Partner with Us

The World’s Leading Islamic Finance News Provider

(All Cap) 1200 New trade Bahrain to Women and INTERVIEW: 1,162.92 1150 ﬁ nance fund debut ﬁ rst Words: What Prof Rifaat 0.67% 1,155.10 1100 highlights Islamic retail does the election Ahmed, the

1050 growing REIT next of Trump mean recipient of the

1000 opportunities...5 week...6 for women Royal Award for W T F S S M T in Islamic Islamic Finance Powered by: IdealRatings® ﬁ nance?...10 2016...21 COVER STORY 16th November 2016 (Volume 13 Issue 46) The burgeoning growth of green financing in the Gulf

Green fi nance has been putt ing down building but allow countries to diversify Platform to facilitate and showcase roots in the GCC for some time, and in their economies away from hydrocarbons innovative projects, partnerships and 2016 some of its initiatives are fi nally and develop new technologies and technology, as well as committ ing to bearing fruit. While IFN has long funding avenues that encourage long- develop innovative green fi nancing argued that ethical and Islamic fi nance term sustainability but also provide mechanisms, showcase technological are by no means one and the same, short-term benefi ts. innovation, support a global agreement there is no question that the rapid rise for climate change through supporting of green activity has opened the door So what has been done to work toward the Paris Agreement and develop a for Islamic institutions to benefi t across green objectives — and what does this State of the Green Economy Report a wide range of sectors in terms of mean for Islamic fi nance? for Dubai. It also underscores key public perception, consumer demand, actions for fi nancial institutions such investment opportunities and fi nancing United Nations Finance as the identifi cation of a ‘champion’ to transactions. LAUREN MCAUGHTRY promote corporate social responsibility looks at the latest developments. Initiative (CSR) and sustainability; reducing One of the most signifi cant steps this the environmental footprint by The GCC region is one of the biggest year has been the Dubai Declaration on implementing strategies and processes oil producers in the world, and carbon Sustainable Financing, signed in October such as digitalization, energy and water emissions in the Middle East have at the UN Environment’s Finance effi ciency, green buildings and recycling; doubled over the past 30 years with Initiative 2016 Global Roundtable, in improving access to and encouraging the some countries (such as Qatar) achieving which 11 fi nancial institutions in the use of public transport; supporting access almost 10 times the yearly CO2 emissions UAE made a fi rm commitment toward to fi nancial services for all segments of per capita than the global average sustainable fi nance. Thani Ahmed society; and integrating environmental, (see Chart 1). Yet the region has not Al Zeyoudi, the minister of climate social and governance criteria and dismissed these growing concerns, and change and environment for the UAE, climate change factors into the risk every GCC country apart from Saudi introduced the Dubai Declaration assessment processes for the Arabia has now signed the United at the Global Roundtable: institution’s business lines. Nations Framework Convention on highlighting the importance Climate Change Paris Agreement sett ing of stimulating change in the “Achieving a green economy reduction requirements — although only fi nance sector and establishing requires the contribution of the UAE has so far ratifi ed it. strategic partnerships with the private sector to invest local investment and in several projects, not These steps are not just benefi cial from fi nancing institutions. only in the renewable an environmental perspective — for energy sector, but the GCC region, green projects not The Declaration establishes only encourage much-needed capacity- a Public-Private Partnership (PPP) 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 46 DiamondCorp makes Dagong Global Credit DEALS second drawdown worth Rating Company jointly IFN Rapids ...... 2 Central Bank of Bahrain’s GBP300,000 (US$371,895) maintain Al Baraka IFN Reports: monthly Sukuk Ijarah from its Islamic facility Banking Group’s ratings • New trade fi nance fund highlights growing worth BHD26 million Outer Temple Chambers MARC affi rms ANIH’s opportunities • Bahrain to debut fi rst Islamic (US$68.26 million) fully sets up offi ce in Dubai RM2.5 billion (US$594.46 subscribed retail REIT next week • Islamic fi nance arbitration International Financial million) senior Sukuk as near-term solution to global issue of Shariah International Islamic Center Musharakah program at ‘AAIS’ and legal discord • Kenya to get in the good books Liquidity Management Three Iranian banks Corporation auctions three- of international Islamic fi nance entities to power considering sett ing up shop Kuwait Finance House month US$840 million in Turkey (Malaysia) maintains ‘AA+/ Shariah fi nance drive • Fund Focus: Islami Bank Sukuk facility MARC-1’ ratings with a Bangladesh adds depth to Bangladesh’s Islamic Gulf Islamic Investments Samalaju Industrial Port stable outlook capital markets with latest mutual fund • Sovereign raises US$145 million for seeks to extend RM950 California-based technology Fitch affi rms Kuwait’s Sukuk: Tepid times ...... 5 million (US$225.89 million) fi rm Aptt us ratings at ‘AA’ with a stable Women in Islamic Finance: Sukuk program for another outlook IDB off ers US$500 million Women and Words – What does the election of Donald fi ve years in fi nancing for TAPI gas Egypt’s currency Trump mean for women in Islamic fi nance? ...... 10 DIFC Sukuk makes Sukuk pipeline project devaluation a positive IFN Analyses: profi t distribution worth for the sovereign’s credit IDB approves over US$592 Malaysia: Undisputed leader? ...... 11 US$15.14 million profi le, Fitch says million in fi nancing for Shariah compliant trade fi nancing ...... 12 Sunway Treasury Sukuk’s development projects MARC affi rms CIMB th Case Study: 155 Islamic commercial Islamic Bank’s Sukuk Lebanon expects funding papers oversubscribed by ratings with a stable Kuveyt Turk’s US$500 million Sukuk Wakalah 13 from the IDB for waterfront RM105 million (US$24.8 outlook Column: million) project Do I have to be a Muslim? ...... 14 Egyptian government’s Pakistan exploring another IFN Country Correspondents: reforms gain rating outlook dollar Sukuk sale to fi nance ASSET upgrade from S&P New Zealand; Brazil; India; Afghanistan; Iran; budget Kenya; Oman; Malaysia ...... 15 MANAGEMENT S&P revises Oman’s IDB plans global Sukuk outlook to negative based IFN Sector Correspondents: Azimut Group and roadshows for US dollar on longer than expected Islamic Crowdfunding; Mergers & Maybank Asset paper; Etihad expects to fi scal consolidation Acquisitions ...... 20 launch Sukuk soon Management agree to partnership to develop Moody’s affi rms Jordan’s Interview: Malaysia’s RM3 billion capabilities in global Sukuk ‘B1’ rating with a stable Professor Rifaat Ahmed Abdel Karim, the recipient (US$678.53 million) GII market outlook of the Royal Award for Islamic Finance 2016 ....21 Murabahah facility att racts RM6.62 billion (US$1.5 Sultan of Johor launches Kazakhstan maintains Special Report: billion) in bids Waqf fund for people in the ‘gBBB2(pi)/Stable’ global Impact of a Trump presidency on US real estate ...... 23 state scale sovereign rating Country Feature: but sees a downgrade JS Investments to roll out NEWS in ASEAN scale and Islamic fi nance market in Turkey ...... 25 JS Islamic Hybrid Fund of Malaysian scale ratings Sector Feature: Liberia applies for OIC Funds membership Islamic trade fi nance: Opportunities abound with Ibdar Bank partners with the right approach ...... 27 Take-up of Islamic credit Barak Fund Management MOVES Takaful Feature: cards to increase in to launch Barak Ibdar Commercial Bank of Morocco over the next few Advancements of regulations in Takaful – what are Shariah Trade Finance Fund Dubai appoints Dr Bern years van Linder as new chief the implications? ...... 29 International Islamic TAKAFUL Bank Sohar names Pieter Trade Finance Corporation Burger De Witt as CFO Islamic Finance news ...... 31 supports Senegalese 2016- SABB Takaful secures Deal Tracker ...... 37 17 groundnut campaign via approval to renew group Turkiye Finans appoints REDmoney Shariah Indexes ...... 38 US$75 million syndicated debt insurance program Wael Abdulaziz Raies as general manager Eurekahedge Funds Tables ...... 40 Murabahah fi nancing Dealogic League Tables ...... 42 Indonesian president signs RATINGS REDmoney Events ...... 46 presidential decree on Islamic International Subscription Contact...... 46 national Shariah committ ee Rating Agency and

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.

The burgeoning growth of green ﬁ nancing in the Gulf Continued from page 1

also in various green and eco-friendly Chart 1: GCC emissions per capital 1960-2013 (metric tons per capita) business areas. We need to work toward improving the bank fi nancing for green UAE projects in the UAE, and to fi nd the best way to contribute to the government’s eff orts to change the fl ow of investments Saudi Arabia in the fi eld of sustainability,” said Mubarak Rashid Khamis Al Mansouri, the governor of the Central Bank of Qatar the UAE. “The central bank has begun to work closely with the Ministry of Climate Change and Environment and Oman the Federation of UAE Banks in order to involve UAE fi nancial institutions in Kuwait sustainable funding dialogue sessions.”

Bahrain Achieving a green Global average economy requires 0 5 10 15 20 25 30 35 40 45 the contribution 2013 1960 of the private Source: World Bank investment and accelerate the adoption of the fi nancial sector in the UAE toward sector to invest in green technologies, products and services green projects and green innovation of across regional and global markets. fi nancial products and services. This several projects, includes the development of domestic State of green finance green fi nance models and products such not only in the The Green Agenda was launched in as energy performance contracts, public January 2015 as a cohesion of the UAE fi nance initiatives and green Sukuk. renewable energy Green Growth Strategy launched in 2012. The scheme includes capacity-building, sector, but also in Developed as an overarching framework match-making between entrepreneurs to implement the strategy, in June 2015 and potential lenders, and policy various green and the Emirates Green Development Council support. (EGDC) was formed to coordinate and eco-friendly oversee the implementation and ensure Banking on support eff ective collaboration. But is there actually any interest from business areas banks? In fact, the answer is yes. In But the priority now is to engage and 2015, the Emirates Green Development involve the private sector. The Green Council, the Central Bank of the UAE The Dubai Green Economy Agenda will require at least 1-2% of GDP and the UNEP Finance Initiative Partnership annually for the next 15 years — and undertook the fi rst national survey on With the signing of the declaration, the this massive level of investment means contributions of fi nancial institutions to banks also confi rmed their support for the that private sector fi nancing is now the green economy — and the results UAE Vision 2021, and committ ed to the paramount. However, up until now most were promising. national goal of becoming a global capital of the pioneering green projects in the for the green economy in accordance with UAE have been led and funded by the According to the survey, 48% of UAE the UAE Green Agenda 2015-30. government, and the limited banks already off er green products private sector fi nancing while 41% are planning to develop This vision began in 2012, when Sheikh has been a major green fi nancing solutions in the near Hamdan Mohammed Rashid Al challenge in developing future. Almost a quarter (23%) of Maktoum launched the Dubai Green the green economy. fi nancial institutions have invested Economy Partnership (Dubai GEP) — the in green projects, with 67% of those fi rst multi-stakeholder and cross-sector The Green Agenda has focused on the UAE and half of this partnership to promote green growth therefore developed domestic investment going toward in the Middle East. The programs and a Green Finance and water and electricity projects. initiatives of Dubai GEP are designed Investment Support to enable the growth of green trade and Scheme to stimulate continued on page 4

The burgeoning growth of green ﬁ nancing in the Gulf Continued from page 3

Notably for Islamic fi nance, wealth management at almost half (47%) of fi nancial Emirates Islamic. “We The Dubai Green Fund institutions in the UAE will off er fl exible The Dubai Green Fund, launched in believe that the rise of Islamic fi nancing schemes at 2015, is one of the central pillars of fi nance will provide more competitive rates Dubai’s Clean Energy Strategy 2050 opportunity to develop green through our range which sets a target of 7% clean energy fi nance products. of credit cards for Dubai by 2020, increasing to 25% and personal by 2030 and 75% by 2050. So who is doing what — and fi nance are any banks willing to take up products. We With an anticipated scale of US$100 the challenge? Again, the answer expect that a billion and seed funding provided is yes. Most recently, last month at the convenient by the Dubai Electricity and Water World Green Economy Summit in Dubai, fi nancing option will be a huge incentive Authority (DEWA) along with other Emirates Islamic signed an agreement with for the higher uptake of products from local and international investors, the the Dubai Green Economy Partnership the Green Deal platform.” fund has a target of US$30 billion (Dubai DEP) to provide green fi nancing of green investment by 2030 and solutions through the government’s Green will provide fi nancing for viable A model for success green initiatives in Dubai including Deal website and e-commerce platform The benefi ts go beyond the retail aspect (www.greendeal.ae). green loans, green project fi nance though, with the increasing adoption of transactions and green Sukuk. The environmental technologies expected to fund will also act as a market catalyst boost trade fl ows and att ract investment to to help build and accelerate the green We expect that the region. And this is where the att raction sector, and support PPPs in the region. lies — in developing the role of the private In November this year, it was reported a convenient sector to the benefi t of all stakeholders. that Dubai is already in discussions financing option This is where Dubai has been supremely with international fi nanciers, including successful, and where its eff orts can be held a Chinese state bank, to help provide will be a huge up as a template to other countries hoping fi nancing for the fund — currently the to emulate this achievement. only such government initiative in the GCC region. incentive for the Other countries in the GCC have, of course, taken their own steps toward higher uptake of green fi nancing — in Oman, for example, and has invested heavily in green Bank Muscat launched a major CSR technologies through targeted fi nancing products from the initiative in October supported by its initiatives supporting 188 successful Islamic arm Meethaq. The Imprints projects. It has not yet however managed Green Deal program to sustain a green environment to fully engage the Islamic fi nance will focus on energy-saving initiatives industry, and no bank in Malaysia has platform — starting with a pilot Meethaq branch yet made a similar commitment to that of using solar energy, followed by two Emirates Islamic or to the US$10 billion “The key element in achieving more branches run on green energy. in sustainable fi nancing promised by the environmental sustainability is the role The energy saving program will be National Bank of Abu Dhabi earlier this of the individual, and Green Deal is an implemented in association with the year. “To see a similar growth trajectory eff ort to promote everyday sustainable International Finance Corporation and for ESG/responsible investment, the practices at the grass-roots level,”” said will focus on energy-effi cient products government needs to follow a similar Fahad Al Gergawi, the secretary-general for homes and SMEs, as well as special path to that which has led to Malaysia’s of Dubai GEP and CEO of Dubai FDI. incentives including lower charges and leadership position in Islamic fi nance,” “Individuals may not want to pay out interest rates on Meethaq and Baituna urged RAM Ratings CEO Foo Su Yin. thousands on a device at once, but with mortgages for houses featuring energy- an easy payment plan, this makes it effi cient design and fi xtures. And this is the key. To engage the private easy for consumers to go green. Our sector, ironically, requires strong partnership with Emirates Islamic now And it is not just the GCC government support — something off ers long-term fi nancing schemes that who has a monopoly on that has been gift ed in abundance allow consumers to buy a green product green fi nance. Malaysia by the authorities in Dubai but without having to pay upfront.” has committ ed to ratifying which has perhaps been lacking the Paris Agreement this elsewhere. Green fi nance off ers “We are pleased to be a partner in month, aft er presenting the Islamic industry an Dubai’s transformation to a green it to parliament on the 4th extraordinary opportunity, but economy by making green products November. The country the sector needs the right support more easily available to the average has promised to cut its and encouragement in order to consumer,” confi rmed Faisal Aqil, greenhouse emissions grow — just as every plant deputy CEO and the head of consumer by 45% by 2030, needs sunlight and water.

New trade finance fund highlights growing opportunities

Bahrain-based Islamic investment institution Ibdar Bank this week announced the launch of a new Shariah compliant trade ﬁ nance fund to take advantage of the growing popularity of the asset class and rising demand from investors. This latest development highlights the strong growth of Islamic trade ﬁ nance and the increasing att ention being paid to its potential by stakeholders across the industry. LAUREN MCAUGHTRY explores.

The new fund was developed by original Barak Trade Finance Fund, aff ordable trade fi nance can unlock Ibdar in partnership with specialized which has seen a seven-year positive the trading potential of millions of trade fi nance manager Barak Fund record since its launch in 2009 with a individuals and small businesses in Management, with Ibdar Bank acting 168% total return since inception and an underserved parts of Asia and Africa.” as the exclusive placement agent. “We average annual return of 13% per year. have launched this fund… in response The ITFC has been instrumental to our clients’ request for a liquid Co-founder and joint chief investment in promoting Islamic trade fi nance investment product with high returns,” offi cer for Barak, Prieur Du Plessis, especially in the MENA and African confi rmed Ahmed Al-Rayes, acting CEO commented that: “Barak has been regions, and this year opened a new of Ibdar Bank. looking to launch a Shariah fund off branch in Dubai to act as its gateway to the back of its fl agship structured trade Africa and signed fi nancing agreements fi nance fund for some time in the GCC with Djibouti, Comoros, Guyana, Mali Given the region, and the strategic partnership and Mauritania, among others. The with Ibdar Bank has now actively group approved transactions worth over Middle Eastern aff orded this opportunity. Given the US$6 billion in the fi nancial year ending region’s historical Middle Eastern region’s historical October 2015, up from US$5.2 billion familiarity with trade and trade fi nance, a year earlier — with approvals to familiarity with Barak is particularly optimistic on the sub-Saharan Africa more than doubling fund’s outlook and believes it will be — and is aiming for over US$7 billion trade and trade able to provide strong risk-adjusted in 2016. The agency has also developed returns for its investors on the back of a global network of around 70 Islamic finance, Barak its growing deal pipeline.” fi nancial institutions which in 2015 provided US$4.2 billion in 25 syndicated is particularly The open-ended fund is US dollar- fi nancing deals, representing 68% of the denominated with a monthly total ITFC trade fi nancing activity and optimistic on the subscription and quarterly redemption, highlighting the growing importance of and will invest in African commodities private sector involvement. fund’s outlook and and general trade fi nance transactions including import, export and The estimated value of unmet demand believes it will be merchandizing requirements with for trade fi nance is between US$110-12 the target of a 10% annual return for billion in Africa and over US$1 trillion able to provide investors (net of fees). in Asia. strong risk-adjusted The fund is the latest in a wave of returns for its Islamic interest in trade fi nance. Earlier Receive all the latest news via the this year, US-based Azzad Asset No.1 Islamic fi nance based feed Management participated in a series investors on the back of syndicated ethical trade fi nance of its growing deals arranged by the International Islamic Trade Finance Corporation deal pipeline (ITFC) through its fl agship Azzad Wise Capital Fund. “A lack of reasonable trade fi nancing results in huge missed opportunities to leverage the power of The Barak Ibdar Shariah Trade Finance th trade for growth and development,” Fund was announced on the 14 said Azzad Vice-President and Portfolio November as a parallel fund to the Manager Jamal Elbarmil. “Providing

Bahrain to debut first Islamic retail REIT next week

Bahrain’s fi rst Islamic retail REIT The REIT will comprise initially of two Industry participants expect the has secured all necessary regulatory income-generating properties — Segaya introduction of this new instrument to approval and is set to launch next Plaza and Danaat Al Madina — with deepen the Islamic investment market — week, giving individual investors, a view of broadening the portfolio not only in Bahrain but also regionally sub-investment managers and in the near future. The REIT targets — as REITs remain an underdeveloped dedicated market makers a chance to to distribute a yield of 6.5% net of all asset class in the Shariah compliant gain exposure to the Bahraini property costs. universe. While most Islamic REITS are market through an instrument that manufactured in Malaysia, Gulf nations has so far been scarce in the region. “We will augment the existing seed have paid more att ention to developing VINEETA TAN reports. assets by inviting private and public this segment recently. Apart from sector developers to include their Bahrain which formulated REIT listing “Following full regulatory compliance properties in the Eskan Bank Realty rules in 2015, Saudi Arabia followed with with the Central Bank of Bahrain, we Income Trust, subject to meeting the its own set of rules earlier this year. are now proceeding with plans for the REIT’s strict criteria for acquiring public off ering of the REIT, which will assets and compliance with regulatory The upcoming Eskan Bank REIT will be open for subscriptions on Tuesday, the requirements,” said Ahmad Tayara, subsequently listed on the Bahrain nd 22 November,” confi rmed Dr Khalid Eskan Bank’s chief business offi cer and Bourse aft er its IPO closes on the 6th Abdulla, the general manager of Eskan deputy general manager. December. Bank, the issuer of the REIT.

Islamic finance arbitration as near-term solution to global issue of Shariah and legal discord

Court litigation may still be the most to bett er serve and promote Islamic preferred route to resolving disputes in fi nance arbitration services, seeing it Islamic fi nance, but there is a growing as the likely immediate solution to the chorus calling for arbitration services as global conundrum of Shariah and legal an alternative, and as potential short- disharmonization. term solution to the perennial issue of the lack of legal standardization. “In the long term, sights should be set VINEETA TAN writes. on creating a global legal framework for Islamic fi nance, through the convergence and codifi cation of Islamic contract law,” said the ICC Commission on In the long Arbitration on ADR. “In the near term, another option is to provide for dispute term, sights sett lement through arbitration when the the ICC confi rmed. A possible parties wish the mandatory principles of explanation for the weak popularity should be set on Shariah to prevail.” of Islamic arbitration is the prevailing scepticism of major Islamic fi nance creating a global Having to comply with both the jurisdictions — the GCC and Malaysia requirements of Shariah and secular laws for example — toward non-litigation legal framework could be tricky and challenging for the forms of dispute resolutions. Islamic fi nance community with potential for Islamic issues arising due to specifi cities of However, industry practitioners have finance, through underlying Islamic contracts, the noted to IFN that they are seeing a small diff erent backgrounds of parties involved but meaningful gravitation toward the convergence as well as the potential diversity of legal Islamic arbitration especially as Islamic jurisdictions involved. fi nance transactions increasingly cross and codification borders of multiple jurisdictions (See IFN Arbitration as an alternative to sett ling Report Vol 13 Issue 26: ‘World nations of Islamic disputes outside of courts may seem like turn to Islamic arbitration services as the best next option, however, Islamic Shariah fi nance goes international’). contract law fi nance stakeholders are still hesitant There is also optimism that Chinese about going down that route. President Xi Jinping’s ‘One Belt, One Road’ strategic initiative, which has The Paris-founded International “The push to promote the arbitration of opened the doors for Shariah compliant Chamber of Commerce (ICC) is urging Islamic fi nance disputes appears to have project funding opportunities, has also more professionals to be trained in the gained very litt le traction among major cleared the way for third-party Shariah fi nance dispute resolution sphere Islamic banks and fi nancial institutions,” commercial dispute resolution services.

Kenya to get in the good books of international Islamic finance entities to power Shariah finance drive

VINEETA TAN takes a look at Kenya, one of Africa’s greatest success story, which is aligning itself with the Islamic world to capture Shariah compliant opportunities and investments to fuel its development plans.

The government and the regulator’s calculated move to align with the supranational Kenya is counting on memberships in finance, one which could be the catalyst global Islamic finance bodies (and the for its long-delayed sovereign Sukuk and international OIC) to build its Islamic finance arsenal issuance, expected to materialize next as the country beefs up efforts to increase year. standard-setting its Shariah assets market share with new regulations and support measures. In the last couple of years, Kenya body comes amid has introduced several reforms and The Ministry of Foreign Affairs is eyeing regulations to facilitate Islamic finance efforts to finally to join the IDB while the Capital Markets including new REIT rules to pave Authority (CMA) has submitted an the way for Islamic REITs as well as put in place a application to join the IFSB, according provisions to allow for the creation to Business Daily Africa. If these come of Takaful windows. However, the dedicated regulatory to fruition, Kenya will join its peers sub-Saharan nation is bringing things including Senegal, Sudan, Ivory Coast one step further by establishing an infrastructure for and Nigeria among many others in Islamic Finance Project Management receiving support — both technical and Office (PMO) this year to develop an Islamic finance, one financial — from the Islamic multilateral institutional, policy and regulatory organization to develop its economy and framework for the Shariah finance which could be the Islamic financial industry; the CMA on industry. the other hand will broaden the number catalyst for its long- of Kenyan institutions in the IFSB circle The task ahead for the PMO is which currently stands at three: Chase monumental. Despite the presence of delayed sovereign Bank, First Community Bank and Gulf Islamic banks, (re)Takaful providers and Sukuk Africa Bank (all observer members). Shariah asset managers, a majority of the 44 million population are still in the dark issuance The government and the regulator’s about Shariah compliant finance. The calculated move to align with the Christian-majority nation also struggles supranational and international with a dearth of technical expertise and Aiming to establishing itself as a global standard-setting body comes amid proper infrastructure to support the financial hub through its proposed efforts to finally put in place a dedicated segment — which could be ameliorated Nairobi International Financial Center, regulatory infrastructure for Islamic with the help of the IDB. Straight to Web Feature Justifications of avoiding Riba (Part VI): Incentives for trading Since trading money with money is forbidden under God’s law, we are therefore left with one alternative, that is, trading goods with money. It is stated in the Holy Quran: “….That is because they say, trade is like interest. But God has permitted trade and forbidden interest”, which reflects that God in a way is asking us to take another route for making things legal. In this article, MABROOR MAHMOOD will illustrate how people benefit from the trading of goods in order to understand God’s wisdom behind encouraging us to trade goods with money. To read the full article, log on to www.islamicfinancenews.com.

Fund Focus: Islami Bank Bangladesh adds depth to Bangladesh’s Islamic capital markets with latest mutual fund

While Islamic banking has made steady progress in Bangladesh over Greater the years with a 20% market share of the overall banking industry, the participation Shariah compliant mutual funds have hardly made a comparable signifi cance of mutual funds will in a market where the assets under according to the fund’s prospectus. “By management of the entire mutual fund purchasing one unit of [the] SEML IBBL enhance liquidity industry account for only 2% of the total Shariah Fund, investors will have access market capitalization. While progress to a wide range of securities, and this to the overall in the Shariah compliant mutual funds will drive down the transaction costs sector may have yet to pick up pace, the greatly. Greater participation of mutual market and since 10-year close-ended SEML IBBL Shariah funds will enhance liquidity to the Fund by Islami Bank Bangladesh (IBBL) overall market and since most mutual most mutual funds is one of the few Islamic mutual funds funds are long-term investment vehicles, making its way into Bangladesh’s this will create price stability and bett er are long-term marketplace. DANIAL IDRAKI takes price discovery and reduce short-term a look at this new initiative that would volatility in [the] market,” the prospectus investment vehicles, deepen Bangladesh’s Islamic capital added. markets. this will create price While IBBL’s latest fund will provide Being the third-largest Muslim country further diversifi cation to Bangladesh’s stability and better in the world with around 90% of its capital markets by catering to the 160 million people professing the pent-up demand for Islamic products, price discovery and Islamic faith, the emergence of Islamic there is currently a limited number of reduce short-term banking in Bangladesh could be seen listed Shariah compliant securities in as a natural development as more both the Dhaka Stock Exchange (DSE) volatility in individuals realize the benefi ts of Shariah and Chitt agong Stock Exchange (CSE). compliant fi nancial transactions. IBBL’s Furthermore, a very thin secondary [the] market latest Shariah compliant mutual fund, bond/debt market makes it diffi cult which has received the approval of the to swap between asset classes as and available in the Bangladeshi market at Bangladesh Securities and Exchange when required, while limited options the moment, IBBL’s fund provides an Commission, is certainly poised to in the Shariah-based money market impetus to other market players to add depth to Bangladesh’s capital instruments will narrow the opportunity consider Shariah compliant investments markets given the relatively muted and for short-term or temporary investments as a viable alternative to the conventional underdeveloped mutual funds industry, of the fund, which may adversely market, now that Islamic banking makes by investing in both listed and non-listed impact the returns, the prospectus up approximately one-fi ft h of the entire securities over a period of a decade. noted. Currently, there are 77 listed banking industry in the South Asian companies included in the DSE Shariah country. With a view to broaden the base The fund, with a total size of BDT1 Index and 105 companies in the CSE of Shariah compliant investment billion (US$12.69 million), is available to Shariah Index, across a variety of sectors instruments in Bangladesh, IBBL’s latest individuals, institutions and non-resident such as pharmaceuticals and chemicals, fund could help unlock further potential Bangladeshis looking for long-term telecommunications, banking and in the country’s Islamic capital markets, capital growth and dividend payment energy. where there are currently only 35 through investing in Shariah compliant close-ended mutual funds in the market fi nancial instruments, with an off er Despite the relatively underwhelming with assets under management of over price of BDT10 (12.69 US cents) per unit, amount of Shariah compliant securities BDT50 billion (US$622.18 million).

IFN ONLINE DIRECTORY

Over 6,955 individual companies directly involved in the Islamic fi nance industry

Sovereign Sukuk: Tepid times

As markets move closer toward the end of the year, the sovereign Sukuk Upcoming sovereign Sukuk space has shift ed to a more lukewarm Country Amount Expected date environment, with the exception of regular issuers. The past week saw key Oman US$2 billion TBA markets such as Malaysia issuing its Iran IRR60 trillion 2016 government investment issues (GII) Murabahah, while Bahrain’s monthly Nigeria TBA 1st quarter of 2017 Ijarah facility was fully taken up by investors. DANIAL IDRAKI keeps you Egypt TBA 2016 updated with the latest developments in Kazakhstan TBA 2016 the sovereign Sukuk space. Kenya TBA 2016

Malaysia South Africa TBA 2016 The Malaysian government’s RM3 billion (US$678.53 million)-worth of government Bangladesh TBA TBA investment issues (GII) Murabahah Hong Kong US$500 million to US$1 billion TBA with a proﬁ t rate of 4.39% issued on the 15th November were oversubscribed by Ningxia Hui Autonomous Region US$1.5 billion TBA RM3.62 billion (US$818.76 million) aft er Niger XOF150 billion TBA receiving a total of 254 bids, conﬁ rmed a tender announcement on Bank Negara Luxembourg TBA TBA Malaysia (BNM)’s website. BNM, acting Tunisia US$500 million TBA as the facility’s agent, may purchase up to 10% of the issuance size. UAE TBA TBA

Shandong Province CNY30 billion TBA Bahrain The monthly issue of the Sukuk Ijarah Sindh Province US$200 million TBA facility by the Central Bank of Bahrain Kuwait KWD5 billion TBA (CBB) worth BHD26 million (US$66.73 million), which carries a maturity of 182 Maldives TBA TBA days, was fully subscribed, according to Sri Lanka US$1 billion TBA a statement. The expected return on the issue, which began on the 10th November Germany US$1 billion TBA and matures on the 11th May 2017, is th 2.2%. The issuance is the CBB’s 135 Sukuk market, more sovereign and quasi Kazakhstan, Kenya and South Africa as short-term Sukuk Ijarah series. sovereign issuers are expected to tap the these countries have in recent times market this year, due to the depressed oil expressed the possibility of issuing Potential issuers prices and ongoing budget deﬁ cits. The Islamic debt papers in 2016, as more With industry players expecting a market is still expecting further issuances nations seek to diversify their source of continuous ﬂ ow of issuers tapping the by countries such as Kuwait, Iran, Egypt, funding.

An all-new digitalal media platform

Featuring IFN Forum clips, exclusive interviews with senior industry movers and shakers, in-depth roundtable discussions, seminars and much more, IFN-TV is at the cutting edge of Islamic finance analysis.

By Laura Elder, a cultural anthropologist Indeed these narratives have been will also be curtailed. In this regard, who teaches in the Department of Global particularly powerful in global fi nancial a recent survey by Marie-Laurence Studies at Saint Mary’s College in Notre services where aggressive, sexualized Guy et al in 2011 of the opinions of Dame. Her primary research interests are masculinity is construed as competence corporate directors on women’s roles global political economy, Islam and gender. at work. Take, for example, a Treasury on boards is revealing. Asked what She can be contacted at lauraeveelder@ Select committ ee report in the UK that it would be like to be the only man gmail.com. identifi ed a ‘lap dance ethos’ at the on a board composed of women, heart of the City of London’s sexism. some directors echoed the response Women around the world have been Or, for example, the case of the lone of Paul Chan, the former president of anxiously tracking the US elections woman working at an Asian hedge the Malaysian Alliance of Corporate this year. One reason for their interest fund who told me that she acquired Directors who said: “I think I would be is the rhetoric deployed by Donald and disseminated footage of a political a very lucky man!” Others, however, Trump’s campaign with regard to sex scandal as a means of becoming an were more thoughtful. Zaff ar Khan, women’s leadership. For example, acknowledged, savvy market player by the former chairman of Karachi Stock during his primary campaign Trump her colleagues. Exchange, said: “I think I can imagine criticized fellow candidate Carly it, but I would feel intimidated and Fiorina by stating that she Of course what is at stake in less confi dent. This is a good question, was too ugly to be elected: all these representations is because it helps me think about how “Look at that face! Would the cultural and economic women may feel when joining a male- anyone vote for that? Can value of women’s work. dominated board. There’s a lot of you imagine that, the face As discussed in previous consensus building needed in a board of our next president? I columns, women have discussion. You share your point of mean, she’s a woman, and long been subject to view, you debate it, and then somebody I’m not supposed to say sexual harassment at supports you, and this is how decisions bad things, but really, folks, work in Islamic fi nance. get made. If you feel that you are come on. Are we serious?” And one result of Trump’s somehow diff erent from the others, you victory may be an uptick might not be as confi dent about gaining And, in addition to the multiple in this kind of hostility support for your position.” accusations of sexual harassment at workplaces in both by Trump, during his campaign conventional fi nancial Indeed, for years women have dozens of women spoke of his services and Islamic argued that the problem is not a endless commentary on women’s fi nancial services. This dearth of qualifi ed women but bodies at work. This kind of talk means that women in Islamic rather the problem is that women creates an atmosphere of hostility fi nancial services will have are being diff erently aff ected by toward women and, in particular, to navigate this hostility on a unequal structures in the workplace. women as leaders. But, this kind daily basis. Unfortunately, the rhetoric of Trump of talk also has the eff ect of making will not emphasize the value of these aggressive masculinity seem like Further, women’s att empts to women’s voices. the only route to leadership. move up through the glass ceiling

Malaysia: Undisputed leader?

VINEETA TAN provides an overview of the Malaysian Islamic ﬁ nance industry.

Regulatory landscape Malaysia are listed as Shariah compliant, Takaful Malaysia has one of the most translating to 669 securities with a There are 11 Takaful operators in sophisticated and comprehensive Islamic market capitalization of RM1.03 billion Malaysia, two of which are foreign- fi nance regulatory framework in the (US$232.96 million) as at the end of the owned. By July 2018, composite Islamic world and the country continues to fi rst half of 2016, according to the SC. insurers are required to split their Family enhance its legal infrastructure: in 2016, The country is also home to three Shariah and General Takaful businesses under Bank Negara Malaysia (BNM) updated indices: FTSE Bursa Malaysia Hĳ rah two separate licenses as required by several related regulations including Index Emas, FTSE Bursa Malaysia EMAS IFSA 2013, a requirement which could the reporting template for Tawarruq, Shariah Index and FTSE Bursa Malaysia signifi cantly change the dynamics of the Kafalah, the capital adequacy framework Small Cap Shariah Index. Takaful landscape as Takaful companies and investment accounts among others. may consider relinquishing one license The Securities Commission Malaysia (SC) In the Sukuk space: Sukuk accounted for over the other for cost purposes. is also expected to release new guidelines 50.4% of the bond market, or RM62.66 for Islamic wealth management this billion (US$14.17 billion), in the fi rst half At the end of the fi rst half of 2016, year. Islamic banking and fi nance are of 2016, according to the SC. Malaysia Takaful assets held by composite direct governed under the Islamic Financial continues to be a world-leading Sukuk Takaful operators reached RM29.79 Services Act 2013 (IFSA 2013). issuer, commanding over half of the billion (US$6.74 billion), or 31.1% of the global market share. total composite direct insurer market, Banking and finance while those held by Family direct There are 17 fully-fl edged Islamic banks Asset management Takaful operators stood at RM1.31 billion in Malaysia and 11 Islamic windows. The Malaysian Islamic asset management (US$296.29 million), according to BNM. Growing at an average of 18% year-on- industry is a small, but growing sector The Malaysian Takaful Association year, Islamic banking assets account for accounting for approximately one- projects for the number of Islamic approximately 23.27% of the country’s fi ft h of the total fund industry at the policies to increase 10% in 2016 to 5.05 total banking sector at the end of end of September 2016 at RM148.82 million, more than double the 4.3% September 2016 at RM554.85 billion billion (US$33.66 billion). The most growth recorded in 2015. (US$125.5 billion) (22.36% in December promising development of the year is 2015), according to the latest statistics the introduction of a Shariah compliant In 2016, an enduring theme is mergers by BNM. The country intends to almost scheme by the Employees Provident and acquisitions: Allianz Malaysia in st double that to 40% by 2020. Fund (EPF) in August. As at the 31 October was given the green light by October 2016, the initial allocation BNM to begin negotiations to purchase of the EPF’s Simpanan Shariah 2017 the full ownership of HSBC Amanah Capital market scheme of RM100 billion (US$22.62 Takaful while Swiss insurer Zurich The Malaysian Islamic capital market, one billion) was 50.25% subscribed, and the fi nally acquired MAA Takaful which of the most sophisticated in the world, sovereign fund is considering upsizing has been renamed to Zurich Takaful in more than tripled in size between 2005 and the allocation next year depending on August. Hong Leong Financial Group in 2015 (compound annual growth rate of demand. This, along with the fact that November ceased negotiations to sell its 11.7%) reaching RM1.69 trillion (US$382.24 the nation’s second-largest pension stake in Hong Leong MSIG Takaful and billion) by the end of 2015, or 60% of the fund Kumpulan Wang Persaraan with Hong Leong Assurance. total market. In September, Bursa Malaysia over RM110 billion (US$24.96 billion) in became the world’s fi rst to introduce an assets is also working toward converting Fintech end-to-end integrated Islamic securities itself to become Shariah compliant, exchange platform, the Bursa Malaysia-i. Malaysia is increasingly viewed as a hub is viewed positively in the expansion for Islamic fi ntech due to its leading and development of the Islamic asset position in the global Islamic fi nance In terms of the equity market: a majority management industry. (74%) of listed securities on Bursa industry and strong regulatory and political will to advance fi ntech and the Table 1: Statistics for fund management industry as at the 30th September 2016 digital economy. The country became the Asset class (in RM billion) Shariah funds Overall (including Shariah funds) fi rst to issue an operating license to an Equities 56.53 331.28 Islamic peer-to-peer (P2P) fi nancing platform — under the SC’s new P2P Fixed income securities 35.2 143.25 regulatory framework — and is likely to Money market placements 52.26 168.18 house the Asia’s fi rst Islamic robo- Unit trust funds 1.17 19.87 advisor in the fi rst quarter of 2017; the SC Private equities/unquoted stocks 0.16 12.8 also plans to set up a framework for Others* 3.5 24.48 digital investments next year. BNM on Total 148.82 699.86 the other hand has established a sandbox *Includes wholesale funds, REITs, ETFs, close-end funds, derivatives, business trust, payables, regulatory framework and the Financial receivables, accruals and uninvested cash. Technology Enabler Group. Source: SC

Shariah compliant trade financing

Shariah compliant trade fi nance has been highlighted as having the potential to provide new opportunities for emerging and frontier markets. The sector has benefi ted from both the perception of Islamic fi nance as performing more robustly than the conventional sector during fi nancial crises, and from a growing global interest toward Shariah compliant banking. DANIAL IDRAKI provides an overview on the developments in Islamic trade fi nance worldwide.

Emirates Trade Bank in Tajikistan. The agreement aims Middle East Working toward its ambition to become to promote Islamic fi nance through Noor Bank, via Noor Trade, inked an the global capital for the Islamic multiple Islamic fi nance modes and agreement with the Mohamed Bin economy, the UAE recently announced products. Rashid Fund earlier in January to plans to launch the world’s fi rst Shariah support the UAE’s SME industry. Part of compliant, trade fi nance-focused bank, The organization has also been rather the agreement will see the Islamic bank which is to be known as the Emirates active in promoting Islamic fi nance trade extending fi nancing to UAE nationals Trade Bank. The Dubai Islamic Economy developments across a number of African for existing ventures that have been Development Center (DIEDC) and the countries over the past year. It is set to operating for more than one year, by Department of Economic Development support Egypt’s export fi nancing sector off ering fi nance of up to 80% of the are said to be in advanced discussions through programs which include export project cost, up to a maximum of AED5 with the Central Bank of the UAE to programs under the Arab Africa Trade million (US$1.36 million). obtain approval for a wholesale Islamic Bridge initiative following the signing of banking license for the new entity, which a lett er of intent with the government of Egypt. US will support endeavors to double the The Azzad Wise Capital Fund (WISEX), UAE’s trade fl ows — estimated at US$1.4 managed by Virginia-based Azzad Asset trillion in 2014 — by 2020. Over in Tunisia, the ITFC signed a US$310 million framework agreement Management and the fi rst Halal mutual fund in the US, expanded its scope of A statement from the DIEDC said with the Tunisian government to develop the country’s energy sector. The package investments (from primarily Sukuk that the new bank would specialize and community development banks) to in international trade and commodity will add to a slew of previous trade fi nancing operations by the ITFC in favor include ethical trade fi nance deals. Azzad fi nance, which would be the fi rst of positioned itself in the trade fi nancing its kind. It is to be a global Shariah of Tunisia which has totaled US$349 million since 2008. market through WISEX, which allows it compliant bank exclusively off ering to participate in a group of syndicated integrated trade and international The organization also inked a number ethical trade fi nance deals arranged by commodity fi nancing solutions the ITFC. through leveraging and mobilizing the of deals with banks across Africa, infrastructure and logistics ecosystem including a US$9 million two-step of the UAE. The bank is expected to Murabahah fi nancing agreement with Asia enhance trade fi nance between countries Coris Bank International in March this The International Finance Corporation in the GCC, Central Asia and Africa, year, aft er the Burkina Faso-based bank (IFC) signed a US$75 million investment and become a new source of liquidity for launched a range of Shariah compliant agreement with Bank Danamon trading between Islamic countries. fi nancial products and services to the Indonesia in February to develop the local market. bank’s Shariah compliant trade fi nancing operations. The investment will be ITFC The ITFC also penned an MoU with structured as an Islamic trade fi nancing An autonomous entity within the IDB Att ĳ ariwafa Bank in February to explore instrument and matched by an equal Group, the International Islamic Trade opportunities in Shariah compliant joint contribution from the bank to make up Finance Corporation (ITFC) is created trade fi nancing in Morocco and Africa. a US$150 million Islamic trade fi nance with the purpose of advancing trade The partnership will also see both entities facility. to improve economic conditions across collaborating in diff erent areas including the Islamic world. The ITFC is seeking bilateral treasury and interbank The IFC plans to establish a Murabahah to build a partnership with the OECD transactions for liquidity investment and trade co-fi nancing facility with Bank and be part of the OECD-led Euro- borrowing foreign exchange. Danamon, which off ers Islamic banking Mediterranean dialogue on trade- services through its Shariah compliant related matt ers, aft er the two sides met In the same month, the ITFC signed a window Bank Danamon Syariah. The on the sidelines of the MENA-OECD US$75 million syndicated Murabahah facility will provide Shariah compliant Ministerial Conference in Tunis in fi nancing agreement with the trade fi nancing to corporate customers in October this year. government of Senegal, with SONACOS selected agri-commodity sectors in both — the major player in the Senegalese the US dollar and Indonesian rupiah. The Earlier in January, the ITFC and groundnut sector — acting as the IFC will also support Bank Danamon in Agroinvestbank entered into an executing agency. The agreement is to expanding its Islamic banking business, MoU which will see the two entities fi nance a signifi cant part of the 2015-16 with a focus on critical commodity trade cooperate in search of opportunities in groundnut campaign. fi nance. Shariah compliant joint trade fi nancing

Kuveyt Turk’s US$500 million International Sukuk issuance

Sukuk Wakalah US$500 million

Kuveyt Turk reinforces its stellar a lower cost (5.12% annual gross return) position in the Turkish capital market compared to other deals strengthened through the recently-issued US$500 investors’ confi dence in our bank,” million Sukuk Wakalah facility which affi rmed Kuveyt Turk. 1st November 2016 was oversubscribed four times. NURUL ABD HALIM provides an insightful Relative to other conventional issuances account of the deal. of a similar size and tenor, Kuveyt KT Kira Sertifi kalari Issuer Turk’s fi ve-year Sukuk achieved Varlik Kiralama Kuveyt Turk witnessed signifi cant the tightest pricing at midswaps Kuveyt Turk Katilim Obligor traction on its latest US dollar Wakalah (MS)+385bps — making it the most Bankasi paper, with the fi nal orderbook almost successful international capital market Size of issue US$500 million reaching US$2 billion. According to the issuance performed in Turkey this year. Market deal to qualifi ed participation bank, the oversubscription For example: Isbank’s US$600 million Mode of issue investors was US$500-700 million more than that 5.5-year senior bond was priced at To allocate funds for long- of bond issuances by other Turkish banks MS+420bps, while Vakifb ank’s US$500 Purpose term requirements observed in the past month. million fi ve-year eurobond issue was at MS+435bps, a full 50bps wider in respect Tenor Five years to the Wakalah facility. Turk Eximbank’s Issuance price 100% US$500 million seven-year bond was Profi t rate 5.14% Relative priced at MS+400bps, considered as one Payment Semi-annually of the tightest pricings in Turkey. Currency US dollars to other Maturity date 2nd November 2021 conventional “If we look at the value of their Arab Banking September 2021 bond on the morning of Corporation, Dubai the 25th October (trading at Z+365bps) Joint lead Islamic Bank, Emirates issuances of a and apply the same new issue premium managers/ NBD, KFH Capital and curve extension from September bookrunners Investment Company, similar size and to November, Turk Eximbank would Noor Bank, QInvest and have priced [its] fi ve-year trade today at Standard Chartered Bank tenor, Kuveyt Warba Bank and Al Rayan MS+390-395; [still] 5-10bps wider than Co-lead Turk’s five-year Kuveyt Turk’s,” explained the Islamic Investments bank. Governing law English and Turkish Mutlu Avukatlik Legal advisor(s)/ Sukuk achieved the Ortakligi, Cliff ord Proceeds from the issuance will be counsel tightest pricing channeled to support the funding Chance, King & Spalding requirements of its clients, including Listing Irish Stock Exchange Ijarah assets, Murabahah, the provisioning of long-term project Underlying at midswaps tangible investment fi nancing and other investment activities. assets (MS)+385bps Kuveyt Turk utilized the Wakalah Sukuk structure to provide fl exibility in dealing Rating Fitch: ‘BBB’ — making it the with underlying assets, which consist Shariah KFH Capital Shariah of a range of fi nancing assets including advisor(s) Committ ee most successful Ijarah, Murabahah and tangible Sukuk Structure Wakalah investments. Tradability Yes international By geography As the Turkish subsidiary of Kuwait GCC: 61% capital market Finance House, Kuveyt Turk benefi ts England and continental from easy access to a large pool funding Europe: 27% issuance performed resources in the Gulf region. The Turkish Asia: 12% bank, however, aspires to stand Investor By investor type in Turkey alongside peers in the region by playing breakdown Banks: 56% a more prominent role in foreign trade as Asset management: 29% this year well as increasing the channels of access Hedge funds/private and funding to Gulf investors. “In the banks: 9% The deal was realized at a favorable cost long run, the bank seeks to be the largest Insurance/Takaful and despite the country’s sovereign rating participation bank in [terms of] asset size. pension funds: 6% being cut to junk by Moody’s on the back On the other hand, we also seek new Face value/ of the unstable economic environment. opportunities to enlarge our international minimum US$200,000 “The fact that the Sukuk were off ered at network at diff erent locations.” investment

Do I have to be a Muslim?

By Daud Vicary, the president and CEO of the International Center of Education in Islamic Finance (INCEIF), The Global University of Islamic Finance.

During the last month I made one trip. That was to Dubai. I must say it was certainly an eye-opener and I could say life-changing. Here is why. I sit on the Advisory Panel for a global award program and I also sit on the Board of Trustees of the RFI Foundation. The former was holding its awards dinner and the three fi nalists were to pitch at that event and be voted on by the guests att ending the dinner. In tandem, the RFI Foundation had managed to get a one-hour panel discussion at the United Nations UNEP–Finance Initiative, Global Round Table, to raise the profi le of Islamic fi nance and its alignment to sustainability, ethical fi nance and the UN’s Sustainable Development Goals (SDGs). The panel went very well. However, you could sense from the sharp collective breath intake taken by the 400 or so att endees from all over the world at this session that this was prett y much the fi rst fi nance was included in the been able to get the message across time that any of them consultative document going before now. This issue does require had heard anything forward. considerable refl ection and I see it as a about Islamic call to action to get the dialogue going fi nance and what When I was able to get a few with non-Muslims around the world it brings to the minutes of self-refl ection and to share the universality of Islamic table! on the events of the day, fi nance. I was able to dwell on a Roll forward a couple of things. One was couple of hours to give thanks for the Despite 30- to a breakout opportunity to participate session titled and to get a message plus years ‘The Principles across. The second was the for Positive somewhat startling revelation of growth and Impact Finance’. that despite 30-plus years During this session, of growth and development, development, the I was able to explain the world of Islamic fi nance more about Islamic is litt le understood or known. world of Islamic fi nance, its value It was almost like winding the proposition as well as clock back 15 years and hearing finance is little the alignment between the most frequently asked question understood Maqasid Shariah and the that I used to be asked, namely: SDGs. Once again, “Do I have to be a Muslim or known there was not much to participate in Islamic knowledge or fi nance?” It was almost as awareness about if the UN was asking this Islamic fi nance, question collectively in 2016. Without any doubt at all, we have much but there was a great deal Credit to them that they want to to do and not a moment to lose. of interest and a palpable enhance their understanding and desire to learn more and to include us in, but one has to ensure that Islamic to wonder why we have not

The launch of Awqaf International IFN Country Correspondents AFGHANISTAN:, Manezha Sukhanyar, Organization head of Islamic banking, Maiwand Bank BAHRAIN: Dr Hatim El Tahir, director of Islamic Finance Knowledge Center, Deloitt e NEW ZEALAND are approved by all Waqf organizations & Touche worldwide. This step will further BANGLADESH: Md Siddiqur Rahman, By Mohamed Nalar executive vice president, Islami Bank Bangladesh enhance the role of the endowment BOSNIA HERZEGOVINA: Amer Bukvic, CEO, Bosna sector and make it a partner in fi nancial Mohammad Abdullah Al Gergawi, Bank International transactions and investments in various BRAZIL: Fabio Figueira, the minister of cabinet aff airs and Islamic economy sectors,” Mohammad partner, Veirano Advogados the future, in line with the vision CANADA: Jeff rey S Graham, Abdullah added. and support of the chairman of the partner, Borden Ladner Gervais EGYPT: Dr Walid Hegazy, Executive Council, Sheikh Mohammed Awqaf New Zealand’s innovative managing partner, Hegazy & Associates Rashid Al Maktoum, announced the FRANCE: Jean-Baptiste Santelli, projects like the development of Waqf launch of the Awqaf International lawyer, De Gaulle Fleurance & Associates farms linked to the supply of livestock Organization (AIO), a fi rst of its kind HONG KONG: Wilson Yeung, to the seasonal Qurban and Aid relief member, The Taxation Institute of Hong Kong initiative regionally and globally, on industries and the Smart Waqf linked INDIA: H Jayesh, the 11th October 2016. founder & partner, Juris Corp to Waqf Sukuk initiatives have a huge INDONESIA: Farouk Alwyni, potential to benefi t from this platform in CEO, Alwyni International Capital Awqaf New Zealand is one of the the future. It is also anticipated the AIO IRAN: Majid Pireh, founding members of AIO and other Islamic fi nance expert, Securities & Exchange will play a pivotal role in strengthening Organization of Iran founding members include the following: the functioning of endowment ITALY: Stefano Padovani, institutions through facilitating the partner & head of banking and fi nance, NCTM Studio • Awqaf and Minors Aff airs Legale Associato fi nancing of SMEs in these countries, Foundation KAZAKHSTAN: Timur Rustemov, including the development of new chairman, Association for development of Islamic fi nance • Dubai Islamic Economy Development social Islamic fi nance instruments via KENYA: Mona K Doshi, Center senior partner, Anjarwalla & Khanna Advocates the capital markets. This will also open • Mohammed bin Rashid Global KOREA: Yong Jae Chang, doors to the Islamic fi nance industry to partner, Lee & Co Centre for Endowment Consultancy engage with a Waqf industry body with KUWAIT: Thuwaini Al-Thuwaini, executive manager of • Department of Awqaf in Sharjah investments, Warba Bank an international reach in developing and • Awqaf SA (National Awqaf MALAYSIA: Ruslena Ramli, providing new and innovative fi nance- head, Islamic fi nance, RAM Rating Foundation of South Africa) related products and services. MALDIVES: Aishath Muneeza, • Awqaf Canada (National Awqaf deputy minister, Ministry of Islamic Aff airs, Maldives Foundation of Canada) MALTA: Reuben Butt igieg, Husain Benyounis, the secretary-general president, Malta Institute of Management • Awqaf USA of Awqaf New Zealand, said: “The MOROCCO: Ahmed Tahiri Jouti, • Awqaf Australia COO, Al Maali Consulting Group AIO has been launched not merely • Independent Committ ee of Islamic NEW ZEALAND: Mohamed Nalar, to coordinate the eff orts of member Finance in Europe, and trustee and board member, Awqaf New Zealand foundations and entities, but to create NIGERIA: Auwalu Ado, • Awqaf Sheikh Mohammed Abdulaziz a global network that shares best head of Shariah audit, Jaiz Bank Al Rajhi. OMAN: Anthony Coleby, practices and can manage international head of corporate commercial, Said Al Shahry Law Offi ce endowments and funds. The body has PAKISTAN: Muhammad Shoaib Ibrahim, This pioneering initiative is mandated also been tasked with recommending managing director & CEO, First Habib Modaraba to enhance the role of endowments in QATAR: Amjad Hussain, unifi ed templates for legal frameworks, the development of societies worldwide. partner, K&L Gates supporting the organizing of Waqf Mohammad Abdullah pointed out that RUSSIA: Roustam Vakhitov, investments and overseeing applications managing partner, International Tax Associates the AIO complements the vision of of Shariah standards in accounting, SAUDI ARABIA: Nabil Issa, Sheikh Mohammed Rashid in globalizing partner, King & Spalding reviewing and governance.” SINGAPORE: Lim Say Cheong, the Islamic economy ecosystem and head of Islamic banking, Maybank Singapore enhancing the role of endowments as The AIO has a bright future and is a truly SRI LANKA: Imruz Kamil, head of Islamic banking, one of the most important social and Richard Pieris Arpico Finance international platform that convenes economic development tools. TANZANIA: Yassir Salim Awadhi Masoud, Waqf development initiatives on both a head Islamic Banking and Retail Banking, National Bank global and local scale and brings like- of Commerce Mohammad Abdullah said: “The TUNISIA: Mohamed Araar, minded philanthropic foundations onto a initiative is a main pillar for the ‘Dubai: general directorate of External Financing and Sett lements, single platform. This collaboration is a deputy director of Private Financing and International Capital of Islamic Economy’ initiative Relations Department , Central Bank of Tunisia vital part of change for the sector, and that aims to develop the Waqf sector and TURKEY: Ali Ceylan, this new organization can successfully partner, Baspinar & Partners unify the eff orts of global Waqf entities utilize this approach to enhance its UAE: Anita Yadav, and organizations to improve the role senior director, head of fi xed income research, Emirates outreach. of Waqf as a key catalyst of economic NBD development.” UK: Siraj Ibrahim, Mohamed Nalar is the trustee and board senior relationship manager, Qatar Development Bank member of Awqaf New Zealand. He can be US: Anup Patel, “The new organization will unify all partner, Arch Street Capital Advisors contacted at [email protected]. IFN Correspondents are experts in their respective fi elds and local and global eff orts to establish are selected by Islamic Finance news to contribute designated short country reports. For more information about becoming a shared system for endowment an IFN Correspondent please contact sasikala.thiagaraja@ investments whose laws and regulations redmoneygroup.com

Is Brazil well known abroad as an export country?

BRAZIL with Saudi Agriculture and Livestock the exchange rate was US$1 to BRL3.2. Investment and sovereign funds from Therefore, depending on the current rate, By Fabio Figueira Qatar and the UAE. a Brazilian export item can become more interesting for a Brazilian entrepreneur to Brazil is a country that, of course, Despite the diff erent nature of its export it and this could be a movement participates in the international export items (such as commodities and that companies abroad, which usually trade market. This participation manufactured goods), Brazilian exports do not acquire Brazilian products, could occurs through the export of either do not have a signifi cant importance monitor in order to import products commodities or manufactured goods. in the Brazilian GDP. In 2015, for from Brazil in what could be a favorable Some examples of Brazilian export example, Brazilian exports would have moment for them. items are the following: soya, iron corresponded to 13% of the country’s ore, cane sugar, poultry, airplanes and GDP and the main explanation for Brazilian banks do not include the vehicles. this would be the fact that there is purchase and sale of goods as one of its an important domestic demand and economic activities. However, Islamic In the particular case of poultry, GCC entrepreneurs would see no need in fi nancial institutions do have this activity countries like Saudi Arabia and the looking for clients/customers abroad. of purchase and sale of goods. Therefore, UAE are among the main importers of a Exports of emerging countries like Brazil a company abroad interested in Brazilian product (Halal chicken). BRF, may suff er the infl uence of the country’s importing products from Brazil may a major company in Brazil, has created currency value vis-à-vis currencies like organize a Shariah compliant transaction a subsidiary named BRF Halal whose the US dollar or the euro. with the assistance of its fi nancial corporate purpose is the production, consultant and an Islamic fi nancial distribution and commercialization of The fl oating of a currency like the institution, which could make viable the food products to Muslim countries. Brazilian one can happen in connection sale and purchase transaction under the According to Bloomberg, BRF is with foreign events (like elections in Murabahah structure. currently in discussions in the Middle the US) or internal events (political East in order to raise funds amounting crisis). For example, in March 2016, Fábio Amaral Figueira is a partner at Veirano to US$500 million for BRF Halal before the exchange rate was about US$1 to Advogados. He can be contacted at fabio. an intended IPO occurs. Also according BRL3.8 and on the 28th October 2016, fi [email protected]. to Bloomberg, the discussions are

First Islamic fund issuance starts the ball rolling in India

INDIA performance to current and potential past, J&K Bank has considered sett ing up investors. We have identifi ed a number a subsidiary for Islamic fi nance. By H Jayesh of factors that support our strategy to invest in Indian equities.” The rationale India’s fi rst fully Shariah compliant and Emirates NBD Asset Management for the agreement is driven by Emirates Securities and Exchange Board of (Emirates NBD) has entered into NBD’s solid interest in India as a growth India-registered fund launched its third a partnership agreement with UTI market for its overseas investment investment fund, Realty AIF 1 International (UTI), one of India’s strategies. (Alternative Investment Fund) on the 17th prime money managers, to launch the October 2016. The fund is meant for the Emirates Islamic India Equity Fund. Jammu and Kashmir Bank (J&K Bank) real estate sector with Vistra ITCL acting The fund, to be managed by UTI, will is reassessing off ering Islamic banking as the trustee for the fund. Promoted by infl ate Emirates NBD’s global portfolio to its customers in the state. It is looking Secura Investment Management (India), and off er investors exposure to Shariah to examine the proposal aft er taking the the fund’s investments and operations compliant Indian equities. Reserve Bank of India (RBI) on board. are Shariah compliant. Mehaboob MA, The J&K Bank said there is a huge scope the managing director of Secura The new fund will build on Emirates for Islamic banking in the state, but the Investment Management, commented NBD’s existing SICAV, an open-ended concept needs to be understood in its that the fund’s tenor is expected to be collective investment scheme popular right perspective to make it acceptable. seven years with fi rst close on the 31st in Western Europe. The platform, Parvez Ahmad, the chairman of J&K December 2016 and with a target to raise among others, includes the Emirates Bank, was quoted by Brighter Kashmir as INR2 billion (US$29.94 million) with a Emerging Market Corporate Absolute stating the following: “Well, we have not green shoe option of INR1 billion Return Fund, the Emirates Islamic given serious thought to it, but there is a (US$14.97 million). The minimum Global Balanced Fund and the Emirates lot of demand for Islamic banking in the investment under the scheme is INR10 MENA Fixed Income Fund. Tariq Hendi, state. A few clients do not want to have million (US$149,677). CEO of Emirates NBD, commented: the interest on their saving bank accounts “Our agreement with UTI is part of an [and] we do not have the mechanism to H Jayesh is the founder and partner of Juris ongoing eff ort to extend our in-house take care of that particular component. Corp. He can be contacted at jayesh.h@jclex. product range. It also demonstrates our But we will examine the proposal and com. commitment toward innovation and we have also took RBI on board.”. In the

Afghanistan: Shortage of investment opportunities due to excessive liquidity

AFGHANISTAN The main reason for the excessive and the government is in the process liquidity faced by Islamic windows is the of building a government bond market By Manezha Sukhanyar shortage of investment opportunities. based on Sukuk. Due to the involvement of Riba, Islamic While most banks around the world fi nancial institutions are restricted from Furthermore, an offi cial of the central are trying to cope with liquidity issues investment/placement opportunities bank is of the view that a government and manage the liquidity shortage such as capital notes and overnight Sukuk issuance, besides att racting more risk, nearly all Islamic windows in placements off ered by the central bank. funds into the fi nancial sector, will also Afghanistan are facing a surplus in assist the capital market to stabilize and liquidity. Considering the existence of a strong the fi nancial market to develop further market for Islamic fi nance products based on the Shariah compliance Due to the volatile situation in the in Afghanistan, Sukuk can play an system. country, the investment climate is not eff ective role in resolving the surplus favorable, and considering the risk- liquidity issue faced by Islamic fi nancial Manezha Sukhanyar is the head of Islamic sharing nature of Islamic banking, institutions. banking at Maiwand Bank. She can be Islamic fi nancial institutions have to contacted at [email protected]. tread with additional caution with To date, several discussions have taken regards to investments. place to introduce Sukuk in Afghanistan

Investment banks in the Iranian capital market

IRAN Diagram 1: Main and secondary activities of investment banks in Iran By Majid Pireh

An investment bank is a fi nancial Providing services relating Providing consultancy services; ȱȱȱȱȱę intermediary that provides a variety of marketing and/or managing instruments for companies; services, including underwriting, acting the process of securities transfer providing asset management services as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a Subscription, underwriting and undertaking broker for institutional clients. In other ȱȱȱȱȱ¢ȱě words, an investment bank is a fi nancial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting Brokerage; Portfolio management; as the client’s agent in the issuance of broker/dealership market-making securities. It may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market-making, trading of derivatives, fi xed income instruments, foreign Source: Author’s own exchange, commodities and equity securities. Unlike commercial banks and retail banks, investment banks do not take deposits. Table 1: Investment banking industry in Iran Initial required capital for establishment Around US$60 million In Diagram 1, the main and secondary Debut investment banks Amin Investment Bank areas of investment banks’ activities are Novin Investment Bank indicated in accordance to the ‘Rules Month of fi rst investment bank activities April 2008 Governing the Operations of Investment Banks’ ratifi ed in August 2007 by the Number of active investment banks Nine Securities High Council of Iran. Source: Author’s own

However, as Iran’s capital market moves lift ing of a great part of the ﬁ nancial Majid Pireh is the Islamic ﬁ nance senior toward development, there would be a sanctions seems to open the door wider expert at the Securities and Exchange greater place for investment banks to for investment banks to do business Organization of Iran. He can be contacted at prove their abilities. In this regard, the internationally. [email protected].

Building a dual financial system

KENYA the peculiarities relating to Islamic Musharakah Construction Mortgage to banking. Traditionally, Islamic banks the tune of approximately KES2 billion By Mona K Doshi have practiced self-regulation in terms (US$19.33 million), making it one of the of their adherence to religious principles, biggest real estate developments in the Speaking at a conference in Nairobi, the but a centralized approach is gaining industry in Kenya. head of supervision at the Sacco Societies momentum to help standardize contracts Regulatory Authority (SASRA) lamented across the board. The government, Offi cials from the Retirement Benefi ts that many applications for Islamic through the treasury, has now stepped in Authority (RBA) in a recent conference Saccos (savings and credit cooperative to get the subsector to toe the regulatory held in Nairobi noted that the RBA organizations) do not comply with the line by sealing loopholes that have been does not have any product available basic tenets of Islamic fi nance. He singled used to dodge the strict defi nitions for Muslim pensioners. They further out an instance where an application had in Islamic fi nance. FSD has helped added that there is the need to leverage been made by individuals to operate an the government establish a Project technology and mobile phones to get the Islamic Sacco only for SASRA to discover Management Offi ce (PMO) that will ordinary Muslim on the street to start that the team that was proposed to head help police Islamic banks and windows. saving for retirement. the Sacco had never held an offi cial The PMO has recently stated it aims meeting. This is the situation regulators to develop Islamic fi nance to include a Notwithstanding the challenges that like the Central Bank of Kenya, Insurance wide-ranging taxation review and the stand in the way, Kenya is committ ed Regulatory Authority, Capital Markets establishment of a national Shariah board. toward providing the necessary Authority, Retirement Benefi ts Authority environment to build a dual fi nancial and SASRA have to grapple with as In the real estate sector, it is expected that system where Islamic fi nance can operate Islamic fi nance grows in Kenya. Kencom Sacco (which is largely owned in a fair and level playing fi eld with their by employees of Kenya Commercial conventional counterpart for the benefi t Financial Sector Deepening Africa (FSD) Bank) will complete the construction of the country and the region. said in a past report that some of the of 113 four-bedroom maisonett es banks have been operating without on 20 acres in one of the upmarket Mona Doshi is the senior partner at any formal guidelines issued by the neighbourhoods in Kenya. The project Anjarwalla & Khanna. She can be contacted Central Bank to recognize and govern has been funded by the National Bank’s at [email protected]. Islamic finance in Oman without the government

OMAN the last 18 months. The two therefore there is no slated further government remain part of an Islamic fi nance sector Sukuk issuance proposed at the present By Anthony Coleby comprising six conventional banks with time to follow the aggregate issuance to dedicated windows and two specialist date in 2015/16. The breaking news in the Oman Islamic banking operators. banking sector for the month of The Sukuk option remains vulnerable October 2016 is the abandonment, aft er Of far greater importance to the Islamic to any further reduction in the credit a courtship of more than three years, fi nance sector in Oman is the change in rating of the Sultanate and the apparent of merger negotiations between Bank approach of the government, as the fi nal reluctance by the government to Dhofar and Bank Sohar. Had the merger 2016 budget defi cit is slated as being surrender (as it sees it) further sovereign gone through, this would have created OMR3.3 billion (US$8.54 billion) (43% lands and other assets in order to address a US$16 billion entity, ranking second of annual GDP) due to the sustained what clearly continues to be perceived only to Bank Muscat which has a current weakness in the price of crude oil. The in the corridors of power as a temporary market capitalization of US$34 billion. government’s current commitment is to budget funding problem. plug the defi cit to the end of the fourth What are the ramifi cations, if any, for the quarter of 2016 with the use of US$10 There is an initiative, belated but recently Islamic fi nance sector in Oman? Well, the billion of international borrowings publicized, underway to expand, answer to that is probably not that many. (already part drawn) having recently been through the economic strategic plan, the Bank Dhofar has been very successful restated. To balance the books, domestic use of the public-private partnership with its Maisarah Islamic window and borrowings will also be accessed with (PPP) structure in Oman beyond the has led many Islamic fi nancings on any defi ciency being found addressed by current sectors (principally, hydrocarbon, the corporate side, most notably the drawing on the Sultanate’s reserves. power and water) to meet the Millenium Hotel project in Ghubra and government’s project commitments and the Medical City development outlined Most relevant here is the proposed it remains to be seen to what extent the in Salalah, realizing a handsome net nature of domestic borrowings — the PPP will serve as a rival to further profi t of OMR2.13 million (US$5.51 government has recently indicated that sovereign Sukuk issuance in the million) to the end of the third quarter it will draw a further OMR150 million immediate future. of 2016. Bank Sohar, which is much (US$388.26 million) in government smaller, with its Sohar Islamic window development bonds in December Anthony Coleby is the head of the Corporate has focused more on retail and has (totaling OMR450 million (US$1.16 Commercial Department at Said Al Shahry undertaken a prodigious branch opening billion) for 2016, a 300% increase in Law Offi ce. He can be contacted at ajc@saslo. program across the Sultanate over utilization from previous years). But com.

Takaful industry: Gathering momentum from stronger demand

MALAYSIA Table 1: Evolution of Malaysian Takaful industry (1984–2016) By Ruslena Ramli 1984 2016 (based on data as at the end of October 2016) The Malaysian Takaful industry Operators • Sole composite operator – • Eight composite operators and three has been evolving and charting Syarikat Takaful Malaysia, Family Takaful operators, with a minimum healthy growth since its inception 32 with RM10 million (US$2.36 capital of RM100 million (US$23.62 million) capital. million) each. years ago. As at the end of 2015, the industry’s expansion exceeded that of Shareholders • An Islamic bank and state • Majority are either backed by banks or religious councils and established foreign insurance groups. its conventional counterpart, driven foundations. by increasing demand and active Regulatory • Regulated by BNM under • Replaced by new risk-based capital regime promotion by Takaful operators. Total framework the Takaful Act 1984 with a in 2014. Regulation was consolidated under gross contributions surged from RM6.4 solvency capital regime. the Islamic Financial Services Act 2013. billion (US$1.51 billion) in 2011 to Products • Limited products mainly • Broad range of products with distinct RM9.3 billion (US$2.2 billion) in 2015 confi ned to motor, fi re and features. (compound annual growth rate (CAGR) mortgage Takaful. • Family products dominated the market of 10.1%), albeit from a small base. • General products dominated with more than a 70% share (in terms of Notably, this is almost twice the pace the market, with a 63% share contributions). of the conventional insurance sector (in terms of contributions). (CAGR of 6.3%). Meanwhile, fund Business model • Mudarabah • Wakalah assets increased from RM16.9 billion Distribution • Branches and marketing • Branches, marketing offi cers, agency force, (US$3.99 billion) in 2011 to RM24.7 channels offi cers. bancaTakaful, brokers, online and strategic billion (US$5.83 billion) in 2015 (Bank alliances. Negara Malaysia (BNM)). Investment • Confi ned to Islamic deposits • Wider range of Shariah investment avenues and government Islamic instruments issued by the government and As at the end of 2015, the top Takaful securities. the private sector. operators were Etiqa Takaful (RM2.3 Source: BNM, RAM Ratings billion (US$543.24 million) of net contributions), Prudential BSN Takaful Takaful sectors. The framework — to be Malaysian Takaful Association and EY (RM1.2 billion (US$283.43 million)) and implemented over the next fi ve years — Malaysia; a growing Muslim population; Syarikat Takaful Malaysia (RM1.1 billion seeks the gradual removal of limits on urbanization and rising consumer (US$259.81 million)). Together, these three operating costs, the diversifi cation of awareness; the Takaful industry – operators dominated the domestic market. distribution channels and the especially Family Takaful — is poised to strengthening of market practices. With a deliver an even stronger performance The Life Insurance and Family Takaful low penetration rate of about 14.5% of the over the medium to long term. Framework, which came into eff ect on the population (relative to the overall 1st December 2015, outlines measures to insurance and Takaful industry’s 55.7%) Ruslena Ramli is the head of Islamic fi nance support the long-term growth and according to data from Malaysian Takaful at RAM Ratings. She can be contacted at sustainability of the life and Family Dynamics — Central Compendium 2015, [email protected].

Figure 1: Gross contributions in Malaysian Takaful segments

Segment 5-year CAGR 2015 Gross contributions Family 9.8% RM7 billion Market share* of conventional General 11.3% RM2.3 billion insurance and Takaful

RM billion 100% ...... 90% 88% 87% 87% ...... 86% 8 7.4 84% 85% ...... 7 ...... 80% 84% 84% ...... 7 ...... 6.2 6.5 ...... 5.8 ...... 70% ...... 6 ...... 60% ...... 5 ...... 50% ...... 4 ...... 40% ...... 3 ...... 1.9 2.2 2.3 ...... 2.4 30% ...... 2 1.7 ...... 20% ...... 1 ...... 10% ...... - ...... 16% 12% 15% 13% 16% 13% 16%...... 14%...... 0% 2012 2013 2014 2015 2016f 2013 2014 2015 2016f

Gross contributions - Family Gross contributions - General Family Takaful Life Insurance General Takaful General Insurance

Sources: BNM and Sector Commentary: Insurance & Takaful in Malaysia – Slower growth amid challenging climate, RAM Ratings, March 2016 * Market share by gross premiums/contributions.

A promising outlook for Islamic crowdfunding

ISLAMIC CROWDFUNDING of technology and innovation. The the US$260 billion SME funding gap in fi ntech revolution is having a profound the MENA region alone. By Craig Moore impact on how we do business, transact money and how customers interact with Investors also face challenges seeking The Global Islamic Economy Summit products and service providers. Shariah compliant investment options 2016 in Dubai demonstrated the reach due to the limited range of opportunities, and visibility of the burgeoning While the impact of fi ntech on Islamic but that is beginning to change with Islamic economy. A recent report, banking has been limited to date, the the arrival of new fi ntech-based asset ‘State of the Global Islamic Economy sector is certainly ripe for disruption and classes, such as Islamic crowdfunding, to Report 2015/2016’, estimated Islamic could stand to benefi t signifi cantly from help them diversify their portfolio and fi nance assets to be US$1.81 trillion in the rapid technological advancements support their community. 2014 with a forecast of US$3.1 trillion transpiring in the fi nancial industry. by 2020, with around 80% represented Islamic crowdfunding is a nascent by Islamic banking. Demand from an increasingly younger, industry, but one with a lot of tech-savvy audience, who expect opportunities. As many governments While the growth of the Islamic fi nance more choice and a more sophisticated pledge signifi cant investment into sector is impressive, and currently customer experience, is driving the technology and innovation, the future for outpaces that of conventional banking, digitization of fi nancial products and Islamic crowdfunding is looking bright. there exists more opportunities to services. As a result, we are starting to But investment into innovation is only further propel this growth among SMEs, witness the emergence of a new breed of one factor required for growth. whose fi nance and growth requirements fi nancial service providers, leveraging are critical to the economy yet oft en the digital revolution and off ering What is equally important is ensuring overlooked by conventional Islamic competitive, technological platforms that that the right infrastructure and banks. can eff ectively deliver against changing regulations are developed to help consumer needs. support industry entrants. One that is A clear message emerging from fl exible enough to help nurture the industry is that innovation and Islamic crowdfunding models, such innovation while creating trust and technology are universally viewed as as peer-to-peer fi nance and equity transparency. Adopting a holistic critical enablers of sustainable Islamic platforms, are harnessing technology approach of creating a robust economic growth. And only the most to off er new fi nancial alternatives to infrastructure plus continued forward-thinking countries which businesses looking for fi nance. The investment into technology will enable fully embrace and invest in innovation result is a more effi cient and streamlined Islamic crowdfunding to reach its full and technology will catapult their online process that increases potential. growth and optimize their global accessibility to alternative, and oft en competitiveness. more cost-eff ective sources of SME Craig Moore is CEO of Beehive. He can be fi nance. Innovations like this is just one contacted at [email protected]. The fi nance industry is one sector way in which fi ntech could help alleviate currently experiencing the infl uence

Value of mergers and acquisitions increased in terms of value so far in 2016

MERGERS & First Gulf Bank for US$14.8 billion which The consumer sector’s nine deals in 2016 ACQUISITIONS is the largest transaction so far in 2016. so far contributed to a total amount of The said merger will be approved by US$3.5 billion; the amount was only By Burak Gencoglu shareholders of the two banks, which US$175 million in the previous year. already approved the transaction in To date, the Middle East has seen July through their respective boards, in While transport and consumer markets 55 deals worth up to US$26.6 billion meetings to be held on the 7th December. experienced increased deal values, this year, according to data released energy, mining and utilities witnessed a by Mergermarket. This indicates a In addition to the increase in the value signifi cant decrease compared with 2015, signifi cant increase of 236.71% in the of total transactions, the transport with their shares in total transactions of value of transactions of mergers and and consumer sectors specifi cally also mergers and acquisitions falling from acquisitions when compared with 54 witnessed an increase in transaction 60.1% to only 5.4%. deals worth up to US7.9 billion in 2015. value compared with 2015. The main reason for the increase in the transport Burak Gencoglu is the senior att orney at The total value of the deals was sector is due to the acquisition of United GSG Att orneys at Law. He can be contacted infl uenced by the mega-merger between Arab Shipping Company by German at [email protected]. the National Bank of Abu Dhabi and company Hapag-Lloyd for US$5.4 billion.

Professor Rifaat Ahmed Abdel Karim, the recipient of the Royal Award for Islamic Finance 2016

There are very few in the global Islamic ﬁ nance industry whose reputation or résumé could be as impressive as Professor Rifaat Ahmed Abdel Karim’s. He has led the creation and development of three international Islamic ﬁ nance organizations and is an established academic. Professor Rifaat’s contributions to the industry are invaluable and far-reaching. Leading up to him being conferred the prestigious Royal Award for Islamic Finance 2016, Professor Rifaat sits down with VINEETA TAN in an exclusive interview — sharing his thoughts, experiences and hopes for the industry, and of course, what the Royal Award means to him.

The past “When I fi nished my PhD, I wrote “I remember a friend telling me that I to my professor at the University of was crazy for taking up Islamic fi nance,” Birmingham who was famous for writing Professor Rifaat said laughing as he a book called ‘Societal Accounting’. I told candidly shares how his Islamic fi nance him that the model in his book would journey started. Understandably, the collapse if we brought in the model of the response of his friend was not unusual basis of Islamic fi nance — and he agreed! at that time —it was aft er all early days He also asked if I would be interested in when Professor Rifaat fi rst decided to publishing a paper on the matt er. I was explore Islamic fi nance, as an academic. very junior at that time, but was keen The idea of taking a conventional fi nance — so why not, I said to myself. Aft er theory — studying it and looking at it publishing the paper, he asked me if I from an Islamic fi nance perspective and wanted to write a book. The end product to engineer it to comply to Shariah tenets was ‘Business and Accounting Ethics was too intriguing, and hard to pass in Islam’ — and that really gave me the up, for Professor Rifaat. It was out of head-start in the industry,” said Professor sheer academic intrigue that motivated Rifaat. Professor Rifaat to learn the ways of Islamic fi nance; but it was writing a book That was in 1991, and Professor Rifaat which ignited and reaffi rmed his passion went on to author several other Islamic for Islamic fi nance. fi nance books and also ascended to the top echelons of the industry, becoming the inaugural secretary-general of I remember AAOIFI and then the IFSB when the 2013, is one development Professor Rifaat organizations were formed. And market saw as very signifi cant, and it would the day when participants worldwide continue to credit not have been possible if the market Professor Rifaat’s leadership in forming did not understand the specifi cities of the IFSB was to be governance, regulatory and Shariah Islamic fi nance, which is instrumental in standards as well as in the development allowing the market to innovate within a inaugurated in of much-needed Islamic liquidity safe regulatory environment. management instruments in his capacity Malaysia, somebody as CEO of the International Islamic “The IFSB, IFSA — these would not have Liquidity Management Corporation happened if it weren’t for the support of told me that we are (IILM). individuals like [former] Bank Negara Malaysia (BNM) governor Zeti Akhtar now newly born The present Aziz,” said Professor Rifaat. — I asked how. He “The industry has indeed changed a One only needs to look at the annual lot,” Professor Rifaat recounts almost reports of BNM to gauge how far Islamic said: ‘We now have nostalgically. “I remember the day fi nance has come – and how Malaysia when the IFSB was to be inaugurated has been at the forefront in developing in Malaysia, somebody told me that we the Shariah fi nance proposition. regulators — and this are now newly born — I asked how. He means we are now said: ‘We now have regulators — and this “When governor Zeti was appointed in means we are now recognized.’” 2000, the annual report only included one recognized paragraph on Islamic fi nance but today Regulations for Islamic fi nance — it is a whole chapter; and you cannot worldwide continue to evolve over the author an entire chapter if you don’t have years – the Islamic Financial Services Act

Continued

The Royal Award for Islamic Finance

This biennial Royal Award initiative, spearheaded by Bank Negara Malaysia and Securities Commission Malaysia recognizes individuals who have excelled in advancing Islamic ﬁ nance globally through their outstanding contributions and achievements.

The recipients of the Royal Award serve as a role model to inspire others to contribute to the advancement of the industry. The three previous recipients were Dr something to off er,” Professor Rifaat Abdul Halim Ismail, founding opined. The Royal member of Malaysia’s fi rst Islamic bank (2014), Iqbal Khan, CEO of The future Award is a Fajr Capital (2012) and Shaikh Saleh From enhancing the regulatory and Abdullah Kamel, founder of the governance infrastructure for the really prestigious one Dallah Al Baraka Group, one of the industry, Professor Rifaat now focuses Middle East’s largest conglomerates his time and energy in coming up with – and to have it from a (2010). solutions to yet another perennial issue in Islamic fi nance: the lack of liquidity country like Malaysia so much for Islamic fi nance means a lot management tools. to me; it is indeed a great honor to be which has done so its recipient,” said Professor Rifaat. “It The IILM was groundbreaking in many will also be my second time meeting ways – an answer to this dearth of high- much for Islamic the King; the fi rst being when I quality, tradable, Islamic papers the received [a] Datukship (a Malay industry sorely needs. Under Professor finance means honorary title conferred by the head of Rifaat’s leadership, the IILM successfully state), making this special!” introduced the fi rst Shariah compliant, a lot to me short-term, highly-rated, tradable US dollar Sukuk. The paper was also the fi rst market instrument backed by sovereign “We will go on a membership drive: at Are you receiving our daily assets in the form of Sukuk and is present we have nine members – similar IFN Alerts? the fi rst to have a multi-jurisdictional as to how [the] IFSB started. But when I primary dealer network facilitating left the IFSB, it had almost 200 members distribution to investors worldwide. and we are hoping to do the same at [the] IILM,” Professor Rifaat revealed, adding Not resting on his laurels, Professor that the IILM is keen to partner with Rifaat expects the IILM to continue the UK, Hong Kong and China, among No. innovating to meet the needs of investors others. and market players which are growing in sophistication. A true honor For his great service to the industry, “The IILM has introduced four-month spanning decades and crossing borders, tenor papers (in addition to three- being conferred the Royal Award for month); we are hoping to fi ll the rest of Islamic Finance is indeed well deserved, the tenors and become a yield curve for and a recognition Professor Rifaat values the global industry to refer to,” shared deeply. Professor Rifaat. The Number ONE news service with “The Royal Award is a really over 20,000 registered daily readers The supranational is also keen at prestigious one – and to have it from a recruiting new members. country like Malaysia which has done

Impact of a Trump presidency on US real estate

Donald Trump has been elected the 45th president of the US, with the Republican Party retaining control of both the US Senate and House of Representatives. One party will now have unifi ed control of the Executive and Legislative branches of the US federal government. While the US stock futures dropped signifi cantly on election night (likely due to the uncertainty of what direction a Trump presidency would take the country), the major US stock indices recovered quickly the next morning and opened higher as the market absorbed and analyzed the results, with markets currently achieving new highs. Meanwhile, treasuries have fallen since the election based on President-elect Trump’s fi scal policies of tax cuts and greater infrastructure spending which are expected to trigger a surge in infl ation and larger federal budget defi cits. ANUP PATEL writes.

Anup Patel is the president perspective, some investors may wait Act, one of the signature legislative and chief investment offi cer and not deploy new capital until they accomplishments of President Obama of Arch Street Capital have more visibility into Trump’s main that provides healthcare to an estimated Advisors. He can be contacted legislative initiatives and policies. This 20 million people, while also reforming [email protected]. Gautam may moderate the investment sales the Medicare (government-sponsored Mashett iwar, the vice-president at Arch volume to some extent, but Trump’s health insurance program for people 65 Street, assisted in draft ing the article policies to eff ectuate growth should have and over) and Medicaid (government- and can be reached at Mashett iwar@ a net positive impact on the real estate sponsored health insurance for families archstreetcapital.com. market as a whole. Trump’s experience, and individuals with limited resources) net worth and family business are all programs. Depending on the location, While the election results have brought predominantly tied to the real estate healthcare providers and large hospital an element of uncertainty to the industry – a fact that could prove to be systems rely signifi cantly on these infl uence of government policy on of some signifi cance when assessing government-sponsored insurance the US economy, the current market’s the eff ect of a Trump presidency on the programs and could be negatively reception to Trump’s election has been industry. Nonetheless, the following is impacted going forward. Due to the positive. Trump is viewed as pro- an analysis on how various real estate uncertainty in this sector, the investment business and pro-growth, and expected sectors may be potentially impacted sales volume and asset values for this to stimulate the economy through during Trump’s tenor. sector (which includes medical offi ce decreased regulation and increased buildings, senior housing and skilled infrastructure spending. Trump nursing homes among others) could has inherited a US economy much potentially decline in the future. This improved from the prior recession. The The election sector is perhaps the most exposed to overall US economy grew at an annual changes in government policy in the near rate of 2.9% in the third quarter (Q3) results are not term as a result of a new presidential of 2016, its highest level in nearly two administration. years. Moreover, the Bureau of Labor projected to have an Statistics recently reported that the Q3 immediate impact Industrial real estate sector 2016 infl ation-adjusted weekly median During the campaign, Trump announced income hit an all-time high while the on the overall US an aggressive capital-spending plan to unemployment rate has stabilized at focus on core infrastructure including 4.9% (as compared with a peak of 10% economy but rather, investments in roads, bridges, tunnels, in October 2009). The fundamentals rail, airports, ports, clean water, the of the US economy remain strong and may have an impact electricity grid, telecommunications and are anticipated to remain strong in the energy infrastructure. Analysts have near term. The election results are not on the government suggested that the total cost of the plan projected to have an immediate impact could be upwards of US$1 trillion. The on the overall US economy but rather, policies that could infrastructure plan is seen as largely may have an impact on the government benefi cial to the industrial real estate policies that could infl uence the influence the direction sector as the need for raw materials direction of the economy over a longer and fi nished goods would benefi t period of time. of the economy over a US industrial companies especially those involved in the construction and It is diffi cult to predict the impact that longer period manufacturing sectors. In addition, the policies of Trump and the Republican Trump repeatedly stated that he would Party may have on the US real estate of time look to renegotiate trade deals and look market until any broader economic to bring more manufacturing jobs back trends develop. There remains a great to the US. This would have a mixed deal of uncertainty as to the kind of Healthcare real estate sector impact on the industrial real estate president Trump will be and what the Both Trump and the Republican sector as bringing manufacturing jobs priorities will be for his administration. Party signaled their desire to repeal back onshore would increase demand From a real estate capital markets and replace the Aff ordable Care for manufacturing-oriented industrial

Continued real estate while a reduction in imports election results. This sector is also highly could potentially decrease demand for Until Trump’s correlated to the local economies where distribution-oriented industrial real assets are located as well as the overall estate and increase overall operating/ administration US economy. input costs for manufacturers. more clearly defines Hospitality real estate sector Office real estate sector This sector is highly correlated to the This sector is highly correlated to the its priorities, it is overall US economy and will likely be overall US economy and will likely be less impacted in the short term. However, less impacted in the short term. However, impossible to know hospitality demand in gateway markets there is a chance that the policies of the may be negatively impacted due to lower Trump administration could impact the the long-term levels of international tourism, which value of US government lease properties. may be off set with a weakening dollar. A central goal of the Republican Party is implications on the Meanwhile, hospitality demand in and to shrink the size of the US government near manufacturing centers, such as the in terms of both the total federal budget US real estate Midwest, may increase due to Trump’s and total federal employment. This sector infrastructure, trade and manufacturing would likely reduce the total number jobs policies. of long-term government-leased assets household income among others as well in the market which could potentially as the overall US economy. It is diffi cult Until Trump’s administration more make these assets more valuable as they to assess the impact on this sector clearly defi nes its priorities, it is become less common. without fi rst allowing broader economic impossible to know the long-term trends to take shape. implications on the US real estate sector. Retail real estate sector While this uncertainty will exist for some This sector is generally correlated to Multifamily real estate sector time, any impact (both positive and numerous economic indicators including This sector is generally considered the negative) on US commercial real estate consumer confi dence/spending, most stable real estate sector and will from Trump’s policies will take time to unemployment rate and median likely see the least impact from the develop over the course of many months and potentially multiple years.

SHARIAH GOVERNANCE, ADVISORY, LATEST ISSUES IN SHARIAH, REGULATION, AUDIT & RISK MANAGEMENT FOR FINANCIAL RISK MANAGEMENT AND ISLAMIC FINANCIAL INSTITUTIONS CAPITAL ADEQUACY FOR TAKAFUL OPERATORS

Latest Issues, including Bank Negara Malaysia Islamic Financial th Institutions Reference Manual for Shariah Advisory Boards 29 November 2016 DoubleTree Hotel by Hilton, Kuala Lumpur

SIDC CPE - accredited: 10 CPE Points With many of the country’s individuals, organisations and businesses without adequate th 6 December 2016 levels of insurance or risk management products of any kind, it has been said that the DoubleTree Hotel, Kuala Lumpur Takaful sector in Malaysia has the potential to be a high-growth industry. However, the industry faces challenges in its developmental cycle, such as product innovation and a bid to This one day, fully-updated seminar will provide delegates with an in-depth understanding of Shariah governance, advisory further educate the market of the benefits and features of Takaful. The evolving regulatory risk and review for Islamic financial institutions, highlighting where banks are exposed, what relevant regulations and and financial risk management requirements for Takaful, as well as the continuous duty of reporting requirements need to be adhered to and the use of Shariah risk assessment tools. The seminar will outline the importance of Shariah key risk indicators in managing Shariah risk, as well as the implications of IFSA 2013 on Shariah ensuring Shariah-compliance (and rigorously avoiding Shariah non-compliance) also add to governance and reporting, and recent Bank Negara Malaysia requirements concerning Shariah advisory boards. the inherent challenges of the industry.

Panel Speakers: Panel Speakers: Hassan Scott Odierno Datin Dr Nurdianawati Assoc. Prof. Dr. Mohd Johan Mohd Nazri bin Noor Azian Nik Shahrizal Partner, Irwani Abdullah Younes Soualhi Lee Chik Ismail Sulaiman Actuarial Partners Consulting Associate Professor, Senior Researcher, Managing Partner, Chief Shariah Officer, Head, Group Audit - Senior Executive Director, International Islamic University Malaysia ISRA J Lee & Associates Bank Islam Malaysia Islamic Banking, PricewaterhouseCoopers Berhad Maybank Berhad (PwC) Malaysia REGISTER NOW REGISTER NOW www.REDmoneyevents.com www.REDmoneyevents.com

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

Islamic finance market in Turkey

It has been 32 years since the ﬁ rst Islamic bank of Turkey was founded. The Islamic banks operated as special ﬁ nance houses (Ozel Finans Kurumlari) until 2005 when the necessary legislation were enacted to allow these institutions to assume bank status and began to be called participation banks. HULUSI HOROZOGLU explores.

Hulusi Horozoglu is the Turkey took place only in 2010 and this att ractive and sizeable fi nancings with assistant general manager, was from the private sector. The Turkish long tenors to corporates with adequate managing director and Treasury has led the way since then with credit profi les resulting in potential head of wholesale banking four international and six local Sukuk Sukuk issuers favoring bank funding and investment banking at issuances reaching a total volume of instead of making an international HSBC Bank. He can be contacted at US$8.4 billion. There have also been Sukuk issuance particularly for event- [email protected]. numerous issuances by the participation driven fi nancing needs. banks both in the senior unsecured and Looking forward, although the capital space. Moving forward, corporates need growth of Islamic fi nance and product to more seriously consider Sukuk as off erings had been limited in Turkey HSBC has been instrumental in a fi nancing option for two reasons. mainly due to economic crisis cycles developing the Sukuk market in Firstly, Sukuk allow companies to and the lack of a legislative framework, Turkey and enabling issuers to access tap into a diff erent investor base and there is potential for a faster and international Sukuk markets. HSBC diversify their funding structures. In comprehensive development of the arranged all four international issuances the current economic environment of Islamic fi nance market. of the Turkish Treasury to date and eight market volatility, this makes prudent issuances of Turkish participation banks risk management sense. Although Turkey has come a long way since 2005. including the fi rst Malaysian ringgit US$300 million has traditionally been Now there are fi ve strong participation Sukuk out of Turkey. The total fi nancing the minimum size for an international banks that have a total asset size of volume arranged through these 11 Sukuk issuance prompting an event- US$41 billion representing a market transactions reached US$7.4 billion since driven requirement, smaller-sized share of over 5% as at the end of 2015 2011. transactions can be achieved in a private and a government that actively supports placement format for working capital the development of Islamic fi nance with and/or refi nancing purposes. the implementation of a vision for 2025 where the market share of participation The decision Specifi cally for smaller funding banks are forecasted to triple within the needs and in the absence of adequate overall banking sector. to choose tangible assets, syndications in the Murabahah format may be considered The participation banking sector targets Sukuk over another by borrowers. Through these relatively to achieve this growth mainly through smaller transactions, borrowers reaching out to unbanked and/or alternative financing may gain recognition in the eyes of underbanked populations in general Islamic investors and get accustomed and via new product propositions to solution comes down to the structure and process before a enable customers to diversify the usage benchmark deal. of Shariah compliant instruments. to all-in cost, terms, In order to tap this potential and to rating and Secondly, Turkey has ambitious enable the Islamic fi nancing sector to targets for 2023 that require signifi cant grow, it is essential for competitive execution infrastructure investments. Mainly fi nancing instruments utilized by Turkish and a select number of conventional banks to be made available international banks again have to participation banks. The Central We have not seen a corporate Sukuk been able to fi nance these projects Bank of Turkey and Borsa Istanbul are issuance out of Turkey yet in the successfully so far with conventional taking measures toward that direction international markets. The corporates bank facilities. However, considering the and a few examples of these eff orts are that showed interest in Sukuk as a estimated total US$350 billion fi nancing enabling participation banks to conduct fi nancing tool either preferred to issue a requirement for these projects, Islamic open market operations and to do repo conventional eurobond fi rst as a debut project fi nance schemes will be a serious using lease certifi cates (expected to issuance or they had to hold the process option in the future. come into eff ect near the end of 2017). due to structural problems. In any case, the decision to choose Sukuk over In this context, project Sukuk should What is at the forefront of this recently another alternative fi nancing solution be seen as an important tool for the achieved growth of this sector is comes down to all-in cost, terms, rating fi nancing of infrastructure projects. undoubtedly the prevalence of Sukuk and execution. On the other hand, the Istisnah (procurement contract) and issuances both by sovereign and Turkish banking sector, thanks to its forward Ijarah (lease contract) are the participation banks. It is impressive to robust fundamentals, strong liquidity most common Sukuk structures for such think that the fi rst-ever Sukuk out of and risk appetite, can oft en provide project fi nance transactions.

Continued

Istisnah is a contract of sale where a commodity is transacted before coming into existence. Sukuk Istisnah issuers use proceeds from investors to pay for the construction and delivery of projects.

Sukuk Ijarah is a lease contract where issuers acquire the ownership or usufruct rights of an asset from an originating company and lease the said asset back to it for a speciﬁ c duration against rental payments.

Islamic fi nance principles require the establishment of ownership over project assets thereby creating complexities when combined with western-style fi nancing structures. However, they can be complementary sources of sizeable liquidity with competitive pricing to conventional project fi nance facilities.

What slowed down the usage of these products both globally and domestically policyholders are invested in interest- has a long way to go in Turkey from is that these structures were creating free assets thereby creating demand for both product and structure variety and negative tax implications for both instruments like Sukuk/lease certifi cates. investor education perspectives. borrowers and fi nanciers. An omnibus bill was submitt ed to the Turkish Furthermore, the current government A connected and constructive approach parliament back in June and came has decided to establish the fi rst national should be adopted among sector players th into force on the 15 July; the main asset management company and the – both private and public — regulators changes coming into eff ect are stamp main aim of this will be to provide and customers with a close follow-up tax exemptions for leasing certifi cates, conventional fi nancing for non-fi nancial on industry developments globally, with exemption from the land registry sector investments and invest in an ultimate aim to put in place relevant fee for transfers of immovable assets Islamic fi nance assets in order to raise legislation, fi scal infrastructure and to leaseholders at the end of leasing awareness and increase their usage product innovations. periods and the regularization of fee locally. There are already private funds exceptions for leasing certifi cates. that invest in Sukuk/lease certifi cate The introduction of state-owned assets issued domestically. We believe participation banks to the sector is In order to understand what will further this public initiative will further boost therefore expected to further boost the develop the Sukuk market locally, the growth of the local Sukuk/lease public and private partnership in this we need to look at the product as an certifi cate market. aspect, resulting in the development of investment tool. There have been several the Islamic fi nance market in Turkey at a sovereign and private sector Turkish There are also eff orts to increase product faster pace in line with the 2023 and lira-denominated lease certifi cate diversity for investors, the most recent 2025 goals of the government and the issuances so far that indicate there is being consumer price-indexed (CPI) Participation Banks Association of investor demand. Albaraka and Kuveyt lease certifi cates. As the name suggests, Turkey respectively. Turk established the fi rst joint Islamic this product will provide greater fi nance pension fund in Turkey in protection to its investors against All kinds of transactions shall be subject late 2014 and such pension funds will infl ation. These securities will be listed to the business conduct of HSBC Bank require fi xed income Islamic Turkish in Borsa Istanbul and will increase the and compliance to local legislation. No lira assets to provide returns for their liquidity of these assets. More recently, information in this document is provided by members. the Turkish Treasury issued two CPI HSBC for the purpose of off ering, cross- lease certifi cates totaling TRY2.15 billion border marketing and sale by any means of Islamic insurance known as Takaful is (US$671.33 million) in late September any banking services outside of the Republic relatively new in Turkey but is growing that att racted important investor of Turkey. Therefore, this document may not quickly. Starting fi ve years ago, today appetite; the notes were approximately be considered as an off er made or to be made the sector has 1.5 million insurance two times oversubscribed. outside of the Republic of Turkey. policies and a market share of 3%, indicating plenty of room for further In a nutshell, Islamic fi nance globally growth. The premium payments of is a vast and important discipline and

Islamic trade finance: Opportunities abound with the right approach

Although Islamic trade grew beyond the phenomenal growth of Islamic banking during the last few decades, Islamic trade ﬁ nance did not witness a similar growth probably due to a lack of expertise or the non-availability of relevant product oﬀ erings to match their conventional counterparts. K NIZARDEEN takes a look at the situation.

K Nizardeen is the senior rest of the world and in the meantime The main hindrance for Islamic trade vice-president and the head of complying with Shariah requirements. fi nance is that Islamic banks are not trade fi nance and corporate allowed to advance funds without operations at Emirates In the event trade fi nance communities underlying goods unlike conventional Islamic. He can be contacted agree on the aforementioned separate banks. However, at the same time this at [email protected]. rules or to use UCP 600 with the hindrance is the main strength of Islamic necessary amendments, Islamic fi nance banking and it resolves many issues At the current level, Islamic banks’ will still face challenges from and within for fi nancial institutions. This answers global market share of trade fi nance the industry due to the non-availability the majority of trade-based money is as low as less than 2% of the total of a unifi ed standard interpretation on laundering (TBML) issues and mitigates global trade fi nance. However, with what constitutes a Shariah compliant the risks of fi ctitious or fraudulent the emergence of Islamic economies, off ering. transactions to a greater extent. This is more and more Gulf-based Islamic one area of strength and Islamic banks banks are focusing specifi cally in this Diff ering Shariah interpretations in need to bring in advanced technology particular area with innovative products diff erent countries, or among diff erent and know-how for further consolidation and services. This has created healthy banks within the same country, have and avoid TBML-related issues. competition among banks, and on the created a negative impact, hindering whole, trade fi nance has benefi ted the cross-border business or a global In the recent past, Islamic banks have most. Islamic trade fi nance has also standardization of any such rules. been extensively using International benefi ted from shift ing preferences Therefore, the Islamic fi nance industry Maritime Bureau services to monitor toward Shariah compliant banking has to bring in globally accepted goods and ship movement to avoid mainly in Muslim-majority countries standard guidelines with clarity and any TBML issues as they are the buyers and could assist as one of the main transparency to unify the industry. This of goods. To comply with Shariah growth drivers to help double the size will eventually pave the way to solve requirements and to mitigate Shariah of the Islamic fi nance industry. many other issues and consolidate its risks, Islamic banks carry out inspections integrity to maintain the growth of on underlying goods on any transaction While this particular area of business Islamic banking globally. that involves fi nancing. presents huge potential for Islamic banks, the entry of Islamic banks into Moreover, unlike conventional banks, In the event the constructive position trade fi nance faces challenges such as Islamic banks take more risks while of the goods is available, then Islamic complexity in documentation, lack of doing a trade fi nancing transaction as banks will transfer the title of the goods adequate knowledge or awareness of they deal in documents as well as the by merely endorsing the transport trade products among customers, lack ownership of goods. To facilitate Shariah document (mostly the bill of lading), if of standardization in the industry and requirements, Islamic banks involve the Islamic banks are satisfi ed with the lack of expertise to align industry rules themselves in the buying and selling title of constructive position that it is and regulations to comply with Shariah of goods. Islamic banks will buy the holding. guidelines. goods from the seller and sell it to their customer (the ultimate buyer) with a Previously, Islamic banks used to endorse Many Islamic trade experts are clamoring profi t mark-up and diff erent payment any bill of lading if they are holding the for a separate set of rules from the options with the most common products title of goods; however, by bringing in International Chamber of Commerce used among Islamic banks being quality expertise, Islamic banks are now (ICC) for Islamic lett ers of credit or a Murabahah and Musharakah. even inspecting goods pertaining to separate version of the Uniform Customs charter party bills of lading as they do and Practice for Documentary Credits The Islamic bankss themselves need to not hold any title of goods thus adding (UCP) for Islamic lett ers of credit. The understand that any fi nance transaction value to the meaning of constructive best option is to use the existing set will have two legs. One leg of the position. of UCP 600 (latest version) rules with transaction being buying and the other appropriate amendments to comply with selling though it is only one transaction. In November 2015, Dubai-based Shariah requirements as it is fl exible Under the lett er of credit process, the Emirates Islamic launched its state-of- and allows you to amend, modify, add bank takes a major risk while buying the-art online internet platform, the or delete any clause (UCP 600 article 1) the goods and has to mitigate the risk by fi rst of its kind that eliminates manual according to your needs or requirements. having adequate stringent controls in the documentation. This has brought in a This would be the best option as you will lett er of credit as per the specifi cation of new revolution to Islamic banking with be following one set of rules with the the ultimate buyer. the promise of a one-hour turnaround

Continued time (TAT) for the issuance of lett ers of credit.

To improve TAT on inspection, Islamic banks have adopted several diff erent approaches including bank inspectors using the latest technology to provide instant inspection certifi cates by uploading and making them available online. One notable development is that EximBills Enterprise, along with ICC Technical Advisor Vincent O’Brien and a Dubai-based Islamic bank, is developing a new online inspection process involving block chain technology to bring in a stringent and effi cient methodology to the Islamic inspection process. By introducing this, data of goods inspected will be available on a block chain for all members and this could eliminate fi ctitious or duplicate fi nancing for the same goods, bringing in much-needed control.

Islamic banks have immense opportunities to oﬀ er innovative solutions in trade ﬁ nance and funding especially in the area of SMEs. The Islamic structure suits and caters to SMEs well, provided Islamic banks identify and mitigate appropriate risks in line with their business model.

Trade fi nance, which is relatively short term in nature, is dominated by conventional banks. Products such as factoring are used widely by conventional banks to off er fi nancing to trade. Factoring today has a worldwide volume in excess of US$500 billion. There is a huge opportunity for Islamic banks to venture into this segment through innovative structures, for example, a Murabahah structure with underlying goods or a liquidity Murabahah product in exceptional instances.

Trade ﬁ nance is one of the segments that will have opportunities irrespective of adverse market conditions. Lett ers of credit have shown an upward trend during bad times as sellers revert to a more secure mode of payment. With the right products, innovation, expertise and industry standardization, Islamic banks may overcome sustainability challenges in the area of trade ﬁ nance which can spur a growth in their market share, ultimately contributing to the growth of Islamic banking as a whole.

Advancements of regulations in Takaful – what are the implications?

Globally, there have been many developments and increasing sophistication in the regulation of the insurance industry in various markets in recent years with the introduction of Solvency II in Europe as well as the emergence of IFRS accounting for insurers being two recent examples. Many Takaful markets around the world are also following similar movements, with the introduction of more robust regulatory frameworks in line with the trends observed in the conventional insurance industry. FARZANA ISMAIL delves further.

Chart 1: Minimum allocation rate under the LIFE Framework vs. typical allocation rates Farzana Ismail is the currently observed in the market for investment-linked business head of life insurance and Family Takaful consulting 110% at Milliman. She can be contacted at Farzana.Ismail@ 100% milliman.com. 90% LIFE Higher solvency requirements 80% A Most Takaful markets are largely 70% operating with a Solvency I type B 60% framework. Malaysia, with one of the C largest Family Takaful markets in the 50% D world, is leading the Takaful space in terms of regulatory advancement, 40% with the country being the fi rst Takaful 30% market to introduce a risk-based capital 1 2 3 4 5 6 7 8 9 10+ framework in 2014. The introduction Source: Author’s own of the new risk-based capital (RBC) framework did come with various Malaysia in 2015 is also likely to have a criticisms from industry players, in material impact on Takaful players. From It is inevitable particular as it was considered to mimic 2018, there is a requirement for higher the regulation for the conventional allocation rates toward the unit fund for that Takaful insurance industry in Malaysia. investment-linked business, as shown in Chart 1. Currently, the allocation rates are markets will need There were arguments that as the nature lower in the early years (as shown in blue of Takaful is largely risk-sharing rather based on a range of Takaful companies in to adopt a RBC than risk-transfer, the capital requirement Malaysia) compared to the requirements should technically be lower for shown in red. This has the implication framework to Takaful. However, from the regulator’s of being able to charge lower Wakalah perspective, this was not necessarily fees to the contributions in earlier be in line with the case. In a dual market where both policy years, and thus resulting in lower conventional and Takaful business are margins to cover expenses, commissions its conventional sold, there is no signifi cant diff erentiation and overall profi t margin. between the two types of businesses from counterparts in the viewpoint of consumers, and hence Most Takaful operators in Malaysia are a similar capital requirement was put in fairly recent start-ups and have yet to the long run place to protect consumers’ interest. achieve economies of scale, and thus The UAE introduced new regulations most companies experience expense in 2015, adopting a ‘light’ RBC-type The introduction of the RBC framework overruns. This new requirement is regulatory approach and improved for Takaful operators has an impact on likely to extend the period of expense Shariah supervision. However, there has the type of business sold. Under the RBC overrun position, particularly since most been a challenge for Takaful operators to framework, investment-linked business Takaful operators are heavily weighted comply with the new solvency standards, is less capital-intensive compared to in investment-linked business. Going given the lack of skilled human resource ordinary life business, and thus as a forward, it is likely that companies and poor risk management capabilities. consequence, many Takaful operators will need to consider changing the Similarly, in many other markets in the have changed their product mix with a product design or product mix in order Middle East such as Bahrain and Qatar, focus toward selling investment-linked to manage expense margins and profi t new regulations have resulted in higher products. margins. capital requirements for the purpose of strengthening the solvency positions The Life Insurance and Family Takaful In the Middle East, there has also been of Takaful operations. However, the (LIFE) Framework recently introduced in a strengthening of Takaful regulations. solvency requirements in the remaining

Continued

Middle Eastern countries typically remain on a Solvency I type basis.

Window vs. stand-alone For many countries contemplating new regulations for Takaful, there is oft en a debate on whether Takaful should be allowed to operate as a window of conventional insurance companies, or strictly as a stand-alone company. In Kenya, when specifi c Takaful regulations were introduced in 2015, windows were allowed. However many countries, including the UAE, Oman and Morocco, result of the new regulations, there are Most countries are yet to implement an take the view that Takaful should be set now 17 companies with Takaful window RBC framework for Takaful, as there up as a stand-alone company. operations. is a more immediate need to develop human talent as well as to have a variety In Indonesia, a new ruling in 2014 of suitable assets, prior to introducing requires companies operating a Takaful such a robust set of regulations. We oft en As innovation window to spin off their Takaful see regulations playing a signifi cant operations into a stand-alone entity role in either impeding or stimulating continues to at the latest by the year 2024. This has the growth of a Takaful and insurance resulted in companies having to consider industry, and therefore any new develop, regulations their strategic options, on whether they regulatory development needs to be would undertake the spin-off sooner or cognizant of the current level of market also need to be later toward the regulatory deadline. sophistication. Companies are required to strengthen flexible so as to their operational capabilities and In particular, for countries that have develop their human resources before both a conventional and Takaful market, avoid stifling and implementing the spin-off . In addition, regulators are oft en faced with the given the lower capital requirements challenge of ensuring a level playing inhibiting innovation, under the current ‘window’ structure, fi eld, where one set of regulations is some companies may choose to delay the not penal compared to the other nor while putting in spin-off as long as possible. giving either the conventional or Takaful industry an unfair competitive edge. It is place appropriate However, there are also fi rst-mover inevitable that Takaful markets will need advantages for companies to spin off to adopt a RBC framework to be in line safeguards to their Takaful business as soon as possible, with its conventional counterparts in the manage the in particular, the opportunity to have long run. However, given that Takaful is fi rst choice for potential joint venture still a young industry in most markets, risks and bancassurance partnerships since the implementation of more robust and there are very few stand-alone companies sophisticated guidelines is likely to take operating in the market currently. There time. The regulators in Pakistan had will also be the opportunity to acquire previously taken the same stance of other Takaful spin-off s and Takaful In addition, with the upcoming advances having only a stand-alone Takaful set- businesses who do not want to spin in fi nancial technology such as fi ntech up when specifi c Takaful regulations off , which will enable the company to and insurtech, regulators are expected to were introduced in 2015. However, accelerate growth rather than relying face further challenges in regulating subsequently in 2012, there was a only on organic growth. these new innovations. More developed change in regulations allowing Takaful Takaful markets such as Malaysia have to be operated as a window with the Moving forward already prepared for such advances via intention to further increase Takaful We are increasingly observing the its fi nancial technology regulatory penetration in the country. This caused introduction of a number of new Takaful- sandbox framework, in order to create a dissatisfaction from the fi ve stand-alone specifi c regulations, particularly for conducive environment for the Takaful companies in Pakistan who new markets such as those in Africa. For deployment of fi ntech and the viewed that the window operations Tanzania, Takaful-specifi c regulations are introduction of new business models and would give conventional players an expected to be issued soon. For countries solutions. As innovation continues to unfair competitive advantage. These such as Morocco and Turkey, the new develop, regulations also need to be stand-alone companies subsequently Takaful regulations refer to ‘participative fl exible so as to avoid stifl ing and challenged the decision in court, and the fi nance’ and ‘participation insurance’ to inhibiting innovation, while putt ing in issue was only resolved in 2014, with refl ect the local cultural sensitivities. place appropriate safeguards to manage window operations being allowed. As a the risks.

of up to RM950 million (US$225.89 US$1.5 billion. Pakistan in October raised DEALS million) in nominal value to extend the US$1 billion from the international tenor of the program for another fi ve Sukuk market. CBB’s Sukuk Ijarah fully years, according to an announcement on subscribed Bank Negara Malaysia’s website. This DIFC Sukuk makes profit BAHRAIN: The monthly issue of the will result in the tenor of the Sukuk Sukuk Ijarah facility by the Central Bank program to be 25 years from the date of distribution the fi rst issue. Should the Sukukholders UAE: DIFC Sukuk has made a of Bahrain (CBB) worth BHD26 million th (US$68.26 million), which carries a approve the proposal, the maturity of the distribution to Sukukholders on the 12 maturity of 182 days, has been fully Sukuk program will be on the 28th November 2016 in the total amount of subscribed, according to a statement. The December 2040 instead of the 28th US$15.14 million at a profi t rate of 4.33% expected return on the issue, which December 2035. under its US$700 million trust certifi cates began on the 10th November and matures due 2024. According to a bourse fi ling, on the 11th May 2017, is 2.2%. The the profi t distribution was for a period of Malaysia issues GII th th issuance is the CBB’s 135th short-term 180 days from the 12 May until the 12 Sukuk Ijarah series. Murabahah November 2016. MALAYSIA: The government of Malaysia has raised RM3 billion STSSB’s 155th ICP IILM auctions US$840 million (US$678.53 million) via a government Sukuk investment issue (GII) Murabahah facility oversubscribed MALAYSIA: The International Islamic at a 4.39% profi t rate on the 15th MALAYSIA: Sunway Treasury Sukuk (STSSB)’s 155th Islamic commercial papers Liquidity Management Corporation November. According to an (ICPs) worth RM120 million (US$28.34 (IILM) has auctioned a short-term announcement on Bank Negara million) were oversubscribed by RM105 US$840 million Sukuk facility with a Malaysia’s website, the facility, which million (US$24.8 million) aft er receiving a tenor of three months on the 16th matures on the 7th July 2023, att racted 254 total of nine incoming bids, according to November 2016, according to an bids amounting to RM6.62 billion (US$1.5 an announcement on Bank Negara announcement on Bank Negara Malaysia billion). BNM, acting as the facility’s Malaysia’s website. (BNM)’s website. The auction for the agent, may purchase up to 10% of the certifi cates, which will mature on the 22nd issuance size. February 2017, was conducted in BNM’s IDB and Etihad to issue Sukuk Fully Automated System for Issuing/ Pakistan considers dollar GLOBAL: It has been reported that the Tendering (FAST). IDB will soon announce its plans to hold Sukuk investor roadshows for its planned US PAKISTAN: The Pakistani government is Samalaju Industrial Port dollar Sukuk sale, expected to be in exploring the possibility of issuing a excess of US$1 billion, according to seeks Sukuk extension benchmark-sized dollar Sukuk against Reuters quoting unnamed sources. The MALAYSIA: Samalaju Industrial Port is the Islamabad Lahore Motorway to sources also added that Etihad Airways seeking indulgence from the fi nance the budget, reported BRecorder. is expected to launch its private Sukukholders of the Sukuk Murabahah Quoting Secretary of Finance Dr Waqar placement Sukuk issue soon, likely to be program (via a Tawarruq arrangement) Masood, the issuance could be upsized to in the US$1 billion region.

DEAL TRACKER Full Deal Tracker on page 37

EXPECTED DATE COMPANY'S NAME SIZE STRUCTURE ANNOUNCEMENT DATE November 2016 Islamic Development Bank upward of US$1 Sukuk 15th November 2016 billion November 2016 Etihad Airways up to US$1 billion Sukuk 15th November 2016 TBA Sichuan Development US$300 million Sukuk 4th November 2016 Holdings TBA Warba Bank US$250 million Sukuk 3rd November 2016 First quarter of 2017 National Real Estate US$500 million Sukuk 25th October 2016 Company TBA Al Faisal Holding US$200 million Sukuk 19th October 2016 November 2016 Angkasa Pura I IDR500 billion Sukuk 18th October 2016 TBA Housing Development TBA Sukuk 13th October 2016 Finance Corporation of Maldives TBA APM Automotive Holdings up to RM1.5 billion Sukuk Murabahah 11th October 2016 TBA Shatel IRR10 trillion Sukuk Murabahah 10th October 2016 November 2016 Angkasa Pura I IDR500 billion Sukuk 18th October 2016

Islamic credit cards in and the government of Senegal, via AFRICA Morocco SONACOS acting as the executing Liberia applies for OIC agency, have signed a syndicated MOROCCO: The utilization of Shariah Murabahah fi nancing agreement for membership compliant credit cards is expected to rise US$75 million to support the country’s LIBERIA: Liberia has applied for in the next few years, according to 2016-17 groundnut campaign. membership to the OIC, the Liberian research company Timetric, as reported Observer reported. Citing a dispatch by Morocco World News. The According to a statement, the fi nancing from Riyadh, the daily noted that government reportedly plans to agreement is now eff ective and ready for Liberia’s ambassador to Saudi Arabia, Dr authorize 10 banks to off er Islamic credit disbursement. The funds will be used to Brahima D Kaba, presented Liberia’s card facilities. purchase the groundnuts from farmers application when he recently met with and cooperatives, before processing the the secretary-general of the OIC, Iyad ITFC finances Senegalese nuts into oil and animal feed by Ameen Madani. Being a member of the groundnut sector SONACOS. OIC provides member countries with SENEGAL: The International Islamic direct access to the large pool of fi nancial Trade Finance Corporation (ITFC) resources and facilities of the IDB.

according to Republika.co.id. However, commissioners of Lembaga Penjamin ASIA there are no plans to implement the Simpanan, the fi nance minister, the decree into a policy in the near term as minister for national development Indonesian president signs the government is focusing on the planning (Bappenas) minister, the decree on Shariah committee formation of the KNKS board. KNKS coordinating minister for economic INDONESIA: The president of will be led by the president and aff airs, the minister of religious aff airs, Indonesia, Jokowi Widodo, has on the supported by nine directors including the minister of cooperatives and SMEs, 13th November signed a presidential the chairman of the board of the minister of state-owned enterprises decree on the Komite Nasional commissioners of Otoritas Jasa and the head of Majelis Ulama Keuangan Syariah (KNKS), or the Keuangan, the governor of Bank Indonesia. National Shariah Finance Committ ee, Indonesia, the chairman of the board of

and arbitration, company and Iranian banks look to Turkey GLOBAL employment law, multinational and GLOBAL: Three Iranian banks — Bank OTC registers in DIFC cross-border law, regulatory issues and Pasargad, Saman Bank and Parsian Bank wealth management, has announced its GLOBAL: Outer Temple Chambers — are looking to set up operations in registration with the Dubai International (OTC), a London-based barristers’ Turkey, Turkish Economy Minister Nihat Financial Center (DIFC), according to a chambers whose members specialize in Zeybekci told state news agency Anadolu statement. Islamic ﬁ nance, commercial litigation Agency. However, no oﬃ cial application

WEBSITE NEWSLETTER IFN Education is a one stop portal Our monthly newsletter features all the keeping you abreast with the global latest news influencing the Islamic finance human capital developments across human capital, through news briefs, the Islamic finance industry reports, contributions, interviews and a cover story

And the best bit… IT’S ALL FREE: Register now for full unlimited access to the website, directory and newsletter.

has been made yet to the Banking provide 51% in funds while the member countries and some Muslim Regulation Supervision Agency. remaining 34% will be arranged by communities in non-member countries. diff erent fi nanciers. A plan has been GII raises funds for IT fi nalized by the government of Major approvals include: US$105 million Turkmenistan to conduct roadshows in for the Fadhili Combined Heat and provider the UAE, Singapore and London in an Power project in Saudi Arabia; US$338.5 GLOBAL: Islamic private equity fi rm eff ort to raise fi nancing for the million for the High-Speed Train Sets Gulf Islamic Investments (GII) has closed engineering, procurement and Project inTurkey; US$74 million for the a US$145 million fundraising for Aptt us, construction contract for the TAPI Kabul City Ring Road Project in a category-defi ning quote-to-cash pipeline. Afghanistan; US$43.4 million for the soft ware company based in San Mateo, Franco-Arabic Bilingual Education California with global offi ces. According IDB approves fund for Support Project in Niger; US$20 million to a statement, this is the fourth company to help construct the Kulob-Kalai-Khumb out of Silicon Valley for which GII has development projects Road on the west-east corridor of the raised funds for in the last two years, GLOBAL: The IDB’s board of executive country in Tajikistan; and US$10 million bringing the total amount raised to directors has approved four grants to study measures that prevent any US$350 million. totaling US$775,000 under the IDB Waqf possible outbreaks of avian infl uenza in Fund for educational projects for Muslim Egypt. IDB offers financial aid for communities in non-member countries in Ethiopia, Ghana, Malawi and Sri TAPI project Lanka, as well as two technical assistance GLOBAL: The IDB has off ered US$500 grants: US$278,000 to fi nance the IDB EUROPE million in fi nancing for the Group’s contribution to the COP22 DiamondCorp draws down Turkmenistan, Afghanistan, Pakistan and in Morocco; and US$294,000 to build India (TAPI) gas pipeline project, capacity on epidemiological surveillance Islamic facility according to The Express Tribune. and communicable disease control in 15 UK: DiamondCorp in a statement Turkmenistan will contribute 85% of the West African countries. According to a announced that it is in the process of pipeline cost estimated at US$10 billion, statement, more than US$592 million in drawing down the second tranche of the whereas Afghanistan, Pakistan and India fi nancing has also been approved to fund Islamic fi nancing facility from Rasmala in will have a 5% share each in investments. new development projects in several the gross amount of GBP300,000 Of the 85% cost, Turkmenistan will (US$371,895).

Saudi Hollandi Bank (SHB) which also guarantees (36%), are intended to fi nance MIDDLE EAST operates Islamic banking services, the company’s capital requirements and Lebanon expects IDB funding according to Reuters quoting unnamed the working capital of some projects. sources. Credit Suisse has been picked to LEBANON: Lebanon is expecting arrange the sale, potentially worth around fi nancial support from the IDB for a GFH invests in education US$1.2 billion. Sources have also indicated waterfront project, according to that Saudi Arabia’s sovereign wealth fund, sector Lebanon’s The Daily Star. The mayor of Public Investment Fund, was considered a BAHRAIN: GFH Capital has made an Sidon, Mohammed Saudi, was quoted as likely buyer of the stake. investment in the form of a Shariah saying that they are still in talks with compliant convertible Murabahah facility several fi nanciers to secure funding for in AMA Group for the latt er’s growing the project, which is estimated to cost JPMorgan’s name change operations in Bahrain, GFH said in a between US$10-12 million. The project approved statement without stating the value of the aims to improve the city of Sidon’s SAUDI ARABIA: The Capital Market investment. The AMA Group manages seafront. Authority has approved JPMorgan Saudi the largest network of educational Arabia’s request to change its name to institutions across Asia and also has SSIF acquires IDB’s shares in JPMorgan Saudi Arabia Company, various other business interests ranging APC according to a bourse fi ling. from information technology, banking, real estate and agriculture. JORDAN: The Social Security Investment Fund (SSIF) of Jordan has acquired the Al Khodari renews Islamic IDB’s entire stake in Arab Potash facilities deal Iran and Hong Kong Company (APC) through a purchase deal SAUDI ARABIA: Abdullah AM Al collaborate worth JOD74 million (US$104.04 million), Khodari Sons Co (Al Khodari) has IRAN: Iran and Hong Kong will expand according to a statement. APC is renewed an Islamic facilities agreement cooperation in a number of sectors considered an important national worth SAR276.05 million (US$73.51 including banking and fi nancial services, company in terms of its contribution to million) with Riyad Bank, and will capital markets, energy, transportation, the domestic national economy and extend the fi nancing tenor between two information technology, tourism, exports. and fi ve years as per the time frame of education, banking and fi nancial the fi nanced projects. According to a services, aft er the two countries’ fi nance RBS to sell stake in SHB bourse fi ling, the facilities, comprising ministers penned an MoU on economic SAUDI ARABIA: Royal Bank of Scotland Murabahah and Tawarruq (64%) as well cooperation in Tehran recently, the (RBS) is reportedly selling its 40% stake in as lett ers of guarantees and multipurpose Tehran Times reported.

ADIB to launch voice- fi nancing for buyers of residential units TID files a case against KFH at the project, according to the Times of BAHRAIN: The Investment Dar (TID) activated ATMs Oman. UAE: Abu Dhabi Islamic Bank (ADIB) announced in its investor bulletin No. will roll out voice-activated ATMs in 97 that it has fi led a case against Kuwait phases commencing with 20 ATMs in Yemen seeks deadline Finance House (KFH) for the return of December to facilitate customers with extension from IDB funds aft er receiving no satisfactory visual impairment in conducting their YEMEN: Yemen’s former minister of response from KFH pertaining to an transactions easily and securely. planning and international cooperation, offi cial pre-litigation warning on the bank According to a statement, ADIB has Dr Mohammed Al-Maytami, has recently in connection to KFH’s unlawful actions partnered with NCR Corporation on this met with the president of the IDB, Dr concerning the sum of KWD42.31 million initiative. Bandar Hajjar, seeking to postpone the (US$139.21 million) removed from TID’s payment of debts of some Yemeni account. AIB provides home financing institutions due to the ongoing war in the country, reported Asharq Al-Awsat The funds taken by KFH, according to for Telal Al Qurm quoting a high-ranking Yemeni source. TID, had been earmarked to be shared OMAN: Alizz Islamic Bank (AIB) has The source also added that the IDB has among all of TID’s creditors. inked an MoU with Telal Al Qurm, the responded positively toward the request Sultanate’s latest integrated tourism and is moving toward approving it. complex, to provide Shariah compliant

instrument to improve the economy, Shariah compliant income, money health and education for the people in market and equity schemes off ered by ASSET the state. The fund, which will be the whole mutual fund industry through managed by Perbadanan Islam Johor diff erent allocation baskets (off ering a MANAGEMENT (PĲ ), has so far collected RM12 million diff erent mix of allocations) in a fund of Azimut partners with MAMG (US$2.85 million) which includes RM5 funds structure. GLOBAL: European asset manager million (US$1.19 million) from the state Azimut Group has partnered with government, RM2 million (US$474,372) Ibdar launches Shariah trade Malaysia’s Maybank Asset Management each from PĲ and Majlis Agama Islam finance fund Group (MAMG) to develop their Negeri Johor, RM1 million (US$237,186) BAHRAIN: Ibdar Bank has partnered respective capabilities across the global from Johor Corporation and RM500,000 with Barak Fund Management to launch Sukuk market, leveraging on Azimut’s (US$118,593) from the state’s UMNO the Barak Ibdar Shariah Trade Finance Global Sukuk Fund to cater to the liaison body. Fund, a US dollar-denominated open- demand for hard currency Sukuk ended monthly-subscription fund with strategies in the ASEAN region. As a JS Investments offers new quarterly redemption that will invest in result, the fund will be rebranded as Islamic fund African commodities and general trade Azimut MAMG Global Sukuk. PAKISTAN: JS Investments will soon fi nance transactions such as import, launch its new Shariah compliant export or general merchandising-related Waqf fund for Johoreans open-end fund following the signing of a investments, and will target a 10% return launched trust deed on the 28th October, according net of fees for investors, according to a MALAYSIA: The Sultan of Johor has to The News International. The JS Islamic statement. launched Tabung Waqaf Rakyat Johor Hybrid Fund of Funds off ers investors (Johor People’s Waqf Fund) as an the opportunity to invest in selected

year-on-year compared with AED1.3 (US$930,900) during the fi rst nine months RESULTS million (US$353,880) over the same of 2016, representing a 16.2% growth period in 2015, according to a statement. year-on-year, according to a statement. Abu Dhabi Islamic Bank Egypt The company’s total assets reached The bank’s net fi nancing income during EGYPT: Abu Dhabi Islamic Bank (ADIB) AED632.58 million (US$172.2 million) the period also grew 29.5% to reach Egypt recorded a consolidated net profi t during the period, an increase of 44% LKR1.4 billion (US$9.25 million). The of EGP272.1 million (US$16.97 million) from the end of the previous year. The bank’s total assets, meanwhile, grew year for the nine-month period of 2016, almost growth was driven by Takaful Emarat’s to date by 10.8% to reach LKR53 billion double that of EGP144 million (US$8.98 strengthened sales capabilities and (US$350.16 million). million) recorded during the same period distribution channels in addition to the a year ago, Reuters reported. growing popularity of its life and health Inovest product portfolio. BAHRAIN: For the fi rst nine months of Takaful Emarat 2016, Shariah compliant Inovest reported UAE: Takaful Emarat reported a net Amana Bank a net profi t of US$9.18 million compared profi t of AED11.22 million (US$3.05 SRI LANKA: Amana Bank reported a with a net loss of US$2.59 million for the million) for the nine-month period of profi t before tax of LKR140.9 million corresponding period in 2015. According 2016, representing a growth of 761%

© 34 16th November 2016 NEWS to a statement, Inovest also recorded an Ahli United Bank September 2016, up 1% as compared with increase in net profi t for the three-month BAHRAIN: Ahli United Bank reported a December 2015. th period ending the 30 September to net profi t of US$140.9 million for the US$3.79 million from US$651,000. third quarter of 2016, similar to the GFH Financial Group Earnings per share for the January- corresponding quarter of the previous BAHRAIN: GFH Financial Group saw its September period amounted to 3.23 US year, according to a press statement. For net profi t for the fi rst nine months of 2016 cents compared with a loss per share of the nine months ended the 30th slide to US$9.7 million as compared with 0.91 US cent in the previous year. September 2016, net profi t att ributable to US$17.98 million achieved for the same its equity shareholders stood at US$442.1 period in the previous year, while its Ithmaar Bank million, a 5.5% increase compared with consolidated net loss for the third quarter BAHRAIN: Ithmaar Bank registered a the US$419.2 million recorded during the of 2016 was US$8.26 million against a net net profi t of US$16.73 million for the same period of 2015. profi t of US$4.32 million in 2015. January-September period of 2016 According to a statement, GFH’s compared with US$11.39 million Bank ABC Islamic consolidated total income for the achieved in the corresponding period in BAHRAIN: Bank ABC Islamic recorded a January-September 2016 period stood at 2015, according to a statement. The net profi t of US$6.1 million for the third US$99.3 million compared with 2015’s Islamic retail bank also observed growth quarter of 2016, representing an 18% US$67.1 million. in its net profi t for the three-month growth year-on-year from the US$5.2 th period ending the 30 September to million the bank posted for the same Amlak Finance US$4.77 million from the net loss of period in 2015, according to a statement. UAE: Amlak Finance has reported US$1.65 million reported for the similar Net profi t for the fi rst nine months of AED94 million (US$25.59 million) in net period in the previous year. 2016 was US$16.8 million, 4% higher than profi t for the nine months ending the US$16.1 million reported for the same September 2016, up 32% year-on-year; for Khaleeji Commercial Bank period in the previous year. The bank’s the third quarter, profi ts reached AED6.7 BAHRAIN: Khaleeji Commercial Bank total assets as at the end of September million (US$1.82 million). The Islamic reported a net profi t of BHD4.58 million 2016 stood at US$1.62 billion compared real estate fi nancier said in a statement (US$12.07 million) for the fi rst nine with US$1.34 billion at the end of 2015. that nine-month revenue grew 86% to months of 2016 compared with BHD6.04 AED625 million (US$170.12 million). million (US$15.91 million) achieved in The Arig Group Total assets fell by 3% to AED6.67 billion the previous year. In a statement, the BAHRAIN: The Arig Group, whose (US$1.82 billion) as at the end of Islamic bank noted that its net profi t for subsidiaries include Takaful Re (Dubai) September 2016 due to lower fi nancing th the three-month period ending the 30 (currently in run-off ), Gulf Warranties and investing assets portfolio. For the September amounted to BHD359,731 (Bahrain) and Arig Capital (UK), same period, Amlak’s equity position (US$947,858), a huge decline from the recorded a net profi t of US$3.4 million as increased from AED1.59 billion previous quarter of BHD1.37 million at the 30th September compared with (US$432.79 million) to AED1.64 billion (US$3.61 million). US$1.4 million in the similar period a (US$446.38 million), showing an increase year ago. According to a statement, its of 3% since the beginning of 2016. SHUAA Capital revenues increased by 7% over the most UAE: SHUAA Capital, which off ers recent three quarters, writing US$227.5 Islamic and conventional products, million in gross premiums over the reported a net loss of AED35.3 million nine-month period of 2016. (US$9.61 million) for the third quarter of TAKAFUL SABB secures approval for 2016 compared with a net loss of Al Baraka Banking Group AED28.6 million (US$7.78 million) in the BAHRAIN: For the fi rst nine months of renewal corresponding quarter of 2015, according 2016, Al Baraka Banking Group reported SAUDI ARABIA: Saudi British Bank to a press release. This was driven mainly a 7% increase in total operating income to (SABB) has approved SABB Takaful’s by fi nancing business provisions. US$789 million and an 8% growth in net plan to renew the Takaful program for Revenue for the quarter, meanwhile, operating income to US$362 million, group debt insurance with total annual increased 42% year-on-year to reach against the same period in 2015. The premium expected at SAR39.09 million AED48.7 million (US$13.26 million) Islamic banking group said in a (US$10.42 million), according to a bourse compared with AED34.3 million (US$9.34 statement that total assets reached fi ling. The one-year deal is a related- million) during the third quarter of the US$24.9 billion as at the end of party transaction but does not grant any previous year. preferential advantages.

have jointly maintained the foreign and environment. The outlook on the ratings, RATINGS local currency ratings of Al Baraka however, is assessed at negative. Political Banking Group (ABG) on the stability and policy continuity remain IIRA and Dagong maintain Al international scale at ‘BBB+/A3’, areas of concern in ABG’s core countries Baraka’s ratings according to a statement. The national including Algeria, Jordan and Egypt and BAHRAIN: The Islamic International scale ratings of ABG are assessed at most notably Turkey. The rating agencies Rating Agency (IIRA) and Dagong ‘A+(bh)/A2(bh)’ and denote its noted that if pressure on the Global Credit Rating Company (Dagong) creditworthiness relative to the local macroeconomic front intensiﬁ es and

translates into rising credit risk in these a stable outlook, according to a delivery on program reforms. The rating countries’ banking systems, it may pose statement. The country ceiling has been agency noted in a statement that the IMF challenges to the heretofore steady affi rmed at ‘AA+’ and the short-term will likely approve the three-year US$12 trajectory of growth and profi tability in foreign and local currency IDRs have billion Extended Fund Facility following ABG’s operations. been affi rmed at ‘F1+’. the Egyptian authorities’ decision to fl oat the Egyptian pound and cut fuel MARC affirms ANIH’s Sukuk Egypt’s currency devaluation subsidies. Musharakah program a positive move MALAYSIA: MARC has affi rmed its EGYPT: The devaluation of the Egyptian Negative outlook for Oman ‘AAIS’ rating on toll road concessionaire pound and the Central Bank of Egypt OMAN: The outlook on Oman has been ANIH’s RM2.5 billion (US$594.46 (CBE)’s stated intention to allow the revised to negative from stable by S&P million) senior Sukuk Musharakah currency to fl oat are major steps in based on the expectation that the program with a stable outlook, according Egypt’s external, monetary and fi scal Sultanate’s fi scal consolidation may take to a statement. The rating incorporates adjustment and are positive for the longer than expected, according to a the stable traffi c performance and sovereign’s credit profi le, according to statement. The rating agency also suffi cient cash fl ow generation from Fitch Ratings. The rating agency noted, assumes that the government’s fi nancing ANIH’s portfolio of mature toll roads to however, that such a large currency needs will largely be funded externally support its fi nance service obligations. adjustment puts the spotlight on social due to its narrow domestic capital and political risks in an already markets. S&P, meanwhile, affi rmed MARC affirms KFH Malaysia’s challenging policy environment. The CBE Oman’s ‘BBB-/A-3’ long and short-term recently devalued the pound and said the foreign and local currency sovereign ‘AA+/MARC-1’ ratings currency would fl oat freely. It also raised credit ratings. MALAYSIA: MARC has affi rmed Kuwait its policy rate by 300bps to tighten Finance House (Malaysia) (KFH monetary conditions. Capital Intelligence Jordan’s ratings affirmed Malaysia)’s ‘AA+/MARC-1’ long-term and Ratings, meanwhile, said that the JORDAN: Moody’s has affi rmed Jordan’s short-term fi nancial institution (FI) devaluation and fl exible exchange rate ‘B1’ government issuer rating and ‘B1’ ratings with a stable outlook, according regime is not expected to have any senior unsecured debt rating, with a to a statement. KFH Malaysia is a immediate implications for sovereign stable outlook. Moody’s said in a wholly-owned subsidiary of Kuwait and bank ratings. statement that the ratings refl ect its view Finance House, on which MARC that the Kingdom will manage to maintains FI ratings of ‘AAA/MARC-1/ CIMB Islamic’s Sukuk ratings stabilize its main debt and external Stable’. KFH Malaysia’s FI rating of ‘AA+’ vulnerability indicator metrics even as is notched down from its parent’s on affirmed overall debt remains high when MARC’s assessment of a high probability MALAYSIA: MARC in a statement compared to similarly rated peers. of parental support, taking into account announced that it has affi rmed the KFH’s full ownership in KFH Malaysia, ‘AA+IS’ rating on CIMB Islamic Bank’s record of past fi nancial support and RM5 billion (US$1.13 billion) Basel Kazakhstan’s global scale signifi cant strategy guidance provided. III-compliant Tier 2 junior Sukuk rating reaffirmed MARC is of the view that KFH Malaysia’s program and RM2 billion (US$453.81 KAZAKHSTAN: Kazakhstan’s asset quality could come under pressure million) Tier 2 junior Sukuk program, ‘gBBB2(pi)/Stable’ global scale sovereign given the weakening economic while also affi rming the Islamic bank’s rating has been reaffi rmed by RAM on conditions. Partly mitigating this risk is fi nancial institution rating at ‘AAA/ account of its still sizeable fi scal reserves. the bank’s strong capital position, as MARC-1’. The one-notch rating The rating agency said in a statement, refl ected by its common equity Tier 1 and diff erential between the two ratings however, that the country’s ASEAN scale total capital ratios of 18.9% and 25.4% refl ects the subordination of the and Malaysian scale ratings have been respectively, both of which are programs to CIMB Islamic’s deposits and downgraded to ‘seaAA3(pi)/Stable’ from substantially higher than the domestic other senior unsecured debt. All ratings ‘seaAA2(pi)/Stable’ and ‘AA3(pi)/Stable’ Islamic banking industry average of 13% carry a stable outlook. from ‘AA2(pi)/Stable’ respectively to and 16.8% as at the end of June 2016. refl ect the signifi cant negative impact of S&P upgrades Egypt’s outlook both low oil prices and consequences of Kuwait’s ‘AA’ ratings affirmed EGYPT: S&P has revised its outlook on the abrupt change in its monetary policy KUWAIT: Fitch has affi rmed Kuwait’s Egypt from negative to stable predicated at a more granular level on these rating long-term foreign and local currency on the likelihood of support from the scales. issuer default ratings (IDRs) at ‘AA’ with IMF following the government’s upfront

early next year, according to a press Witt as CFO and assistant general MOVES statement. He was previously CEO of manager, according to a bourse ﬁ ling. Commercial Bank of Dubai Saudi Hollandi. UAE: Commercial Bank of Dubai, which Turkiye Finans oﬀ ers Islamic banking services under Bank Sohar TURKEY: Turkiye Finans has appointed Att ĳ ari Al Islami, has appointed Dr Bern OMAN: Bank Sohar, which runs Sohar Wael Abdulaziz Raies as its new general van Linder as the new CEO, beginning Islamic, has appointed Pieter Burger De manager, according to a statement.

Expected date Company's name Size Structure Announcement Date November 2016 Islamic Development Bank upward of US$1 billion Sukuk 15th November 2016 November 2016 Etihad Airways up to US$1 billion Sukuk 15th November 2016 TBA Sichuan Development Holdings US$300 million Sukuk 4th November 2016 TBA Warba Bank US$250 million Sukuk 3rd November 2016 First quarter of 2017 National Real Estate Company US$500 million Sukuk 25th October 2016 TBA Al Faisal Holding US$200 million Sukuk 19th October 2016 November 2016 Angkasa Pura I IDR500 billion Sukuk 18th October 2016 TBA Housing Development Finance TBA Sukuk 13th October 2016 Corporation of Maldives TBA APM Automotive Holdings up to RM1.5 billion Sukuk Murabahah 11th October 2016 TBA Shatel IRR10 trillion Sukuk Murabahah 10th October 2016 2017 Muhammadiyah up to IDR1 trillion Sukuk 28 th September 2016 TBA Aktif Bank TRY25 million Sukuk Murabahah 26th August 2016 TBA Widad Capital up to RM110 million Sukuk Murabahah 23rd August 2016 First quarter of 2017 Government of Nigeria TBA Sukuk 11th August 2016 Fourth quarter of 2016 Malaysia Debt Ventures up to RM1 billion Sukuk 4th August 2016 August-September DanaInfra Nasional RM10 billion Sukuk 19th July 2016 2016 2017 Government of Kuwait up to KWD5 billion Sukuk 4th July 2016 TBA Iranian Mines and Mining IRR4 trillion Sukuk Musharakah 24th June 2016 Industries Development and Renovation Organization TBA Tiga Pilar Sejahtera Food IDR1.5 trillion Sukuk 17th June 2016 TBA Almarai Company TBA Sukuk 10th June 2016 By the end of 2017 Ministry of Housing Saudi TBA Sukuk 9th June 2016 Arabia TBA Mahan Air IRR5 trillion Sukuk Ijarah 8th June 2016 TBA The Philippines TBA Sukuk 6th June 2016 TBA GFH Financial Group US$150 million Sukuk 2nd June 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 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 US$1 billion Sukuk 18th May 2016 By 2017 Republic of Maldives TBA Sukuk 29th April 2016 Second half of 2016 Saudia up to SAR5 billion Sukuk 26th April 2016 TBA PRAN Foods BDT1 billion Sukuk 11th April 2016 Fourth quarter of 2016 Bank Syariah Mandiri IDR1 trillion Sukuk 5th April 2016 2016-17 Sarana Multigriya Finansial IDR200 billion Sukuk 4th March 2016 TBA Ziraat Participation Bank 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 2017 Government of Kenya TBA Sukuk 26th January 2016 TBA Toprak Mahsulleri Oﬁ si up to TRY600 million Sukuk 7th January 2016

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 1650

2090 1460

1680 1270

1270 1080

860 890

450 700 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov

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 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov

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 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov

SAMI Halal Food Participation (All Cap) 6 months

2250

2110

1970

1830

1690

1550 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-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 1550 1650

1330 1400

1110 1150

890 900

670 650

450 400 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov

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 Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov

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%

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

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

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 Index Values 90 80 70 60 50 Jul-10 Jul-03 Jan-14 Jan-07 Jun-15 Oct-16 Oct-09 Oct-02 Feb-16 Feb-09 Feb-02 Sep-14 Sep-07 Sep-00 Dec-11 Dec-99 Apr-13 Apr-06 Aug-12 Aug-05 Mar-11 Mar-04 Nov-04 May-08 May-01

Top 10 Yield-to-Date Returns for ALL Funds Fund Fund Manager Performance Measure Fund Domicile 1 Deutsche Noor Precious Metals Securities - Class A DWS Noor Islamic Funds 69.94 Ireland 2 JS Islamic JS Investments 29.06 Pakistan 3 Mandiri Investa Atraktif - Syariah (Mitra Syariah) Mandiri Manajemen Investasi 20.32 Indonesia 4 Atlas Islamic Stock Atlas Asset Management 20.30 Pakistan 5 Atlas Pension Islamic - Equity Sub Atlas Asset Management 18.65 Pakistan 6 Meezan Tahaﬀ uz Pension - Equity Sub Al Meezan Investment Management 16.40 Pakistan 7 Meezan Islamic Al Meezan Investment Management 16.28 Pakistan 8 PNM Syariah PNM Investment Management 16.23 Indonesia 9 Mandiri Investa Syariah Berimbang Mandiri Manajemen Investasi 15.61 Indonesia 10 Al Meezan Mutual Al Meezan Investment Management 15.25 Pakistan Eurekahedge Islamic Fund Index 1.61

Based on 55.50% of funds which have reported October 2016 returns as at the 14th November 2016 Top 10 Sharpe Ratio for ALL Funds Fund Fund Manager Performance Measure Fund Domicile 1 Public Islamic Money Market Public Mutual 20.55 Malaysia 2 PB Islamic Cash Management Public Mutual 17.94 Malaysia 3 Boubyan KWD Money Market Boubyan Bank 17.40 Cayman Islands 4 PB Islamic Cash Plus Public Mutual 12.35 Malaysia 5 Boubyan USD Liquidity Boubyan Capital Investment Company 9.76 Kuwait 6 Meezan Tahaﬀ uz Pension - Money Market Sub Al Meezan Investment Management 9.61 Pakistan 7 Rasmala Trade Finance Rasmala Investment Bank 8.79 Cayman Islands 8 Meezan Tahaﬀ uz Pension - Debt Sub Al Meezan Investment Management 6.42 Pakistan 9 Al Rajhi Commodity Mudarabah - USD Al Rajhi Bank 6.36 Saudi Arabia 10 Atlas Pension Islamic - Debt Sub Atlas Asset Management 6.34 Pakistan Eurekahedge Islamic Fund Index 0.10 Based on 55.50% of funds which have reported October 2016 returns as at the 14th November 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 Fixed Income Index over the last 5 years Eurekahedge Islamic Fund Fixed Income Index over the last 1 year 125

120 104

115 102 110 Percentage Percentage 105 100 100

95 98 Jul-13 Jul-16 Jan-13 Jan-16 Jun-16 Oct-11 Oct-16 Oct-15 Oct-16 Feb-16 Sep-14 Sep-16 Dec-15 Dec-15 Apr-16 Aug-12 Aug-15 Aug-16 Mar-12 Mar-15 Mar-16 Nov-13 Nov-15 May-14 May-16 May-16

Top 10 Islamic Fund Fixed Income by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 MAA Takaful Shariah Income Zurich Takaful Malaysia 2.54 Malaysia 2 MAA Takaful Shariah Flexi Zurich Takaful Malaysia 2.43 Malaysia 3 Libra AsnitaBond Libra Invest 1.90 Malaysia 4 PB Islamic Bond Public Mutual 1.80 Malaysia 5 Public Islamic Bond Public Mutual 1.69 Malaysia 6 Atlas Pension Islamic - Debt Sub Atlas Asset Management 1.66 Pakistan 7 Meezan Tahaﬀ uz Pension - Debt Sub Al Meezan Investment Management 1.52 Pakistan 8 CIMB Islamic Sukuk CIMB-Principal Asset Management 1.35 Malaysia 9 Meezan Islamic Income Al Meezan Investment Management 1.22 Pakistan 10 Public Islamic Enhanced Bond Public Mutual 1.16 Malaysia Eurekahedge Islamic Fund Index 0.99

Based on 55.56% of funds which have reported October 2016 returns as at the 14th November 2016

Top 10 Sortino Ratio for ALL Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 CIMB Islamic Money Market UOB Asset Management 60.56 Malaysia 2 Atlas Pension Islamic - Debt Sub Atlas Asset Management 25.84 Pakistan 3 Meezan Tahaﬀ uz Pension - Debt Sub Al Meezan Investment Management 25.02 Pakistan 4 Public Islamic Income Public Mutual 11.97 Malaysia 5 Public Islamic Select Bond Public Mutual 6.41 Malaysia 6 PB Islamic Bond Public Mutual 5.88 Malaysia 7 Public Islamic Bond Public Mutual 5.81 Malaysia 8 Atlas Pension Islamic - Money Market Sub Atlas Asset Management 3.32 Pakistan 9 Oasis Crescent Balanced Stable Fund of Funds Oasis Crescent Management 3.26 South Africa 10 Public Islamic Select Enterprises Public Mutual 2.74 Malaysia Eurekahedge Islamic Fund Index (0.38)

Based on 55.50% of funds which have reported October 2016 returns as at the 14th November 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 31st Oct 2016 Bank Pembangunan Malaysia Sukuk Domestic market 357 HSBC, CIMB Group Malaysia public issue 25th Oct 2016 Kuveyt Turk Katilim Kuwait Sukuk Foreign market 500 Standard Chartered Bank, Kuwait Finance Bankasi public issue House, Arab Banking, Dubai Islamic Bank, Emirates NBD, QInvest, Noor Bank 24th Oct 2016 Celcom Networks Malaysia Sukuk Domestic market 133 HSBC, CIMB Group public issue 20th Oct 2016 Maxis Broadband Malaysia Sukuk Domestic market 120 AmInvestment Bank public issue 18th Oct 2016 Ahli United Bank Bahrain Sukuk Euro market 200 Credit Suisse, Citigroup, Credit Agricole public issue 12th Oct 2016 TNB Global Ventures Malaysia Sukuk Euro market 750 BNP Paribas, HSBC, CIMB Group, Citigroup Capital public issue 12th Oct 2016 Cagamas Malaysia Sukuk Domestic 139 CIMB Group market private placement 12th Oct 2016 DanaInfra Nasional Malaysia Sukuk Domestic market 1,079 HSBC, RHB Capital, Maybank, CIMB Group, public issue AmInvestment Bank 5th Oct 2016 Islamic Republic of Pakistan Sukuk Euro market 1,000 Standard Chartered Bank, Deutsche Bank, Dubai Pakistan public issue Islamic Bank, Citigroup, Noor Bank 4th Oct 2016 Kingdom of Bahrain Bahrain Sukuk Euro market 2,000 Standard Chartered Bank, JPMorgan, BNP public issue Paribas, Arab Banking, Credit Suisse 26th Sep 2016 Edaran SWM Sdn Malaysia Sukuk Domestic market 194 CIMB Group, Hong Leong Financial Group public issue 22nd Sep 2016 UMW Holdings Malaysia Sukuk Domestic market 169 Maybank, CIMB Group public issue 8th Sep 2016 Lembaga Pembiayaan Malaysia Sukuk Domestic market 986 OCBC, RHB Capital, Maybank, Bank Islam Perumahan Sektor public issue Malaysia, CIMB Group, Aﬃ n Investment Bank, Awam AmInvestment Bank 7th Sep 2016 Emaar Sukuk UAE Sukuk Euro market 750 Mashreqbank, Standard Chartered Bank, Arab public issue Banking, National Bank of Abu Dhabi, First Gulf Bank, Dubai Islamic Bank, Union National Bank, Emirates NBD, Noor Bank 1st Sep 2016 SIB Sukuk Co III UAE Sukuk Euro market 500 Standard Chartered Bank, HSBC, Kuwait public issue Finance House, Arab Banking, Maybank, Dubai Islamic Bank, Emirates NBD, QNB Capital, Noor Bank 30th Aug 2016 EI Sukuk UAE Sukuk Euro market 250 Standard Chartered Bank, Arab Banking, Dubai public issue Islamic Bank, Emirates NBD 19th Aug 2016 Lebuhraya DUKE Malaysia Sukuk Domestic market 912 RHB Capital, Maybank, CIMB Group, Fasa 3 public issue AmInvestment Bank 9th Aug 2016 Qatar Islamic Bank Qatar Sukuk Euro market 368 Standard Chartered Bank public issue 29th Jul 2016 Sarawak Hidro Malaysia Sukuk Domestic market 1,365 RHB Capital, Maybank public issue 29th Jul 2016 Ziya Capital Malaysia Sukuk Domestic market 222 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 1102 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 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 6.3 Standard Chartered Bank, Deutsche Bank, Dubai Islamic Bank, SBSN Indonesia III public issue CIMB Group, Citigroup 2 DanaInfra Nasional Malaysia Sukuk Domestic market 2,242 5.7 RHB Capital, Maybank, CIMB Group, Hong Leong Financial public issue Group, AmInvestment Bank 3 Jimah East Power Malaysia Sukuk Domestic market 2,100 5.3 HSBC, Maybank, CIMB Group public issue 4 Kingdom of Bahrain Bahrain Sukuk Euro market 2,000 5.1 Standard Chartered Bank, JPMorgan, BNP Paribas, Arab public issue Banking, Credit Suisse 5 IDB Trust Services Saudi Sukuk Euro market 1,600 4.1 Standard Chartered Bank, JPMorgan, National Bank of Kuwait, Arabia public issue Gulf International Bank, Natixis, CIMB Group, Emirates NBD 6 Malaysia Sukuk Malaysia Sukuk Euro market 1,500 3.8 JPMorgan, HSBC, Maybank, CIMB Group Global public issue 7 Sarawak Hidro Malaysia Sukuk Domestic market 1,365 3.5 RHB Capital, Maybank public issue 8 DP World UAE Sukuk Euro market 1,200 3.0 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 9 Prasarana Malaysia Malaysia Sukuk Domestic market 1,192 3.0 RHB Capital, Maybank, Kenanga Investment Bank, CIMB public issue Group, AmInvestment Bank 10 Danga Capital Malaysia Sukuk Domestic market 1,110 2.8 RHB Capital, AmInvestment Bank, Standard Chartered Bank, public issue DBS, CIMB Group 11 EI Sukuk UAE Sukuk Euro market 1,007 2.6 Standard Chartered Bank, HSBC, Arab Banking, Maybank, public issue Dubai Islamic Bank, Emirates NBD, Al Hilal Bank, Noor Bank 12 Islamic Republic of Pakistan Sukuk Euro market 1,000 2.5 Standard Chartered Bank, Deutsche Bank, Dubai Islamic Bank, Pakistan public issue Citigroup, Noor Bank 12 Hazine Mustesarligi Turkey Sukuk Euro market 1,000 2.5 Standard Chartered Bank, HSBC, Emirates NBD Varlik Kiralama public issue Anonim Sirketi 14 Lembaga Malaysia Sukuk Domestic market 986 2.5 OCBC, RHB Capital, Maybank, Bank Islam Malaysia, CIMB Pembiayaan public issue Group, Aﬃ n Investment Bank, AmInvestment Bank Perumahan Sektor Awam 15 Lebuhraya DUKE Malaysia Sukuk Domestic market 912 2.3 RHB Capital, Maybank, CIMB Group, AmInvestment Bank Fasa 3 public issue 16 National Higher Malaysia Sukuk Domestic market 880 2.2 Maybank, CIMB Group, Aﬃ n Investment Bank, AmInvestment Education Fund public issue Bank 17 Kuveyt Turk Kuwait Sukuk Euro market 850 2.2 HSBC, Kuwait Finance House, Dubai Islamic Bank, Abu Dhabi Katilim Bankasi public issue Islamic Bank, Emirates NBD, Kuwait Projects, QInvest, Noor Bank, Standard Chartered Bank, Arab Banking 18 TNB Global Malaysia Sukuk Euro market 750 1.9 BNP Paribas, HSBC, CIMB Group, Citigroup Ventures Capital public issue 18 Emaar Sukuk UAE Sukuk Euro market 750 1.9 Mashreqbank, Standard Chartered Bank, Arab Banking, public issue National Bank of Abu Dhabi, First Gulf Bank, Dubai Islamic Bank, Union National Bank, Emirates NBD, Noor Bank 20 Pengurusan Air SPV Malaysia Sukuk Domestic market 748 1.9 RHB Capital, Maybank, CIMB Group, AmInvestment Bank public issue 21 Jambatan Kedua Malaysia Sukuk Domestic market 644 1.6 RHB Capital, Maybank, Kenanga Investment Bank, public issue AmInvestment Bank 22 Cagamas Malaysia Sukuk Domestic market 578 1.5 CIMB Group, Maybank public issue 23 Sime Darby Malaysia Sukuk Domestic market 535 1.4 Maybank public issue 24 Sultanate of Oman Oman Sukuk Euro market 500 1.3 Standard Chartered Bank public issue 24 SIB Sukuk Co III UAE Sukuk Euro market 500 1.3 Standard Chartered Bank, HSBC, Kuwait Finance House, Arab public issue Banking, Maybank, Dubai Islamic Bank, Emirates NBD, QNB Capital, Noor Bank 24 Noor Bank UAE Sukuk Euro market 500 1.3 Standard Chartered Bank, First Gulf Bank, Dubai Islamic Bank, public issue Sharjah Islamic Bank, Citigroup, Emirates NBD, Noor Bank 24 Emirate of Sharjah UAE Sukuk Euro market 500 1.3 Bank of Sharjah, HSBC, Barclays, Dubai Islamic Bank, Sharjah public issue Islamic Bank, Commerzbank Group 24 Dubai Islamic Bank UAE Sukuk Euro market 500 1.3 Standard Chartered Bank, HSBC, Arab Banking, National Bank of public issue Abu Dhabi, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD 24 Axiata SPV2 Malaysia Sukuk Euro market 500 1.3 Deutsche Bank, HSBC, CIMB Group public issue 30 Hilal Services Saudi Sukuk Euro market 500 1.3 Mizuho, Standard Chartered Bank, HSBC, Arab Banking, Arabia private placement National Bank of Kuwait, First Gulf Bank, Dubai Islamic Bank, SG Corporate & Investment Banking, CIMB Group, Emirates NBD, Warba Bank, Noor Bank Total 39,519 100

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

Manager US$ (mln) Iss % US dollar 21.0 1 CIMB Group 6,254 42 15.8 Malaysian ringgit 18.1 2 Maybank 5,298 35 13.4 Indonesian rupiah 0.3 3 Standard Chartered Bank 4,007 22 10.1 4 RHB Capital 3,440 32 8.7 Kuwaiti dinar 0.2 5 HSBC 2,909 19 7.4 6 AmInvestment Bank 2,525 22 6.4 Sukuk Volume by Issuer Nation US$ (billion) 12 Months

7 Dubai Islamic Bank 1,544 15 3.9 Malaysia 21.6 8 Emirates NBD 1,491 15 3.8 UAE 5.2 Indonesia 2.6 9 JPMorgan 1,209 5 3.1 Saudi Arabia 2.5 10 Citigroup 1,146 6 2.9 Bahrain 2.2 11 Deutsche Bank 987 4 2.5 Qatar 1.3 12 National Bank of Abu Dhabi 875 6 2.2 Turkey 1.3 13 Arab Banking Corporation 854 8 2.2 14 Noor Bank 670 9 1.7 Global Sukuk Volume by Sector 12 Months 15 BNP Paribas 588 2 1.5 12% 16 Credit Suisse 467 2 1.2 7% Finance Government 17 Kenanga Investment Bank 453 6 1.2 40% 8% Utility & Energy 18 Hong Leong Financial Group 367 4 0.9 Construction/Building 19 Aﬃ n Investment Bank 365 3 0.9 9% Transportation Other 20 National Bank of Kuwait 311 3 0.8 24% 21 First Gulf Bank 300 4 0.8 22 DBS 255 4 0.7 Global Sukuk Volume - US$ Analysis 23 Sharjah Islamic Bank 226 3 0.6

24 OCBC 224 6 0.6 US$bn US$m 18 600 25 Natixis 214 1 0.5 16 Non-US$ US$ 500 14 25 Gulf International Bank 214 1 0.5 12 400 10 300 27 Kuwait Finance House 206 4 0.5 8 6 200 28 Barclays 203 2 0.5 4 100 2 29 Mashreqbank 183 2 0.5 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 30 QInvest 151 3 0.4 2011 2012 2013 2014 2015 2016 Total 39,519 130 100

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 9.0 1 Allen & Overy 3,197 3 23.6 2 Al Rajhi Capital 663 2 7.2 2 Latham & Watkins 2,282 2 16.9 3 Baker & McKenzie 1,365 1 10.1 3 Banque Saudi Fransi 579 4 6.3 4 Adnan Sundra & Low 1,361 1 10.0 4 Alinma Bank 550 2 6.0 4 Zaid Ibrahim & Co 1,361 1 10.0 5 HSBC 497 3 5.4 6 Norton Rose Fulbright 915 1 6.8 5 Samba Capital & Investment 497 3 5.4 7 Cliﬀ ord Chance 758 1 5.6 Management 7 White & Case 758 1 5.6 7 National Commercial Bank 491 3 5.4 9 Anjarwalla Collins & Haidermota 172 2 1.3 8 Mitsubishi UFJ Financial Group 377 3 4.1 9 Haidermota & Co 172 2 1.3 9 Aga Khan Fund for Economic 354 2 3.9 9 Lincolns Law Chamber 172 2 1.3 Development 9 Linklaters 172 2 1.3 10 Standard Chartered Bank 329 3 3.6 9 Mohsin Tayebaly & Co 172 2 1.3

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 Samba Capital 969 5 6.2 15th Apr 2016 Yanbu Aramco Sinopec Saudi Arabia 4,700 2 Banque Saudi Fransi 939 4 6.0 Reﬁ ning 3 Saudi National Commercial Bank 933 4 6.0 27th Jun 2016 Rabigh Electricity Saudi Arabia 2,686 4 Abu Dhabi Islamic Bank 912 7 5.9 8th Sep 2016 Aluminium Bahrain Bahrain 1,500 5 Dubai Islamic Bank 684 9 4.4 19th Sep 2016 Saudi Electricity Saudi Arabia 1,333 6 China Development Bank 621 1 4.0 9th Mar 2016 Dhuruma Electricity Saudi Arabia 1,138 7 Emirates NBD 615 7 4.0 15th Jun 2016 PNB Jersey Malaysia 889 8 Abu Dhabi Commercial Bank 568 6 3.7 st 9 SABB 559 5 3.6 21 Dec 2015 Engro Powergen Pakistan 851 10 Noor Bank 545 8 3.5 29th Aug 2016 Atlantis The Palm UAE 850 11 Mashreqbank 489 5 3.2 11th Dec 2015 Cititower Malaysia 751 12 Al Rajhi Capital 366 2 2.4 29th Nov 2015 Gulf Marine Services UAE 620 13 HSBC 345 5 2.2 Top Islamic Finance Related Financing by Country 12 Months 14 Maybank 338 1 2.2 Nationality US$ (mln) No % 14 CIMB Group 338 1 2.2 1 Saudi Arabia 5,406 6 34.8 16 Standard Chartered Bank 327 5 2.1 2 UAE 4,313 16 27.7 17 Union National Bank 308 3 2.0 3 Pakistan 1,548 3 10.0 18 Al Hilal Bank 307 3 2.0 4 Bahrain 1,188 2 7.6 19 AKFED 292 2 1.9 5 Malaysia 959 2 6.2 20 National Bank of Abu Dhabi 286 4 1.8 6 Jordan 550 2 3.5 21 Alinma Bank 260 2 1.7 7 Egypt 475 3 3.1 22 Riyad Bank 258 2 1.7 8 Qatar 460 1 3.0 23 Arab Banking Corporation 251 4 1.6 9 India 368 1 2.4 24 Credit Agricole 249 3 1.6 10 Turkey 204 2 1.3 25 Bank Albilad 229 1 1.5 Top Islamic Finance Related Financing by Sector 12 Months 26 Gulf International Bank 193 3 1.2 27 Sharjah Islamic Bank 179 3 1.2 Utility & Energy

28 Natixis 175 3 1.1 Oil & Gas

29 BBK 174 3 1.1 Transportation 30 EBRD 170 1 1.1 Construction/Building

Top Islamic Finance Related Financing Mandated Lead Arrangers Real Estate/Property 12 Months US$ bln0 128 3 4 5 6 7 Bookrunner US$ (mln) No % 1 Abu Dhabi Islamic Bank 1,626 7 18.2 Global Islamic Financing - Years to Maturity (YTD Comparison) 2 Mashreqbank 1,050 3 11.8 3 Abu Dhabi Commercial Bank 610 2 6.8 2015 2014 4 Dubai Islamic Bank 488 4 5.5 2013 5 Emirates NBD 474 3 5.3 2012 6 Noor Bank 421 4 4.7 2011 2010 7 Maybank 338 1 3.8 2009 7 CIMB Group 338 1 3.8 2008 9 Arab Banking Corporation 275 4 3.1 0% 20% 40% 60% 80% 100% 0-3yrs 3-5yrs 5-7yrs 7-10yrs 10+yrs 10 Saudi National Commercial Bank 267 1 3.0

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

NOVEMBER 2016 MAY 2017

28th IFN Saudi Arabia Forum Jeddah, Saudi Arabia 16th IFN UK Forum London, UK

FEBRUARY 2017 JULY 2017

22nd KL Awards Dinner Kuala Lumpur 27th IFN Indonesia Forum Jakarta, Indonesia

27th Iran Dialogue Tehran, Iran SEPTEMBER 2017

th 28 Dubai Awards Dinner Dubai 14th IFN Turkey Forum Istanbul

MARCH 2017 18th Investor Dialogue Luxembourg

7th IFN Oman Forum Muscat, Oman 19th IFN Investor Forum Luxembourg

9th Jordan Dialogue Amman, Jordan OCTOBER 2017

th 14 CIS Forum Astana, Kazakhstan TBC Africa Islamic Finance Forum TBC

nd 22 China OIC Forum Beĳ ing, China 16th Sovereign Sukuk Dialogue Washington DC, US

th 28 IFN Morocco Forum Casablanca, Morocco 18th IFN US Forum New York, US

APRIL 2017 NOVEMBER 2017

Kuala Lumpur, th 10th – 11th IFN Asia Forum 19 IFN Kuwait Forum Kuwait City, Kuwait Malaysia

Kuala Lumpur, 22nd IFN Saudi Arabia Forum Jeddah, Saudi Arabia 12th IFN FinTech Forum Malaysia

How to subscribe: [email protected] Each subscription will receive: • 50 issues of Islamic Finance news INDIVIDUAL SUBSCRIPTION COMPANY-WIDE SUBSCRIPTION GROUP-WIDE SUBSCRIPTION • Daily news alerts • Exclusive login details for each subscriber • 1 Year at US$1,250 nett • 1 Year at US$5,250 nett • 1 Year: US$12,500 • Unlimited access to entire archived library • 2 Years at US$2,250 nett • 2 Years at US$9,450 nett • 2 Years: US$22,500 • All additional supplements, guides and reports (Max: 10 Individual Subscriptions)

Deputy Publisher & Director Subscriptions Development Manager Subscriptions Director & Head of Educational Institutions Geraldine Chan (Dubai oﬃ ce) Jaya Chitra Kunchiraman Faizan Haider [email protected] [email protected] [email protected] Tel: +971 4 427 3623 Tel: +603 2162 7800 ext 59 Tel: +603 2162 7800 x 24

Head of Hasnani Aspari Deputy Publisher Geraldine Chan (Dubai oﬃ ce) Production [email protected] & Director [email protected]

Group Lauren McAughtry Senior Production Norzabidi Abdullah Managing Andrew Tebbutt Managing Editor [email protected] Manager [email protected] Director andrew.tebbutt @REDmoneygroup.com

Editor Vineeta Tan [email protected] Senior Graphic Eumir Shazwan Kamal Bahrin Managing Director Andrew Morgan Designer [email protected] & Publisher [email protected] Senior ContributionsSasikala Thiagaraja Senior Production Mohamad Rozman Besiri Editor [email protected] Published By: Designer [email protected] Senior Copy Kenny Ng MALAYSIA UAE Editor [email protected] Associate Steve Stubbs Suite 22-06, 22nd Floor PO Box 126732, 16th Floor, Publisher [email protected] Menara Tan & Tan X2 Tower, Jumeirah Lake Senior Danial Idraki 207, Jalan Tun Razak Tower (JLT), Jumeirah Bay, Associate Sandra Spencer 50400 Kuala Lumpur, Malaysia Dubai, UAE Journalist [email protected] Publisher [email protected] Tel: +603 2162 7800 Tel: +971 4 427 36 23 Fax: +603 2162 7810 Fax: +971 4 431 4614 Journalist Nurul Ashikin Abd Halim [email protected] Finance Faizah Hassan Director [email protected]

DISCLAIMER All rights reserved. No part of this publication may be reproduced, duplicated or copied by any means without the prior consent of the holder of the copyright, requests for which should be addressed to the publisher. While every care is taken in the preparation of this publication, no responsibility can be accepted for any errors, however caused. NE-IFN13/45