasarana 22 Associazione Bancaria Italiana 1 Ecobank 24 PruBSN Takaful CEO 5 Azerbaijan CIS Islamic Banking Advisory Council 23 Emirates College of Technology 8 Qatar Islamic Bank 23 Bahana Pembinaan Usaha Indonesia 23 Emirates REIT 27 Qatari Diar Finance 28 Bahrain Islamic Bank 27 Emirates REIT Management 27 QInvest 10 Banca Monte Dei Paschi di Siena 1 Employees Provident Fund 5, 26 Raeed Holdings 10 Bank Islam 10 European Central Bank 9, 12 RAM 12, 28, 29 Bank Islam Brunei Darussalam 28 European Council 26 Bank Mandiri 22, 23 Faysal Bank 23 Rawabi Holding 9 Bank Mellat 25, 26 FCTC 14 Rawabi Vallianz Off shore Services 9, 22 Bank Muamalat 10 Financial Services Regulatory Authority 25 RBC Capital Markets 9 Bank Negara Indonesia 22, 23 Fitch 6, 23, 26 RHB Islamic 17 Bank Negara Malaysia 5, 10, 17, 22, 24 Franklin Templeton GSC Asset Management 5 RMS 21 Bank of England 9 GFH Financial Group 25 Robert Walters 8 Bank of Italy 4 GIB Capital 9, 22 S&P 9, 28, 29 Bank of Lebanon 25 Golden Agri-Resources 28 Samba Bank 26 Bank of Palestine 27 Golden Assets International Finance 28 Saudi Arabian Monetary Agency 23 Bank of Tokyo-Mitsubishi (Malaysia) 5 Harakat-Afghanistan Investment Climate Organization 20 Saudi Fransi Capital 9, 22 Bank Rakyat 10 Hogan Lovells 14 Saudi Hollandi Capital 9, 22 Bank Rakyat Indonesia 22, 23 HSBC 11 Schroder Investment Management Indonesia 26 Bank Sepah International 9 IAP Integrated 10 Securities & Investment Company 27 Bank Simpanan Nasional 10 ICD 14 Bank Tabungan Negara 23 Icopal 25 Securities and Exchange Commission of Nigeria 7, 24 Barkat Islamic Banking 23 IDB 23, 24, 25 Societe Generale 12 BCA Research 6 IFSB 11, 13 St Mary College 11 BEST Solutions 23 IILM 22 Standard Chartered 23, 26 BNP Paribas 12 IMF 27 Sun Life Takaful Malaysia 17 Borsa Italiano 1, 3 Infrastructure Concession Regulatory Commission of Nigeria 16 Swiber Holdings 9 BTN Syariah 23 Inovest 27 Swiss Life 12 Cahya Mata Sarawak 29 Integrated Capital 25 Takaful Emarat 27 Cambridge Center of Risk Studies 21 International Organization for Standardization 13 UBL Fund Managers 26, 27 CBRE 12 International Trade Center 13 UN Institute for Training and Research 15 Central Bank of Bahrain 23, 29 Investcorp 25, 27 Unicredit 1 Central Bank of Egypt 24 ISFIN 4 United Bank (Egypt) 24 Central Bank of Iran 25, 26 ITFC 25, 26 United Nations Industrial Development Organization 13 Central Bank of Jordan 13 Jersey Financial Services Commission 25 University College of Bahrain 8 Central Bank of Oman 26 Khazanah Nasional 5, 23 Central Bank of Sri Lanka 23 Kuwait Finance House 6 Vakif Katilim 24 Chartered Institute for Securities and Investment 8 Lazard & Co 25 Vakifb ank 24 CIMB 23 Lloyd’s 13, 21 Vallianz Capital 9 CIMB Group 5 London Stock Exchange 24 Vallianz Holdings 9, 22 CIMB Islamic 5, 17 Manulife Aset Manajemen Indonesia 26 Warba Bank 6

Each subscription will receive: Subscribe me to Ȋ 50 issues of Islamic Finance news available every Wednesday INDIVIDUAL SUBSCRIPTION COMPANY WIDE SUBSCRIPTION GROUP WIDE SUBSCRIPTION Ȋ Daily ne s alerts ŗ USǞŗǰŘśŖ Ĵ ŗ Year at USǞśǰŘśŖ neĴ 1 Year: US$12,500 Ȋ Exclusive login details for each subscriber Ř USǞŘǰŘśŖ Ĵ Ř Years at USǞşǰŚśŖ neĴ 2 Years: US$22,500 Ȋ Unlimited access to entire archived library (Max: 10 Individual Subscriptions) Ȋ All additional supplements, guides and reports YOUR DETAILS

Full Name: (First Name) (Surname) Company Name: Job Title:

Address:

Postal/Zip: Country:

Work Email: Telephone: Fax:

Payment can be made in US$ by: Credit Card Ȯ Go to ǯislamicęnancene sǯcom/subscribeǯasp Check Telegraphic Transfer (T/T) Please send your T/T advice ith your subscription form to us either by post or faxǯ A conęrmation ill be sent once payment is receivedǯ Subscription is not conęrmed until payment has been made in fullǯ * All currency conversion will be applicable to the date of invoice. All prices above are not inclusive of taxes, 6% service tax will be imposed to Malaysian based subscriber.

How to subscribe: [email protected] ¢si oĜceǱ Suite 22-06, 22nd Floor, Menara Tan & Tan, 207, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia T +603 2162 7800 F +603 2162 7810 Dubi oĜceǱ 3/F, X2 Tower, Jumeirah Lake Towers (JLT), Jumeirah Bay, PO Box 126732, Dubai, UAE T +971 4427 3600 F +971 4431 4614 NE-IFN13/08