Saudi Arabia Had Assets of Over Ashar Nazim, the Global Head of from Both the Bahraini and Malaysian US$82 Billion in 2015, Kuwait Finance Islamic ﬁ Nance for EY

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(All Cap) Indonesia’s International Halal hotels Women in 1100 corporate Sukuk mining fi rms hunting for Islamic Finance: 1050 979.76 struggle: Bank look to Islamic the affl uent PowerTalk — 1000 0.6% Syariah Mandiri fi nance in the Muslim Dr Aishath 950 973.84 to the rescue?...6 Middle East...7 traveler ...8 Muneeza...14 900 TMSSFTW

COVER STORY 8th June 2016 (Volume 13 Issue 23) Islamic megabank: A false debate?

Last month, the Turkish government Islamic bank had it not fallen through in management services, and capitalized announced plans for yet another January 2015. Subsequently, Indonesia highly enough to be able to compete Islamic megabank to be launched by joined the fray with yet another with conventional players to off er cost- the end of the year — the latest in merger bid, this time for the Shariah eff ective tenders for major projects. In a long line of att empts to create an compliant units of a number of state- particular, an institution able to issue industry giant. With rumors swirling owned entities including Bank Mandiri, high-quality Islamic papers would and litt le information forthcoming, Bank Negara Indonesia, Bank Rakyat remove a signifi cant impediment LAUREN MCAUGHTRY asks just Indonesia and Bank Tabungan Negara to growth within the industry. And what an Islamic ‘megabank’ would do in order to fund infrastructure projects although there are currently at least for us — and whether we really need and quadruple Indonesia’s Islamic 22 Islamic banks globally with US$1 one at all? banking assets to 20% by 2018. billion or more of equity capital, some observers think this is not enough. A brief history lesson Driving force The idea of an Islamic megabank has So what is the reason behind these “The industry is ripe to go global. There been circulating for years, with multiple continued att empts to launch a is a dire need for Shariah compliant failures from a variety of markets. ‘megabank’ despite repeated failures? banks with sizeable balance sheets In 2009, Malaysia’s central bank fi rst The Islamic fi nance industry already that can facilitate large infrastructure posited the idea, while in 2011 an has a number of large banks — Al Rajhi and cross-border transactions,” thinks att empt received initial approvals in Saudi Arabia had assets of over Ashar Nazim, the global head of from both the Bahraini and Malaysian US$82 billion in 2015, Kuwait Finance Islamic fi nance for EY. “This absence is governments. In 2012, the IDB stepped House followed not far behind with seriously holding back the industry. into the game with support from Saudi’s US$56.8 billion and Dubai Islamic Bank Dallah Albaraka Group and the Qatar with US$33.73 billion, while Iranian Identity crisis Government and a goal of between banks alone are thought to But what will a ‘megabank’ actually US$3-10 billion in capital to account for up to 40% of do? Of the multiple previous att empts, fi nance profi table ventures in OIC global Islamic assets. There some have been from governments, countries — which again did not appears to be no shortage some from multilateral institutions and materialize. of capital. some from private institutions merging to create a stronger entity — the goals in A more recent att empt came However, what the each case seemed very diff erent, ranging again from Malaysia, in the form industry does lack is a from the creation of a regional lender of of a planned merger between lender of last resort: a cross- last resort to a simple size advantage in CIMB Group, RHB Capital and border institution able to the local market. Surely the new bank Malaysia Building Society act as a competitive will have to defi ne its identity before it which would have force to provide both can make any real impact — and after so resulted in the formation fi nancial support many failed att empts, many are already of the nation’s biggest and liquidity 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 23 Otoritas Jasa Keuangan S&P withdraws ‘B+’ ratings DEALS expects to fi nalize Islamic of Egyptian Life Takaful IFN Rapids ...... 2 Perodua Global REITs rules in second half after affi rmation IFN Reports: of 2016; to include tax Manufacturing partially Meezan Bank maintains incentive • Indonesia’s corporate Sukuk struggle: Bank redeems Islamic medium- ‘AA/A-1+’ ratings with a Syariah Mandiri to the rescue? • International term notes Bank Negara Malaysia stable outlook establishes dedicated mining fi rms look to Islamic fi nance in the Middle Indonesia awards IDR4.93 Etiqa Group maintains ‘A’ group to regulate fi nancial East • Halal hotels hunting for the affl uent Muslim trillion (US$360.88 million) rating in sovereign Sukuk technological innovations traveler • Islamic fi nance in India: Regulatory including fi ntech Moody’s affi rms Lebanon’s hurdles remain • IIFM and ISDA launch new GFH Financial Group ‘B2’ ratings, with outlook Indonesian peer-to-peer plans US$150 million Sukuk remaining negative standards to assist Islamic fi nancial institutions lending marketplace plans hedge against currency risks • Dubai-based property Turkey prices US$1 billion Shariah compliant off erings Noble Group removes fi ve-year Sukuk at 4.25% rating on its RM3 billion developer turns to Islamic fi nancing for new project Indonesia to form task (US$722.6 million) Sukuk in MotorCity • Egyptian banks on solid ground Mohammed Al Barwani forces to supervise and Holding to raise US$150 Murabahah program despite weaker GDP growth • Turkey back in the expedite implementation of million from private Sukuk Economic Policy Packages RAM delays annual review spotlight, while Pakistan shelves its upcoming market of Al Bayan’s Sukuk Bangladesh keen to join issuance • Malaysia prepares to welcome fi rst Basel program Horizon Hills Turkey, Indonesia and III subordinated Sukuk program by development Development seeks consent Saudi Arabia to set up IDB’s Maybank Indonesia to fi nancial institution • Ekovest plans to part-fund from investors for new Islamic infrastructure bank issue up to IDR700 billion fi nancing (US$52.08 million)-worth of billion-dollar highway project with Sukuk ...... 6 ICB Islamic Bank has no Sukuk Sunway Treasury Sukuk merger plans, says CEO issues Islamic commercial Moody’s maintains IFN Analysis: FTSE Bursa Malaysia Hijrah papers worth RM200 negative outlook on Saudi Arabia: Vision 2030 to drive Islamic Shariah Index adds three million (US$48.17 million) Bahrain’s banking system fi nance ...... 16 new constituents replacing Pakistan holds off US$500 BIMB Holdings, Malakoff Private banking and wealth management in Islamic million Sukuk plan after and Bumi Armada MOVES fi nance ...... 17 tapping cheap loans Macklowe Properties hires Case Study: Emirate Islamic’s US$750 million 1Malaysia Development Malaysian water asset CORE to market Shariah names new board of Sukuk ...... 18 management company compliant-fi nanced One directors; maintains Arul Column: to raise RM1.4 billion Wall Street apartments Kanda as president (US$337.19 million) through A lett er from Amin ...... 19 Sukuk this year Rasmala seeking approval Bank Sohar’s acting CEO Country Correspondent: to re-elect directors on the resigns Bank AlJazira completes th Malaysia ...... 20 20 June issuance of SAR2 billion Cagamas Holdings (US$533.1 million) Sukuk Italy’s export credit agency appoints new non-executive Special Report: via private placement looks to Islamic fi nance; directors studying Islamic structure Avoiding Riba is not rocket science ...... 21 Oversight board member Philippines considering for fi nancing investment of Emirates REIT resigns to Islamic microfi nance: A panacea for poverty and selling Sukuk to fund and export contracts assume new role at parent fi nancial exclusion ...... 22 infrastructure projects company Measuring Maqasid Shariah ...... 24 Malaysian government to ASSET New CEO for Maybank Country Feature: raise RM3.5 billion (US$854.7 million) from Murabahah Islamic A quantum leap for the Luxembourg fund MANAGEMENT investment notes HSBC Holdings outlines structuring toolbox ...... 25 Public Mutual distributes new structure for more than RM424 million Islamic Finance news ...... 27 investment banking unit NEWS (US$103.01 million) for Deal Tracker ...... 34 Al Baraka Bank Egypt 10 funds, including three David Williams and REDmoney Shariah Indexes ...... 35 plans branch expansion; Islamic funds Jabra Ghandour elected Eurekahedge Funds Tables ...... 37 focuses on SME fi nancing as directors of BLME Dealogic League Tables ...... 39 Holdings Meezan Bank inks MoU RATINGS Events Diary...... 43 with Hamdard University S&P affi rms Indonesia Company Index ...... 44 to provide interest-free at ‘BB+/B’ with a positive Subscription Form ...... 44 loans to students outlook

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.

Islamic megabank: A false debate? Continued from page 1 deeply skeptical. “I don’t like the word will surely help fulfi ll this ambition. IDB as founding members,” Finance megabank. In my opinion, it doesn’t add It will revive the emerging economies Minister Bambang Brodjonegoro told anything to the industry,” commented in particular, that are in need of reporters at the time. Mohamed Damak, the global head of large investments in hard and social Islamic fi nance for S&P. “A large bank infrastructure.” Yet in May 2016, the Turkish deputy within a country could certainly add prime minister, Mehmet Simsek, value, whether it is an Islamic bank The next step announced what appeared to be a or not, as it will have high capacity The question perhaps is whether the diff erent approach for the creation to fi nance large projects. But does the new megabank will actually be able of a new Islamic institution based in industry need a megabank? It is a false to achieve these goals, or whether it Istanbul, suggesting the possibility of debate.” will turn out to be just another empty competition rather than collaboration. att empt to make some noise. The initial “We have been in contact with the signs seem promising — but industry IDB to found a megabank in Turkey. The industry observers still have their doubts. Indonesia has made a similar request,” he announced. “Turkey will host a is ripe to “I think it is still unclear what it is going megabank that will serve this region. to do and how it will be structured. Indonesia will have one as well. go global. There It will supposedly be focusing on They will be either specialized or fi nancing infrastructure — but there territorialized.” is a dire need for has been very litt le information on Shariah compliant what its mandate will be, how it will be Is this a good thing or a bad thing? structured and where it will be located,” Ashar thinks it could be a positive step. banks with sizeable pointed out Mohamed. “It is diffi cult to “Initially, there is ample room for two see what the most successful outcome or three Islamic banks with at least balance sheets that could be, because the bank has not yet US$20 billion or more of shareholder been launched and we have not heard equity,” he told IFN. “You need these can facilitate large much from its stakeholders on their intermediaries to write the new story plans.” Rizwan Kanji, a partner at King of trade and economic fl ows along the infrastructure and & Spalding, agrees. “I don’t think it is new south-south and east-east silk route quite clear what the remit of an Islamic that are being established over [the] next cross-border megabank will be. The concept has been decade.” discussed numerous times previously transactions but not quite materialized.” A real need Will it really happen though — and will This is a key argument. Of course size it be successful if it does? “The problem is important, because large banks have A confusing concept This is a stumbling block in any att empt is that multiple sovereigns and countries more capacity to fi nance large projects are involved,” points out Rizwan. and more headroom to extend big ticket to analyze the impact of the new bank or even its likelihood of success — we “Every time you have that situation, it fi nancing while remaining in compliance takes a substantial amount of time and with the regulation on concentration simply don’t have enough information and what we do have comes from eff ort to have [a] decision made and for their respective countries. But is this objectives aligned.” truly what the Islamic fi nance industry confl icted sources. Will the bank be based in Turkey or Indonesia? Will it needs today? Is it something that has to There are also doubts as to the need for be achieved in order for the industry to be one global bank or two competing banks? Will the IDB unite the an Islamic megabank at all. Mohamed reach its next level of growth? “I am not suggests that there are more so sure about that,” thinks Mohamed. institution or provide separate support to each att empt? pressing issues facing the “It is important for the industry at the industry at the moment than the end of the day but perhaps it is more As long ago as May 2015, need for a ‘mega’ institution. about the achievement itself rather than “You already have players what the bank will actually do.” Indonesia announced its plans to contribute like the IDB and the ICD who should be providing this kind However, others disagree. “The Islamic US$300 million to a new Islamic infrastructure of fi nancing,” he pointed out fi nance industry was originally created to IFN. “The challenges that with a massively transformative bank. “It will be like an infrastructure bank, the industry faces remain the purpose. We need to regularly ask same. Standardization is one ourselves if we are making this impact,” but with a Shariah approach, with of our biggest challenges, insisted Ashar. “For example, what will and the necessity to it take [for] the industry to positively the Republic of Indonesia, standardize some of the touch the lives of a billion consumers? contracts and structures, I feel an infrastructure bank of this sort Turkey and the continued on page 4

Islamic megabank: A false debate? Continued from page 3 especially those that are used in the Sukuk market, remains imperative.

“When you look at year-to-date numbers for Sukuk issuance and compare them to the numbers for overall bond issuance, the market is defi nitely still in a correction mode and performance is below the performance of the conventional market. In the GCC, year to date numbers show an increase in conventional bond issuance of around 102%, but Sukuk issuance is down by around 27%. That is related to the diffi culties of structuring Sukuk, putt ing it together and making it fl y.”

A large bank within a country could certainly add value, meaning theoretically deeper pockets approach and an ‘exim bank’ type remit, and higher capitalization.” In addition, so that Islamic institutions can look to it whether it is an the bank is likely to be highly rated, in place of their own central bank as a and in the long term will probably issue source of funding, guarantees, liquidity Islamic bank or not, its own paper and thus create a deeper management and cash or non-cash capital market demand — urgent in a support. If the bank is able to do real as it will have high market that continues to have a highly lending and support real transactions, skewed demand versus supply ratio. for example acting in the same capacity capacity to ϔinance And while the IDB and the ICD do as the UKEF did for Emirates Airlines in large projects. But already off er this type of support, they 2015, then: “It could become a tipping do not currently have the capacity point for Islamic fi nance across the does the industry to meet the needs of the industry as world,” suggested Rizwan. a whole. “The bank will serve the need a megabank? purpose of creating additional capacity Looking ahead beyond what the IDB and [the] ICD Perhaps this is fi nally the answer — a It is a false can provide,” agreed Mohamed. truly global megabank that is able to “Infrastructure needs in OIC countries meet the infrastructure requirements of debate are huge, and the IDB and [the] ICD OIC member countries and support the alone, although they play a prominent activities of the commercial banks both Success or failure? and important role in providing through fi nancing and debt issuance. So So what are the positives — how would fi nancing to their member countries, what are the next steps — and what are an international Islamic megabank be do not have the capacity to fi nance the challenges that the new bank will able to materially address the current the overall needs of the face in its journey to execution? “We challenges facing the industry? In fact, Islamic world. This is need to focus on what it is going to the involvement of the IDB itself is a probably the thinking do with its two parallel operations signifi cant factor that adds weight to the behind the creation of in Indonesia and Turkey,” thinks idea. “The idea of Turkey sett ing up a the new bank, although Rizwan. “Setup will see the usual megabank in partnership with the IDB it is very diffi cult to tell regulatory challenges and won’t changes the dynamics and the potential at this stage due to the be too diffi cult. What will be of success becomes more likely. lack of information.” interesting is to see how they set Suddenly, the impetus and the approach themselves up in terms of gett ing are diff erent and more achievable,” Ideally, the new their customer base (Islamic thinks Rizwan. “The diff erence between institution would act fi nance institutions) at a the new megabank and other big as a quasi-central cost base and a price that Islamic banks would theoretically be bank with an its multilateral and treasury support, international continued on page 5

Islamic megabank: A false debate? Continued from page 4 encourages them to choose the new a trillion dollar asset warehouse over volume, this barely makes US$1 billion in megabank over other sources.” [the] fi rst 10 years of existence. This capitalization. in turn will reignite [the] exponential growth of equity and Sukuk capital “Anything short of an aggressive business markets.” mindset will cost the bank the trust of There is future investors,” warned Ashar — and A realistic future while size is of course a key component of demand, but success, the fi nal shareholder group will But how will it achieve this, where also be vital. It is these who will determine other att empts have so signally failed? can the new bank the board composition, who will select the “Think ‘reinvent’,” suggests Ashar. management team, and who will create “‘Incremental’ choices will be the wrong actually tap it? It the vision of the institution. “It should be recipe. The business model needs to led by industry seniors who understand connect with diff erent pockets of capital is a domino effect. the emerging concept of ‘exponential — and the game changer will be if the fi nance’ and are not just bankers of the bank is able to mobilize social capital. Can it convert past.” That can be the catalyst to att ract private that demand into market capital. It will be a shame if this And this, perhaps, is the name of the opportunity is missed.” game — focusing on the future, rather monetized than looking at the past. Yes, there business? Yet the bank faces substantial challenges have been failures — but we only need if it is to reach this goal — and with one success to make a diff erence. The the lack of information surrounding This is likely to be the key challenge question is whether this latest venture is its structure and launch, there remains the one that will succeed. Att itudes are — getting people to utilize its services considerable doubt over its ability to hopeful and the narrative paints a rosy in order to achieve commercial achieve it. There is certainly a gap in the picture — but when you look past the viability — and it is where other banks industry – but is yet another ‘megabank’ rhetoric, we have litt le information on have failed in the past. As soon as att empt the right way to fi ll it? which to base any real judgment. a megabank becomes commercially viable, then it becomes useful, and the “The challenge, given the youth of the Yes, if the new megabank succeeds then demand for its products and services Islamic banking industry, has been to it could make a major diff erence — but will increase. “There is demand, create real institutions that are driven will the industry be materially aff ected if but can the new bank actually tap by demand and supply mechanics and it doesn’t? There are other challenges to it?” queried Rizwan. “It is a domino not just national interests or short-term address, other issues to face — and effect. Can it convert that demand into fi nancial goals of shareholders. This is whether a megabank materializes or not, monetized business?” where the industry has failed thus far to business will go on as usual. Perhaps that impress,” said Ashar. is the real benchmark of how important The new bank hopes to help facilitate this issue is to the industry. trade and economic fl ows across But whatever the interests of the emerging markets — but to do so, it shareholders, they have yet to be stated. The IDB and representatives from the needs to make a bold splash — half Both Indonesia and Turkey have said Turkish government, Turkish Treasury and measures will not work. “The vision they will commit at least US$300 million Indonesian government were contacted for has to be bold and exponential,” agreed — even if the IDB commits the same this article but declined to comment. Ashar. “It should position itself to create

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Indonesia’s corporate Sukuk struggle: Bank Syariah Mandiri to the rescue?

Sukuk issuance in Indonesia’s corporate sector remains a relatively quiet space, compared with the bustling government’s sovereign issuance, which is often under the spotlight. The Republic’s marketplace, however, was given a slight jolt last month when Bank Syariah Mandiri announced plans to issue Sukuk worth IDR1 trillion (US$74.4 million) later in the fourth quarter of this year, with a minimum coupon rate of 9.5%. DANIAL IDRAKI writes.

The bank’s director of wholesale banking, Kusman Yandi, told the local press that the planned subordinated Sukuk will lower taxes compared to companies a slightly diff erent approach toward have a 10-year tenor and a fi ve-year call issuing conventional bonds, in order to the reason behind Syariah Mandiri’s option, which will depend on regulatory prop up the Islamic papers. high coupon rate. “The issuance is by approval. The proceeds will be used to an independent private sector, and one refi nance a separate Sukuk facility that Syariah Mandiri’s targeted minimum must also look at its underlying assets. expires some time in December, and is coupon rate of 9.5% might appear to be a There might be high-risk infrastructure targeting the likes of pension funds and relatively high rate in the eyes of foreign projects involved,” Abas explained to insurance companies for the take-up. investors, but Farouk Abdullah Alwyni, IFN. Syariah Mandiri’s rate is a stark CEO of Alwyni International Capital, contrast to the US$500 million Sukuk said that the rates in Indonesia need to be facility issued by Garuda Indonesia Corporates benchmarked against the government’s last year with a coupon rate of 5.95%. issuance. “The last retail Sukuk issued “With Garuda, it is very much diff erent view Sukuk by the government off ered a return of from Syariah Mandiri, as the airline 8.3% for a three-year tenor, so Syariah is considered a strategic asset by the issuance as being Mandiri’s Sukuk need to off er returns government, who will step in should higher than the government’s, in order anything happen,” Abas added. more complicated to be att ractive. Although this might be considered high internationally, it is Compared with the corporate than issuing not the case for the current Indonesian counterparts with similar Sukuk tenors context, especially if we take into in neighboring Malaysia, for example, conventional consideration the steady depreciation of rates typically hover around 4-6%. the Indonesian rupiah over the last one Sime Darby’s RM2.2 billion (US$538.03 bonds in terms of year,” Farouk told IFN recently. million) perpetual non-call 10-year Sukuk facility has a coupon rate of 5.65%, paperwork. Without Farouk further gave the example of while Axiata’s 10-year US$500 million Bank Muamalat Indonesia, which issued Sukuk Wakalah facility has a profi t rate incentives, it is more Sukuk Mudarabah worth IDR500 billion of 4.36%. (US$37.2 million) some four years ago costly to issue — under its IDR1.5 trillion (US$111.6 Whether Syariah Mandiri’s planned million) Sukuk program — with a Sukuk issuance will be priced at a Sukuk profi t above 10% (reaching around a premium or not, what is clear is that 12% equivalent rate). “What Syariah Indonesia is in dire need of more Mandiri off ers is quite an average corporate issuance. This is exemplifi ed Corporates in the Republic face a number profi t rate for corporates in Indonesia. by the Indonesian Financial Services of regulatory and tax issues when it Unlike in Malaysia, there is no special Authority or OJK last month calling for comes to the issuance of Sukuk, thus government incentive for corporates to 53 out of 119 state-owned fi rms operating hindering its growth. The government is issue Sukuk. Corporates view Sukuk in the infrastructure sector to issue more studying the possibility of removing the issuance as being more complicated than Sukuk. While Indonesia may be one of income tax on sovereign bonds, which issuing conventional bonds in terms of the leading sovereign issuers in the is currently set at 15% for Indonesia- paperwork. Without incentives, it is more world, its corporate sector has much based investors and 20% for non-resident costly to issue Sukuk,” Farouk explained. catching up to do, and providing an investors. There have also been calls by incentive to do so as well as harmonizing market observers for corporates issuing Abas Jalil, CEO of Kuala Lumpur- its regulatory framework will give it a Sukuk to be given a tax incentive through based Amanah Capital Group, takes much-needed boost.

International mining ϐirms look to Islamic ϐinance in the Middle East

The global mining industry has modern techniques and equipment. In taken a beating over the last few Africa, over 30% of the world’s global years, as the commodity price slump mineral reserves are found, yet less has seen job losses soar and share than 5% of the total global mineral prices plummet. But as international exploration and extraction budget is mining fi rms expand their horizons invested in the continent,” noted DLA to seek additional opportunities for Piper in a recent report. “The potential profi t, the MENA region is at the for a burgeoning mining industry same time welcoming new players across these two emerging regions in new industries to assist in its is immense.” New laws across many push for diversifi cation away from MENA countries are already seeking to hydrocarbons — and, LAUREN att ract investment to the mining sector, MCAUGHTRY opines, Islamic fi nance while the GCC is also working toward has the opportunity to fund this new developing a unifi ed regulatory system trend. for the industry. Oman itself drafted in outbound direct investment from a new mining law in December 2015, Australia last year, the largest industry In a pioneering move for Oman’s designed to capture inward investment by total value of investment was mining rapidly expanding mining industry, and develop the sector with the goal of with 29%, while there are already over Australian mining group Alara last enhancing its contribution to the GDP. 200 Australian-listed mining companies week announced that it would be “The Public Authority for Mining has working on more than 1,000 projects in looking at Islamic fi nancing to fund already drafted the law and sent it to Africa, according to data from research its new Al Hadeetha copper-gold the concerned government ministries fi rm IntierraRMG — with around initiative in Oman. A 70/30 joint to review it,” said Ahmed Hassan AU$700 billion (US$515.7 billion)- venture with Oman’s Al Hadeetha Al Dheeb, the undersecretary at the worth of minerals discovered across Investment Services, the new project is Ministry of Commerce and Industry, the African continent by Australian likely to require a signifi cant fi nancing speaking at an event. companies over the last fi ve years. And package, and is expected to return as demand continues to slow in China, up to AU$586.5 million (US$432.1 fi rms are likely to keep looking further million) annually over 10 years from a afi eld for new opportunities. capital expenditure of AU$66.6 million New laws (US$49.1 million). across many “Mining in the MENA is an emerging industry off ering impressive “The company is making steady MENA countries are opportunities for mining, resources and progress toward a selection of major infrastructure companies,” confi rmed project fi nancing arrangements; this already seeking to AusTrade. “Gulf countries in particular, includes consideration of both Shariah are looking to diversify their economies compliant and conventional banking attract investment in order to reduce their dependency products,” according to a status update on oil and gas and create jobs for their issued by the joint venture’s Australian to the mining sector, young, fast-growing population.” promoter on the 31st May. Alara has also indicated that it might consider the while the GCC is also Although the sector is still in its infancy, possibility of a rights issue to support its the trend is growing and increasing project fi nancing ambitions. working toward numbers of major mining deals have already been fi nanced through a The project seeks to exploit copper developing a uniϔied combination of Islamic and conventional deposits and gold ore through three funding — including the US$1.3 billion exploration licenses covering a total regulatory system refi nancing of an Emirates Steel area of around 105 square kilometers, for the Industries project in Abu Dhabi in 2014 which the fi rst targeted license alone and the US$2.4 billion Islamic fi nancing is expected to hold around 14 million industry facility for Saudi’s Ma’aden in 2012: tons in resources. Approvals for the both of which were signifi cantly venture have already been provided oversubscribed. With Oman’s by the Ministry of Housing and Public International mining fi rms have not burgeoning Islamic capital market and Authority for Electricity and Water, and been slow to recognize these new an increasing appetite in the MENA the project is expected to launch in the opportunities — especially players region for combination funding for third quarter of next year. from Australia, who have seen their project fi nance, the Alara deal looks to domestic industry struggle. According be the latest in a new line of “In the Middle East… much of the to the Australian Trade Commission, opportunity. land has not been explored using of the AU$495 billion (US$364.7 billion)

Halal hotels hunting for the afϐluent Muslim traveler

The past few years have seen a signiﬁ cant change to the GCC cityscape which is increasingly being dott ed by hotels and apartments labeled as Halal or Shariah compliant as the region is being swept away by the wave of the increasingly aﬄ uent Muslim traveler. VINEETA TAN explores how real estate players in the GCC are positioning themselves to capitalize on the rise of lucrative Halal tourism.

Worth US$145 billion in 2015 and expected to grow to US$233 billion by 2020 (according to estimates), the Halal tourism segment is hard to ignore and both Islamic and non-Islamic jurisdictions from the UAE to Spain and Japan are transforming themselves to become more Muslim-friendly in a bid to capture the Shariah dollar.

The demand arising from Halal tourism is gaining traction “The demand arising from Halal asset class due to the potential rental tourism is gaining traction in Dubai, yields while being in compliance with in Dubai, with a with a signifi cant number of visitors their religious principles. from the GCC, and most notably signiϔicant number Saudi Arabia, who seek luxury DAMAC Properties recently announced accommodation options, which are also the limited release of its new Halal of visitors from Shariah compliant,” confi rmed Ziad El luxury hotel apartment development Chaar, the managing director of Dubai- — Ghalia — following the launch of its the GCC, and based DAMAC Properties. fi rst phase, which was completely taken up by buyers and investors. “Ghalia most notably Listed on the London Stock Exchange, presents a niche opportunity to invest Saudi Arabia, DAMAC Properties is a major real in Dubai’s growing hospitality market estate developer in the UAE generating through a vehicle that is in line with the who seek luxury US$1.23 billion in profi ts last year. It principles and beliefs of many of our also launched the region’s fi rst Shariah customers,” said Ziad. accommodation compliant development in 2014. Hospitality Management Holdings is options, which are According to Ziad, Saudi tourists also committ ed to create a Halal travel account for the largest proportion of experience for Muslims as it became one also Shariah travelers from the GCC, with 1.5 million of the fi rst to operate an alcohol-free visiting Dubai in 2015 alone and this chain of hotels in the Middle East. compliant fi gure is expected to rise to 2.5 million Saudi-based Emaar Middle East in May by 2020. also revealed plans to debut a line of Already topping global lists for being Shariah compliant hotel and serviced one of the most att ractive Halal tourist “Considering the demand for such residence in Jeddah — a strategic destinations in the world, the UAE is accommodation along with the limited decision made taking into account the taking the lead in transforming its hotel supply, we at DAMAC Properties see infl ux of Hajj pilgrims pouring into industry to become more palatable to this scenario as a huge opportunity to Saudi Arabia every year making the Muslims worldwide with an increasing tap into,” shared Ziad. However, the Kingdom an even more compelling number of property developers making opportunity is not only limited to real Halal tourism investment destination. the conscious decision to cater to the estate developers, as Muslim investors faithful Muslims. also stand to benefi t from this promising

Islamic ϐinance in India: Regulatory hurdles remain

India’s central bank, the Reserve Bank the Modi administration and the Islamic Established in the southern state of of India (RBI), released a report last Corporation for the Development of the Kerala in 2013, Cheraman’s managing December stating that the absence of Private Sector (ICD) to set up India’s director, Muhammad Hanif, reveals to Islamic fi nancial institutions in the second Islamic non-banking fi nancial IFN that despite it having felt like “a country is possibly the reason why company (NBFC) in the state of Gujarat, tight-rope walk between Islamic fi nance “some Indians, including those in the is a highly anticipated milestone in principles and Indian banking laws for economically disadvantaged strata of India’s Islamic fi nance history to date. the past three years, Cheraman’s biggest society, [are] not able to access banking achievement has been that with its small products and services due to reasons The current regulatory structure in India, model, it has demonstrated that a viable of faith while [this] also [denies] India however, may be one of the biggest Islamic fi nance company can exist within access to substantial sources of savings obstacles to Islamic fi nancial institutions Indian norms”. from other countries in the region”. like the ICD fulfi lling their potential in ANAM TARIQ delves deeper to assess the country. An example is the prevailing the potential of India endorsing an Banking Regulation Act (1949) which Islamic fi nance sector in the near future, does not allow for commercial banks to Cheraman’s while looking at the challenges specifi c be involved in trading, or any kind of to the country. profi t-sharing, among other restrictions. biggest

The Indian government, under NBFCs are also imposed with specifi c achievement has Prime Minister Narendra Modi’s albeit less stringent guidelines, such as administration, has initiated a number the need to declare a minimum level been that with its of projects including: ‘Jan Dhan Yojana’, of interest on deposits and the need to aimed at improving fi nancial literacy invest a percentage of these deposits into small model, it has and inclusion; ‘Make in India’, aimed interest-bearing securities. at boosting the Indian manufacturing demonstrated that sector and easing regulations pertaining There is also the added element of to foreign direct investments; and diff erences in opinions as many in the a viable Islamic specifi c programs targeted at minorities political arena are wary of anything with ϔinance company such as ‘Nai Manzil’, a US$100 million the word ‘Islamic’ or ‘Shariah compliant’ project in collaboration with the World att ached to it. In this sense, for many can exist within Bank, aimed at improving literacy of the 200 million Indian Muslims, of and vocational skills among the which nearly 31% live below the poverty Indian disadvantaged minority youth — of line and only 4% hold graduate degrees which Indian Muslims form a large (according to the Sachar Committ ee norms majority. report and aaghazfoundation.com), as well as for the other minorities in India, Such initiatives are promoted by the if Islamic fi nancial institutions are to Cheraman focuses on providing current administration as precursors to make an impact, special provisions will lease fi nancing and equity fi nancing. India becoming signifi cantly more open, need to be made to supersede existing According to Muhammad, these are more progressive and more att ractive as regulations. the ideal services for the Indian market an investment hub, possibly with Islamic along with working capital fi nancing. He fi nancial institutions becoming a great Cheraman Financial Services is the believes that Islamic fi nance can provide contributing force as well. In this regard, fi rst of its kind in the country to break the kind of private fi nancing needed the recent agreement signed between the mold as India’s fi rst Islamic NBFC. for infrastructure development in the country. Muhammad adds that despite political volatility and varying opinions on Islamic fi nance, “Indian fi nancial markets are quite steady and have great depth. The RBI needs to give suffi cient space for Islamic fi nance to establish itself in this country”.

Although the RBI may have already clearly shown its conﬁ dence in the potential for Islamic ﬁ nance in India, it is for society and for India’s ruling political class to follow the RBI’s lead and ensure a regulatory environment that allows Islamic banks to not only survive but thrive as well.

IIFM and ISDA launch new standards to assist Islamic ϐinancial institutions hedge against currency risks

The International Islamic Financial usually limited to capital market and Market (IIFM) and International Swaps treasury activities; Islamic FX forward and Derivatives Association (ISDA) on the other hand has a greater range have launched two new standards for of utility including in trade fi nance and Islamic foreign exchange (IFX) products corporate banking as well as treasury this week in response to a growing and capital markets. call by global industry players for Shariah compliant hedging products as “The Islamic banking industry has long Islamic fi nance becomes increasingly which some scholars say refl ects a been desirous of an industry standard internationalized. VINEETA TAN has binding contract prohibited by Shariah. which does not require the usage of the the details. balance sheet for both counterparties “The dual unilateral Waad structure is in foreign exchange forward hedging “The IIFM-ISDA standards include the more sought-after and has the potential transactions. These standards using more common and presently practiced to lead the way for several other risk- the Waad structure will overcome IFX forward product based on the mitigation treasury products,” added Ijlal. this constraint and lead the way to single Waad structure as well as the handling other off -balance sheet hedging IFX forward product based on a dual Increasing cross-border Islamic fi nance structures,” said Naveed Khan, the vice- unilateral and independent Waad activities and the growing sophistication chairman of IIFM. structure which is a new and innovative of international deals in recent years product where credit risk of both the make the need for greater currency risk- In addition to these new standards, the transacting parties is covered,” explained mitigating instruments as well as tools to IIFM is currently working on credit Ijlal Alvi, CEO of the IIFM, to IFN. reduce risks arising from rate-of-return support arrangement for Islamic hedging mismatches more pressing. While there and risk participation agreements The dual unilateral Waad structure is are existing products available in the (funded and unfunded) for trade fi nance also expected to provide an alternative market to that eff ect, such as Islamic and corporate fi nance, which Ijlal to the more commonly utilized but profi t rate swaps and cross-currency revealed, is expected to be completed this controversial bilateral Waad mechanism, swaps, these products, however, are year or in early 2017.

Dubai-based property developer turns to Islamic ϐinancing for new project in MotorCity

Islamic fi nancing is stepping up its agent for the Islamic facility, security Oia Residence is a mid-to-upscale gated presence in the real estate market in agent, account bank and global agent,” community which comprises 271 low- Dubai, with Union Properties the latest Mohamed noted. However, he did not rise residential units, including duplex player to successfully sign a AED290 disclose the facility amount provided by apartments with private gardens, terraces million (US$78.95 million) project Ajman Bank toward the project. and direct access to the swimming pools. fi nancing facility for the construction The Oia Residence project is situated of Oia Residence in MotorCity, which Khalid Kalban, the chairman of Union adjacent to the existing GEMS Metropole includes an Islamic tranche from Properties, said that the collaboration School and Windsor Crescent Villas, to Ajman Bank. The Shariah compliant to fi nance the Oia Residence project the south of MotorCity Autodrome. commercial bank together with the will play a signifi cant role in further National Bank of Ras Al-Khaimah enhancing the business model of the For the full fi nancial year 2015, Union (RAKBANK) acted as joint lead group and driving the growth of its Properties posted a net profi t of managers for the deal with the publicly portfolio. “We are grateful to Ajman AED434.61 million (US$118.32 million), listed Dubai-based property developer, Bank, RAKBANK and Alpen Capital about half the AED865 million while Alpen Capital was the sole for their support and we look forward (US$235.49 million) it posted the year fi nancial advisor for the transaction. to a long and fruitful relationship with before. Ajman Bank, meanwhile, recently DANIAL IDRAKI reports. them,” Khalid added. Sanjay Vig, the announced plans to raise AED675 million managing director of Alpen Capital, (US$183.76 million) by issuing 500 Mohamed Amiri, CEO of Ajman noted that the group has gained million new shares in order to boost its Bank, commented in a statement that extensive debt advisory experience over capital base to AED1.62 billion Union Properties enjoys an excellent the years and will use its expertise to (US$441.03 million). For the full fi nancial reputation for constructing high-quality add value to Union Properties, while year 2015, the bank posted a net profi t of real estate for residents in Dubai. “On Peter England, CEO of RAKBANK, said AED122.08 million (US$33.24 million), a this transaction, Ajman Bank played that the transaction marks a signifi cant 71% jump from AED71.4 million a comprehensive role by acting as the milestone in its strategy of returning to (US$19.44 million) recorded in the original Islamic term bank, investment the corporate real estate market. previous year.

Egyptian banks on solid ground despite IFN Country Correspondents AFGHANISTAN: Dr Alam Khan Hamdard president, Afghanistan Islamic Finance and Consulting Co AUSTRALIA: Dr George Mickhail weaker GDP growth senior lecturer, School of Accounting, Economics and Finance, University of Wollongong, Australia BAHRAIN: Dr Hatim El-Tahir director of Islamic Finance Knowledge Center, Deloitt e & Political turmoil, a growing terrorism Egyptian banks’ high liquidity buff ers Touche BANGLADESH: Md Shamsuzzaman threat and a string of aviation and drive their profi tability. “Migrant deputy managing director, Islami Bank Bangladesh catastrophes have dealt a severe blow workers send home large fl ows of BELGIUM: Prof Laurent Marliere, CEO, ISFIN BERMUDA: Belaid A Jheengoor to Egypt’s economy, particularly to remitt ances, which will likely remain director of asset management, PwC BRAZIL: Fábio Figueira its once-booming tourism sector; a signifi cant driver of deposit growth partner, Veirano Advogados however, VINEETA TAN writes that BRUNEI: Dr Aimi Zulhazmi, Islamic fi nance consultant, over the next 12-18 months,” explained Draznine Advisory the Northeast African country’s Islamic Skouridou. “In addition, deepening CANADA: Jeff rey S Graham partner, Borden Ladner Gervais and conventional banking community fi nancial inclusion will further support CHINA: Abdullah Han is expected to thrive as Cairo’s economic partner, Al-Sadiq Consulting deposit growth.” EGYPT: Dr Walid Hegazy reforms to att ract foreign direct managing partner, Hegazy & Associates FRANCE: Kader Merbouh investment (FDI) are bearing fruit. With regards to earning ability, co-head of the executive master of the Islamic fi nance, Paris- Dauphine University Egyptian banks are faring bett er than HONG KONG: Amirali Bakirali Nasir chairman, The Law Society of Hong Kong working party on “We expect Egypt’s gradually recovering their regional peers: as of December Islamic fi nance INDIA: H Jayesh economy to continue to provide banks 2015, the sector’s return on equity hit founder partner, Juris Corp with plenty of business opportunities,” INDONESIA: Farouk A Alwyni 18.9% while return on average assets CEO of Alwyni International Capital and the chairman commented Melina Skouridou, an of Centre for Islamic Studies in Finance Economics and totalled 1.3%. Development assistant vice-president at Moody’s IRAN: Majid Pireh Islamic fi nance expert, Securities & Exchange Organization Investors Service, who anticipates a 15% of Iran “Moody’s considers that banks’ IRAQ: Khaled Saqqaf domestic fi nancing growth over the next profi tability will continue to benefi t partner and head of Jordan & Iraq offi ces, Al Tamimi & Co 12-18 months, although she adds that ITALY: Stefano Padovani, partner and head of Banking & from their high exposure to high- Finance, NCTM Studio Legale Associato Egyptian banks’ increasing exposure yielding sovereign debt as well as JAPAN: Kaoru Haraguchi to the sovereign will remain a key risk, founding att orney, Haraguchi International Law Offi ce from rising interest rates, central bank JORDAN: Nafi th Al Hersh Nazzal, Islamic banking specialist, given modest capital buff ers. certifi ed fi nancial and investment advisor regulations allowing banks to fi nance KAZAKHSTAN: Timur Rustemov, deputy chairman, certain SME loans from their reserves, association for development of Islamic fi nance Despite weaker GDP growth projections KENYA: Mona K Doshi and high lending volumes,” noted the senior partner, Anjarwalla & Khanna Advocates — 3.5% for the fi scal year ending June KOREA: Yong-Jae Chang, partner, Lee & Ko rating agency. 2016 and 4% for 2017 against 2015’s KUWAIT: Alex Saleh, partner, Al Tamimi & Co LEBANON: Johnny El Hachem 4.2% — Moody’s, which assigned a partner – corporate, Bin Shabib & Associates This eff ect is already refl ected on the LUXEMBOURG: Said Qaceme, senior manager of Advisory & stable outlook to Egypt’s banking sector, Consulting, Deloitt e Tax & Consulting balance sheet of Egyptian banks expects banking asset quality metrics to MALAYSIA: Ruslena Ramli including Al Baraka Bank Egypt which head, Islamic fi nance, RAM Rating Services improve over the next year with the ratio MALDIVES: Aishath Muneeza saw net income surge 101% year-on-year deputy minister, Ministry of Islamic Aff airs, Maldives of non-performing loans to gross loans MALTA: Reuben Butt igieg during the January-March 2016 period. president, Malta Institute of Management moderating to 6% by December 2016 as MAURITIUS: Mohammad Akshar Maherally compared with 6.8% in December 2015 The Islamic bank grew its assets by 4% Director (taxation), International Financial Services while its fi nancing and investment MOROCCO: Ahmed Tahiri Jouti driven by the sett lement of legacy cases on managing consultant, Al Maali Consulting Group portfolio increased by 4%, deposits by NEW ZEALAND: Mohamed Nalar banks’ books. However, tourism-related trustee and board member, Awqaf New Zealand 5% and equity by 6%. Egypt is home to NIGERIA: Auwalu Ado; borrowers will remain risky and over Shariah auditor, Jaiz Bank several fully-fl edged Islamic banks OMAN: Muhammad Abdullah Dewaya the longer term, government-mandated Islamic fi nance scholar lending to SMEs could compromise asset including Al Baraka Bank Egypt, Faisal PAKISTAN: Muhammad Shoaib Ibrahim Islamic Bank and Abu Dhabi Islamic managing director & CEO, First Habib Modaraba quality, said the rating agency. PHILIPPINES: Rafael A Morales Bank Egypt as well as a few Islamic managing partner, SyCip Salazar Hernandez & Gatmaitan QATAR:Amjad Hussain Nonetheless, the improving economic windows such as those of NBK-Egypt partner, K&L Gates RUSSIA: Roustam Vakhitov conditions of the country will support and Ahli United Bank. managing partner, International Tax Associates SAUDI ARABIA: Nabil Issa partner, King & Spalding SENEGAL: Abdoulaye Mbow ȱŗǱȱę¢ȱȱ¢ȱȱȱȱȱ Islamic fi nance advisor, Africa Islamic Finance Corporation SOUTH AFRICA: Amman Muhammad CEO, First National Bank-Islamic Finance 1.6% SINGAPORE: Suhaimi Zainul-Abidin, Jordan Egypt advisor, 5Pillars 1.4% SRI LANKA: Imruz Kamil head of Islamic banking, Richard Pieris Arpico Finance 1.2% Morocco SWITZERLAND: Khadra Abdullahi Lebanon associate, Investment banking, Faisal Private Bank 1.0% SYRIA: Gabriel Oussi, Tunisia general manager, Oussi Law Firm 0.8% TANZANIA: Yassir Masoud head, Islamic banking, retail banking, National Bank of Commerce 0.6% TURKEY: Ali Ceylan partner, Baspinar & Partners 0.4% UAE: Rima Mrad partner, Bin Shabib & Associates 0.2% UK: Fara Mohammad director of Islamic fi nance, Foot Anstey 0.0% Return on average assets Return on average US: Joshua Brockwell investment communications director, Azzad Asset Management 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% YEMEN: Moneer Saif; head of Islamic banking, CAC Bank IFN Correspondents are experts in their respective fi elds and For Egypt as of September 2015, Lebanon and Jordan as December 2015 are selected by Islamic Finance news to contribute designated short country reports. For more information about becoming Morocco as of June 2015 and Tunisia as of March 2015 an IFN Correspondent please contact sasikala.thiagaraja@ Source: Central Bank of Egypt, Central Bank of Jordan, Bank Al-Maghrib and Moody’s Investors Service redmoneygroup.com

Turkey back in the spotlight, while Pakistan shelves its upcoming issuance

Turkey made some noise the past week Upcoming sovereign Sukuk when it returned to the Islamic capital markets with its fi rst Sukuk issuance Country Amount Expected date in two years, while Pakistan decided to Oman TBA Second quarter postpone its Sukuk off ering which was Hong Kong TBA TBA slated for issuance before the end of June. DANIAL IDRAKI brings you the Egypt TBA TBA weekly updates. Iran IRR60 trillion 2016 Nigeria TBA TBA Turkey Jordan JOD175 million TBA The government of Turkey has issued Pakistan PKR79.1 billion TBA a US$1 billion dollar-denominated Egypt TBA 2016 Sukuk facility at a 4.25% profi t rate, a lead arranger confi rmed with IFN. The Kazakhstan TBA 2016 fi ve-year paper was priced at +290bps Kenya TBA 2016 over midswaps and saw participation South Africa TBA 2016 from the Middle East (54%), Turkey Bangladesh TBA TBA (16%), Europe (11%), the UK (10%), Asia (5%) and the US (4%). The Sukuk Hong Kong US$500 million to US$1 billion TBA facility has been admitt ed to the London Ningxia Hui Autonomous Region US$1.5 billion TBA Stock Exchange and, according to the Senegal TBA TBA lead arranger, is trading at the same Niger XOF150 billion TBA level of pricing to that of comparable conventional bonds — a fi rst for Turkey. Luxembourg TBA TBA Tunisia US$500 million TBA Pakistan UAE TBA TBA The Pakistani government has shelved Shandong Province CNY30 billion TBA its US$500 million Sukuk off ering that Sindh Province US$200 million TBA was slated for issuance before the end Kuwait KWD1 billion 2016 of June, after it managed to raise US$1.4 billion through other less expensive Maldives TBA TBA means, according to Pakistan Today. In Sri Lanka US$1 billion TBA a separate report by Reuters, Pakistan Germany US$1 billion TBA is said to be planning to raise PKR79.1 billion (US$754.41 million) via Sukuk the 8th June, according to a central bank trillion (US$366.79 million) from the sale in the fi scal year ending June 2017, as announcement. Bank Negara Malaysia of fi ve sovereign Sukuk securities part of a budget aimed at shoring up the may purchase up to 10% of the issuance, (SPNS01122016 and four others) on the country’s fi nances. which will mature on the 30th September 31st May, after receiving total incoming 2026. bids of up to IDR9.63 trillion (US$716.47 Malaysia million), according to an announcement Over in Malaysia, the government Indonesia on the Ministry of Finance’s website. will issue RM3.5 billion (US$855.96 In neighboring Indonesia, the million)-worth of GII Murabahah on government awarded a total of IDR4.93

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Malaysia prepares to welcome ϐirst Basel III subordinated Sukuk program by development ϐinancial institution

Malaysia will soon see its fi rst allows the bank, or its SPV, to redeem, in (increasing bank liquidity and reducing subordinated Islamic debt program by whole or in part. leverage) has triggered a new trend in the a development fi nancial institution as Islamic markets — Basel III-compliant the country’s largest Islamic cooperative “In line with Bank Rakyat’s strategy, Sukuk programs and Tier 2 instruments, bank gears up to issue a Tier 2 the establishment of the subordinated in particular, are gaining popularity subordinated Sukuk as part of its plan Sukuk program will be a strategic in many Islamic fi nance jurisdictions to comply with more stringent rules on platform to further support the readiness including Malaysia, Turkey and the capital requirements. VINEETA TAN of Bank Rakyat to adhere to Basel III GCC. AmIslamic in 2014 issued the reports. requirements,” explained Abdul Aziz world’s fi rst Tier 2 subordinated Sukuk Haji Zainal, the bank’s chairman. The program and many Islamic fi nancial Bank Rakyat, with assets totaling RM92.4 bank is no stranger to the Islamic debt institutions have followed suit including billion (US$22.45 billion) as at the end of market: it entered the market in 2012 CIMB Islamic, Bank Asya, Kuveyt Turk 2015, recently launched a 20-year Sukuk and 2014 via its senior debt programs and Al Baraka among others. Murabahah program of up to RM5 under Imtiaz Sukuk and Imtiaz Sukuk II billion (US$1.21 billion) in nominal value cumulatively worth up to RM10 billion Bank Rakyat expects to issue the fi rst to be issued via Mumtaz Rakyat Sukuk. (US$2.43 billion) in nominal value. tranche worth RM300 million (US$72.77 Rated ‘AA3/Stable’ by RAM Ratings, the million) of its subordinated program mid program carries a maturity of at least fi ve The third installment of the Basel June. AmInvestment Bank and Maybank years and up to two decades from the Accords calling for stronger risk Investment Bank have been mandated as issue date, subject to a call option which management measures from banks joint lead managers for the program.

Ekovest plans to part-fund billion-dollar highway project with Sukuk

VINEETA TAN takes a look at the “The rating on the proposed Sukuk expect the GDP growth of the Southeast tolled-highway sector as a driver of Wakalah incorporates the adequate cash Asian nation to moderate to around Sukuk issuance in Malaysia under fl ow coverage, the strong track record 4.8%. Prime Minister Najib Razak’s fi ve-year of the project sponsor, Ekovest, and the economic transformation plan. importance of the expressway in the Infrastructure projects, which include transportation development plan for public transportation and basic A public-listed construction company Kuala Lumpur,” noted MARC. amenities enhancement, are major is targeting to raise RM3.64 billion components of the RM260 billion (US$876.69 million) from the Islamic Enhancing the transportation network (US$63.07 billion) 11MP which has debt capital markets to part-fund for the Malaysian capital (and areas subsequently opened up opportunities its RM5.05 billion (US$1.22 billion) beyond the city) is a priority for Prime for Malaysia to further bolster its expressway venture, one of the many Minister Najib Razak’s government as it position as a world leader in Islamic infrastructure projects the Malaysian enters the fi nal leg of its journey to prop fi nance; infrastructure development government has in store under its 11th up Malaysia to become a developed initiatives are expected to account for a Malaysia Plan (11MP) to elevate the nation by 2020. signifi cant portion of Malaysian Sukuk tiger cub economy to high-income issuance. status. Najib, who faces political pressures amid controversies surrounding a In 2015, the tolled-expressway sector Ekovest, which was awarded the state investment fund, however, faces alone added up to RM54 billion concession to undertake the construction challenges in achieving the Malaysian (US$13.1 billion) to the domestic bonds and management of the Lebuhraya ideal – Vision 2020 – which was set and Sukuk market (as at mid-August DUKE Fasa 3 (DUKE 3) expressway by his predecessor, former premier 2015). Apart from the DUKE 3, the West — a 32.1 km expressway in Kuala Mahathir Mohamad as economic growth Coast Expressway also turned to the Lumpur expected to be completed in weakens on a domestic and global level. Sukuk market – raising RM1 billion 2020, plans to part-fund the project cost (US$242.58 million) in 2015, and the with a Sukuk Wakalah, which recently First quarter GDP grew 4.2% against pipeline remains robust as Najib secured an ‘AA-IS’ rating from MARC, 4.5% in the previous quarter, a 1% announced in his 2016 budget that signaling that an issuance is imminent. expansion according to the nation’s several major infrastructure projects will The remaining cost will be covered by Department of Statistics after quarter- be mobilized including those for the a RM560 million (US$135.84 million) on-quarter seasonal adjustments; the Pan-Borneo Highway, Mass Rapid interest-free government reimbursable government targets to boost GDP to Transit and high-speed rail among interest assistance (RIA) and RM850 5-6% per year over the 2016-20 period others. million (US$206.19 million) of equity. under the 11MP. Analysts, however,

PowerTalk: Dr Aishath Muneeza

Young, soft-spoken and unassuming, sitt ing with male scholars and constantly one may fi nd it surprising to learn that at the receiving end of criticisms and Dr Aishath Muneeza was the woman doubts, but I love challenges – so when who built Maldives’s Islamic capital somebody tells me I can’t do it, I’ll go markets from scratch and is the one all out to prove that it can be done,” Dr responsible for introducing many Aishath shared with IFN. pioneering Shariah compliant fi nancial instruments (and institutions) to the When Dr Aishath joined the CMDA’s South Asian tropical nation – all before SAC, she had her work cut out for her. she turned 30. This week, VINEETA With no precedents, no regulations and TAN brings you the story of this not even an established conventional Dr Aishath Muneeza inspiring trailblazing woman in Islamic bond market at that time, Dr Aishath had Deputy Minister of the Maldives’s fi nance. a challenging time introducing Sukuk, Ministry of Finance and Treasury or any products for that matt er, to the Dr Aishath’s resume reads like a book: market. It was diffi cult securing the buy- placement. This was followed by regular the chairwoman of multiple Shariah in from both private (due to the lack of an Islamic treasury bill off erings – the fi rst boards including for the Capital Market enabling regulatory infrastructure) and for a South Asian country. Development Authority (CMDA), Alia public companies (which had signifi cant Investment Maldives, Allied Insurance debt-ratio issues), but Dr Aishath got Establishing a Sukuk market in a non- Maldives and Maldives Hajj Corporation her fi rst break with the national Housing Islamic fi nancial jurisdiction with no (which she had a direct hand in sett ing Development Financing Corporation knowledge of (and infrastructure for) up); an Islamic fi nance consultant and (HDFC). such an instrument was a herculean task advisor to various government-linked in itself but perhaps not as challenging as entities including the Central Bank “They were very open to the idea of when Dr Aishath endeavored to develop of Maldives, the Maldives Monetary Islamic fi nance and very interested but the Shariah mutual fund industry: she Authority, the Ministry of Finance and they were a conventional institution so wanted to follow in the footsteps of Treasury and the Housing Development we had to purify their assets: we needed Malaysia and create a Lembaga Tabung Finance Corporation; and an author to open a window and separate their Haji for the Maldives. and researcher whose works have been assets,” recalled Dr Aishath, who added published above her role as the deputy that it was the fi rst time Musharakah “We were met with resistance at every minister of fi nance and treasury – a Muntanaqisah was introduced to the level,” said Dr Aishath. “The privately- position she assumed after she completed country. owned Hajj Corporation was against her tenor as the second-in-command at the idea for political reasons; Maldives the Ministry of Islamic Aff airs, a fi rst for Likening the creation of HDFC’s Islamic Islamic Bank was hesitant to launch a any woman in the Maldives. window – HDFC Amna – to giving birth Hajj-related product as it had no control to a child, Dr Aishath said: “Everything over Hajj travel prices; the Hajj-related The stars may have aligned for the young was hands-on – from structuring the bill which I did and pushed to the Dr Aishath (who at that time was still product, to producing the documents parliament, as advised by the Ministry of pursuing her Master’s degree in Islamic and even marketing the product. Of Islamic Aff airs, was rejected.” At the end, banking and law in Malaysia) when the course, these would have been so much Dr Aishath decided to heed the advice of Islamic fi nance talent-starved CMDA in easier if it were in Malaysia where the government to form a Hajj trust fund 2010 opened its doors to fresh talents to expertise is abundant and infrastructure under the Public Finance Act. form its Shariah Advisory Council (SAC), sophisticated.” but it was her tenacity, intelligence, “Again, I felt like I had to fi ght alone – perseverance and passion for Islamic Following the establishment of HDFC but I managed to convince the President fi nance which kept her there and drove Amna, Dr Aishath went on to lead the of the Maldives to create Maldives Hajj her to continue her struggle to develop creation of short-term Wakalah liquidity Corporation, a government company her country’s nascent Islamic fi nance management instruments, designing with 100% government shares.” market despite the criticisms directed at regulations for the screening of Shariah her due to her gender and age. stocks and for Sukuk. In 2013, she hit yet Since Dr Aishath took the mantle of another milestone: Maldives launched developing the Islamic fi nance industry “It was tough, being the only woman its fi rst sovereign Sukuk via private for the Maldives in 2011, there has not

been a year where a new Shariah product has not been launched by a new entity. Under her guidance, she has established 11 Islamic ﬁ nancial institutions, and there are several more new products in the pipeline this year including a product for HDFC.

For her contributions to Islamic fi nance, Dr Aishath was honored by the government with the Rehendhi Award – the highest award recognizing the contributions of women toward nation- building. “I am actually quite happy to retire now,” quipped the 31-year old, who shared that she wishes to pursue her dream of being a professor (she is now an associate professor with INCEIF). For the past three years, she has been conducting free monthly Islamic fi nance training courses for the public and has been authoring books (distributed for free) to FORUM educate and raise awareness on Shariah TURKEY fi nance among Maldivians. 2016 “I know I can’t do this forever – I need to exit at some stage; I still want to practice as a lawyer, I want to be a professor and I #IFNTurkey16 want to also be a politician in the future,” shared Dr Aishath. “That’s why it is important to mould the next generation IFN Turkey Forum of Islamic fi nance human capital to 28th September 2016 continue developing the industry, which Borsa Istanbul is why we approached INCEIF to assist us in training existing conventional bankers.” Turkey is another upcoming market for Islamic finance and one which many players have long had their eyes on. With a strong commitment from the Turkish authorities, the industry continues to flourish and IFN Turkey remains And while Dr Aishath may be ready to one of our strongest and longest-running events. retire, however, she still has one more vision she’d like to realize before she As the country steps up its Shariah compliant activities, new players, new regulations and new issuances make for closes her Islamic fi nance chapter – the Maldives Center for Islamic Finance, an a vibrant market driven by growing investor interest both domestic and international. With exceptional support initiative for which she single-handedly from the Turkish regulators making this a truly progressive event, IFN Turkey returns to the excellent facilities of developed the strategic plan. Borsa Istanbul for its 2016 incarnation.

“Maldives is a small country and we cannot achieve the economies of REGISTER FREE NOW scale like that of Malaysia, but we can www.REDmoneyevents.com defi nitely build ourselves as a fi nancial center,” enthused Dr Aishath. And the ambition of positioning the Maldives as a regional Islamic fi nance hub via a dedicated center may come to fruition IN PARTNERSHIP WITH MULTILATERAL STRATEGIC PARTNER ASSOCIATE PARTNER sooner than later, and Dr Aishath is grateful and content with all that she has achieved. EXECUTIVE PARTNERS LUNCHEON SPONSOR LEAD MEDIA PARTNER “At least during my tenor at the Islamic (aff airs) ministry, I was able to do something for Islamic fi nance and do something benefi cial for my country. INFORMATION PARTNER RESEARCH PARTNER MEDIA PARTNERS I truly believe that the citizens of my country can benefi t from Islamic fi nance and am happy to be able to contribute to that.” W: www.redmoneyevents.com | E: [email protected] | T: 603 2162 7800 ext. 43 | Twitter : #IFNTurkey16

Saudi Arabia: Vision 2030 to drive Islamic ϐinance

Islamic fi nance heavyweight Saudi Arabia has had a tough couple of years with weak oil prices heavily pressuring its fi nances (and credit ratings). But VINEETA TAN writes that a major economic overhaul and a new ambitious national vision to transform oil-dependent Saudi Arabia into a diversifi ed global investment powerhouse have set the stage for a promising Shariah compliant fi nance story.

Regulatory landscape Chart 1: Sukuk volume by issuer nation in US dollar billion (last 12 months rolling) Theoretically, all banking transactions in Saudi Arabia are supposedly Shariah Malaysia 17.5 compliant; this however is not the case. Saudi Arabia 5.2 While the Kingdom practices Shariah law, UAE 3.2 its banking laws make no reference to Islamic banking as the country adopts a Indonesia 2.5 single regulatory framework for all banks. Qatar 1.5 Source: Dealogic Shariah compliance supervisory rests largely on the shoulders of individual totalled SAR5.51 billion (US$1.47 billion) intentions to tap the market including Shariah boards of respective banks as against SAR4.96 billion (US$1.32 billion) Saudi International Petrochemical there is not a specifi c body at a national in 2014. Islamic banking assets represent Company and Saudi Arabian Airlines. level which oversees the Shariah 51.2% of Saudi’s total banking assets The Saudi Vision 2030 is also expected compliance of fi nancial transactions and and 33% of the global Islamic banking to spark more Sukuk issuance as the products; all banking matt ers, however, market according to a 2016 EY report. Kingdom readies itself to reduce its fall under the purview of the Saudi dependence on oil and spur private Arabian Monetary Agency (SAMA) It is worth noting that Saudi Arabia is sector investments by launching public- which acts as the central bank whereas reportedly keen to join Turkey, Indonesia private partnership projects. the nation’s capital markets are regulated and the IDB in becoming a founding by the Capital Market Authority (CMA). member of the IDB’s proposed Islamic Takaful infrastructure bank. Practicing a unique cooperative model, Banking and ϐinance Saudi Arabia is considered the world’s There are 12 licensed banks in Saudi Capital markets largest Takaful market commanding Arabia and 13 licensed foreign Saudi Arabia is one of the world’s largest almost half (48%) of global contributions investment banks (including Qatar Sukuk issuers after Malaysia although and 77% of GCC contributions according National Bank which has been granted a its Islamic debt capital market is not as to EY which also projected for GCC gross license but yet to commence operations) developed as it could be due to the stiff Takaful contributions to reach US$20 according to SAMA. Out of the 12 competition posed by the bank fi nancing billion in 2017 based on the expectation domestic banks, four are fully-fl edged segment. According to 12 months rolling of 14% annual growth rates over the Islamic banks: Al Rajhi, Aljazira, Alinma, data from Dealogic, the Kingdom issued 2014-16 period. The industry, comprising Albilad; with the rest off ering Shariah US$5.2 billion-worth of Sukuk as at the 35 insurers and 38 brokers, is regulated compliant products on a window basis. end of May 2016 (See Chart 1). In the under the Law on the Supervision of Jadwa Investment is another CMA- GCC, it is the leading issuer of bonds Cooperative Insurance Company by licensed Islamic investment bank. and Sukuk in 2015, raising US$35 billion SAMA. Net writt en premiums in the fi rst through 15 issues and representing half of 2015 reached SAR30.27 billion The drop in oil prices from its mid-2014 53.73% of the total value raised by GCC (US$8.07 billion) for the protection and peak has exerted signifi cant pressure on issuers during the year, according to health segments whereas the general the Kingdom’s fi nances and economic the Kuwait Financial Center. Saudi line realized net writt en premiums strength as well as its banking sector as riyal-dominated GCC issuance was of SAR11.25 billion (US$3 billion), a result of reduced government support at SAR129.4 billion (US$34.48 billion) according to SAMA. in times of stress as well as a tougher or 52.9% of the total amount. Sukuk operating environment among others. issuance witnessed a modest growth of Yet, Saudi Arabia remains a severely Moody’s Investors Service in May 2016 3.71% to US$9.56 billion in 2015 from underserved and highly concentrated downgraded 11 Saudi banks to refl ect US$9.22 billion a year earlier. market. At 1.1%, the insurance the ongoing negative impact of softer oil penetration level of the Kingdom is the prices. Several privately-placed off erings have lowest compared with regional peers. taken place in the fi rst fi ve months of According to the latest data from 2016 including Al Bayan Group Holding Islamic funds SAMA, total assets of banks reached Company which raised US$50 million Saudi Arabia has a deep funds industry, SAR526.48 billion (US$140.33 billion) in through a three-year Sukuk – becoming refl ected by it being the largest fund the second quarter of 2015, higher than the fi rst private conglomerate in the domicile of the Arab world. As at the 7th the SAR473.36 billion (US$126.17 billion) Kingdom to close a private US dollar June 2016, there are 197 mutual funds the year before. Earnings before tax Sukuk and the 2016 Sukuk pipeline looks registered as Shariah compliant on the and Zakat for banks in the same period robust as several entities have expressed Saudi Stock Exchange.

Private banking and wealth management in Islamic ϐinance

Catering to a speciﬁ c group of clients, private banking and wealth management involves protecting and growing the assets of high-net-worth individuals. With the rising aﬄ uence of Islamic-based investors globally, more needs to be done to expand this highly niche area to meet the growing demand. DANIAL IDRAKI recaps the developments over the past 12 months.

Overview Figure 1: Portfolio splits; Proportion of total UHNWIs wealth allocation Knight Frank’s 2016 Wealth Report found that there were 187,500 ultra-high-net- Financial investments (equities, bonds, etc) 28% worth individuals (UHNWIs) — those with US$30 million-worth of assets or more — globally at the end of 2015, with Primary residence and second homes 24% a combined wealth of US$19.3 trillion. The number of UHNWIs, however, Personal businesses 19% has declined 3% compared with 2014. This downward shift, according to the report, refl ected slower economic Cash 15% growth and the more volatile fi nancial climate. Brazil saw the biggest decline Real estate investments 11% in individuals with US$30 million-plus- worth of assets, down 12%, followed by Saudi Arabia and Russia, which fell 8% Collectibles (art, wine, cars, etc) 2% and 5% respectively. Despite the slight dip, there are now more than 13 million Precious metals (gold, etc) 1% millionaires across the globe, up from 8.7 million in 2005. Source: Knight Frank's Wealth Report Recent developments appetite for Shariah compliant wealth The Securities Commission Malaysia Figure 2: Changes in selected UHNWIs recently said that it will launch the population 2014 to 2015 and fi nancial planning services in the Islamic fund and wealth management GCC region grows. The group embarked blueprint sometime this year. The -1% on its Shariah compliant ambitions by blueprint will chart the medium to long- China partnering with Salama Islamic Arab term strategic direction for the industry Insurance Company. in the Southeast Asian powerhouse, -2% US as well as map out strategies and Sudan’s largest bank, Bank of Khartoum recommendations to strengthen -5% (BOK), had in December last year Malaysia’s competitive position in the Russia received the approval from the Central global Islamic fi nancial sector. Bank of Bahrain to carry out Shariah -8% compliant wholesale banking operations Qatar First Bank (QFB) said in May that Saudi Arabia in the Kingdom, as it eyes a slice of the they are developing an open architecture Gulf wealth. BOK will focus on capturing private banking platform targeted businesses from fi nancial institutions, toward its private banking clients. -12% corporates as well as high-net-worth The innovative platform is set to off er Brazil individuals. The bank will also leverage Shariah compliant products including its position in Bahrain to reach out to the fi nancing, private banking services, Source: Knight Frank's Wealth Report wider Gulf region. innovative investment solutions, as well as family offi ce services covering said it will off er clients bespoke property Conclusion trusts, foundations, advisory, real estate fi nance products ranging from simple With the growing affl uence of the planning and statement consolidation. single residential investment fi nance Muslim community globally, new asset In April, London-based investment to more complex company structures classes by the Islamic fi nance industry bank Gatehouse Bank launched Shariah including property portfolios and short- will provide an avenue for Shariah- compliant fi nancing solutions for lease fi nance. conscious investors to grow their wealth. its clients, including high-net-worth An innovative approach toward the individuals, who are seeking to acquire Conventional fi nancial advisory group creation of new products and service or refi nance residential properties, with Holborn Assets launched a dedicated level will also att ract such investors to a focus on greater London. Gatehouse Islamic desk in March this year as this niche area.

Emirate Islamic’s US$750 million US$2.5 billion Sukuk issuance Sukuk program

US$750 million After a four-year gap, Emirates Islamic “We have decided to tap the market in May 2016 tapped the Islamic now to take advantage of the current debt capital market again with the market rates to drive our strategy and successful issuance of a US$750 help us achieve our goal to become million fi ve-year Sukuk facility the clear leader in the Islamic banking under the US$2.5 billion Sukuk sector,” said Jamal Ghalaita, CEO of issuance program. NURUL ABD EI, adding that: “The strong demand HALIM explores the latest US dollar for this Sukuk is a clear sign of the 23rd May 2016 transaction. resilience of the UAE economy, the positive outlook of the nation’s banking Despite being launched in a crowded sector and the bank’s strong credit market amid many institutions raising fundamentals and growth outlook.” Issuer EI Sukuk Company capital via Sukuk instruments within the same month, the bank’s latest US dollar This is the third issuance under EI’s Obligor Emirates Islamic transaction was very well-received. US$2.5 billion Sukuk issuance program, The facility was priced at 220bps over which received the ‘A+’ rating with a Size of issue US$750 million midswaps and oversubscribed three stable outlook from Fitch Ratings. The times, att racting bids of over US$2.2 bank currently has two Sukuk issuances Mode of issue Book-building process billion with over 150 orders from of US$500 million each outstanding in investors across the GCC, Asia and the market. Purpose General business purposes Europe. Tenor Five years Building on EI’s previous issuances, the bank utilized the Wakalah Bi Istithmar Issuance price 100% structure as it is the most common We have structure employed among banks. Profi t rate 3.54% Seeking to secure long-term funding decided to tap to drive EI’s strategy, proceeds from Payment Principal repayment: the transaction will be used for general bullet the market now to business purposes. Periodic profi t payment: semi-annual take advantage of For the 12-month period of 2015, EI Currency US dollars reported a year-on-year jump in net st the current market profi t by 76% to AED641 million Maturity date 31 May 2021 (US$174.49 million) while total net rates to drive our Lead Al Hilal Bank, Bank ABC, income (net of customers’ share of manager(s) Dubai Islamic Bank, profi t) rose to AED2.43 billion Emirates Islamic, Emirates strategy and help (US$661.47 million), up 25% from the NBD Capital, HSBC Bank, previous year’s AED1.95 billion Maybank, Noor Bank, us achieve our goal (US$530.81 million). EI is the subsidiary Standard Chartered Bank to become the clear of Emirates NBD. Principal Standard Chartered Bank advisor(s) leader in the Islamic Bookrunner(s) Al Hilal Bank, Bank ABC, Dubai Islamic Bank, banking Emirates Islamic, Emirates Rating ‘A+/Stable’ by Fitch NBD Capital, HSBC Bank, sector Maybank, Noor Bank, Shariah Emirates Islamic Standard Chartered Bank advisor(s) Governing English and UAE’s laws The rate of return on the latest Sukuk Structure Sukuk Wakalah Bi law installment is 3.54%, lower than that of Istithmar Legal Cliff ord Chance EI’s Sukuk outstanding of US$1 billion Tradability Yes advisor(s)/ maturing in January 2017 and 2018 counsel Investor Diverse base (4.72% and 4.15% respectively) under breakdown Listing Irish Stock Exchange and the program, underlining investor NASDAQ Dubai support for good quality issuances and Face value/ US$1,000/US$200,000 minimum Underlying Ijarah and Murabahah Sukuk in particular. investment assets assets

A letter from Amin IFN Sector Correspondents CROSS-BORDER FINANCING Fara Mohammad, director of Islamic ﬁ nance, Foot Anstey

By Mohammed Amin, an Islamic fi nance interest above infl ation. Repayments are CAPITAL MARKETS: consultant and former tax partner at PwC in made by deductions of 9% from income Suhail Ahmad, CEO, Hikmah Capital Corp the UK. above GBP21,000 (US$30,676.6) per year, DERIVATIVES Suhaimi Zainul - Abidin, treasurer for Gulf-Asia Shariah until the loan plus accumulated interest Compliant Investment Association and advisor to 5Pillars Apathy and disengagement are all and infl ation uplift is fully repaid. If the GLOBAL ECONOMIC OUTLOOK Tariq Alrifai, expert, Islamic investment products and too common today. Many people can person has not paid off their loan after 30 market trends see failings in the world but make no years, the unpaid balance of the loan plus LAW (EUROPE): att empt to address them to make the infl ation uplift and interest is waived. Ayhan Baltaci, att orney at law, Bereket & Baltaci Law Firm world a bett er place. Why is this? LAW (MIDDLE EAST) As the aforementioned details show, the Bishr Shiblaq, head of Dubai offi ce, Arendt & I believe the reason is that they hold student loan scheme is very generous, Medernach LEASING: one of the following two diametrically with income contingent repayments and Youssef Aboul-Naja, Ijarah specialist, a supranational opposite views about the achievability of waiver of any outstanding balance after banking institution MERGERS & ACQUISITIONS: change, both of which are incorrect: 30 years. Encouragingly, the data on stu- Tushar Garg, associate, bulge bracket investment dents’ backgrounds shows that the loan bank MICROFINANCE (ASIA): 1. Some believe that the world cannot scheme has not deterred poorer students Dr Mahmood Ahmed, executive vice-president and director training, Islami Bank Training and Research be changed. Therefore, they do not from applying to university. However, Academy try to achieve change and are, by the scheme is not Shariah compliant. MICROFINANCE (AFRICA): Mansour Ndiaye, director of microfi nance, Assistance and defi nition, apathetic. Accordingly, for religious reasons, some Consulting for Development Muslims refuse to take out student loans, PRIVATE BANKING & WEALTH MANAGEMENT: 2. Others believe that change can be and some may therefore not att end uni- Thomas Woods, product development, wealth management, The Islamic Bank of Asia achieved easily and quickly. Accord- versity at all, damaging their life chances. PRIVATE EQUITY & VENTURE CAPITAL: ingly, they set off with great enthusi- Arshad Ahmed, partner, Elixir Capital asm to change the world. However, From the inception of the student loan PROJECT & INFRASTRUCTURE FINANCE when nothing seems to change, they scheme, Muslims have been lobbying Anthony Coleby, head of corporate commercial become discouraged, give up and the government for a Shariah compliant department, Said Al Shahry Law Offi ce (SASLO) REAL ESTATE become apathetic. alternative. I was involved in private Philip Churchill, founder partner, 90 North Real Estate meetings with civil servants as far back Partners Both my own life experiences over six as 2011, modeling an alternative fi nance REGULATORY ISSUES (ASIA) Intan Syah Ichsan , chief operating offi cer, Samuel Aset decades, and my knowledge of history, scheme that would use commodity Mu- Manajemen have taught me that the world is changed rabahah transactions. In October 2013, REGULATORY ISSUES (MIDDLE EAST): Mohammad Abdullah Malik Dewaya, head of Shariah regularly by people who have a clear speaking to the World Islamic Economic compliance and audit, Maisarah Islamic Banking Services vision of what they want to achieve. Forum in London, Prime Minister David RETAIL BANKING: Chowdhury Shahed Akbar, offi cer, Southeast Bank, However, achieving such change Cameron committ ed the UK govern- Bangladesh. often takes many years, during ment to off ering Shariah compli- RISK MANAGEMENT: which progress may appear to ant fi nancing for students. A Dr Ken Baldwin, CEO, Islamic Financial Analytics be minimal or zero. I could recent government white SECURITIES & SECURITIZATION: cite an endless list of paper stated: “We plan to Nidhi Bothra, executive vice-president, Vinod Kothari examples, but will give legislate for the Secre- Consultants just one. It was in 1885 tary of State to off er an STOCK BROKING & TRADING: that the Indian National alternative [Shariah Athif Shukri, research analyst, Adl Capital Congress was founded, compliant] student fi - STRUCTURED FINANCE: John Dewar, partner and head of Islamic fi nance, Milbank, with the aim of freeing nance product alongside Tweed, Hadley & McCloy India from British Impe- his current powers to SUKUK Anthony Coleby, head of corporate commercial rial rule. However, In- off er grants and loans.” department, Said Al Shahry Law Offi ce (SASLO) dian independence was However, given the need SYNDICATED FINANCE not achieved until 1947, for legislation, the earliest Damir Galiev, portfolio manager, AK BARS Bank some 62 years later. I would expect students TAKAFUL & RE-TAKAFUL: to be able to access such fi - Dr Sutan Emir Hidayat, assistant professor and academic advisor for Islamic fi nance, University College of Bahrain The most recent experi- nancing is September 2017. TAKAFUL & RE-TAKAFUL (AFRICA): ence from my own life That is more than six years Uwaiz Jassat, acting head of Islamic banking, Absa Islamic concerns Shariah compliant after my work in 2011. Banking TAKAFUL & RE-TAKAFUL (EUROPE): fi nancing for students. In the Ezzedine Ghlamallah, director, Solutions Insurance and UK, students have to pay fees The positive message is that Islamic Finance in France (SAAFI) of up to GBP9,000 (US$13,147.1) TRADE FINANCE change can be achieved, but it Anthony Coleby, head of corporate commercial per year for university fi rst requires determination, perse- department, Said Al Shahry Law Offi ce (SASLO) degree courses. To avoid deter- verance, a clear message and the TREASURY PRODUCTS: Nafi th Al Hersh Nazzal, Islamic banking specialist, ring the poor, the government ability to work with all allies certifi ed fi nancial and investment advisor provides loans to all students. who are interested in achieving IFN Correspondents are experts in their respective fi elds The loan amount repayable is the same objectives as you are. It and are selected by Islamic Finance news to contribute designated short sector reports. For more information linked to the retail prices index, and will almost always take much about becoming an IFN Correspondent, please contact the loans also carry a positive rate of longer than you would like! [email protected]

Demand drives supply of Sukuk issuance

MALAYSIA laudable performance is att ributable to a low-base eff ect and competitive yields. By Ruslena Ramli Shariah compliant securities accounted Malaysia’s fi nancial landscape includes for 57% (or US$6.4 billion) of quasi- a thriving Sukuk market that has been government and corporate issues, contributing to the growth of global highlighting the fact that the preferred Sukuk issuance. Despite the rapid fi nancing option is Sukuk. Meanwhile, expansion of other Sukuk markets, Malaysian government securities Malaysia remains the largest (60.9% issued over the same period amounted market share or equivalent to US$13.63 to RM37.5 billion (US$9.11 billion), of billion) as at the end of April 2016 which 48% (US$4.5 billion) constituted and the most liquid, with a deep base Islamic securities. of institutional investors. Coupled with a developed infrastructure on Amid eff orts to deepen the Sukuk Islamic fi nance (such as tax, legal and of Malaysia to launch its pioneer fully market, the government of Malaysia has regulatory frameworks), the Sukuk Shariah compliant fund by January the capacity to support more issuance market has become a popular fi nancing 2017. of Islamic securities in anticipation avenue for domestic issuers and also of the EPF’s potential demand. Other cross-border Sukuk issues by foreign The EPF, with an investment portfolio opportunities to build the Sukuk supply entities. valued at some RM684.5 billion chain will likely be derived from Islamic (US$166.3 billion) as at the end of banks, in a bid to address the maturity Against this backdrop, RAM Ratings December 2015, plans to launch mismatches between their assets and has had the privilege of rating 24 its Islamic initiative with an initial liabilities as well as to improve liquidity foreign issuers from 13 countries. The investment of RM100 billion (US$24.29 management in the context of Basel III. accumulated value of funds raised billion). Given the anticipated appetite by these foreign entities sum up to for Shariah compliant assets, the EPF is Overall, the future performance of the US$8.15 billion to date; the issuers likely to turn to the Sukuk market for quasi-government and corporate sectors include fi nancial institutions as well as investments. is anticipated to hinge on expectations of diversifi ed holdings and plantation- market conditions, which will in turn be based companies. In the fi rst four months of 2016, the aff ected by the operating environment, market witnessed a commendable the performance of the ringgit and Demand for Sukuk has been increasing growth in the issuance of quasi- global oil prices. amid investors’ growing preference for government securities (+14% year-on- Shariah compliant assets. The trajectory year (y-o-y)) and corporate papers (+66% Ruslena Ramli is the head of Islamic fi nance has steepened following the proposal y-o-y), bringing the cumulative value to at RAM Rating Services. She can be by the Employees Provident Fund (EPF) RM45.4 billion (US$11.03 billion). The contacted at [email protected].

Figure 1: Composition of global Sukuk issuance by country as at the end of April 2016

Pakistan (4.3%) Turkey (1.6%) Others Brunei (1.1%) 7.8% Iran (0.7%) Gambia (<0.05%)

Indonesia 12.6% Malaysia 60.9% US$22.4 Saudi Arabia (10.7%) billion GCC UAE (4.5%) 18.7% Bahrain (3.5%)

Source: Zawya and RAM Ratings

Avoiding Riba is not rocket science

Since Riba-based transactions are more apparent in the banking sector, in this article, MABROOR MAHMOOD gives some examples of how both the ﬁ nancier and the borrower can avoid such unlawful transactions by bringing some changes to the mechanisms of dealing with each other.

RIBA free, the fi nancier might opt to become an investor in the business and invest By Mabroor Mahmood US$250 to Amir’s new business with an agreement that both investors will In my last two articles published in share profi t and loss at a 50:50 ratio. This IFN, I have explained in detail the proposition is a bit risky for the fi nancier defi nition of Riba and texts of various because here the fi nancier is not sure religious scriptures prohibiting Riba, that it will be able to recover its total which is a synonym of usury or investment of US$250 with suffi cient modern-day ‘banking interest’. So in profi t in a fi ve-year period. order to conduct a transaction in an ethical manner, it is very important to So the fi nancier can opt for either of the devise mechanisms that will help us following avenues: to avoid the presence of Riba. This is applicable not only for Muslims, but for Jews, Christians, Hindus and Buddhists 2. Deferred sale alike. Islamic banking emerged on the After assessing the business potentials basis of this premise. It off ers fi nancing of the new business, the fi nancier fi nds modes that are free from Riba, but at the that Amir is planning to buy a set of same time, helps concerned parties to equipment with the proposed loan of generate enough returns to make profi ts. US$250. So instead of giving Amir a cash loan of US$250, the fi nancier does the As an example, we can start with a following: typical Riba-based transaction which (1) The fi nancier enters into an agreement you can fi nd in any modern conventional with the equipment supplier to buy commercial bank. Suppose Amir wants the equipment at US$250 under the for avoiding Riba in a typical Islamic to expand his business that needs a fi nancier’s name. banking transaction, investment total capital of US$500. He already has (2) The fi nancier then sells the equipment mechanisms involving ‘profi t and loss US$250, but to complete the project, to Amir at cost plus profi t, which will sharing’ are slowly losing their foothold he still needs another US$ 250. So he be paid in equal installments in the due to the high-risk nature. Deferred approaches a conventional bank and next fi ve years. The profi t rate can be sale (or Murabahah) and leasing (or requests for a loan of US$250 for fi ve the same 10% as before. Ijarah) are more popular fi nancing modes years. (3) After negotiating the agreement, nowadays for making a loan transaction the fi nancier pays to the equipment Riba-free. After assessing the proposal, the bank supplier who in turn ships the decides to give him a fi ve-year loan equipment to Amir, and Amir then As you can see in the example, the rate of US$250 at a 10% interest rate. After starts using the equipment and of profi t of the fi nancier on a transaction signing the agreement, both parties repays the sale price in installments. can be the same 10% as that off ered agreed to exchange US$250 with a higher by the conventional bank, but still the amount of US dollars in fi ve years’ time. 3. Leasing transaction can be made Riba-free. Here The same transaction can also be done the pricing is not a matt er of concern; Since this transaction involves through leasing, where the fi nancier the main concern is whether you are exchanging currencies with higher retains ownership of the equipment avoiding the exchange of currencies with amount of currencies, the transaction throughout the fi ve years, and Amir uses higher amount of currencies that involves involves Riba, and is thus unlawful the equipment and gives the fi nancier a Riba. according to Shariah. Now the question lease rental periodically. is, how can both the fi nancier (in this case So avoiding Riba is not rocket science, is the bank) and the borrower carry out the This lease rental will include the actual it? same transaction without involving Riba? amount paid by the fi nancier plus a profi t. The profi t rate can be set at the The views expressed here are the author’s There are many avenues to make this same 10% rate as before. After the tenor own and do not necessarily represent the transaction Riba-free, but the following of fi ve years is over, the fi nancier then views of the institution where he works. three are the most popular ones among sells the equipment to Amir at a very Islamic bankers: nominal price. Mabroor Mahmood is the principal of term fi nance at the Islamic Corporation for the 1. Equity investment Although the aforementioned three Development of the Private Sector (ICD). He In order to make the transaction Riba- mechanisms are the most popular can be contacted at [email protected].

Islamic microϐinance: A panacea for poverty and ϐinancial exclusion

Islamic fi nance, being a Shariah compliant fi nancial system, is not only expected to follow the principles and rulings of Shariah, but also expected to uphold the Islamic ethical and moral values by default. With such fi rm and transcendent ethical back-up as its foundational concept, Islamic fi nance thus is supposed to off er a unique perspective to fi nance that takes into account Islamic values of what is right or wrong, and what is good or bad for the whole of mankind. FARRUKH HABIB writes.

MICROFINANCE Table 1: Poverty and unemployment in OIC member countries By Farrukh Habib No

Islamic ﬁ nance is to primarily commit itself to its social responsibility, particularly the real economic problems (%) countries faced by society and att empt to solve Economic OIC member development Country rank

them in an eﬃ cient manner. Population below Unemployment rate international dollar* national poverty line national poverty on purchasing power on purchasing power GDP per capita based according to PPP GDP parity (PPP) in current

Two of the biggest real economic 1 Afghanistan 1,932.9 216 36 9.1 Least developed country problems currently faced by the whole 2 Albania 10,304.7 115 14.3 16.1 Developing country world, particularly by Muslim countries, are poverty and fi nancial exclusion. 3 Algeria 14,193.4 137 23 9.5 Developing country Poverty is a multidimensional problem 4 Azerbaijan 17,515.6 113 6 5.2 Developing country that has various root causes. It is 5 Bahrain 45,500.2 49 N/A 3.9 Developed country considered a vicious whirlpool which can swallow the economic prosperity 6 Bangladesh 3,122.7 193 31.5 4.3 Least developed country of a whole nation, and deprive it from 7 Benin 2,030.2 202 37.4 1 Least developed country any economic growth and development 8 Brunei 71,184.8 13 N/A 3.8 Developed country whatsoever. Due to this fact, poverty Darussalam alleviation has been entrenched within 9 Burkina-Faso 1,619.5 204 46.7 3.1 Least developed country the main objectives of the economic policy of many Muslim countries. 10 Cameroon 2,972.2 188 48 4.3 Developing country 11 Chad 2,182 186 46.7 7 Least developed country Financial exclusion, on the other hand, 12 Comoros 1,429.3 210 60 6.5 Least developed country is basically the inaccessibility of poor 13 Cote d’Ivoire 3,258.2 198 42 4 Developing country people to fi nancial services. It is believed to be one of the most crucial factors 14 Djibouti 3,270.4 181 23 N/A Least developed country contributing to the severity of poverty. 15 Egypt 10,529.9 144 25.2 13.2 Developing country Financial inclusion, as opposed to 16 Gabon 19,430.1 72 N/A 19.7 Developing country fi nancial exclusion, is a broader concept of directing the fi nancial markets toward 17 Gambia 1,645.4 195 48.4 7 Least developed country the bett erment of the poor. It aims to 18 Guinea 1,221.3 218 47 1.8 Least developed country serve the fi nancial needs of those who 19 Guinea- 1,385.5 214 N/A 6.9 Least developed country are deprived of mainstream fi nancial Bissau services. Studies have shown that 20 Guyana 6,877.6 129 35 11.1 Developing country fi nancial inclusion is positively correlated with the economic development of a 21 Indonesia 10,517 158 11.3 6.2 Developing country society, and accordingly, plays a critical 22 Iran 17,302.6 103 18.7 12.8 Developing country role in increasing economic growth. 23 Iraq 15,057.1 141 25 16.4 Developing country It also helps in reducing the level of 24 Jordan 12,050.3 150 14.2 11.1 Developing country unemployment and poverty. 25 Kazakhstan 24,227.9 96 5.3 4.1 Developing country The current state of poverty 26 Kuwait 73,245.7 25 N/A 3 Developed country in Muslim countries 27 Kyrgyz 3,322.2 187 33.7 8.1 Developing country Republic The issue of poverty is quite a challenge for Muslim countries. According to 28 Lebanon 17,462.2 87 28.6 6.4 Developing country MuslimPopulation.com (2016), the global 29 Libya 15,597.1 109 33.3 19.2 Developing country population is around 7.3 billion, out of 30 Malaysia 25,638.6 79 3.8 2 Developing country

Continued which 2.08 billion are Muslims. Muslims Table 1: Poverty and unemployment in OIC member countries make up a total of 28.49% of the world’s population. There are 57 OIC member 31 Maldives 12,529.7 125 16 11.6 Developing country countries which are home to a majority of 32 Mali 1,599.2 217 36.1 8.1 Least developed country the Muslim population. Approximately, 33 Mauritania 3,911.8 192 40 31 Least developed country half of the poor population of the world 34 Morocco 7,490.7 155 15 10.2 Developing country live in those countries. That is why most of those countries are considered as 35 Mozambique 1,129.3 212 52 22.6 Least developed country either developing or underdeveloped 36 Niger 937.7 222 63 5.1 Least developed country countries with high rates of poverty and 37 Nigeria 5,911.2 180 70 7.5 Developing country unemployment. In fact, in some of those countries, a major part of the population 38 Oman 38,630.7 50 NA 7.2 Developed country lives below the poverty line (see Table 1 39 Pakistan 4,811.4 177 22.3 5.2 Developing country below). 40 Palestine 4,509 NA 28.5 26.2 Developing country 41 Qatar 140,649.2 1 NA 0.3 Developed country There are approximately two billion poor people around the world who are 42 Saudi Arabia 51,924.4 44 NA 5.6 Developed country excluded from regular fi nancial services. 43 Senegal 2,333.1 194 46.7 10 Least developed country Looking at the Table 1, it can be said 44 Sierra Leone 1,966.1 208 70.2 3.3 Least developed country that the global Muslim community represents a large number of those 45 Somalia 600 226 NA 6.9 Least developed country two billion poor people. In spite of 46 Sudan 4,069.3 183 46.5 14.8 Least developed country that, it is the potential customer base 47 Suriname 16,637.6 101 70 5.6 Developing country for Islamic fi nancial services; yet it is 48 Syria 5,100 159 82.5 10.8 Developing country deprived of such services, as Islamic fi nance continues to off er predominantly 49 Tajikistan 2,690.8 189 35.6 10.9 Developing country mainstream products and services. This 50 Togo 1,428.8 215 32 6.9 Least developed country segment is not only a victim of poverty, 51 Tunisia 11,435.6 120 15.5 13.3 Developing country but also of fi nancial exclusion that adds 52 Turkey 19,199.5 90 16.9 9.2 Developing country a pro-cyclical eff ect to its poverty. A viable panacea for curing its poverty is 53 Turkmenistan 15,473.6 123 0.2 10.5 Developing country to promote fi nancial inclusion through 54 Uganda 1,770.9 203 19.7 3.8 Least developed country Islamic microfi nance. 55 UAE 67,674.1 48 19.5 3.6 Developed country Financial inclusion through 56 Uzbekistan 5,573.1 171 17 10.6 Developing country Islamic microϐinance 57 Yemen 3,784.6 185 54 17.4 Least developed country If Islamic fi nance wants to espouse *An international dollar has the same purchasing power over GDP as the US dollar has in the US. Source: Adapted from various sources its social, ethical and Islamic value- driven image, it should aim to broaden the ownership base of businesses and ȱŗǱȱ£ȱȱ ȱȱȱ ȱęȱ¢ȱŘŖŖŝȬŗŚȱǻǞȱǼ target poor people in terms of fi nancial ęȱǻŗƖǼ assistance. This approach is more ȱǻŗƖǼ suitable and conducive for achieving 9.3% ŗǰşŞŚ ȱǻŚƖǼ the objectives of removing income ŗŘǯřƖ 1,813 inequalities and realizing socioeconomic 1,631 ȱǻŚƖǼ justice. ŘŖǯŘƖ ŗǰřśŝ ȱǻŗśƖǼ 9.9% 19.1% Farrukh Habib is a research offi cer at the 1,139 International Shariah Research Academy for ŗǰŖřŜ ŘŜƖ Islamic Finance (ISRA) in Kuala Lumpur, ŞŘŘ Malaysia. He can be contacted at farrukh@ isra.my. ŘŞǯŜƖ 639 ȱǻŝśƖǼ 

To read the rest of this article, please ŘŖŖŝȱ ŘŖŖŞȱ ŘŖŖşȱ ŘŖŗŖȱ ŘŖŗŗȱ ŘŖŗŘȱ ŘŖŗřȱ ŘŖŗŚ log on to www.islamicﬁ nancenews.com Source: GIFR (2015)

Measuring Maqasid Shariah

The operationalization of Maqasid Shariah (Maqasid) or Shariah objectives has been a trending concern for academicians and researchers. The concept is intuitively appealing as it touches a deep and sincere part in the hearts of researchers. In this article, DR NASER AL ZIYADAT argues for and against the case of Maqasid operationalization.

MAQASID SHARIAH usually link Maqasid with the ultimate superfi cial end results but not the means objective of Shariah: bringing welfare to reach those end results. For example, By Dr Naser Al Ziyadat and avoiding harm. Furthermore, he if an Islamic fi nance institution has recognizes the widely used ‘defi nition’ injustice clauses in its Mudarabah, that Based on the understanding of the of Maqasid as dimensions but not a Islamic fi nance institution will achieve researchers, and in fact their research defi nition. So, there is a big diff erence high results when gauging Maqasid fi ndings, Islamic fi nance institutions between what has been regularly quoted according to the parameters used by are not fully achieving Maqasid. A as the defi nition of Maqasid (the fi ve most researchers. great deal of those who support that essentials) and the real defi nition of claim have based such a claim on Maqasid. That’s why Al-Najjar has a The most important feature of the Fiqh subjective arguments. However, few of specifi c chapter on the new dimensions of Maqasid (Maqasid jurisprudence) is the researchers have operationalized of Maqasid in which he adds three that it concerns the process (ie the rules Maqasid models and tested them dimensions to the original fi ve. of reasoning) used by the Mujtahid (a qualitatively and quantitatively. The highly qualifi ed Fiqh scholar) to reach results have always been the same: the Shariah ruling to achieve Maqasid. Islamic fi nance institutions do not work A good example is the Fatwa issued to fully achieve Maqasid. Researchers by the European Council for Fatwa and Research that permitt ed Muslims The starting point of the argument (for do not have living in non-Muslim countries to use and against Maqasid operationalization) the actual passion interest-based mortgage facilities off ered is the end point of the results of the by conventional fi nancial institutions. researchers: Do Islamic fi nance institutions to investigate the The Fatwa was aimed at achieving the fully achieve Maqasid? In fact, this is not a objectives of preserving human lives question that can be answered with either original sources and wealth; however, the text of the a ‘yes’ or ‘no’. It depends on the way a Fatwa set limitations by location, time researcher defi nes Maqasid. of the deϔinition of and the availability of Shariah compliant alternatives. Taking this example A thorough review of some studies has Maqasid. This has for measuring Maqasid, the models indicated that most of the researchers developed by Maqasid operationalization cited the defi nition of Maqasid as a caused the deϔinition researchers can give negative results. second citation. This means that they This is because they tend to measure quoted the defi nition from a research that to be misunderstood the end results without considering the had taken it from the original source or context in which the end results have from another research before the original and taken for occurred. source. granted Affi rmatively speaking, Maqasid is a With the repetition of the copies of very important and noble branch of the the citations from sources other than The second point in the argument is that theory of Islamic jurisprudence. the original source, the real defi nition most researchers try to operationalize However, Maqasid cannot be gauged of Maqasid has been missed. In fact, the fi ve Maqasid and test the levels of based on a fi nite list of good deeds. the researchers do not have the actual their achievements by Islamic fi nance Maqasid really concerns all deeds of passion to investigate the original institutions. Regardless of the proxies bringing welfare and avoiding harm. The sources of the defi nition of Maqasid. they use, researchers go far away from straightforward way to measure Maqasid This has caused the defi nition to be gauging Maqasid achievement when is to understand the rules of reasoning misunderstood and taken for granted. doing so. In fact, whatever proxies used by members of the Shariah advisory That misunderstanding is due to used to gauge an organization’s boards when issuing their Fatwa the fact that the defi nition has been ethical performance, they can never be concerning the work of Islamic fi nance extracted from its normal context and exhaustive. This is a basic rule in the institutions. Otherwise, researchers will unfortunately used out of its context, a literature of business ethics. Thus, unfair always be revolving in an endless circle matt er that imposes limitations on the instruments have been used to measure when measuring Maqasid. broader meaning. concepts that are totally based on fairness (ie Maqasid). Dr Naser Al Ziyadat is a research fellow at In his Arabic book titled ‘Shariah the Center for Responsible Citizenship and Objectives with New Dimensions’, Al- When assuming the effi ciency of those Sustainability, School of Management and Najjar provides a great deal of Maqasid measures, for the sake of argument, Governance, Murdoch University, Australia. defi nitions cited from modern and a major obstacle stands in the way He can be contacted at n.alziyadat@murdoch. medieval scholars. He notes that scholars of gauging Maqasid: measuring the ed.au.

A quantum leap for the Luxembourg fund structuring toolbox

Being Europe’s most important cross-border investment funds domicile, with respect to retail (such as UCITS) and alternative investment funds (AIFs), and with EUR3.4 trillion (US$3.86 trillion) of assets under management (ALFI, the 31st March 2016), there is no other domicile such as Luxembourg in the world with the same global reach and worldwide recognition from both investors and managers alike. The same is true for Islamic funds, where Luxembourg has become the third-largest funds domicile after Saudi Arabia and Malaysia, with 17% of all Islamic funds domiciled there (Zawya, the 31st December 2015). BISHR SHIBLAQ explores.

LUXEMBOURG fund managers, which combines the It would, however, be incorrect to state legal and tax features of the well-known, By Bishr Shiblaq that the modernized limited partnership tested and tried SIF or SICAR regimes regimes have replaced the tried and without the regulatory supervision of the The success of Luxembourg’s tested investment company in risk Commission de Surveillance du Secteur investment funds industry is mainly capital (SICAR) or the specialized Financier (CSSF). built upon its ability to connect investment fund (SIF). While the launch managers and investors from around the of new SICARs and SIFs has since Legal structuring fl exibility: Just like world through established distribution diminished gradually as opposed to the SIF and SICAR, the RAIF may be channels, giving funds and its managers the launch of CLPs and SLPs, it proves formed under any of the well-known the possibility to use the European that there is no one-size-fi ts-all solution. Luxembourg corporate, partnership and Union (EU) passport for distribution. The unprecedented rise of the limited contractual legal forms: Investment funds require a solid, yet partnership did, however, indicate to - Partnership forms: corporate (SCA), fl exible, legal, regulatory and fi scal the Luxembourg legislator that market common (CLP) or special (SLP) framework, which allows them to make participants no longer perceive product - Corporate forms: public limited long-term projections. The Luxembourg supervision as a must-have. In particular, company (société anonyme - SA), model has traditionally been based on Shariah compliant fund managers based private limited company (société sound regulation at the product level. outside of Europe were less keen to à responsabilité limitée - S.à r.l.), However, since the introduction of establish a fund with supervision of cooperative company organized as the Alternative Investment Managers both the product and the fund manager. a public limited company (société Directive (AIFMD), Luxembourg has Instead, market participants put speed to coopérative organisée comme une SA decided to upgrade its existing fund market, as well as structuring fl exibility - SCOSA), and structuring toolbox and introduce (in the context of regional, international - Contractual form: common fund new and innovative unregulated fund or global off erings) at the forefront of (fonds commun de placement - FCP). structures. benefi cial interests and requirements. Furthermore, a RAIF may adopt a The Luxembourg limited After learning the fi rst lessons from variable (such as SICAV) or fi xed partnership the implementation of the AIFMD, capital (such as SICAF) structure. Also, As an initial step toward the new the Luxembourg fund structuring quite importantly, the RAIF may adopt European approach for regulation of the toolbox is now ready for one of its most an umbrella or multi-compartment AIF sector, the AIFMD was implemented signifi cant evolutions: the creation of a structure. by the Luxembourg legislator. In the new investment funds framework. This same step, the Luxembourg common framework combines the strengths of Investment strategy: The RAIF (just like limited partnership – société en the SIF and SICAR regimes, permitt ing a the SIF) is subject to a minimum risk- commandite simple (SCS or CLP) was further combination with the modernized spreading requirement (such as with a modernized and a quantum leap was limited partnership forms under a new 30% counterparty exposure limit safe taken with the introduction of the acronym. Known as the RAIF (reserved harbor rule of aggregate committ ed special limited partnership – société AIF), it will be reserved for authorized capital/net asset value). If the RAIF elects en commandite spéciale (SCSp or AIF managers (AIFMs). The Luxembourg to only invest in qualifying risk capital SLP). Two years and around 1,000 new Government Council has introduced a investments (just like a SICAR does), limited partnership launches later, bill of law providing for the introduction the risk-spreading requirement will not the Luxembourg unregulated limited of the RAIF regime into Luxembourg law apply. partnership (whether common or special) before the 2016 year-end. has become a new norm for the launch of Eligible investors: The RAIF will be AIFs. As Islamic funds are focusing on a The evolution of the available to well-informed investors large extent on alternative asset classes structuring toolbox – the RAIF which include institutional investors, such as real estate and private equity, professional investors and investors these unregulated funds are quickly regime investing a certain minimum amount also becoming the norm for Islamic The new regime will allow initiators to (GBP125,000 (US$181,411)) further alternative funds. set up a new type of AIF, an asset class which is of particular interest to Islamic continued...

Continued accepting a self-certifi cation. The eligible Additionally, the confi dentiality of the replaced by the AIFM authorization as investor concept will have to be applied limited partnership agreement will be a prerequisite for certain institutional in the context of the AIFMD marketing upheld. investors, it remains to be seen whether passport, which reserves the benefi t of managers will wish to change the the passport to professional EU-based The absence of supervision and the regulatory status if and when the AIF is (such as established or resident) investors fact that the CSSF will not have to running smoothly. In particular, there only. authorize the launch of a new RAIF (or may be limited appetite for managers any changes thereto) will probably be of regulated closed-ended AIFs to seek Governance: The naming convention recognized as the most welcome feature a regime change. The question may of the RAIF stems from the legal of the new regime. Fund managers and possibly be raised much faster in respect requirement that a RAIF must be initiators have long been requesting of umbrella structures, which continue to managed by, and is thus, reserved timing certainty when applying for new launch new compartments or sub-funds, for fully authorized AIFMs. Each product launches. With the introduction ie all the investors in the predecessor Luxembourg AIF which elects to of the manager regulation via the compartments or sub-funds will have to be treated as a RAIF must appoint AIFMD, the Luxembourg legislator consent to such a regime change. a duly authorized AIFM, whether identifi ed an opportunity to revise established in Luxembourg, in another its long-standing strategy: continue Outlook EU member state or, upon and subject the strong and recognized regulatory The introduction of the RAIF is a to the implementation of the third framework applicable to the Luxembourg long-awaited development, made country management passport, a third fund product and the Luxembourg possible by the implementation of the country authorized AIFM. This is the services providers surrounding it, AIFMD without sacrifi cing the investor fundamental access condition for the but replacing the authorization and protection standards, which were built use of the new regime: only authorized prudential supervision of the CSSF by up successfully over the past 25 years. It AIFMs may avail themselves of the new the authorization and supervision of is clear that the new regulatory legal and fi scal framework of the RAIF. the product through the authorized environment has already changed how Registered AIFMs as well as currently AIFM. The outcome will be absolute Islamic funds are being structured in third country AIFMs may not manage a planning certainty, resolving the single Luxembourg. Islamic fund managers are RAIF. most important issue of the Luxembourg already choosing the Luxembourg alternative funds center. limited partnerships over other AIFs. The No CSSF supervision: The creation of a introduction of the RAIF will enable RAIF will have to be witnessed in front Tax features: The RAIF will either be Islamic fund managers to use a true of a Luxembourg notary public. The subject to an annual subscription tax alternative to AIFs set up in other notary public must ensure that the RAIF (taxe d’abonnement) at a rate of 0.01%, domiciles. The combination of a high is then registered with the Luxembourg with various exemptions, or be subject to degree of fl exibility and structuring Trade and Companies’ Register within the tax regime applicable to SICARs, ie possibilities, combined with the 10 days of its formation. However, the be fully subject to tax save for qualifying compatibility with EU regulations and formation in front of a Luxembourg risk capital income and gains. passporting options will be a quantum notary does not mean that a Luxembourg leap for the conventional, as well as the limited partnership and a FCP electing Conversions: Existing SIFs, SICARs Islamic, fund industry. for the RAIF regime must be enacted in a and unregulated AIFs may elect for notarial deed. Unlike the corporate form, the RAIF regime, subject to securing Bishr Shiblaq is the head of offi ce at Arendt & RAIFs and common and special limited the relevant approvals from investors Medernach – Avocats. He can be contacted at partnerships electing for the RAIF regime and, where applicable, the CSSF. [email protected]. may be formed under private seal. While the product regulation has been

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is trading at the same level of pricing According to an announcement on Bank DEALS to that of comparable conventional Negara Malaysia’s website, the Sukuk is bonds — a fi rst for Turkey. The source rated ‘MARC-1IS’. Perodua partially redeems also added that the government will IMTN be looking to the bonds market and Pakistani dollar Sukuk on MALAYSIA: Perodua Global other currencies to raise another US$500 Manufacturing has made a partial million. hold redemption of RM35 million (US$8.5 PAKISTAN: The Pakistani government million) from its RM2 billion (US$485.89 MAB Holding plans Sukuk has postponed its US$500 million Sukuk million) Islamic medium-term notes off ering, which was initially planned OMAN: Omani conglomerate th st for before the 30 June. According to (IMTN) on the 31 May under the Mohammed Al Barwani Holding (MAB stock code VN150342, according to Pakistan Today, the government dropped Holding) is looking to raise US$150 the Sukuk plan after it managed to an announcement on Bank Negara million through the private Sukuk Malaysia’s website. borrow US$1.4 billion through less market. The Capital Market Authority expensive loans. The government in a statement confi rmed that it has intends to issue US$750 million-worth of Indonesia sells Sukuk approved the prospectus of the fi rm’s eurobonds in the new fi nancial year as INDONESIA: The government of proposed issuance. The issue will be the part of a US$6 billion borrowing plan. Indonesia has awarded a total of IDR4.93 fi rst in the country after the new Sukuk trillion (US$360.88 million) from the regulation came into force in April this Separately, the government is reportedly sale of fi ve sovereign Sukuk securities year. planning to raise PKR79.1 billion (SPNS01122016 and four others) on the (US$754.41 million) via a potential sale of st 31 May, after receiving total incoming Horizon Hills seeks consent foreign currency Sukuk in the fi scal year bids of up to IDR9.63 trillion (US$704.92 for ϐinancing ending June 2017, according to Pakistan million), according to an announcement Observer. This is part of a budget aimed on the Ministry of Finance’s website. MALAYSIA: Based on a statement released by AmInvestment Bank on Bank at shoring up the country’s fi nances. Negara Malaysia’s website, Horizon Hills The government is also looking to raise GFH to issue Sukuk Development is seeking consent from the PKR47.7 billion (US$454.94 million) BAHRAIN: GFH Financial Group holders of its RM200 million (US$48.24 in concessional fi nances from the IDB, confi rmed in a statement that it is million) Islamic medium-term note below the PKR92.3 billion (US$880.31 planning to issue Sukuk worth US$150 (IMTN) program for a number of actions million) raised from the multilateral bank million which will be used to repay which include: obtaining new fi nancing in the 2015-16 fi scal year. outstanding debts and undertake future for its project development; creating investments. security interests in respect of the new Malaysian Sukuk issuance on fi nancing; releasing and discharging the horizon Turkey issues US$1 billion existing securities in exchange for cash MALAYSIA: State-owned water asset Sukuk deposits equivalent to the outstanding management company Pengurusan TURKEY: The government of Turkey principal and profi t amount payable Air SPV intends to raise RM1.4 billion has issued its US$1 billion dollar- under the IMTN program; and granting (US$337.19 million) through Sukuk denominated Sukuk facility at a 4.25% waiver from complying with provisions in June, with a view of upsizing the profi t rate, a lead arranger confi rmed in relation to dividend payments and off ering, according to Bloomberg, with IFN. The fi ve-year paper was distributions. which also reported that DanaInfra may priced at +290bps over midswaps and increase its RM46 billion (US$11.1 billion) saw phenomenal participation from the STSSB issues ICP program to RM60 billion (US$14.48 Middle East (54%), Turkey (16%), Europe MALAYSIA: Sunway Treasury Sukuk billion) by 2022 and is considering (11%), the UK (10%), Asia (5%) and the (STSSB) has issued its 100th series of tapping the market two more times in US (4%). The Sukuk facility has been Islamic commercial papers (ICP) worth 2016. admitt ed to the London Stock Exchange RM200 million (US$48.17 million) on and, according to the lead arranger, the 7th June, with a one-month tenor.

DEAL TRACKER Full Deal Tracker on page 34 EXPECTED DATE COMPANY'S NAME SIZE STRUCTURE ANNOUNCEMENT DATE

July 2016 MB Holding Co US$150 million Sukuk 31st May 2016 TBA Republic of Turkey TBA Sukuk 30th May 2016 TBA Government of Sri Lanka US$1 billion Sukuk 27th May 2016

TBA Saudi Aramco TBA Sukuk 26th May 2016 TBA Al-Tajamaout for Touristic JOD45 million Sukuk Ijarah 24th May 2016 Projects

Bank AlJazira issues Sukuk Sukuk market to fund the Republic’s Negara Malaysia may purchase up to SAUDI ARABIA: Bank AlJazira has infrastructure projects, incoming Finance 10% of the issuance, which will mature th completed the issuance of its secondary Minister Carlos Dominguez was quoted on the 30 September 2026. riyal-denominated Sukuk instrument by Reuters as saying. Noting that the worth SAR2 billion (US$533.1 million) government’s decision to tap the Sukuk ICD lists on LSE in nominal value via a place placement, market is not solely for diversifi cation GLOBAL: The Islamic Corporation for according to a bourse fi ling. The facility purposes but also based on securing the the Development of the Private Sector has a maturity of 10 years with an option best deal for funding, Dominguez added (ICD) has listed its Wakalah medium- to buy back after fi ve years. The return that the country is also looking at yuan term note program (MTN) and maiden on the instrument will have a margin of borrowings. US$300 million fi ve-year Sukuk on the 190bps over the six-month SIBOR and London Stock Exchange (LSE). The ICD proceeds will be used to strengthen its GII Murabahah in the works said in a statement that it has raised capital base. MALAYSIA: The government of US$850 million in long-term funds, or Malaysia will issue RM3.5 billion approximately 70% of its 2016 US$1.2 Filipino Sukuk on the horizon (US$854.7 million)-worth of GII billion funding program. The MTN will th PHILIPPINES: The Philippines is Murabahah on the 8 June, according serve as the IDB unit’s main funding considering raising funds from the to a central bank announcement. Bank platform for regular Sukuk issuance.

the next two years and by early 2017, Al Baraka is also planning to sign a AFRICA the bank noted in a statement. In 2016, fi nancing agreement worth EGP100 the bank intends to open two branches million (US$11.23 million) with the Al Baraka outlines growth aimed specifi cally at the retail and SME Social Fund for Development to support strategy sectors in addition to fully refurbishing the fi nancing of SMEs which represents EGYPT: Al Baraka Bank Egypt plans old branches. It is also on track to almost 13% of the bank’s total customer to expand its branch network to 42 by complete its new headquarters building fi nancing. 2020 with three new full branches over in the New Cairo area. Concurrently,

to arrange the sale of its US$1.5 billion completed in part with a Shariah AMERICAS residential conversion of the offi ce compliant fi nancing from Qatar National skyscraper at One Wall Street, according Bank. The sale of the apartments by Macklowe hires CORE to to The Real Deal quoting unnamed a CORE team led by the brokerage’s market apartments sources. Sources also added that the founder and CEO Shaun Osher is US: Macklowe Properties has mandated offi ce building was acquired in 2014 for expected to launch sometime in 2017. local real estate brokerage fi rm CORE US$585 million, with the acquisition

tax incentive for Islamic REITs equal to Investree plans Shariah ASIA conventional REITs as included in the ninth economic policy package launched offerings Qard Hasan for Hamdard in March 2015. The incentive allows INDONESIA: Investree, a newly- University students REITs investors to pay income tax of only launched Indonesian peer-to-peer lending marketplace, plans to introduce PAKISTAN: Meezan Bank, through 0.5%, much lower than the prior tax of Shariah compliant products as part of its its charity arm Ihsan Trust, has signed 5%. expansion plan which includes rolling an MoU with Hamdard University to out a mobile application and building provide Qard Hasan or interest-free BNM launches FTEG a presence in Surabaya, Makassar and loans to students of the university on the MALAYSIA: Bank Negara Malaysia Semarang. According to Dealstreet Asia, need-cum-merit basis, according to the nd (BNM) on the 2 June set up the the start-up will begin working on its Associated Press of Pakistan. Financial Technology Enabler Group plan in the second half of 2016 with (FTEG), a cross-functional group hopes of concluding it by January 2017. OJK to expedite Islamic REITs established to formulate and enhance rules regulatory policies to facilitate the adoption of technological innovations in Indonesia to form economic INDONESIA: Otoritas Jasa Keuangan task forces (OJK) is expecting to fi nalize rules on the Malaysian fi nancial services industry. INDONESIA: Four new task forces Islamic REITs by the third or fourth BNM in a statement noted that the FTEG, will be established by the Indonesian quarter of this year, OJK’s deputy director which will also serve as the regulator’s government to supervise and fast- of the Shariah market, Muhammad dedicated contact point for fi ntech- track the implementation of the Touriq, was quoted by The Jakarta Post related queries, will be led by Aznan country’s Economic Policy Packages as saying. To make the asset class more Abdul Aziz, the director of the Financial designed to deregulate and bolster att ractive, the government would also Sector Development Department at the the economy, confi rmed the Ministry level the playing fi eld by providing a central bank.

of Finance in a statement. The task to co-found the multilateral fi nancier’s remaining 1.5% deposits with the bank forces will respectively be responsible proposed Islamic infrastructure bank, are from corporate clients, and ICB for: accelerating the completion of joining Turkey, Indonesia and Saudi will need two more years to pay their regulations; identifying obstacles, Arabia which are all on board this deposits. problems and cases; evaluating and initiative. According to the Financial analyzing the impact of policies; Express, Prime Minister Sheikh Hasina FTSE Bursa Malaysia conducts and disseminating and publishing conveyed this to IDB Acting President Dr information on policy packages. Ahmed Tiktik during her offi cial visit to review Saudi Arabia. Dr Ahmed also confi rmed MALAYSIA: Three new constituents According to Chief Economics Minister that the IDB will open a new country have been added to the FTSE Bursa Darmin Nasution, there are seven gateway offi ce in Bangladesh, one out of Malaysia Hijrah Shariah Index following incomplete regulations related to the fi ve globally. the semi-annual review of the FTSE nd 1st-12th Economic Policy Packages while Bursa Malaysia Index Series on the 2 two regulations under the Coordinating ICB Islamic Bank not looking June. According to a statement, the new Ministry for Economic Aff airs and entities are: SapuraKencana Petroleum, Ministry of Finance with regards to to merge Kulim Malaysia and My EG Services, income tax involving real estate transfer BANGLADESH: ICB Islamic Bank replacing Malakoff , BIMB Holdings and income tax for employees of has no plans to merge or sell on the and Bumi Armada. The changes th labor-intensive industries are pending majority shares owned by Malaysian will take eff ect on the 20 June. The regulation harmonization from the entrepreneurs despite its fi nancial FTSE Bursa Malaysia Hijrah Shariah Ministry of Justice and Human Rights. struggle, Muhammad Shafi q Abdullah, Index covers 30 of the largest Shariah the managing director and CEO of compliant companies listed on the FTSE ICB Islamic Bank, was quoted by the Bursa Malaysia EMAS Index that are Bangladesh keen to support Daily Star as saying. Although the bank screened by Yasaar and the Securities Islamic infrastructure bank has paid off 98.5% of account holders’ Commission’s Shariah Advisory BANGLADESH: Bangladesh has deposits, those are from individual Council. expressed to the IDB its keen interest depositors. Muhammad added that the

deliberate on a total of eight resolutions, Ferioli, the head of SACE’s regional EUROPE including two special resolutions on the offi ce in Dubai, the agency is studying disapplication of statutory pre-emption Islamic structures such as commodity Rasmala to decide on rights and share buybacks. Murabahah and Istisnah for fi nancing directors investment and export contracts to UK: Shariah compliant independent SACE looks to Islamic ϐinance replace its two basic conventional fi nance investment management group Rasmala ITALY: Italian export credit agency SACE structures — the supplier credit scheme will seek shareholders’ approval for is planning to off er Islamic fi nancial and buyer credit scheme. SACE is the re-election of two of its directors, products in a bid to reach out to more currently in talks with big international Michael Toxvaerd and Neil McDougall at customers in the MENA region as well as banks that operate Islamic windows to its 2016 annual general meeting (AGM) responding to demands from clients in see how the Italian export credit agency’s th to be held on the 20 June. According the region’s Islamic fi nance core market. deals could comply with Islam’s ban on to a statement, the AGM will also According to Reuters quoting Marco interest payments.

titled ‘Macroprudential Regulation and after ending its previous alliance in the GLOBAL Policy in the Islamic Finance Industry: region, according to The Lawyer. DNFP Theory and Applications’. This book specializes in corporate and fi nancial IDB and AVIVO collaborate is expected to be used as a guide by transactions and was launched by GLOBAL: The IDB Infrastructure Fund central banks and other regulatory partners Dewi Djarot and Fachi Fachrul, II, sponsored by the IDB and other authorities in a dual banking system, whose experience include Islamic institutional investors, has partnered to mitigate systemic risks. Topics such fi nance. with AVIVO Group, a healthcare as systemic risks and fi nancial stability provider based in the UAE, to assist in the Islamic fi nance industry, and the Al Rajhi joins BIAN the latt er in expanding its healthcare doctrinal challenge for Islamic banking platform regionally. According to BQ GLOBAL: Al Rajhi Bank has joined the on macroprudential regulations, are Banking Industry Architecture Network Magazine, the fund is managed by included in it. ASMA Capital Partners. (BIAN), a not-for-profi t ecosystem comprising banks, technology providers, Hogan Lovells collaborates consultants and academics from across IRTI and Springer release with DNFP the world to drive the development of an new book GLOBAL: International legal fi rm Hogan agile technology framework for banks. GLOBAL: Islamic Research and Lovells has entered into an association BIAN in a statement to IFN said that the Training Institute (IRTI) and Springer with Indonesia-based Dewi Negara inclusion of Al Rajhi, the largest Islamic International have published a new book Fachi & Partners (DNFP), eight months bank in the world, into its network

will bring valuable knowledge of best Asian Infrastructure Investment Bank subscribed capital. AIIB was formally practices in Islamic banking to its global (AIIB)’s total authorized capital of established at the end of 2015 and was membership base. US$100 billion, Amwal Al Ghad reported. in talks with the IDB in May 2015 on the potential of utilizing Shariah compliant Egypt’s capital commitment According to the agreement signed in fi nancing facilities to fund Asia’s Beijing on the 29th June 2015, and ratifi ed infrastructure needs. to AIIB approved by Egypt’s parliament on the 4th June GLOBAL: Egypt plans to subscribe to 2016, Egypt will pay annual installments US$650 million of the China-backed of US$130 million over fi ve years of the

capital investment above OMR50,000 NASDAQ Dubai’s Sukuk listing MIDDLE EAST (US$130,000). SMEs with a capital reaches US$44.06 billion DFM launches Direct Deals investment of OMR50,000 and turnover of OMR100,000 (US$260,000), however, UAE: The Sukuk listing on NASDAQ service would only have to pay 3% tax provided Dubai has reached a total nominal value UAE: The Dubai Financial Market (DFM) certain conditions related to Omanization of US$44.06 billion from issuers in the announced in a press release that it has are met. Middle East and beyond, according to launched the Direct Deals service, a a statement. Boubyan Bank’s US$250 million Sukuk became the 8th Sukuk to be new process that enables investors and New law for QFC in the works brokerage fi rms to conduct bulky deals listed on the exchange in 2016. QATAR: A new law governing the on shares of a listed company, while Qatar Financial Center (QFC), aimed at being exempted from the price cap in In addition, EI Sukuk Company’s US$750 streamlining diff erent aspects of existing eff ect (15% up and 10% down). The million Sukuk and DP World Crescent’s regulation, including how companies number of shares has to be 3% and above US$1.17 billion Sukuk were admitt ed on registered in the zone access fi nancial st of the capital or with a value of AED200 the exchange for trading on the 1 June. products and services, is being debated million (US$54.44 million) at least, while with the Council of Ministers, Kamal the price must not exceed the previous Nagi, the chief strategic and business DIB plans rights issue for closing price by 25% up or down. development offi cer at the QFC, was capital increase quoted by Reuters as saying. There is UAE: Dubai Islamic Bank has opened New Islamic bank in Palestine no timeline for the new rule but it is subscriptions on the 7th June for a rights PALESTINE: Palestine will soon expected to be introduced sometime this issue worth AED3.16 billion (US$860.08 welcome a new locally-founded Islamic year, added Kamal. million) to raise their capital base, bank, Al Safa Bank Co, to be based in according to Reuters. The bank is off ering Ramallah, according to Reuters. With a Two bidders for stake in 988.4 million new shares on the basis of capital of US$75 million, the new bank is one new share for every four currently set to take off in the third quarter of this Shuaa held by shareholders. At the end of this year and will be off ering services that UAE: Abu Dhabi Financial Group and Al year’s fi rst quarter, the bank’s total capital include project-funding, foreign currency Mal Capital are among bidders for Dubai adequacy ratio remained above the trading and real estate investment. Group’s 48.4% stake in Shuaa Capital, regulatory minimum of 12% at 15.6%. The bank’s secretary of the founding according to Reuters. Dubai Group is a committ ee, Abdel-Rahim Al-Hassan, was unit of Dubai Holding and the sale of its Bahrain Bourse assigned as quoted as saying that some 37 million stake in Shuaa is to raise funds to meet shares, valued at US$37 million, have repayments under its US$10 billion debt share registrar for Al Baraka already been bought by co-founders of restructuring. BAHRAIN: Bahrain Bourse (BHB) and Al the bank, with another 38 million shares Baraka Banking Group (Al Baraka) have now on sale to the public. Islamic ϐinancing mulled for signed an agreement on the 25th May to assign BHB as a share registrar for the Omani mining project Omani government to raise shares of Al Baraka, according to a press OMAN: Al Hadeetha Resources — a release. BHB will provide Al Baraka corporate tax rate locally incorporated company that is with a number of services including OMAN: The government of Oman has 70% owned by Alara Oman Operations maintaining and updating a record of received the approval to increase the and Al Hadeetha Investments — is the share register, and online services country’s corporate tax rate, a measure considering Islamic fi nancing to fund that include real-time shareholding that will mean the government can raise the Al Hadeetha copper-gold mining confi rmations and other periodical an additional OMR125 million (US$324.6 project, which is to be implemented reports. BHB is also the share registrar million) to OMR250 million (US$647.16 in the Dakhiliyah governorate of the for United Gulf Bank and Bank ABC. million) a year, Majlis Al Shura member Sultanate. According to Oman Daily Tawfi q Al Lawati told Times of Oman. Observer, the companies are considering EIBFS hosts Islamic asset The representatives of the Council of both conventional and Islamic fi nancing State and Majlis Al Shura on the 26th May options, as well as a rights issue. The management workshop voted to increase the country’s corporate expected investment is about US$35 UAE: Despite its impressive growth tax rate from 12% to 15%, applicable to million and annual revenues projected and being the second-largest Islamic companies which are not SMEs and with at around US$430 million for the fi rst 10 banking market after Malaysia, the UAE years of operations. must continue to address the shortfall in

Islamic investment avenues in addition BTMU to extend Murabahah took place following the release of a new to improving and diversifying short-term Sukuk regulation by the Capital Market asset management product off erings, said ϐinancing to Bahri Authority. The Oman chapter is aimed Jamal Al Jassmi, the general manager of SAUDI ARABIA: The Bank of Tokyo- at supporting capital market fi nancing the Emirates Institute for Banking and Mitsubishi UFJ (BTMU) has signed a and promoting the growth of the fi xed Financial Studies (EIBFS) at its recent Murabahah fi nancing facility worth income market. Islamic asset management workshop SAR472.5 million (US$125.94 million) with the National Shipping Company which was att ended by senior level Sohar Islamic and Gulf Muscat bankers and fi nancial experts across the of Saudi Arabia (Bahri), according to a UAE. bourse fi ling. The fi nancing covers 80% United sign MoU of the purchase of two second-hand very OMAN: Sohar Islamic, the Islamic large crude carriers announced on the 26th banking window of Bank Sohar, and Gulf New court for ϐinancial October 2015 and will be repaid over 10 Muscat United have signed an MoU to disputes underway years by equal quarterly installments. provide preferential Shariah compliant BAHRAIN: Bahrain will soon be fi nancing solutions to potential buyers establishing a new Commercial Court DAMAC capitalizing on Halal of the offi ce units in the new smart to sett le fi nancial disputes and it will be offi ce iTower complex currently under separate from criminal and civil courts tourism development in Bausher, according to the that already exist in the Diplomatic Area, UAE: DAMAC Properties has announced Muscat Daily. according to GDNonline.com. a limited release of the second phase of its Shariah compliant luxury hotel apartments, Ghalia, according to a Samba approves dividend Bank Nizwa rolls out new statement. Operated by DAMAC distribution product Hotels & Resorts, the 38-storey tower SAUDI ARABIA: Samba Financial OMAN: Bank Nizwa has introduced in Jumeirah Village will comprise 742 Group has approved the board’s commercial fi nance for salaried keys, with furnished units ranging from recommendation to distribute dividends individuals, a tailored new product that studio, one, two and three-bedroom amounting to SAR1.13 billion (US$301.19 will allow them to acquire business assets apartments, with prices starting at million) for the second half of 2015, and earn extra income, according to a AED550,000 (US$149,733). during the group’s extraordinary general press release. Based on the Murabahah meeting. According to a bourse fi ling, structure, the facility is extending GBSA launches Oman chapter the payout equals to 4.5% of the share fi nancing to individuals with a minimum OMAN: The Dubai-based Gulf Bond and capital net of Zakat, and is in addition to monthly salary of OMR500 (US$1,295.24) Sukuk Association (GBSA) has launched the SAR1.2 billion (US$319.85 million) and off ers competitive profi t rates and its Oman chapter in Muscat, according distributed in the fi rst half of 2015. fl exible repayment periods extending up to Oman Daily Observer. The launch to 10 years.

the Central Bank of Nigeria. Hassan will RESULTS take over from Mahe Abubakar, who has ASSET been the acting managing director since Al Baraka Bank Egypt December 2015. MANAGEMENT EGYPT: Al Baraka Bank Egypt posted a Public Mutual declares net income of EGP127 million (US$14.25 million) in the fi rst quarter of 2016, up Mawarid Finance distributions for 10 funds 101% compared with the corresponding UAE: Dubai-based Mawarid Finance MALAYSIA: Public Mutual, a wholly- period in 2015. In a statement, the reported a net profi t of AED69.8 million owned subsidiary of Public Bank, bank noted that total assets grew 4% to (US$19 million) for 2015, a 20.3% year- declared distributions of more than EGP30.1 billion (US$3.38 billion) as at the on-year increase from AED58 million RM424 million (US$103.01 million) for 10 end of March 2016. (US$15.77 million), according to its latest funds, including three Shariah compliant fi nancial report. The Shariah compliant funds. According to a statement, Public investment and advisory group also Itt ikal Fund received a gross distribution Jaiz Bank saw its revenue jump 193% to AED184.8 of 3.5 Malaysian sen (0.85 US cents) per NIGERIA: Shariah compliant Jaiz Bank million (US$50.3 million) from AED63.1 unit, while Public Islamic Equity Fund posted a profi t before tax of NGN794.2 million (US$17.17 million) recorded in and Public Islamic Select Treasures Fund million (US$3.96 million) for the fi nancial 2014. Its Wakalah deposits, meanwhile, received 1.25 sen (0.3 US cents) and 1 year 2015, representing a six-fold or increased by 44.7% year-on-year to sen (0.24 US cents) per unit respectively. 526% growth compared with NGN126.8 AED381.1 million (US$103.73 million) As at the end of April 2016, the total million (US$632,040) recorded in the from AED263.3 million (US$71.67 fund size managed by the company was previous year, naija247news.com quoted million). RM66.9 billion (US$16.25 billion). Alhaji Umaru Mutallab, the bank’s chairman, as saying during the bank’s annual general meeting. At the same Abu Dhabi National Takaful time, the board of directors appointed UAE: Abu Dhabi National Takaful Hassan Usman as the managing director recorded a fi rst quarter net profi t of of the bank, subject to approval from AED18.1 million (US$4.93 million), a

51% year-on-year growth compared on-year, while its net operating income 196% compared with the fi rst quarter of with AED12 million (US$3.27 million) increased 44% to reach DZD1.5 billion 2015. registered in the corresponding period of (US$13.52 million), according to a press last year, according to a statement. release. The changes are partly att ributed to the bank’s success in diversifying its income Gross Takaful contributions for the Al Baraka Bank Sudan sources from commissions, fees and quarter also rose 19% to AED93.4 million SUDAN: Al Baraka Bank Sudan has fi nancing. (US$25.42 million), from AED78.7 million announced its fi rst quarter results (US$21.42 million) in the fi rst quarter of for 2016 with net operating income Total assets and equity both increased 2015. increasing by 215% to reach SDG44 by 1% from the previous year to SDG2.3 million (US$7.16 million) compared with billion (US$374.3 million) and SDG292 Al Baraka Bank Algeria the same period last year. million (US$47.52 million) respectively, ALGERIA: Al Baraka Bank Algeria according to a press release. posted a net profi t of DZD960 million After allocating for provisions and (US$8.65 million) for the fi rst quarter taxation, net income increased to SDG33 of 2016, a marginal 1% increase year- million (US$5.37 million), doubling by

and Etiqa Insurance (Singapore) at ‘A’ nor secured a management meeting RATINGS with a stable outlook, according to a date to carry out a review of the Sukuk press release. The affi rmation refl ects program, issued by ABHC Sukuk, an S&P afϐirms Indonesia at the group’s position in the market as one SPV incorporated to facilitate the Sukuk ‘BB+/B’ of Malaysia’s major insurance groups transaction eff ected by Al Bayan which INDONESIA: S&P has affi rmed as well as its sound capitalization and is currently rated ‘AA3(s)/Stable’. At Indonesia’s ‘BB+’ long-term and ‘B’ short- profi tability fi gures. This is further the same time, the group has requested term sovereign credit ratings, as well as supported by it being a subsidiary of for its corporate credit ratings of ‘AA3/ its ‘axBBB+/axA-2’ AEAN regional scale Maybank, which also has stable ratings. Stable/P1’ to be withdrawn. ratings. According to a statement, the Fitch maintains that an upgrade of the long-term rating has a positive outlook. rating in the near future is unlikely. Maybank Indonesia’s Sukuk The rating agency added that the rated country’s fi scal framework has improved, Moody’s afϐirms Lebanon at which should enhance the quality of INDONESIA: Fitch has assigned a public expenditure and lead to more ‘B2’ national long-term rating of ‘AAA(idn)’ predictable fi scal outcomes. LEBANON: Moody’s has affi rmed on Maybank Indonesia’s senior Sukuk Lebanon’s ‘B2’ government debt and of up to a maximum of IDR700 billion issuer ratings, while maintaining (US$52.08 million) with a maturity of S&P withdraws ratings of a negative outlook, according to a three years, according to a statement. The ELTC statement. The affi rmation refl ects the Sukuk facility is issued under Maybank EGYPT: S&P has withdrawn its ratings credit support derived from the country’s Indonesia’s existing Shariah senior debt on Cairo-based Egyptian Life Takaful demonstrated fi scal resilience and strong program I of up to IDR1 trillion (US$74.4 (ELTC) at the company’s request, after liquidity position, despite the country’s million). At the same time, the rating having affi rmed its ‘B+’ counterparty continued political vacuum, Moody’s agency also assigned a national long- credit and insurer fi nancial strength added. The rating agency has also term rating of ‘AA(idn)’ on the bank’s ratings. The outlook on ELTC was affi rmed Lebanon’s short-term rating at subordinated bonds of up to a maximum negative at the time of withdrawal. ‘(P)Not Prime’. of IDR800 billion (US$59.52 million) with a maturity of seven years. MBL maintains ‘AA/A-1+’ Noble Group removes rating ratings on Sukuk program Negative outlook on Bahrain’s PAKISTAN: The ‘AA/A-1+’ entity ratings MALAYSIA: Noble Group has changed banking system on Meezan Bank (MBL) have been its rated RM3 billion (US$722.6 million) BAHRAIN: Moody’s has maintained a reaffi rmed with a stable outlook by JCR- Sukuk Murabahah program to unrated negative outlook on Bahrain’s banking VIS Credit Rating Company. According on the 19th May, according to a fi ling on system as it expects the operating to a statement, the ratings refl ect MBL’s Bank Negara Malaysia’s website. conditions for the country’s banks to healthy customer franchise which has continue deteriorating over the next 12 allowed the bank to build a sizeable, cost- Al Bayan’s annual Sukuk to 18 months, according to a statement. eff ective and granular deposit base. Christos Theofi lou, the assistant vice- review delayed president-analyst at Moody’s, noted that MALAYSIA: RAM has delayed the Etiqa Group rated ‘A’ low oil prices and reduced government annual review of Al Bayan’s RM1 billion spending are expected to weigh on GLOBAL: Fitch has affi rmed the insurer (US$244.56 million) Sukuk program, Bahraini banks, although this will fi nancial strength (IFS) ratings of the which was scheduled to be completed by likely be partly mitigated by the non-oil core entities of the Etiqa Group, namely June 2016. In a statement, RAM said that economy’s diversity and a GCC-funded Etiqa Insurance (Malaysia), Etiqa Takaful it has not received suffi cient information economic support package.

appointments of Shaik Abdul Rasheed appointed as the group head of global MOVES Abdul Ghaff our and Wan Hanisah banking, while Amirul Feisal Wan Zahir 1MDB Wan Ibrahim as its non-executive will take over the role of group chief directors, eff ective the 26th May and fi nancial offi cer from Mohamad. MALAYSIA: 1Malaysia Development the 1st June respectively. According (1MDB), a wholly-owned subsidiary of to a statement, Shaik is the assistant the Minister of Finance Incorporated, HSBC Holdings governor of Bank Negara Malaysia has appointed Norazman Ayob, a senior GLOBAL: HSBC Holdings, which off ers (BNM) and is responsible for the central private secretary to the chief secretary Islamic fi nancing and Sukuk products bank’s monetary and economic sector, of the government and Kamal Mohd globally, has detailed a new structure for while Wan Hanisah has over 30 years Ali, COO of Prokhas, to its board of its investment banking unit which saw of experience at BNM and held several directors, which is chaired by Dr Mohd notable moves among the raft of changes. director positions before she retired as Irwan Serigar Abdullah, according to According to Bloomberg, Matt hew the director in BNM’s LINK and Regional a statement. The fund maintained Arul Westerman and Robin Phillips, who Offi ces Department. Kanda as its president. 1MDB’s previous jointly lead the investment bank, said in board of directors resigned in the wake of a memo to staff that the fi rm has created the Public Accounts Committ ee’s inquiry Emirates REIT a corporate, fi nancials and multinationals into the controversial state fund. UAE: Abdul Wahab Al Halabi has banking group led by Philippe Henry, resigned with immediate eff ect from to combine the lending and transaction- Bank Sohar his role as oversight board member banking units. Matt hew Wallace, at Shariah compliant Emirates REIT formerly the global head of HSBC’s OMAN: Bank Sohar, which runs Islamic to assume a new position within the resources and energy unit, has switched window Sohar Islamic, has announced Equitativa Group, the parent of Emirates to a regional role as the head of banking the resignation of its general manager REIT, according to a bourse fi ling. in the Middle East and sub-Saharan and acting CEO, Rashad Ali Al-Musafi r, Africa. due to personal reasons, according to a bourse fi ling. Maybank MALAYSIA: Maybank has appointed BLME Holdings Cagamas Holdings Mohamad Rafi que Merican as the new UK: Shareholders of BLME Holdings CEO of Maybank Islamic and group head have voted in favor of electing David MALAYSIA: Cagamas Holdings, of Islamic banking, as part of the top Williams and Jabra Ghandour as the holding company of Cagamas or management reshuffl ing of the group. directors during its 2016 annual general the National Mortgage Corporation According to a statement, Mohamad will meeting held on the 3rd June, according to of Malaysia, has announced the replace Muzaff ar Hisham, who has been a bourse fi ling.

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Sophia Lee Mohd Muzamir Mohamad Radzi REGISTER NOW Co-Head, Financial Institutions Ratings Head, Business Development www.REDmoneyevents.com Rating Agency Malaysia IAP Integrated Sdn Bhd

W: www.redmoneyevents.com | E: [email protected] | T: 603 2162 7800 ext. 43 W: www.redmoneyevents.com | E: [email protected] | T: 603 2162 7800 ext. 43

Expected date Company's name Size Structure Announcement Date First half of 2016 Bank Maybank Syariah IDR700 billion Sukuk 7th June 2016 TBA Government of Pakistan PKR79.1 billion Sukuk 7th June 2016 TBA The Philippines TBA Sukuk 6th June 2016 Jun-16 Pengurusan Air SPV RM1.4 billion Sukuk 3rd June 2016 TBA Ekovest RM3.64 billion Sukuk Wakalah 2nd June 2016 TBA GFH Financial Group US$150 million Sukuk 2nd June 2016 July 2016 MB Holding Co US$150 million Sukuk 31st May 2016 TBA Government of Sri Lanka US$1 billion Sukuk 27th May 2016 TBA Saudi Aramco TBA Sukuk 26th May 2016 TBA Al-Tajamaout for Touristic JOD45 million Sukuk Ijarah 24th May 2016 Projects Third quarter of 2016 Government of Nigeria TBA Sukuk 23rd May 2016 TBA Societe Generale RM1 billion Sukuk 23rd May 2016 TBA Bank Muamalat Malaysia RM1 billion Sukuk Murabahah 23rd May 2016 TBA Bank Rakyat Malaysia RM5 billion Sukuk Murabahah 20th May 2016 TBA Government of Germany TBA Sukuk 18th May 2016 Second quarter of 2016 Bank Albilad SAR1-2 billion Sukuk 17th May 2016 TBA Saudi International SAR1.8 billion Sukuk 16th May 2016 Petrochemical Company TBA Aktif Bank TRY100 million Sukuk 9th May 2016 TBA Turkiye Finans TBA Sukuk 9th May 2016 By 2017 Republic of Maldives TBA Sukuk 29th April 2016 Third quarter of 2016 Saudia up to SAR5 billion Sukuk 26th April 2016 TBA Neelum Jhelum Hydropower PKR100 billion Sukuk 25th April 2016 Company By 2017 BRI Syariah TBA Sukuk 21st April 2016 TBA PRAN Foods BDT1 billion Sukuk 11th April 2016 TBA Government of Kuwait KWD2 billion Sukuk 5th April 2016 Fourth quarter of 2016 Bank Syariah Mandiri IDR1 trillion Sukuk 5th April 2016 TBA Qatar International Islamic Bank QAR1 billion Sukuk 31st March 2016 Second quarter of 2016 Government of Oman TBA Sukuk 9th March 2016 2016-17 Sarana Multigriya Finansial IDR200 billion Sukuk 4th March 2016 TBA Kuveyt Turk TRY1.85 billion Sukuk 1st March 2016 TBA Ziraat Bank (Participation Unit) TRY1.5 billion Sukuk 1st March 2016 TBA Hong Kong TBA Sukuk 1st March 2016 TBA Cahya Mata Sarawak RM1 billion Sukuk Ijarah 22nd February 2016 TBA Saudi Electricity Company US$2.5 billion Sukuk 16th February 2016 2016 Kuwait Finance House TBA Sukuk 1st February 2016 TBA Oman Telecommunications US$130 million Sukuk 28th January 2016 March-April 2016 Government of Qatar TBA Sukuk 26th January 2016 2017 Government of Kenya TBA Sukuk 26th 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 First quarter of 2016 Government of Egypt TBA Sukuk 7th December 2015 TBA Samalaju Industrial Port up to RM950 million Sukuk Murabahah 27th November 2015 TBA WAPDA PKR144 billion Sukuk 26th November 2015 TBA WAPDA PKR100 billion Sukuk 26th November 2015 TBA Widad Capital RM120 million Sukuk Murabahah 13th November 2015 TBA Hascol Petroleum PKR2 billion Sukuk 9th November 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 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun

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 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun

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 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun

SAMI Halal Food Participation (All Cap) 6 months

2250

2110

1970

1830

1690

1550 Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-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 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun

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 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun

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

170 160 150 140 130 120 110 100 90 Index Values 80 70 60 50 Jul-09 Jan-04 Jun-05 Oct-06 Feb-08 Sep-02 Dec-99 Dec-14 Apr-16 Aug-13 Mar-12 Nov-10 May-01

Top 10 Monthly Returns for Developed Markets Funds Fund Fund Manager Performance Measure Fund Domicile 1 CIMB Islamic Greater China Equity CIMB-Principal Asset Management 6.64 Malaysia 2 AmOasis Global Islamic Equity AmInvestment Management 3.84 Malaysia 3 Amana Growth Saturna Capital 3.09 US 4 The Iman Allied Asset Advisors 2.67 US 5 BLME Sharia'a Umbrella SICAV-SIF Global Sukuk Bank of London and The Middle East 0.32 Luxembourg - Class A USD 6 Jadwa Global Sukuk Jadwa Investment 0.20 Saudi Arabia 7 Al Rajhi Global Equity UBS 0.19 Saudi Arabia 8 Al Rajhi Commodity Mudarabah - USD Al Rajhi Bank 0.15 Saudi Arabia 9 Watani KD Money Market National Bank of Kuwait 0.06 Cayman Islands 10 Watani USD Money Market National Bank of Kuwait 0.01 Cayman Islands Eurekahedge Islamic Fund Index 1.72 Based on 24.59% of funds which have reported May 2016 returns as at the 6th June 2016 Top 10 Monthly Returns for Emerging Markets Funds Fund Fund Manager Performance Measure Fund Domicile 1 CIMB Islamic Asia Pacifi c Equity - MYR UOB Asset Management 4.91 Malaysia 2 Manulife Investment Shariah Asia-Pacifi c MAAKL Mutual 4.79 Malaysia 3 Atlas Islamic Stock Atlas Asset Management 3.41 Pakistan 4 CIMB Islamic DALI Asia Pacifi c Equity Growth CIMB-Principal Asset Management 3.36 Malaysia 5 Atlas Pension Islamic - Equity Sub Atlas Asset Management 3.26 Pakistan 6 Al Meezan Mutual Al Meezan Investment Management 3.20 Pakistan 7 Meezan Islamic Al Meezan Investment Management 2.89 Pakistan 8 Meezan Tahaff uz Pension - Equity Sub Al Meezan Investment Management 2.82 Pakistan 9 Meezan Balanced Al Meezan Investment Management 1.72 Pakistan 10 Namaa' Asia-Pacifi c Equity Growth AmFunds Management 1.66 Malaysia Eurekahedge Islamic Fund Index 3.20 Taking into account funds that have at least 12 months of returns as at the 6th June 2016 Based on 26.67% of funds which have reported May 2016 returns as at the 6th June 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 Balanced Index over the last 5 years Eurekahedge Islamic Fund Balanced Index over the last 1 year

125 110 120 105 115

110 100 105

Percentage 100 Percentage 95

95 90 90

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

Top 10 Islamic Fund Equity by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 Meezan Islamic Al Meezan Investment Management 16.46 Pakistan 2 Al Meezan Mutual Al Meezan Investment Management 16.42 Pakistan 3 Meezan Tahaﬀ uz Pension - Equity Sub Al Meezan Investment Management 15.32 Pakistan 4 Atlas Islamic Stock Atlas Asset Management 14.51 Pakistan 5 Atlas Pension Islamic - Equity Sub Atlas Asset Management 14.23 Pakistan 6 Al Rajhi Petrochemical and Cement Equity Al Rajhi Bank 10.64 Saudi Arabia 7 The Iman Allied Asset Advisors 10.07 US 8 Amana Growth Saturna Capital 8.61 US 9 Amana Income Saturna Capital 7.00 US 10 NBAD Islamic MENA Growth National Bank of Abu Dhabi 6.68 UAE Eurekahedge Islamic Fund Index 3.58 Based on 42.22% of funds which have reported May 2016 returns as at the 6th June 2016 Top 10 Islamic Fund Money Market by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 Meezan Tahaﬀ uz Pension - Money Market Sub Al Meezan Investment Management 1.14 Pakistan 2 Atlas Pension Islamic - Money Market Sub Atlas Asset Management 1.08 Pakistan 3 Manulife Investment Al-Ma'mun MAAKL Mutual 0.93 Malaysia 4 FALCOM SAR Murabaha FALCOM Financial Services 0.64 Saudi Arabia 5 Al Rajhi Commodity Mudarabah - USD Al Rajhi Bank 0.39 Saudi Arabia 6 CIMB Islamic Money Market CIMB-Principal Asset Management 0.20 Malaysia 7 Watani KD Money Market National Bank of Kuwait 0.17 Cayman Islands 8 CIMB Islamic Deposit CIMB-Principal Asset Management 0.04 Malaysia 9 Watani USD Money Market National Bank of Kuwait 0.03 Cayman Islands 10 AmAl-Amin AmInvestment Management 0.00 Malaysia Eurekahedge Islamic Fund Index 0.20 Based on 43.48% of funds which have reported May 2016 returns as at the 6th June 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 2016, 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 2nd Jun 2016 Hazine Mustesarligi Turkey Sukuk Euro market 1,000 Standard Chartered Bank, HSBC, Emirates Varlik Kiralama public issue NBD Anonim Sirketi 26th May 2016 DP World UAE Sukuk Euro market 1,200 JPMorgan, Deutsche Bank, HSBC, National public issue Bank of Abu Dhabi, First Gulf Bank, Barclays, Dubai Islamic Bank, SG Corporate & Investment Banking, Citigroup, Emirates NBD 24th May 2016 Noor Bank UAE Sukuk Euro market 500 Standard Chartered Bank, First Gulf Bank, public issue Dubai Islamic Bank, Sharjah Islamic Bank, Citigroup, Emirates NBD, Noor Bank 17th May 2016 Cagamas Malaysia Sukuk Domestic market 104 CIMB Group public issue 11th May 2016 Ezdan Holding Qatar Sukuk Euro market 500 Mashreqbank, HSBC, Abu Dhabi Islamic Group public issue Bank, Emirates NBD, Barwa Bank 11th May 2016 UEM Sunrise Malaysia Sukuk Domestic market 123 Maybank, CIMB Group public issue 10th May 2016 Boubyan Bank Kuwait Sukuk Euro market 250 Standard Chartered Bank, HSBC, Kuwait public issue Finance House, National Bank of Kuwait, Dubai Islamic Bank, Emirates NBD 28th Apr 2016 Perdana Petroleum Malaysia Sukuk Domestic market 162 UOB public issue 25th Apr 2016 MEX II Malaysia Sukuk Domestic market 333 CIMB Group public issue 21st Apr 2016 DanaInfra Nasional Malaysia Sukuk Domestic market 1,164 RHB Capital, Maybank, CIMB public issue Group, Hong Leong Financial Group, AmInvestment Bank 20th Apr 2016 Malaysia Sukuk Malaysia Sukuk Euro market 1,500 JPMorgan, HSBC, Maybank, CIMB Group Global public issue 18th Apr 2016 Kuala Lumpur Malaysia Sukuk Domestic market 128 Maybank, CIMB Group Kepong public issue 15th Apr 2016 Sarawak Energy Malaysia Sukuk Domestic market 387 RHB Capital, AmInvestment Bank public issue 6th Apr 2016 Hilal Services Saudi Sukuk Euro market 300 Mizuho, Standard Chartered Bank, HSBC, Arabia public issue Arab Banking Corporation, National Bank of Kuwait, First Gulf Bank, Dubai Islamic Bank, SG Corporate & Investment Banking, CIMB Group, Emirates NBD, Warba Bank, Noor Bank 4th Apr 2016 Putrajaya Holdings Malaysia Sukuk Domestic market 137 Maybank, CIMB Group, AmInvestment public issue Bank 25th Mar 2016 Malaysia Airlines Malaysia Sukuk Domestic market 372 CIMB Group public issue 22nd Mar 2016 Dubai Islamic Bank UAE Sukuk Euro market 500 Standard Chartered Bank, HSBC, Arab public issue Banking Corporation, National Bank of Abu Dhabi, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD 21st Mar 2016 Perusahaan Penerbit Indonesia Sukuk Euro market 2,500 Standard Chartered Bank, Deutsche SBSN Indonesia III public issue Bank, Dubai Islamic Bank, CIMB Group, Citigroup 16th Mar 2016 Barwa Bank Qatar Sukuk Euro market 250 National Bank of Abu Dhabi private placement 15th Mar 2016 Axiata SPV2 Malaysia Sukuk Euro market 500 Deutsche Bank, HSBC, CIMB Group public issue

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 14432 5 9876 11 1210 321 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 4Q3Q2Q 4Q3Q2Q1Q 1Q4Q3Q2Q1Q 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 Perusahaan Penerbit Indonesia Sukuk Euro market 2,500 7.7 JPMorgan, HSBC, Dubai Islamic Bank, CIMB Group, Standard SBSN Indonesia III public issue Chartered Bank, Deutsche Bank, Citigroup 2 Jimah East Power Malaysia Sukuk Domestic market 2,100 6.5 HSBC, Maybank, CIMB Group public issue 3 DanaInfra Nasional Malaysia Sukuk Domestic market 1,891 5.8 HSBC, RHB Capital, Maybank, CIMB Group, AmInvestment public issue Bank, Hong Leong Financial Group 4 IDB Trust Services Saudi Sukuk Euro market 1,836 5.7 Natixis, Standard Chartered Bank, JPMorgan, National Bank of Arabia public issue Kuwait, Gulf International Bank, Natixis, CIMB Group, Emirates NBD 5 Malaysia Sukuk Malaysia Sukuk Euro market 1,500 4.6 JPMorgan, HSBC, Maybank, CIMB Group Global public issue 6 DP World UAE Sukuk Euro market 1,200 3.7 JPMorgan, Deutsche Bank, HSBC, National Bank of Abu Dhabi, public issue First Gulf Bank, Barclays, Dubai Islamic Bank, SG Corporate & Investment Banking, Citigroup, Emirates NBD 7 Prasarana Malaysia Malaysia Sukuk Domestic market 1,192 3.7 RHB Capital, Maybank, Kenanga Investment Bank, CIMB public issue Group, AmInvestment Bank 8 Danga Capital Malaysia Sukuk Domestic market 1,110 3.4 RHB Capital, AmInvestment Bank, Standard Chartered Bank, public issue DBS, CIMB Group 9 National Shipping Saudi Sukuk Domestic market 1,040 3.2 JPMorgan, HSBC, Samba Capital of Saudi Arabia Arabia public issue 10 Hazine Mustesarligi Turkey Sukuk Euro market 1,000 3.1 Standard Chartered Bank, HSBC, Emirates NBD, HSBC Varlik Kiralama public issue Anonim Sirketi 10 Axiata SPV2 Malaysia Sukuk Euro market 1,000 3.1 Deutsche Bank, CIMB Group, HSBC, Maybank, Bank Mandiri public issue (Persero) 12 Sarawak Energy Malaysia Sukuk Domestic market 774 2.4 RHB Capital, Kenanga Investment Bank, AmInvestment Bank public issue 13 Pengurusan Air SPV Malaysia Sukuk Domestic market 761 2.4 Maybank, Bank Islam Malaysia, CIMB Group public issue 14 Qatar Islamic Bank Qatar Sukuk Euro market 750 2.3 Standard Chartered Bank, HSBC, Citigroup, QInvest, Barwa public issue Bank, Noor Bank 15 Sultanate of Oman Oman Sukuk Euro market 649 2.0 Bank Muscat public issue 16 Rantau Abang Malaysia Sukuk Domestic market 595 1.8 CIMB Group, AmInvestment Bank, RHB Capital Capital public issue 17 Sime Darby Malaysia Sukuk Domestic market 535 1.7 Maybank public issue 18 Arab National Bank Saudi Sukuk Domestic market 533 1.6 JPMorgan, Deutsche Bank, HSBC, Arab National Bank Arabia public issue 19 Noor Bank UAE Sukuk Euro market 500 1.5 Standard Chartered Bank, First Gulf Bank, Dubai Islamic Bank, public issue Sharjah Islamic Bank, Citigroup, Emirates NBD, Noor Bank 19 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 19 Dubai Islamic Bank UAE Sukuk Euro market 500 1.5 Standard Chartered Bank, HSBC, Arab Banking Corporation, public issue National Bank of Abu Dhabi, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD 19 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 23 Hilal Services Saudi Sukuk Euro market 500 1.5 Standard Chartered Bank, Mizuho, HSBC, Arab Banking Arabia private placement Corporation, National Bank of Kuwait, First Gulf Bank, Dubai Islamic Bank, SG Corporate & Investment Banking, CIMB Group, Emirates NBD, Warba Bank, Noor Bank 24 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 25 Ezdan Holding Qatar Sukuk Euro market 497 1.5 Mashreqbank, HSBC, Abu Dhabi Islamic Bank, Emirates NBD, Group public issue Barwa Bank 26 Cagamas Malaysia Sukuk Domestic market 439 1.4 CIMB Group, Maybank public issue 27 Almarai Saudi Sukuk Domestic market 427 1.3 HSBC, Samba Capital Arabia public issue 28 Kuala Lumpur Malaysia Sukuk Domestic market 417 1.3 Maybank, CIMB Group Kepong public issue 29 Putrajaya Holdings Malaysia Sukuk Domestic market 374 1.2 Maybank, CIMB Group, AmInvestment Bank public issue 30 Malaysia Airlines Malaysia Sukuk Domestic market 372 1.2 CIMB Group public issue Total 32,455 100

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

Manager US$ (mln) Iss % US dollar 15.6 1 CIMB Group 5,494 36 16.9 Malaysian ringgit 13.6 2 Maybank 4,081 25 12.6 2.0 3 HSBC 3,259 21 10.0 Saudi riyal

4 RHB Capital 2,786 28 8.6 Omani rial 0.6

5 Standard Chartered Bank 2,596 19 8.0 6 AmInvestment Bank 1,720 17 5.3 Sukuk Volume by Issuer Nation US$ (billion) 12 Months

7 JPMorgan 1,189 5 3.7 Malaysia 17.0 8 Emirates NBD 1,173 12 3.6 Saudi Arabia 5.2 UAE 3.2 9 Deutsche Bank 1,170 5 3.6 Indonesia 2.5 10 Dubai Islamic Bank 1,111 11 3.4 Qatar 1.5 11 Citigroup 816 4 2.5 Turkey 1.3 12 Bank Muscat 649 1 2.0 Kuwait 0.8 13 National Bank of Abu Dhabi 606 6 1.9 14 Samba Capital 560 2 1.7 Global Sukuk Volume by Sector 12 Months 15 Natixis 551 2 1.7 16 Kenanga Investment Bank 391 10 1.2 17% Finance 36% 17 Noor Bank 384 6 1.2 Government 5% Transportation 18 Hong Leong Financial Group 312 2 1.0 8% Construction/Building 19 National Bank of Kuwait 311 3 1.0 Utility & Energy 14% Other 20 First Gulf Bank 300 4 0.9 20% 21 Barwa Bank 260 3 0.8 22 DBS 253 3 0.8 Global Sukuk Volume - US$ Analysis 23 Abu Dhabi Islamic Bank 243 3 0.8 24 Sharjah Islamic Bank 226 3 0.7 US$bn US$m 25 Gulf International Bank 214 1 0.7 18 600 16 Non-US$ US$ 500 26 QInvest 204 3 0.6 14 12 400 10 27 Barclays 203 2 0.6 300 8 28 SG Corporate & Investment Banking 145 2 0.5 6 200 4 100 29 UOB 139 1 0.4 2 0 0 30 Bank Islam Malaysia 137 3 0.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 4Q3Q2Q 4Q3Q2Q1Q 1Q4Q3Q2Q1Q 2011 2012 2013 2014 2015 2016 Total 32,455 110 100

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 China Development Bank 821 2 9.3 1 Allen & Overy 1,532 1 15.6 2 National Commercial Bank 711 4 8.1 1 Latham & Watkins 1,532 1 15.6 3 Adnan Sundra & Low 1,361 1 13.8 3 Banque Saudi Fransi 675 4 7.7 3 Zaid Ibrahim & Co 1,361 1 13.8 4 Samba Capital & Investment 670 4 7.6 5 Cli ﬀ ord Chance 758 1 7.7 Management 5 HSBC 593 3 6.7 5 White & Case 758 1 7.7 7 Salans FMC SNR Denton Group 650 1 6.6 6 Mitsubishi UFJ Financial Group 474 3 5.4 8 Anjarwalla Collins & Haidermota 172 2 1.7 7 Sumitomo Mitsui Financial Group 474 3 5.4 8 Haidermota & Co 172 2 1.7 8 First Gulf Bank 414 4 4.7 8 Lincolns Law Chamber 172 2 1.7 9 Aga Khan Fund for Economic 354 2 4.0 8 Linklaters 172 2 1.7 Development 8 Mohsin Tayebaly & Co 172 2 1.7 10 Export Development Canada 299 2 3.4 8 Pinsent Masons 172 2 1.7

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 Abu Dhabi Islamic Bank 945 9 5.8 15th Apr 2016 Yanbu Aramco Sinopec Saudi Arabia 4,700 2 Saudi National Commercial Bank 838 6 5.1 Reﬁ ning 3 Mashreqbank 824 10 5.1 24th Jun 2015 Jazan Gas Projects Saudi Arabia 1,790 4 Samba Capital 813 6 5.0 18th Jun 2015 Emirates National Oil UAE 1,500 5 First Gulf Bank 811 11 5.0 9th Mar 2016 Dhuruma Electricity Saudi Arabia 1,138 6 Banque Saudi Fransi 731 4 4.5 21st Dec 2015 Engro Powergen Pakistan 851 7 China Development Bank 621 1 3.8 8 Emirates NBD 550 7 3.4 28th Jul 2015 GEMS Education UAE 817 9 Dubai Islamic Bank 534 9 3.3 16th Aug 2015 ACWA Power International Saudi Arabia 769 10 HSBC 525 5 3.2 11th Dec 2015 Cititower Malaysia 751 11 SABB 502 3 3.1 25th Jun 2015 Tecnimont SpA Italy 650 12 Noor Bank 429 6 2.6 29th Nov 2015 Gulf Marine Services UAE 620 13 Abu Dhabi Commercial Bank 381 5 2.3 14 Arab Banking Corporation 353 6 2.2 Top Islamic Finance Related Financing by Country 12 Months 15 Maybank 338 1 2.1 Nationality US$ (mln) No % 15 CIMB Group 338 1 2.1 1 UAE 5,446 15 33.4 17 AKFED 292 2 1.8 2 Saudi Arabia 4,789 4 29.4 18 Bank Albilad 292 2 1.8 3 Pakistan 1,613 3 9.9 19 National Bank of Abu Dhabi 291 4 1.8 4 Turkey 818 4 5.0 20 Gulf International Bank 253 3 1.6 5 Qatar 700 2 4.3 20 Ahli United Bank 253 3 1.6 6 Malaysia 676 1 4.2 22 Al Khaliji Commercial Bank 252 4 1.5 7 Bahrain 570 1 3.5 23 Qatar Islamic Bank 251 3 1.5 8 Jordan 550 2 3.4 24 Kuwait Finance House 248 3 1.5 9 Egypt 370 2 2.3 25 Standard Chartered Bank 243 4 1.5 10 Kuwait 362 2 2.2 26 Riyad Bank 229 1 1.4 26 Al Rajhi Capital 229 1 1.4 Top Islamic Finance Related Financing by Sector 12 Months 28 Sumitomo Mitsui Financial Group 175 1 1.1 Utility & Energy 28 SG Corporate & Investment Banking 175 1 1.1 28 Mizuho 175 1 1.1 Oil & Gas 28 Mitsubishi UFJ Financial Group 175 1 1.1 Finance

Transportation Top Islamic Finance Related Financing Mandated Lead Arrangers 12 Months Real Estate/Property Bookrunner US$ (mln) No % bln10US$ 28 3 7654 1 Mashreqbank 1,789 6 19.3 2 Abu Dhabi Islamic Bank 1,270 5 13.7 Global Islamic Financing - Years to Maturity (YTD Comparison)

3 Noor Bank 871 4 9.4 2015 4 Emirates NBD 371 3 4.0 2014 2013 5 Standard Chartered Bank 354 3 3.8 2012 6 Maybank 338 1 3.6 2011 2010 6 CIMB Group 338 1 3.6 2009 8 Abu Dhabi Commercial Bank 327 1 3.5 2008 9 Dubai Islamic Bank 319 3 3.4 0% 20% 40% 60% 80% 100% 0-3yrs 3-5yrs 5-7yrs 7-10yrs 10+yrs 10 Arab Banking Corporation 317 5 3.4

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

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21st IFN Investor Forum Kuala Lumpur, Malaysia 25th – 27th Islamic Finance Kuala Lumpur, Qualiﬁ cation Malaysia 28th IFN Turkey Forum Istanbul, Turkey 20th – 21st Developments in Basel 3 Kuala Lumpur, for Financial Institutions Malaysia OCTOBER 2016 26th – 27th Shariah Non-Compliance Dubai, UAE TBA IFN Iran Forum Tehran, Iran & Operational Risk for Islamic Financial Institutions IFN Project & th 9 Infrastructure Finance Dubai, UAE AUGUST 2016 Forum 10th – 11th Understanding, Kuala Lumpur, Africa Islamic Finance 17th – 18th Abidjan, Côte d’Ivoire Structuring & Malaysia Forum Documenting Islamic Derivatives 24th IFN Kuwait Forum Kuwait City, Kuwait 10th – 17th Funds Transfer Pricing Kuala Lumpur, NOVEMBER 2016 Malaysia

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1MDB 33 Central Bank of Nigeria 31 London Stock Exchange 8, 12, 26, 28 Abu Dhabi Financial Group 30 Cheraman Financial Services 9 Lowe Properties 28 Abu Dhabi Islamic Bank Egypt 11 CIMB Group 1 Ma’aden 7 Abu Dhabi National Takaful 31 CIMB Islamic 13 MAB Holding 26 Ahli United Bank 11 Cliﬀ ord Chance 18 Macklowe Properties 28 Ajman Bank 10 Commission de Surveillance du Secteur Financier 25 Malakoﬀ 29 Al Baraka 13 CORE 28 Malaysia Building Society 1 Al Baraka Bank Algeria 32 Dallah Albaraka Group 1 Maldives Center for Islamic Finance 15 Al Baraka Bank Egypt 11, 28, 31 DAMAC Properties 8, 31 Maldives Hajj Corporation 14 Al Baraka Bank Sudan 32 DanaInfra 26 Maldives Islamic Bank 14 Al Baraka Banking Group 30 Dewi Negara Fachi & Partners 29 Maldives Monetary Authority 14 Al Bayan 32 DLA Piper 7 MARC 13 Al Bayan Group Holding Company 16 DP World Crescent 30 Mawarid Finance 31 Al Hadeetha Investments 7, 30 Dubai Financial Markets 30 Maybank 18, 33 Al Hadeetha Resources 30 Dubai Group 30 Maybank Indonesia 32 Al Hilal Bank 18 Dubai Holding 30 Maybank Investment Bank 13 Al Mal Capital 30 Dubai Islamic Bank 1, 18 Maybank Islamic 33 Al Rajhi Bank 1, 16, 29 Egyptian Life Takaful 32 Meezan Bank 28, 32 Al Safa Bank Co 30 EI Sukuk Company 18, 30 Moody’s Investors Service 11, 32 Alara 7 Ekovest 13 Mumtaz Rakyat Sukuk 13 Alara Oman Operations 30 Emirates Institute for Banking and Financial Studies 31 Murdoch University 24 Alia Investment Maldives 14 Emirates Islamic 18 My EG Services 29 Alinma Bank 16 Emirates NBD Capital 18 NASDAQ Dubai 30 Allied Insurance Maldives 14 Emirates REIT 33 National Bank of Ras Al-Khaimah 10 Alpen Capital 10 Employees Provident Fund 20 National Shipping Company of Saudi Arabia 31 Alwyni International Capital 6 Equitativa Group 33 NBK-Egypt 11 Amanah Capital Group 6 Etiqa Group 32 Noble Group 32 AmInvestment Bank 13, 26 EY 1, 16 Noor Bank 18 AmIslamic 13 Faisal Islamic Bank 11 Otoritas Jasa Keuangan 6, 28 Arendt & Medernach – Avocats 26 Fitch Ratings 18, 32 Pengurusan Air SPV 26 Asian Infrastructure Investment Bank 30 Garuda Indonesia 6 Perodua Global Manufacturing 26 ASMA Capital Partners 29 Gatehouse Bank 17 Public Bank 31 AVIVO Group 29 GFH Financial Group 26 Public Mutual 31 Axiata 6 Gulf Bond and Sukuk Association 31 PwC 19 Bahrain Bourse 30 Gulf Muscat United 31 Qatar Financial Center 30 Bank ABC 18, 30 Hamdard University 28 Qatar First Bank 17 Bank Albilad 16 HDFC Amna 14 Qatar National Bank 16, 28 Bank AlJazira 16, 28 Hogan Lovells 29 RAM Ratings 13, 20 Bank Asya 13 Holborn Assets 17 Rasmala 29 Bank Mandiri 1 Horizon Hills Development 26 Reserve Bank of India 9 Bank Muamalat Indonesia 6 Hospitality Management Holdings 8 RHB Capital 1 Bank Negara Indonesia 1 Housing Development Financing Corporation 14, 15 S&P 3, 32 Bank Negara Malaysia 12, 26, 28 HSBC Bank 18 SACE 29 Bank Nizwa 31 HSBC Holdings 33 Salama Islamic Arab Insurance Company 17 Bank of Khartoum 17 ICB Islamic Bank 29 Samba Financial Group 31 Bank of Tokyo-Mitsubishi UFJ 31 ICD 3, 4, 9, 21, 28 SapuraKencana Petroleum 29 Bank Rakyat 13 IDB 1, 3, 4, 5, 28, 29, 30 Saudi Arabian Airlines 16 Bank Rakyat Indonesia 1 IIFM 10 Saudi Arabian Monetary Agency 16 Bank Sohar 31, 33 International Swaps and Derivatives Association 10 Saudi International Petrochemical Company 16 Bank Syariah Mandiri 6 IntierraRMG 7 Saudi Stock Exchange 16 Bank Tabungan Negara 1 Investree 28 Securities Commission Malaysia 17 BIMB Holdings 29 IRTI 29 Shuaa Capital 30 BLME Holdings 33 ISRA 23 Sime Darby 6 Boubyan Bank 30 Jaiz Bank 31 Social Fund for Development 28 Bumi Armada 29 JCR-VIS Credit Rating Company 32 Sohar Islamic 31, 33 Cagamas Holdings 33 King & Spalding 3 Springer International 29 Capital Market Authority of Oman 26, 31 Knight Frank 17 Standard Chartered Bank 18 Capital Market Authority of Saudi Arabia 16 Kulim Malaysia 29 Sunway Treasury Sukuk 27 Capital Market Development Authority 14 Kuveyt Turk 13 Union Properties 10 Central Bank of Bahrain 17 Kuwait Financial Center 16 United Gulf Bank 30 Central Bank of Maldives 14 Lembaga Tabung Haji 14 West Coast Expressway 13

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