New Adventures in Alternative Finance

The World’s Leading Islamic Finance News Provider

(All Cap) Peer-to-peer 2015’s largest Pakistan moving Sovereign 1100 platform Sukuk in the toward single Sukuk: 1050 4.06% Beehive gains works...8 national stock Indonesia

1000 976.54 landmark exchange...8 doubles its 950 Shariah volumes...9 936.89 900 certiﬁ cation...7 W T F S S M T

Powered by: IdealRatings® COVER STORY 2nd September 2015 (Volume 12 Issue 35) Peerless potential: New adventures in alternative finance

Crowdfunding has been a hot topic clarifi cation and documentation, what trillion by 2025. PwC expects the segment for IFN over the past year, and we’ve direction is this evolution taking? to reach US$150 billion by 2025, while the worked hard to promote the exciting International Organization of Securities prospects that the sector could off er the Right now, one of the most exciting Commissions estimates that global P2P Islamic fi nance industry. Now, however, aspects of the industry is its impact on originations could exceed US$70 billion the market is evolving yet further — investor involvement, entrepreneurship within the next fi ve years. with new developments in peer-to-peer and egalitarian access. Last year, business (P2P) platforms and innovations in and entrepreneurship remained the This new sector is benefi ting not only product off erings opening up a whole most popular crowdfunding category, from the growth and reach of new new horizon of opportunity. LAUREN according to Massolution, raising US$6.7 technology solutions and popularity MCAUGHTRY looks at the latest billion or 41.3% of the global total of crowdfunding channels, but from adventures in alternative fi nance. (followed by social causes at US$3.06 an urgent need to source alternative billion, fi lms and performing arts at methods of fi nancing to the traditional A world of opportunity US$1.97 billion, real estate at US$1.01 banking methods. “P2P platforms Global crowdfunding volumes billion and music at US$736 million). seem to have found a niche by off ering accelerated yet again last year, expanding borrowers an improved lending by 167% to reach US$16.2 billion raised, P2P possibilities experience — and they’re quickly up from US$6.1 billion in 2013, according This focus on entrepreneurship gaining momentum,” noted PwC to the latest industry fi gures from and SME support, as well as in a 2015 report entitled ‘Peer Massolution. This year, the industry increasing acceptance from and Pressure: How peer-to-peer is set to more than double once again, involvement with the wider platforms are transforming with an expected US$34.4 billion raised fi nancial infrastructure and the consumer lending — pushing crowdfunding volumes growing investor awareness, industry’. beyond those of the global venture has driven a boom in global capital industry, which invests around P2P or ‘marketplace’ fi nancing Power to the US$30 billion annually. The World — which is estimated to have people Bank in 2013 estimated that by 2025, reached US$9 billion in 2015. This growth can only the global crowdfunding market could US P2P lending platforms’ benefi t the Islamic fi nance reach between US$90-96 billion — 1.8 origination volumes have grown industry — as long as times the size of the current venture an average of 84% per quarter participants are proactive capital market. There is no doubt that since 2007 and while in grasping the the sector is becoming a force to be projections for the opportunity. reckoned with. But how is it evolving future vary, one venture “At its absolute — what new trends are emerging and capitalist has projected with increasingly robust regulation, volumes as high as US$1 continued on page 3

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Volume 12 Issue 35 National Australia Bank DEALS provides debut onshore TAKAFUL IFN Rapids ...... 2 Indonesia sovereign Sukuk Islamic fi nancing deal for Jubilee Insurance launches IFN Reports: auction receives higher- Crescent Wealth Takaful business for • Peer-to-peer platform Beehive gains landmark than-expected bids Ramly Food Industries Pakistani market Shariah certifi cation • Fund Focus: Rasmala Noor Bank to invest more secures syndicated than US$500 million in fi nancing worth RM274 RATINGS Leasing Fund 2 • 2015’s largest Sukuk in Indonesian sovereign million (US$64.77 milllion) MARC affi rms ‘AA-IS’ the works • Pakistan moving toward single Sukuk as it seeks to increase with Agrobank and Bank rating on Kimanis Power’s national stock exchange • Sovereign Sukuk: its Islamic assets Pembangunan Malaysia Sukuk program Indonesia doubles its volumes • STMB Turkiye Finans and Commercial Leasing and Capital Intelligence affi rms Finance introduces CLC diversifi es distribution channel to bolster Takaful Albaraka Turk looking Gulf Finance House’s to raise lira-denominated Islamic Finance to Sri rating with stable outlook penetration rate • IFN Weekly Poll: Will India’s Sukuk Lankan community Capital Intelligence affi rms need for infrastructure funding fi nally open the Puncak Niaga Holdings to Bank Simpanan Nasional Egypt at ‘B-‘ and ‘B’ with a doors to Islamic fi nance? ...... 7 make Sukuk payment on converts deposit products stable outlook the 17th September to Wadiah structure Fitch affi rms Qatar’s ratings IFN Analysis: Sunway Treasury Sukuk to Filipino legislator fi les bill with a stable outlook sell Islamic papers Series 11 to enhance Islamic banking Kazakhstan and Central Asia: Accelerated rise ..... 12 framework Bahrain Mumtalakat’s Takaful and re-Takaful: Gradual progression ...... 13 Saudi Electricity Company Sukuk rating downgraded turns to Sukuk to raise up Meezan Bank expands with in line with sovereign rating Case Study: to US$1.5 billion to fund new branch in Darul Uloom revision Al Meezan’s new fund: Access to Pakistan’s capital projects First French Islamic bank Bahrain to face challenges equity markets ...... 14 Government of Indonesia opens doors in Paris in fi scal consolidation as oil Column: prepares to issue IDR12.2 Gulf private equity fi rms prices remain weak, says trillion (US$856.44 million) RAM The bare truth – Dr Ken Baldwin ...... 15 compete for majority stake in sovereign Sukuk in in Al Raya for Foodstuff Co Sarawak Energy maintains IFN Country Correspondent: 2016 to fund infrastructure ‘AA1/Stable’ rating on Canada; Brunei; Russia; Kazakhstan; projects Malaysian experts study Islamic banking possibility RM15 billion (US$3.57 Pakistan ...... 16 Al Othaim Real Estate and in Russia as the Federation billion) Sukuk program Investment Co issues debut Special Report: keen to collaborate RAM withdraws rating of Sukuk Islamic fi nance in Mauritania: Rapid growth and Iranian banks to resume KLIA’s guaranteed issue International Finance Corp challenges ...... 20 operations in the UK Oman’s government to hold Sukuk roadshow; fi nancing needs grow amid Islamic fi nance in Europe: Which way to go? ..... 21 obtains preliminary top Noor Bank teams up with low oil prices Country Feature: rating for proposed US Dubai Properties to off er dollar issuance Shariah compliant property Bangladesh receives ‘BB-’ Shariah compliant pawnbroking system in Sri fi nancing options ratings from Fitch Lanka ...... 23 TSH Sukuk Ijarah issues RM30 million (US$7.11 Asset Management Feature: million) facility; fully ASSET MOVES The world of Islamic asset management ...... 24 subscribed MANAGEMENT Al Salam Bank Bahrain’s Takaful Feature: Janaka Mendis joins Ibdar Tharawat Investment House A quick glance at the case for Takaful windows ..... 26 NEWS Bank as CFO to liquidate Tharawat Sukuk First National Bank Fund Company Azhar Zabidi to lead inaugurates new branch in Islamic Finance news ...... 28 Capital Markets Malaysia Dar es Salaam EIIB-Rasmala announces as CEO Deal Tracker ...... 34 initial closing of Rasmala Ghana could welcome Markus Blenntoft joins REDmoney Indexes ...... 35 Leasing Fund 2; targets fi rst Islamic bank before US$125 million in capital K&L Gates as banking and Eurekahedge data ...... 37 December commitments asset fi nance partner in Performance League Tables ...... 39 Singapore offi ce International Islamic Public Mutual announces Events Diary...... 43 College and Islamic over RM185 million Qatar Financial Center Banking and Finance names Hamed Al-Saadi as Company Index ...... 44 (US$44.03 million) in Institute sign MoU on distributions for 11 funds chief fi nancial offi cer and Subscription Form ...... 44 academic collaboration tax offi cer

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.

Peerless potential: New adventures in alternative ﬁ nance Continued from page 1

fundamental level, when you look at Chart 1: Crowdfunding growth 2012-15 peer-to-peer and combine it with Islamic fi nance, you are really pulling together the essence of Islamic fi nance — it is a natural progression and one which 40 off ers a real, new and incomparable opportunity for the sector to truly grow into an infl uential power in the global marketplace,” explained Craig 30 Moore, the founder and CEO of UAE- based P2P platform Beehive, which recently received Shariah compliance certifi cation. 20 US$ billion

P2P platforms 10 seem to have found a niche by 0 offering borrowers 2012 2013 2014 2015F an improved Donation Rewards Lending Equity lending experience Source: 2015F The Crowdfunding Industry report (massolution.com) — and they’re Naeem Randhawa, the founder and the wealthy. No more interest-bearing CEO of US-based Shariah compliant good ol’ boys bankers needed… and quickly gaining real estate crowdfunding platform the winner is the value-based Halal HalalSky, explained to IFN that the investor.” momentum crowdfunding trend was also opening up broad new horizons for platforms No-brainer beneϐits like his — and the benefi ts are equally So what are the real benefi ts to P2P att ractive. “HalalSky heralds a new wave participants? “The fi rst is the cost of of global Shariah-based investing, it is fi nance — how much is it costing the “It’s about opening up new opportunities the next disruptive ideology to open through technology: and for individuals businesses. They are keenly aware of the fl oodgate to the everyday investor that and looking to get the best possible to access opportunities that were to participate in equitable, Halal, and not previously available to them — pricing,” explained Moore. “We are value-based opportunities. The payment typically seeing savings of between opportunities that perhaps before we revolution is here, and everyone from limited to PE or VC involvement,” he 25-30% on their cost of fi nance, and that private investors to Wall Street are taking becomes quite material.” elaborated to IFN. “This off ers a far more notice.” Real estate crowdfunding grew egalitarian price point: regardless of 156% in 2014, passing the US$1 billion The second issue is time to fi nance. “If the sum of investment they can still get mark, with further growth expected — involved.” we get all the necessary information we and niche areas like these, along with need, we can turn around a fi nancing the broader SME, equity request in a couple of days, and have Sam Quawasmi, the managing director and entrepreneurship and co-founder of Dubai-based that listed on our marketplace for platforms, are investors to look at and invest in. The platform Eureeca, agrees. “Eureeca revolutionizing is not an Islamic platform but private speed with which they can get access access to the to fi nance is particularly critical equity investing (the type of investing fi nance industry. conducted through Eureeca) — with its in the SME space — if they see an “For the fi rst time opportunity, they need access to risk-sharing among investors and issuers in history, the and interest-free fi nancing — [and] is fi nance in days and weeks, not weeks everyday investor and months,” said Moore. largely aligned with the principles of now has direct Islamic fi nance,” he told IFN. “Islamic access to lucrative And the third issue is fl exibility. banking/fi nance is a multi-trillion dollar opportunities industry so there is clearly a demand for Beehive, for example, traditionally off ers an innovative Islamic products and thus a space for reserved for Islamic platforms to operate.” institutions and continued on page 4

Peerless potential: New adventures in alternative ﬁ nance Continued from page 3

ȱŘǱȱ ȱ¢ȱ ȱęǰȱȱȱ¢ȱ billion — driving an urgent need for alternative fi nance solutions. ȱȱ “There is considerable interest in equity 2015 crowdfunding in the GCC, which 2014 is home to the largest percentage of 2013 investors using the Eureeca platform,” 2012 noted Quawasmi. “The GCC and wider Middle East are experiencing an US$2.7 billion US$6.1 billion explosion of entrepreneurial activity. The US$16.2 billion rise in the number of SMEs means that there must be an increasingly larger pool US$34.4 billion of capital to fund them. This is where ȱȱǱȱŘŖŗś equity crowdfunding and alternative ǞřŚǯŚŚȱ fi nance come in.” Donation US$2.85 billion Islamic Reward US$2.68 billion Lending US$25.1 billion banking/ Equity US$2.56 billion Royalty US$405 million ϔinance is a multi- Hybrid US$811 million trillion dollar Growth by crowdfunding model prediction for 2015 in US$ millions (research-based estimate) Source: 2015F The Crowdfunding Industry report (massolution.com) industry so there is range of products including invoice of The Box, a UAE-based self-storage clearly a demand fi nancing (helping SMEs manage company, about his Beehive activity. cash fl ow by closing the gap between “Luckily Beehive did a good deal of the for Islamic products invoice issuance and receipt of grunt work for us. They provided us payment), business fi nancing (helping with cheaper, quicker and more fl exible and thus a space SMEs who are seeking fi nancing of fi nance, and as a result we saved around over AED100,000 (US$27,218.4)), a 30% on our fi nancing costs. This meant for Islamic marketplace for investors to make bids that we could spend more money on platforms to related to specifi c fi nance requests growing our business and less time (using a ‘reverse auction’ process on red tape.” Vishaal S Shah, CEO of operate which lowers the overall fi nancing Panache International, agreed. “The rate for the business while still giving speed of Beehive’s fi nancing process investors the opportunity to lock in came as a sharp contrast to the months the rate of return they want) and a we had previously spent anticipating Lending a hand secondary market (allowing investors to responses from banks. The way the Currently, however, lending holds by release their invested funds before they process was conducted also allowed us far the lion’s share of the crowdfunding reach their full term, by transferring to assess our business from a variety of market — an estimated US$25.1 billion the outstanding capital to another angles and reconfi rmed to us that we out of the US$34.4 billion expected this investor on the platform). In addition, were on the right path.” year — and this could be problematic the business does not charge early for Islamic players, with interest on repayment fees — compared to banks, These advantages are vital in att racting loan fi nancing presenting a stumbling which can charge anything between businesses to the platform — and block and equity platforms proving 2-5% for early repayment of fi nancing. enabling platforms such as Beehive at the moment to be of more interest “That off ers great fl exibility for SMEs. and its peers to provide a whole new to the Shariah compliant component. It’s all about helping people,” said channel of much-needed fi nancing to However, developments are apace and Moore. the small business sector. SMEs are the industry already has its own Shariah critical to GDP, employment and growth compliant P2P lending platform in the SME support prospects – especially in many Muslim form of Liwwa, an Amman, Jordan- based business that was launched in “As a medium-sized, rapidly growing countries – and yet (according to Beehive 2013 by two Palestinian entrepreneurs: business, one of the major issues fi gures) they account for only 3-4% Ahmed Moor and Samer Atiani. The plaguing us was a lack of fi nancial of bank lending, with bank rejection platform is based on Murabahah and support. Dealing with banks presented rates standing at between 50-70%. The Ijarah transactions — business owners an endless batt le of unreasonable rates, International Finance Corporation (IFC) create a profi le, list their loan application, paperwork and time delays,” said estimates the current SME funding gap Wadih Haddad, the founder and CEO in the MENA region to be at least US$260 continued on page 5

Peerless potential: New adventures in alternative fi nance Continued from page 4 and then make monthly repayments to prospect for investors, and participants opening an offi ce in Amsterdam in 2015. the investors. “The transaction structure are quick to grasp its opportunities. “We “This market expansion will prove to is fully Shariah compliant because the have two fundamental tenets to our be of great benefi t to our investors and capital exchange occurs around an proposition — one is as an emerging entrepreneurs from these markets that asset,” explained Ahmed to ArabNet markets player, and the other is Shariah are raising funds. Investors will have at the launch of the platform. “And the compliance,” explained Moore. “This is a access to deals from an increasing variety profi t rate that investors receive is like great opportunity not only in the Middle of markets so they can further diversify the profi t rate that any merchant receives East but also in Asia. There is a huge their portfolios via the Eureeca platform. when they buy a wholesale good and sell appetite for Islamic fi nance products, and For businesses raising funds, Eureeca’s it to you in the store. For investors, they there is a lot of liquidity in the Islamic market expansion means access to an know exactly how much they’re gett ing fi nance space – but not a lot of spaces ever-growing network of investors, in return and when. They can model outside of property in which to invest. which will translate to more money the returns on their investments. In that We think this is very exciting and gives being available and more door-opening sense, Liwwa is more like a bond than a us a good opportunity to connect east connections to be made from external stock investment.” and west: through matching liquidity to markets,” he explained. investment opportunities.” Beehive also has plans to expand into It is about Malaysia in particular is emerging as Asia and beyond. “Over the next six a highly desirable destination, with months, we will certainly be looking to ensuring that new legislation and a supportive launch in another jurisdiction or two,” regulator encouraging growth. In June, Moore exclusively revealed to IFN. “We you are educating the Malaysian Securities Commission are looking at a number of markets, approved six equity crowdfunding especially in Asia, and including your investor base, (ECF) platforms out of 27 applicants, Malaysia. There is a broad awakening to giving them authority to start their the general principles of crowdfunding so they understand operations by the end of the year. The in many of these markets, and there is a winners included Alix Global, Ata Plus, natural att raction to markets where the that their capital Crowdonomic, Eureeca, PitchIN and regulators are trying to help the economy Propellar Crowd+ — many of which grow through these channels.” Beehive is at risk. It is also have international support. Alix Global has also chosen to create an Asian is in partnership with FundedByMe, a platform with Thailand, as the gateway about ensuring that Swedish platform, while Crowdonomic to its regional expansion. “On the Shariah has US and Japanese backing as well as a side, many western markets are now the investors are presence in Singapore. Eureeca, based in quite comfortable with peer-to-peer and Dubai, is regulated by the UK’s Financial crowdfunding, so to off er fi nance within diversiϔied Conduct Authority, while Propellar a Shariah compliant structure in these Crowd+ has partners from Hong Kong, markets also has some att raction for us,” China, Taiwan, China and New Zealand continued Moore. — demonstrating the breadth and depth East meets west of regional interest. Portfolio theory But expansion is not limited to the One of the key reasons for the success MENA region. The US currently leads Exciting expansion of the sector is its position in the wider the P2P pack, with around US$5.5 billion Dubai-based Eureeca is one of the biggest alternative fi nance landscape. “Investors P2P loans issued in 2014, but other and earliest arrivals to the party, with are looking for a way to diversify their markets are rapidly gaining ground. over 10,000 registered investors, a 43% portfolios and seek healthy returns by By 2016, the P2P market in the UK is repeat investor rate, a 40% campaign investing in private equities,” explained expected to reach GBP5 billion (US$7.7 success rate and the largest network of Quawasmi. The platforms may not play billion), growing to GBP36 billion angel investors in the Middle the same role as banks, but they off er (US$55.44 billion) by 2025. And on East. “It’s an exciting time investors valuable access to an the other side of the globe: “Surprises for us at Eureeca as we alternative investment model. materializing from this year’s research are really focused on “This is a valid part of an included the astounding growth in the market expansion,” said alternative investment strategy P2P and P2B lending market in Asia,” Quawasmi to IFN. within a diversifi ed investment noted Massolution founder and CEO The fi rm is launching portfolio,” agreed Moore. Carl Esposti at the launch of their latest operations in Malaysia “Your average investor will report on the crowdfunding sector. by the end of the year have money in stocks, shares, and expects to be bonds, mainly safe investments, Asian crowdfunding volumes grew by listing businesses but they may have 15-20% in 320% in 2014, to US$3.4 billion — putt ing from Egypt slightly riskier alternative it ahead of Europe (US$3.26 billion). The in the coming Asian market represents a compelling months as well as continued on page 6

Peerless potential: New adventures in alternative fi nance Continued from page 5 investments with a higher return, such themselves, investors become more they could compete directly, developing as private equity or real estate. No one comfortable investing larger and larger their own proprietorial platform. But will should really be putt ing more than 3-5% sums of money, businesses are more it really ever happen? “I think you will of their net wealth on a platform like this, keen to use them for their raises, and fi nd that some of the more progressive but it gives them a good opportunity to governments and their regulators are banks will certainly look at platforms increase their returns overall across their promoting them in their markets. like these as an opportunity, in order portfolio.” to broaden their reach and touch base “Equity crowdfunding, P2P lending, with more customers who are att racted So how are investors protected should it all rewards crowdfunding, invoice fi nancing by the benefi ts of using a peer-to-peer go belly-up? Even good businesses can fall are just some of the models that fall platform,” said Moore. “Over the next on hard times and there’s no guarantee of under the umbrella of alternative fi nance. couple of years, we will see a lot more success. Beehive has around 160 criteria for They are all viable and suited to diff erent banks and platforms teaming up, risk assessment, but at the end of the day: fi nancing requirements, stages of creating more formal relationships, “It is about ensuring that you are educating development, capital structure, to name perhaps the acquisition of platforms by your investor base, so they understand a few,” said Quawasmi. “We anticipate banks. I wouldn’t be surprised if some that their capital is at risk. It is also about that the equity crowdfunding industry of the big banks are already looking at ensuring that the investors are diversifi ed,” will become increasingly globalized. gett ing into this space in a big way. We explained Moore. We also expect that the deal sizes are are all trying to solve the same problem – going to get larger. This is because of the it comes down to what the most effi cient growing confi dence in the model among way is to solve that problem.” Some of more mature businesses that will be the more raising larger sums of money and among A bright future investors who will be investing larger The industry is growing and the progressive banks sums to meet this demand.” opportunities are almost endless — but that is not to say that challenges do not will certainly look at And with this growth will come exist, and not everyone will succeed. integration and collaboration. “My view Ultimately, the P2P and crowdfunding platforms like these is that you will fi nd a lot of collaboration business is highly transparent and between crowdfunding platforms and relatively low margin — the fees are as an opportunity, private equity, venture capital fi rms low and achieving scale is essential. – including a sharing of knowledge “It’s about making a splash and then in order to broaden across the ecosystem,” thinks Moore. building on that success,” explained In the US, around 80% of P2P funding Moore. “Really, it’s a classic technology their reach and already comes from institutional start-up play.” But the rewards look to be investors, including at least 12 funds worth the risk — Beehive expects to raise touch base with that have committ ed to buying US$200 between AED70-80 million (US$19.05- million or more in P2P platform assets 21.77 million) next year, and believes more customers who — suggesting that the big players have the marketplace in the GCC alone to be already cott oned onto the size of the worth tens of billions. are attracted by the opportunity. Naeem of HalalSky agrees that the beneϔits of using a Big banking business potential is spectacular. The platform So what role can banks and existing expects to close on a dozen private peer-to-peer fi nancial institutions play in this placements, starting with the Texas market, burgeoning industry? While it may and opening to other markets. Primary platform seem as if they face litt le danger from properties are single residence, but by early such a niche sector, the astonishing next year the fi rm thinks it will need to Joining the dots growth fi gures suggest it might be start off ering multi-unit and commercial As the sector grows, there is no doubt time they started to look over their properties, as demand is already coming that it will fi nd its place in the broader shoulder at the upcoming competition. in for diverse assets — and is hopeful that fi nancial fi rmament — and there are But will competition or collaboration the US regulations (Title III) will bring signs that a fi rm footing is already being be the name of the game when it comes about easier access to more investors. “We established, with fi nancial institutions to the traditionalists? Might fi nancial expect sustained growth for the foreseeable increasingly att ending to the advantages institutions start to actually get involved future,” confi rmed Naeem. “The sky is the of involvement. Investors, businesses, with their own off erings? limit — and so far, that’s been echoed by and governments are becoming investors!” increasingly aware of the benefi ts of Financial institutions could collaborate – equity crowdfunding and the wider by investing on the platforms themselves It seems that when it comes to alternative fi eld of alternative fi nance, and they or directing their clients towards it. They fi nancing, the only limit to its potential are embracing them accordingly. As could white-label their own P2P off ering, for the Islamic fi nance industry is the various models continue to prove or co-brand with an existing platform. Or imagination.

Peer-to-peer platform Beehive gains landmark Shariah certiϐication

Exclusively talking to IFN, we can registrations, and according to the fi rm reveal that Beehive, the UAE’s leading this number continues to rise. For the Global P2P online marketplace for peer-to-peer businesses themselves, the platform (P2P) fi nance, has received certifi cation can provide a potentially lower cost of ϔinancing, from the Shariyah Review Bureau fi nancing, as well as advantages such (SRB) — making it the fi rst P2P as innovation of fi nancial products, or ‘marketplace platform in the world to independently simplicity of structure and speed confi rm that its processes are Shariah to market — making it an att ractive ϔinancing’, is compliant. LAUREN MCAUGHTRY alternative to traditional forms of bank writes. fi nancing. estimated to have

The step is signifi cant for the rapidly Global P2P fi nancing, or ‘marketplace reached US$9 growing P2P and crowdfunding sector, fi nancing’, is estimated to have reached which is itself widening the horizons US$9 billion in 2014 and expected to billion in 2014 and for available fi nancing and expanding top US$1 trillion by 2025, making it opportunities across the Islamic fi nance one of the fastest-growing sectors in expected to top US$1 industry. “We are pleased with the the global fi nancial market. With its confi dence Beehive has placed in our methods already closely aligned to trillion by 2025, comprehensive Shariah supervisory Islamic principles, especially in the services and we look forward to helping areas of equity fi nancing, it also off ers making it one of them further develop their Islamic an exciting chance to grow and develop the fastest-growing fi nance off er,” said Yasser S Dahlawi, Islamic fi nancing opportunities through CEO at SRB. alternative and innovative methods. sectors in the global As the fi rst online marketplace for The Beehive platform uses peer-to- P2P fi nance in the UAE, and with ϔinancial peer fi nance, based on crowdfunding over AED15 million (US$4 million) in technology, to directly connect investors fi nancing already channeled to over 30 market with creditworthy businesses seeking SMEs less than a year since its launch working capital to grow their business. in November 2014, the message of recognized as the global Islamic fi nance Shariah compliant fi nance requests support and commitment represented capital, and we are proud to support are processed under a commodity by the Beehive Shariah certifi cation is this vision by off ering smart, Shariah Murabahah structure, using the DMCC compelling. compliant investment options to Tradefl ow platform operated by the investors, that directly support Dubai Multi Commodities Center. With “We are proud to off er Islamic investors economic growth and employment in a minimum investment limit of AED100 the opportunity to ethically invest in the country.” (US$27.23) and targeted monthly returns some of the most innovative SMEs in the of between 8-20% APR, the platform UAE,” said Craig Moore, the founder has already att racted over 1,500 investor and CEO of Beehive. “Dubai is

Fund Focus: Rasmala Leasing Fund 2

EIIB-Rasmala this week announced the “In response to the success of this initial investments in asset-backed equipment initial closing of its Rasmala Leasing fund, the positive feedback we received leases with predominately US-domiciled Fund 2, a fund that was launched in from investors, and on the basis of the high-quality corporate credit lessees. line with the group’s renewed asset income generating and overall return management-focus strategy. VINEETA potential from equipment leasing, we Reaching record growth in 2013 and TAN brings you a look at the fi rm’s launched the Rasmala Leasing Fund 2,” 2014, equipment fi nancing in the US (of latest addition. confi rmed Eric Swats, the head of asset which leasing is a single large form of management at EIIB-Rasmala. According commercial fi nance for equipment) is to Swats, the maiden fund generated over Targeting to att ract US$125 million in indeed a lucrative asset class with the US$60 million in capital contributions and capital commitments, the new fund Equipment Leasing & Finance investments and as of the 1st August 2014, builds on the phenomenal response for distributed US$7.41 million to investors. Foundation projecting a 5% investment the Rasmala Leasing Fund 1 introduced in equipment this year. Rasmala’s new last year at a time when the fi rm was With an internal return rate of 6-7% fund will focus on low-obsolescence looking to diversify and expand its and a minimum targeted annual cash equipment leases in a wide range of portfolio which comprised mainly of distribution of about 8.5%, the fund items including rail, manufacturing, equity and fi xed income as well as real is suited for investors seeking stable, material handling, mining, construction, estate investment products. low-risk and att ractive returns from logging, machine tools and trailers.

2015’s largest Sukuk in the works

The tepid Malaysian Sukuk market is balance sheet) increase to 42% from 37% poised to receive a signifi cant boost over (before taking into consideration the use the next few months as Southeast Asia’s The of proceeds and expenses associated to largest power company plans what is the Islamic facility). looking to be the year’s largest Islamic international bond sale. VINEETA TAN zooms into The Malaysian (and global) Sukuk the deal. Sukuk market would market this year has been signifi cantly aff ected due to a confl uence of Electric utility company Tenaga Nasional remain subdued macroeconomic conditions and lingering (TNB) has revealed that it will be turning especially with uncertainties which saw rating agencies to the Islamic debt capital market revising their forecast of Sukuk issuance to raise up to RM10 billion (US$2.4 investor sentiments volume to assume a more moderate billion) in nominal value through its outlook; S&P last month halved its global subsidiary Jimah East Power (JEP) to toward Malaysia — projections from US$110-115 billion to fund the development of a power plant US$50-60 billion. While oil price volatility it earlier procured from the controversial the world’s largest and uncertainties over the Federal sovereign wealth fund, 1Malaysia Reserve’s quantitative easing plan persist, Development (1MDB). Sukuk market by coupled with the more recent plummeting of the ringgit, the Incorporated in 2013 by 1MDB and volume — taking a international Sukuk market would Mitsui and Co as an SPV to develop remain subdued especially with investor a 2,000MW coal-fi red power plant in negative sentiments toward Malaysia — the the state of Negeri Sembilan scheduled world’s largest Sukuk market by volume to be operational in the second half of turn — taking a negative turn. That being said 2019, JEP’s 70% stake was acquired by however, market observers have noted TNB for approximately RM46.98 million that the ongoing (and planned) (US$11.22 million) in July this year, with The Sukuk Murabahah, if issued for the infrastructure development needs of the Mitsui’s 3B Power holding the remaining maximum RM10 billion, would see TNB’s country will continue to support the 30% stake. consolidated gearing (based on 2014 Sukuk sector.

Pakistan moving toward single national stock exchange

Pakistan may soon welcome a unifi ed economy. Earlier this month, the SECP single stock exchange as the Republic’s implemented a nationwide initiative to Streamlining three bourses have agreed in principle establish capital market hubs in non- to integrate their operations as the Tier 1 cities as a means to broaden the the markets frontier market gears itself to att ract investor base by easing access to capital more capital, including those from markets and non-bank fi nancial services would increase abroad, and bolster its competitiveness with the end goal of bolstering its capital in the face of stiff international markets, both Islamic and conventional its competitive competition. VINEETA TAN reports. (See IFN Report Vol 12 Issue 32: ‘SECP moves beyond main fi nancial centers; advantage in The proposed consolidation exercise targeting smaller cities to bolster capital of the Karachi Stock Exchange, Lahore markets’). securing a larger Stock Exchange and Islamabad Stock Exchange has long been discussed in The development of Pakistan’s capital share of global the Muslim country culminating in the market is commendable as the country formation of an expert committ ee on wrapped up the year 2014 as the best- economic demutualization and integration in 2004. performing frontier market according to The Securities and Exchange Commission MSCI measures, and the index provider capital of Pakistan (SECP) confi rmed that a is likely to elevate Pakistan’s status to formal memorandum with regards emerging market in 2016, a testament to compliance with international best to the formation of a Pakistan Stock its solid growth and robust potential. practices and standards. Streamlining the Exchange was due to be signed on the markets would enable investors access to 27th September 2015. Demutualizing and integrating the local geographical neutral trading, custody bourses into a single platform is the next and sett lement services and is anticipated This move by the South Asian nation step for Pakistan in line with the to increase its competitive advantage in is part of a broader strategy to government’s goal of creating a fair, securing a larger share of global develop its capital markets and wider effi cient and transparent market in economic capital.

Sovereign Sukuk: Indonesia doubles its volumes

Over the past week, the sovereign Upcoming sovereign Sukuk Sukuk market was lively with back-to- Country Amount Expected date back news on Indonesian deals. The Republic issued its regular project- Ivory Coast XOF300 billion Fourth quarter of based Sukuk, announced its plans for 2015 2015, and revealed one of its major Sindh Province US$200 million TBA international Sukuk investors. As usual, Oman US$1 billion 2015 NABILAH ANNUAR keeps up with the Kazakhstan TBA 2016 latest developments in the sovereign arena. Turkey US$1.1 billion TBA Bangladesh TBA TBA Following the recent auction of its Hong Kong US$500 million to US$1 billion TBA project-based Sukuk series and Islamic Ningxia Hui Autonomous Region US$1.5 billion TBA treasury bills series held on the 25th August 2015, the government of Kenya TBA 2016 Indonesia awarded IDR2.5 trillion South Africa TBA 2016 (US$176 million) of its Sukuk which Senegal TBA TBA received total incoming bids of IDR6.31 Niger XOF150 billion TBA trillion (US$444.08 million). In a statement on the Ministry of Finance’s Tunisia US$500 million 2015 website, the highest bid-to-cover ratio Jordan JOD400 million 2015 was 3.8 for the SPN-S 05022016 series. UAE TBA 2015 Luxembourg TBA TBA Tapping the Indonesian market, the UAE’s Noor Bank will be investing more than US$500 million in Indonesian state According to Katadata, the Ministry of will be allocated approximately IDR4.9 Sukuk as the bank seeks to increase Finance has approved the issuance of trillion (US$343.98 million).The largest its Shariah compliant asset holdings, Sukuk and there will be a total of 120 fi nancing worth IDR670 billion (US$47.03 including those from emerging market road and railway construction projects million) will be used for road and bridge countries, confi rmed Robert Pakpahan that will be funded by this Sukuk. The constructions in Papua Province, while of the Ministry of Finance to IFN. Ministry of Public Works and Public the construction of an elevated railway Indonesian fi nance minister Bambang Housing through the Directorate track in Medan will be the biggest Brodjonegoro further said that the Sukuk General of Bina Marga and the Transport railway project worth IDR1.4 trillion will be in the form of a private placement Ministry through the Directorate General (US$98.28 million). Directorate General of and the bank would realize returns from of Railway will work on these projects. Bina Marga will hold an early tender for its purchase as soon as possible this year. the 2016 fi scal year projects amounting to Data from the Directorate of IDR28.3 trillion (US$1.98 billion). Meanwhile, the government of Indonesia Transportation of the National is preparing to issue Sukuk in 2016 Development Planning Agency While Indonesia adjusts its sails to amounting to IDR12.2 trillion (US$856.44 (Bappenas) shows that the Sukuk improve its infrastructural facilities and million) which will be used to fi nance issued for road construction next year fi nancial landscape via Sukuk, the several strategic infrastructure projects will reach IDR7.22 trillion (US$506.84 sovereign Islamic bond market waits on such as road and railway constructions. million), whereas railway construction other governments to jump on the boat. ISLAMIC TREASURY & RISK MANAGEMENT PRODUCTS 8th – 10th September 2015, KUALA LUMPUR

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STMB diversiϐies distribution channel to bolster Takaful penetration rate

VINEETA TAN writes how the STMB’s strategic decision follows a slew Bank Muamalat Malaysia, moves which partnership between one of the largest of similar partnerships in recent months build the momentum toward doubling Takaful operators in Malaysia and RHB by its peers including Great Eastern the country’s bancaTakaful penetration Islamic in the backdrop of a growing Takaful with both Al Rajhi Malaysia and rate to 10% as targeted by the central number of bancaTakaful arrangements bank. is indicative of Islamic insurers showing no signs of abating their eff orts Despite Despite commanding the world’s largest to widen their reach and increase their Family Takaful market share, Malaysia market share. commanding intends to up the penetration rate of life insurance and Family Takaful to Syarikat Takaful Malaysia (STMB) the world’s largest 75% from 54% (2013) and Bank Negara revealed this week that it has entered Malaysia in a concept paper highlighted into a 10-year bancaTakaful agreement Family Takaful the need to diversify distribution with RHB Islamic Bank under which the channels to meet that target. Apart bank will distribute the operator’s Family market share, from making available pure protection and General Takaful products for a total products via direct channels and service fee of RM110 million (US$25.84 Malaysia intends to incentivizing the growth of fi nancial million). advisors, the regulator emphasized the up the penetration need to form alliances with Islamic banks “The bancaTakaful service agreement is to capitalize on their extensive network. not expected to have any material eff ect rate of life insurance on earnings and earnings per share of Holding about three quarters share of STMB group for the fi nancial year ending and Family Takaful total gross Takaful contributions in the 31st December 2015 but is expected ASEAN, Malaysia’s total net contribution to contribute positively to the future to 75% of Family Takaful reached RM4.5 billion earnings of STMB group,” the insurer (US$1.06 billion) in 2014 according to noted in a bourse fi ling. from 54% EY. SHARIAH PORTFOLIOS CRAFTED BY GLOBAL EXPERTS

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IFN Weekly Poll: Will India’s need for infrastructure funding ϐinally open the doors to Islamic ϐinance?

This week IFN takes a look at India; at said Mohammad Asif, the director of Will India's need for infrastructure the possibility of fi nally seeing Islamic New Delhi-based boutique consulting funding ęnally open the doors fi nance take off in the country. The fi rm, JaZaa Financial Advisory. to Islamic ęnance? Ministry of Finance earlier this year announced that the national budget Sharing the same sentiment, Saif Yes would focus on the development Ahmed, the managing partner at No infrastructural amenities in the country, Banglore-based Infi nity Consultants spending an additional INR700 billion opined that Islamic fi nance is a far- (US$10.54 billion) on roads, railways, fetched idea for the country. “Though ports and other projects next year. India has a huge need for infrastructure With a view to unblock the country’s funding and is courting cash-rich infrastructure pipeline, could this see a GCC economies under the new spur of Shariah compliant transactions government, I only see limited scope 50% 50% in its fi nancial landscape? NABILAH for this to translate into Islamic fi nance ANNUAR explores. development in India as most of the funds being courted are large GCC- Sitt ing on the fence, the poll results based sovereign funds, which mostly were split 50-50 indicating that the don’t require Shariah compliance to country’s infrastructure fi nancing make investments. Secondly, structuring needs equally may or may not open the a Sukuk for the fi rst time would doors to Islamic fi nance in the country. be a huge challenge given India’s According to industry estimates, the complicated legal and regulatory urban population in India would reach framework and the various issues signed an agreement with the Islamic 500 million by 2017, hence the necessity related to taxation, foreign investment Corporation for the Development of the to connect the infrastructural gaps is a and repatriation of profi ts. Lastly, when Private Sector (ICD) earlier in March large part of the country’s immediate we talk about ‘opening the doors’, what this year. The cooperation agreement demands. I envision is the growth of large-scale will essentially see the ICD and IL&FS services that would be available to 200 joining hands in evaluating and Acknowledging the fact that many million Indian Muslims who currently structuring infrastructure opportunities, projects were stalled by a lack of have very litt le access to Islamic fi nance. as well as achieving fi nancial closure of private funding, India’s recent budget Cracking this market and coming up projects. included US$10.5 billion in increased with products that are both Shariah commitments through private and legally compliant in the Indian “There is a defi nite need for funding in sector enterprises for infrastructure market is something I believe that is the infrastructure sector in India. The investment. According to the country’s only limitedly related to India opening multi-billion dollar fund to be set up by Planning Commission, India is facing up its infrastructure space to Islamic India and the UAE has already set the a funding gap of US$300 billion in investments.” ball rolling to fi ll the huge funding gap. meeting its infrastructure funding However, given that Islamic fi nance is at requirements until 2017. Aiming to improve the environment a relatively nascent stage in India, there for private infrastructure investment is a tremendous requirement for opening “India does need the funding; however, and to cement its initiative to improve of mindsets and markets towards I feel it’s not the most important issue at the country’s public facilities, the unexplored funding methodologies. hand for [the] Indian government. The budget proposed the creation of a Then, there is [a] distinct possibility that more important issues are internal to ‘National Investment in Infrastructure Islamic fi nance may command [a] high the economy like regulatory hindrances, Fund’ (comprising an initial annual mind space if appropriate thrust and supply and raw material bott lenecks, allocation of US$3.25 billion) to invest balance is put behind this by relevant taxation issues, corruption and ‘red- in public sector infrastructure fi nance market participants,” said Jeet Sen tapism’ among others. The current companies which, in turn, will be able Gupta, a partner at Juris Corp. Indian government’s priority would to leverage their higher credit rating to be these issues and opening up [the] access domestic and international debt Evidently, both the government and the Islamic fi nance sector would be the last markets. private sector are pushing for thing on its mind. Also opening up [the] infrastructural development in the Islamic fi nance sector in India would The government’s infrastructure country. However, whether Islamic need lots of political willpower and initiatives also move hand in hand with fi nance would have an instrumental part farsightedness, which is unexpected in the Republic’s Infrastructure Leasing to play in the scheme of things still [the] current political environment,” & Financial Services’s eff orts when it remains as a sceptical premise.

Kazakhstan and Central Asia: Accelerated rise

With a commendable Muslim population and abundance in natural resources due to its strategic location, Central Asia holds much appeal to Islamic investors. While its Islamic ﬁ nance growth story has been slow to unfold, however, this past year has witnessed various landmark progresses — due in no small part to the strong support of the Islamic Corporation for the Development of the Private Sector (ICD) — as the region steps up its game. VINEETA TAN provides an overview of key Shariah ﬁ nance developments in the Central Asian region.

Regulatory landscape to accelerate the development of the October 2014, the bank’s transformation In Central Asia, Kazakhstan arguably industry, Kazakhstan has formed ties will be assisted by the ICD. has the most sophisticated and enabling with established Islamic fi nance markets environment for Islamic banking including Saudi Arabia, with whom the Takaful and fi nance transactions. Following Central Asian nation reportedly intends As dictated by the Islamic Finance the passing of Kazakhstan’s Islamic to create a joint Islamic bank or fund to Amendments, Takaful window operations fi nance law in 2008, the regulation fi nance projects. are not permitt ed in Kazakhstan and all has undergone multiple amendments Shariah compliant insurance activities including in 2011, 2013 and 2015. The The year 2015 also saw local fall under the purview of the National 2015 Islamic Finance Amendments microfi nancier New Finance engaging Bank of Kazakhstan. By law, the assets became eff ective on the 10th May 2015 Bahrain-based Shariyah Review Bureau of a Takaful fund do not belong to the and introduce new legal provisions for to advise and certify its planned Shariah operator and needs to be segregated from Takaful and Ijarah as well as Tawarruq. compliant off erings, becoming the the company’s own assets and should not fi rst fully-fl edged Shariah compliant be included into the insurer’s liquidation Like Kazakhstan, Azerbaijan is another microcredit institution in the country (See estate nor be subjected to bankruptcy regional player working on improving IFN Reports Vol 12 Issue 32: ‘First Islamic claims. The regulation also requires a its legal landscape for Islamic fi nance, microfi nance company in Kazakhstan’). dedicated Islamic Insurance Council to be although its development is not as While Islamic microfi nance products appointed upon the recommendation of fast. The Republic’s largest lender, have been available in Kazakhstan the board of directors. Islamic insurance International Bank of Azerbaijan (IBA), since 2011 (thanks to the IDB, Fund for is available in Kazakhstan via Takaful has been engaging the Ministry of Financial Support of Agriculture and Halal Insurance and will soon be available Economic Development since November KazAgro), experts have called for a more in Azerbaijan through a fully-fl edged 2013 to draft Shariah banking legislation, effi cient tax system to accommodate and Takaful operator. The establishment of initially intended to be presented to support these instruments which are Azerbaijan’s pioneering Islamic insurer the parliament in 2014. No law has largely based on the structures of Salam would be facilitated by Ekvita, a legal been passed yet; however, the bank and Ijarah as well as Murabahah. and tax services provider, which won did confi rm with IFN previously that a contract by the ICD to launch the it anticipates introducing such law — Islamic microfi nance also made its way company. developed in collaboration with the IDB to Azerbaijan. In 2015, VisionFund — to the central bank in 2015. Azer Credit which is part of the World Islamic capital markets Vision Azerbaijan program, entered The fi rst Sukuk to be issued out of the Jumping on the bandwagon, Tajikistan into an agreement with the ICD to region was by the Development Bank of is expected to announce enhancements jointly develop Shariah products for the Kazakhstan in 2012, which again tapped to its Islamic banking law introduced Republic. The IBA, which off ers Islamic the market in January 2015. While there in 2014 later in 2015. This initiative is products on a window basis, plans has yet to be a sovereign issuance out led by the National Bank of Tajikistan to elevate Baku to become a regional of Central Asia, this could, however, through a working group. Kyrgyzstan hub for Islamic fi nance. In 2015, the soon change as Kazakhstan is working also introduced legislation to facilitate bank secured a US$252 million Shariah toward selling Islamic debt in 2015 once Shariah compliant fi nancial transactions. compliant facility (See Case Study regulations are in place. The Kazakhstan Vol 12 Issue 05: ‘IBA’s largest Islamic Stock Exchange earlier in May forged Banking and ϐinance facility to date’) to boost its Islamic a partnership with NASDAQ Dubai to Islamic banking activities in Central fi nancing capabilities and it also began pool resources together to jointly develop Asia is limited although there has been extended Shariah compliant fi nancing initiatives to bring the markets of Dubai signifi cant take-up in recent years, with services to the Russian market via its and Almaty closer including building conventional players expressing keen subsidiary IBA-Moscow. IBA has also links between central securities and interest to spin off Shariah operations reportedly been in discussions with forming stronger cooperation within or convert their business model to be Russian delegates on the possibility of the Islamic capital market space. This in compliance with Islamic law. In establishing a CIS IDB. synergy is anticipated to boost cross- Kazakhstan, Abu Dhabi’s Al Hilal Bank border Islamic investments. is its sole fully-fl edged Islamic bank In May 2015, Tajik lender Bonki Rushdi while Zaman Bank, in partnership with Tojikiston confi rmed that it will be Kazakhstan aside, Azerbaijan’s IBA is the IDB, is in the process of transforming converting its business to become the also planning to issue Sukuk in 2015 its operations to become the country’s country’s fi rst fully-fl edged Islamic bank. when the appropriate legal infrastructure second Shariah fi nancier. Looking Announcing its intentions to do so in is in eff ect.

Takaful and re-Takaful: Gradual progression

Contrary to common perception, the global Takaful industry is not in stagnation. The sector has in fact witnessed a humble growth in respective countries. From regulatory advancements to organic growth, Takaful operators are gradually capturing the market piece by piece. Evidence to this progression, NABILAH ANNUAR provides a comprehensive update of the developments in the Takaful and re-Takaful sector worldwide.

Law and regulation In Malaysia, Khazanah Nasional’s Brunei Insurance and Takaful Association insurance unit Avicennia is looking at the beginning of the year enforced to develop Takaful in Turkey as well new guidelines for insurance and as build best practices in Malaysia. Takaful agents, which also includes a The operator is targeting to invest in common motor tariff and underwriting Malaysia, Indonesia, the Philippines, framework. Singapore and Thailand. MNRB Holdings, the parent company of Takaful Moving to the Middle East, Oman’s State Ikhlas, MNRB Retakaful, Malaysian Council in February approved the draft Reinsurance and Malaysian RE (Dubai), Takaful Insurance Law. The Central is looking to increase its overseas Bank of Bahrain in the same month portfolio to 50% of its entire portfolio, implemented a new Takaful model to from its current 40%, as part of the fi rm’s att ract new entrants to the market and new strategy for its reinsurance business. foster competition. In neighboring UAE, the Insurance Authority of the UAE’s In the UK, providing Takaful coverage ‘Financial Regulations to Traditional for the UK property market, Cobalt and Takaful Insurance Companies’ was Underwriting in July secured a major property portfolio placed by Lockton’s deemed to be well placed (according to remaining 25% interest held by Bahrain’s Real Estate and Construction for AM Best) as it addressed the common Solidarity Company. issues faced by insurance and Takaful Islamic real estate specialist 90 North. operators of the emirate including: Meanwhile, specialist insurance market exposure to high-risk assets, inadequate Lloyd’s of London plans to apply for New players and varied accounting treatment, an onshore reinsurance license and to Several markets welcomed new players unsophisticated measurement of open an offi ce in Malaysia, pending into the Takaful scene. Pakistan’s IGI Life technical reserves and weak enterprise confi rmation from the UK and Malaysian Insurance in January announced its management practices. governments, targeting the Takaful board of directors’ approval to commence market as well as to develop its marine, Family Takaful operations on a window In the African continent, the Insurance energy, construction, engineering and basis; similarly, Premier Insurance in Regulatory Authority of Kenya in liability businesses, while pushing for March signed an agreement with Meezan May released draft rules on Takaful, new products. Bank for the latt er to extend Shariah dictating the scope of duties and technical services and support for PIL’s responsibilities of Takaful operators, Mergers, acquisitions and upcoming Takaful window. The UAE’s Arabian Scandinavian Insurance Co providing a framework for operations exits and sustainable Takaful funds and sett ing (Ascana Insurance) converted its Arab Insurance Group has been in operations to become Shariah compliant, minimum standards for operations — negotiations to purchase the remaining both for fully-fl edged operators and practicing its business on a cooperative 46% in Takaful Re’s equity as it intends basis with a view to transform Takaful windows. In the same month, the to acquire full control over the Islamic Moroccan government adopted a bill to subscriptions of all customers to the reinsurer. The purchase remains subject Takaful insurance system, and the regulate Takaful activities which will face to approvals from shareholders of a fi nal vote by parliament later this year. emirate’s PineBridge Investments Middle Takaful Re and the Dubai Financial East plans to launch a US$500 million Services Authority. re-Takaful company in Dubai. Malaysian Expansion and growth Reinsurance in April received central initiatives Kuwait-based Wethaq Takaful Insurance bank approval to establish a re-Takaful In Southeast Asia, Indonesia’s Company intends to dispose of its stake arm to conduct General and Family Otoritas Jasa Keuangan announced in Wethaq Takaful Egypt for KWD1.3 re-Takaful business; in Somalia, a Takaful plans to develop microinsurance and million (US$4.3 million) after the board company, known as Takaful and Re- microTakaful in order to enhance the of the Kuwaiti insurer had given the Takaful Islamic Insurance Company, public’s access to non-banking fi nancial green light to proceed with the sale to a launched operations in Mogadishu, while services. The Republic’s Islamic non- buyer whose identity was not disclosed. Takaful Insurance Company set up shop bank fi nancial industry only accounted Oman’s Al Madina Takaful in June in the country’s northeastern state of for 3.9% of the total non-bank fi nancial revealed its interest in acquiring 100% of Puntland. industry market share in 2014 whereas Vision Insurance Company. In Malaysia, in relation to the country’s wider Islamic MAA Group seeks to dispose of its 75% fi nance industry, it only commanded 8.8%. equity stake in MAA Takaful, with the

Al Meezan’s new fund: Access to Pakistan’s equity markets

Al Meezan Investment Management well as the fund’s exposure to it; return risk — special circumstances where the (Al Meezan) earlier this month on fi xed income instruments, and timing redemption of units may be suspended launched a new fund, the Meezan equity investments in volatile market or the redemption payment may not Asset Allocation Plan-I (MAAP-I). conditions. occur within six working days of An asset allocation plan for investors receiving a request for redemption from seeking to benefi t from the equity Risks that the fund takes into the investor; and 6) plan-specifi c risks market, the fund is an actively consideration are: 1) price risk — — risk of non-fulfi llment of the plan’s managed investment portfolio with where the value of the fund, due to its investment objective. diversifi cation and an initial term holdings in such securities, rises and of two years. Exclusively speaking falls as a result of change in profi t rates; The fund is said to be unique in a sense to Mohammad Shoaib, CEO of Al 2) liquidity risk — the possibility of that up to 100% equity participation is Meezan, NABILAH ANNUAR gets deterioration in the price of a security possible for the fund, based on fund acquainted with the fund. in the fund when it is off ered for sale managers’ outlook on the market and it in the secondary market; 3) sett lement is strategy-refl ective of the investor’s According to Shoaib, many investors are risk — where the fund encounters risk appetite as market conditions wary of investing in the stock market sett lement risk in purchasing/investing change. Incorporated in 1995, Al Meezan for both obvious and subjective reasons. and maturing/selling its investments has one of the longest track records (20 However with the MAAP-I, investors aff ecting the fund’s performance; 4) years) in the private sector in Pakistan. are provided a convenient way to reinvestment rate risk — risk that With an ‘AM2+’ management quality invest up to 100% in the stock market maturing securities or coupon payments rating, Al Meezan has the distinction of and simultaneously earn the benefi t will be reinvested at lower rates being the largest private sector asset of diversifi cation instead of having to (in a declining profi t rate economic management company in the country invest in multiple funds. “[The] stock environment) which reduces the return with total assets under management of market tends to provide higher returns of the fund compared to return earned over PKR66.4 billion (US$635.22 million) when compared to other asset classes in the preceding quarters; 5) redemption (as of the 30th June 2015). but it is also highly volatile that an investor would be unable to identify when to enter and exit this market. Trading in stock market requires Fund Fact Sheet: Meezan Asset Allocation Plan-I relevant expertise, research, time and resources. Therefore, Al Meezan decided to launch an allocation plan which will Issuer Al Meezan Investment Management actively allocate its portfolio between the equity schemes and fi xed income/ Investment objective The objective of Meezan Asset Allocation Plan-I (MAAP-I) is to earn a money market schemes based on the potentially high return through asset allocation between Shariah compliant equity schemes and Shariah compliant income/money market schemes. fund manager’s view on macroeconomic Trustee Central Depository Company of Pakistan outlook of such asset classes,” he said commenting on the factors leading up to Shariah advisor(s) Meezan Bank the fund’s launch. Benchmark (Index) Weighted average daily return of KMI 30 Index and six-month deposit rate of ‘A’-rated (and above) Islamic banks or Islamic banking windows of The objective of the plan is to earn a scheduled commercial banks, based on the actual proportion of investment potentially high return through asset in equity and fi xed income/money market component made by the allocation plan allocation between Shariah compliant Domicile Pakistan equity schemes and Shariah compliant income/money market schemes. Fund characteristics a) Fund type: Fund of funds “In order to mitigate the risks of b) Fund size: PKR430 million (US$4.11 million) (subscriptions currently open) underperformance of a certain asset c) Net asset value per share: PKR50.54 (48 US cents) (12th August 2014) class due to fl uctuating economic Minimum/subsequent Minimum initial investment: PKR5,000 (US$47.83) conditions, this plan will actively investment Minimum additional investment: PKR1,000 (US$9.57) allocate between various asset classes Management fee Same as underlying funds and 1% on cash based on [the] fund manager’s outlook,” highlighted Shoaib. The fund is Dividend policy Distribution of at least 90% of the accounting income (excluding capital gains and expenses allowed to be charged to the fund under regulations). therefore tailored for investors who wish to gain returns from the equity market The distributable profi ts may be in the form of stock and/or cash dividend, but are unaware of the right time to buy which would comprise bonus units of the scheme and/or re-investment or or sell. Key factors that are expected to payment (net of applicable tax) of cash dividend. drive the fund’s performance include: Fund portfolio Meezan Islamic Fund (equity fund): 34% performance of the equity market as composition Meezan Sovereign Fund (income fund) and cash: 66%

The bare truth

By Dr Ken Baldwin receivables, whereas conventional investment accounts that on the face of it fi nancing allows all-purpose lending are risk-bearing, but in reality will pay us It’s more than 20 years since I was fi rst which does not link fi nancing to a a return which is not too variable and not introduced to Islamic fi nance. Having specifi c asset. This directly impacts too diff erent from conventional deposits. only worked for conventional banks up the transactional underpinning of the If, on the other hand, expectations of the until then, I was curious to know about way Islamic banks source and deploy users of Islamic fi nancial products were Islamic fi nance and whether Islamic funds. Such transactions can, in theory, not shaped by conventional molds, then banking in particular was really any be arranged between the fi nancier and Islamic banks would be at greater liberty diff erent from conventional banking. It ‘fi nancee’ with or without a banking to explore products which align more is, I think, an important question, and intermediary. Hence, the possibility in closely to the risk-sharing characteristics one which many people ask. the future that crowdfunding may reduce of equity-styled instruments, such as the need for bank credit. However, Mudarabah and Musharakah. banking intermediaries benefi t from Competition scale and therefore market access, so Another reason that Islamic banking may they can fi nance many such be struggling to distinguish itself is within the transactions and diversify Islamic fi nance practitioners their risks along the way. themselves. Many practitioners banking sector within the Islamic banking Based on the industry simply do not believe drives Islamic banks aforementioned, Islamic fi nancing products are why then is Islamic any diff erent to conventional toward practices banking not thought banking products. I wish I had of by some people a dollar for every person that that create a close as all that diff erent to has arched his right arm over conventional banking? his head to touch his left ear, and alignment with The root cause is, in my said “This is Islamic banking”. For opinion, primarily due to those not familiar with this conventional competition. Competition scenario, this means to achieve within the banking sector exactly the same outcome by banks drives Islamic banks pretending to do something toward practices that create diff erent. But there is no a close alignment with pretending. Islamic fi nancial There’s no doubt that Islamic fi nance is conventional banks. This products are diff erent and this signifi cantly diff erent in the way that closeness is refl ected in the distinction is made clear in no fi nancing receivables are originated. type of products that we, uncertain terms in the Quran, Islamic fi nance requires the purchase as consumers, expect Islamic wherein it is stated that trade is not and sale of a real asset to originate banks to provide, such as like Riba.

IBI is the Islamic ﬁ nance industry’s ﬁ rst and most comprehensive one-stop source of global Islamic banking information, with numerical and graphical data from over 130 Islamic banks in 36 countries allowing users to analyze and compare various Islamic banks around the world

Opportunity to create an Islamic bank in IFN Country Correspondents AFGHANISTAN: Dr Alam Khan Hamdard president, Afghanistan Islamic Finance and Consulting Co AUSTRALIA: Dr George Mickhail Canada senior lecturer, School of Accounting, Economics and Finance, University of Wollongong, Australia BAHRAIN: Dr Hatim El-Tahir director of Islamic Finance Knowledge Center, Deloitte & CANADA A second in-person meeting with the Touche prospective applicant will be scheduled BANGLADESH: Md Shamsuzzaman By Suhail Ahmad deputy managing director, Islami Bank Bangladesh once OSFI has had an opportunity to BELGIUM: Prof Laurent Marliere, CEO, ISFIN BERMUDA: Belaid A Jheengoor consider the aforementioned information. director of asset management, PwC Canada needs a domestic Islamic The purpose of this second meeting is for BRAZIL: Fábio Figueira bank to service its growing Muslim partner, Veirano Advogados the prospective applicant to demonstrate BRUNEI: Dr Aimi Zulhazmi, Islamic finance consultant, community and other Canadians who Draznine Advisory an understanding of the material risks CANADA: Jeffrey S Graham are looking for an ethical banking partner, Borden Ladner Gervais associated with its business plan and the alternative. EGYPT: Dr Walid Hegazy methods by which it intends to mitigate managing partner, Hegazy & Associates FRANCE: Kader Merbouh those risks. co-head of the executive master of the Islamic finance, Paris- The government of Canada has recently Dauphine University HONG KONG: Amirali Bakirali Nasir indicated its interest in promoting the chairman, The Law Society of Hong Kong working party on Following the second in-person meeting Islamic finance entry and growth of small deposit-taking INDIA: H Jayesh with OSFI, the prospective applicant founder partner, Juris Corp institutions. In response, the Canadian will receive a letter setting out OSFI’s INDONESIA: Farouk A Alwyni Office of the Superintendent of Financial CEO of Alwyni International Capital and the chairman views and expectations regarding: (i) of Centre for Islamic Studies in Finance Economics and Institutions (OSFI) has sought to make Development any material risks or concerns with the IRAN: Majid Pireh regulatory priorities and the application Islamic finance expert, Securities & Exchange Organization proposed business plan and whether of Iran process more transparent. To that end, IRAQ: Khaled Saqqaf OSFI will expect those risks or concerns partner and head of Jordan & Iraq offices, Al Tamimi & Co OSFI has issued guidance that sets ITALY: Stefano Padovani, partner and head of Banking & to be resolved in the application Finance, NCTM Studio Legale Associato out the three phases of the application process; and (ii) additional information JAPAN: Kaoru Haraguchi process, along with the information that founding attorney, Haraguchi International Law Office requirements that the prospective JORDAN: Nafith Al Hersh Nazzal, Islamic banking specialist, applicants are generally expected to certified financial and investment advisor applicant will be required to submit as submit in support of their applications. KAZAKHSTAN: Timur Rustemov, deputy chairman, part of its formal application. association for development of Islamic finance KENYA: Mona K Doshi senior partner, Anjarwalla & Khanna Advocates The phased approach is intended to At this point, the applicant is required KOREA: Yong-Jae Chang, partner, Lee & Ko provide applicants with increased KUWAIT: Alex Saleh, partner, Al Tamimi & Co to publish a notice of intention to apply guidance and feedback both at the initial LEBANON: Johnny El Hachem for a Letters Patent. After publishing the partner – corporate, Bin Shabib & Associates stages of the proposed application and LUXEMBOURG: Said Qaceme, senior manager of Advisory & notice, the applicant submits its formal Consulting, Deloitte Tax & Consulting throughout the application process. MALAYSIA: Ahmad Mukarrami Ab Mumin application for a Letters Patent for review head, Shariah division, RHB Islamic Bank The phased approach will help those MALDIVES: Aishath Muneeza and consideration. deputy minister, Ministry of Islamic Affairs, Maldives considering establishing an Islamic MALTA: Reuben Buttigieg bank in Canada to determine at an early president, Malta Institute of Management Upon completion of the review of MAURITIUS: Mohammad Akshar Maherally stage whether they have a solid basis on Director (taxation), International Financial Services the application, OSFI submits its which to proceed, before they incur the MOROCCO: Ahmed Tahiri Jouti recommendation to the Minister of managing consultant, Al Maali Consulting Group significant costs of preparing and filing a NEW ZEALAND: Mohamed Nalar Finance (Canada) regarding the issuance trustee and board member, Awqaf New Zealand full application. NIGERIA: Auwalu Ado; of a Letters Patent. Shariah auditor, Jaiz Bank OMAN: Muhammad Abdullah Dewaya Prior to submitting the formal Islamic finance scholar While there is no specific time limit PAKISTAN: Muhammad Shoaib Ibrahim application, prospective applicants are managing director & CEO, First Habib Modaraba on the assessment of applications, PHILIPPINES: Rafael A Morales to contact the Legislation and Approvals managing partner, SyCip Salazar Hernandez & Gatmaitan OSFI indicates that it endeavors to Division of OSFI to schedule an initial in- QATAR:Amjad Hussain complete all application assessments partner, K&L Gates person meeting to discuss the proposed RUSSIA: Roustam Vakhitov as quickly as possible. The assessment managing partner, International Tax Associates entity and the application process. SAUDI ARABIA: Nabil Issa of each application will depend on the partner, King & Spalding The initial discussion will also provide specific facts and circumstances, and SENEGAL: Abdoulaye Mbow an opportunity for OSFI to clarify its Islamic finance advisor, Africa Islamic Finance Corporation OSFI indicates that it will communicate SOUTH AFRICA: Amman Muhammad processes and expectations regarding CEO, First National Bank-Islamic Finance regularly with the applicant throughout SINGAPORE: Suhaimi Zainul-Abidin, applications to establish a bank, along advisor, 5Pillars this process. SRI LANKA: Imruz Kamil with any unique considerations that head of Islamic banking, Richard Pieris Arpico Finance may be applicable to that particular SWITZERLAND: Khadra Abdullahi associate, Investment banking, Faisal Private Bank prospective applicant. Final comments SYRIA: Gabriel Oussi, With adequate committed capital general manager, Oussi Law Firm TANZANIA: Yassir Masoud (CA$50-100 million (US$37.69-75.38 head, Islamic banking, retail banking, National Bank of OSFI will request the information Commerce million)), a strong business plan and TURKEY: Ali Ceylan from prospective applicants who partner, Baspinar & Partners wish to proceed with the application. plans to hire management experienced UAE: Rima Mrad with the Canadian banking environment, partner, Bin Shabib & Associates OSFI’s primary purpose in reviewing UK: Fara Mohammad this information is to identify any there is now a tremendous opportunity director of Islamic finance, Foot Anstey US: Joshua Brockwell fundamental issues that should be to create Canada’s first Islamic bank. investment communications director, Azzad Asset Management YEMEN: Moneer Saif; head of Islamic banking, CAC Bank considered by the prospective applicant. IFN Correspondents are experts in their respective fields and are selected by Islamic Finance news to contribute The prospective applicant is generally Suhail Ahmad is CEO of Hikmah Capital designated short country reports. For more information about becoming an IFN Correspondent please contact expected to provide a minimum five-year Corp. He can be contacted at suhail.ahmad@ [email protected] business plan for the proposed bank. hikmahcapital.com.

Major boost for Islamic ϐinance in Brunei

BRUNEI have created a fi scal and regulatory in The Brunei Times as saying: “It’s framework that encourages the growth of [Brunei] already got good banks and By Dr Aimi Zulhazmi Islamic fi nance. insurance [companies]. It’s got a good infrastructure here so there may be The Islamic fi nance industry in Brunei The UK has not only recorded the highest further opportunities on the investment received a welcome boost recently number of Islamic fi nance providers side when Brunei is looking to invest with strong endorsement from the but is also the leading western country here and overseas.” Furthermore, the UK’s top envoy that the UK is highly in Islamic fi nance education. There are envoy emphasized the importance of the keen to collaborate with Brunei on 68 institutions, including universities, Bruneian government’s commitment to the development of Islamic fi nance in schools and educational institutions grow the country’s talent pool to support both countries through the sharing of that off er Islamic fi nance courses; and the Islamic fi nance industry, one of which expertise and knowledge. 25 institutions of which mainly the is through collaboration with the UK’s universities and colleges off er Islamic leading education centers. The UK is the leading western country fi nance degrees. It is well known that the and Europe’s premier center for Islamic UK has been one of the most desirable Indeed, investment in the education fi nance with US$19 billion of reported destinations to study mainstream courses sector is one of the means to achieve assets. Its success in becoming the key including accounting, medicine and Brunei’s ambition to establish itself as one western gateway for Islamic fi nance is engineering. Lately, Islamic fi nance has of the Islamic fi nancial centers in att ributed to its farsightedness years also become a popular course off ered by Southeast Asia. ago, ie removing double tax on Islamic universities and educational institutions mortgages, the extension of tax relief in the UK. Dr Aimi Zulhazmi is an Islamic fi nance on Islamic mortgages to companies as consultant via his own Draznine Advisory well as to individuals and the reform The area of cooperation can be utilized to and an associate professor in the Islamic of arrangements for issues of debt. support Brunei’s intention to specialize fi nance department of UniKL Business The UK has been providing Islamic in niche areas in Islamic fi nance, for School. He can be contacted at draz9. fi nancial services for over 30 years and example, Islamic wealth management. [email protected]. government policies over the last decade The British envoy was also quoted

Slow turn of events for Islamic ϐinance in Russia

RUSSIA windows in the commercial banks in One of the pioneers in the Islamic fi nance Russia. Because of this, Fikra is gett ing By Timur Rustemov education sector is Fikra, an education ready to enhance their education and center based in the city of Makhachkala consulting services throughout the There are some examples of the in the Republic of Dagestan, one of the country. development of the Islamic fi nance Muslim-majority republics in the Russian industry in non-Muslim states. Federation. The center off ers a fi rst-of-its- It is worth noting that traditionally the Countries such as the UK, Luxembourg, kind Islamic fi nance program available in majority of Islamic fi nance projects have Japan, France, Singapore and Hong the Russian language called the ‘Certifi ed been initiated in another part of Russia, Kong have been providing a conducive Islamic Banker’ program from CIBAFI. namely the Republic of Tatarstan. environment for the operations However, due to the territorial size and of Islamic fi nancial institutions in Other services include: drafting legal ethnic diversity, it is expected that the their respective states. The Russian documentation for Islamic fi nance Republic of Dagestan will become Federation is another example in the institutions, providing consultancy another Islamic fi nance hub in Russia, making. Despite the fact that 22 million services to SMEs and mediation especially for the North Caucasian Muslims live in Russia, the majority of procedures among business entities. Federal District with a total Muslim the population are still suspicious of Fikra has established a strategic population exceeding 10 million and anything that has the word ‘Islamic’. partnership with international fi rm Al which also includes the Republic of Maali Consulting Group with offi ces Ingushetia, the Chechen Republic, the According to the vice-president of in Dubai, Brussels and Casablanca that Karachaevo-Cherkess Republic, the VneshPromBank, Vladislav Sitnikov, specializes in providing Islamic fi nance Kabardino-Balkaria Republic, Stavropol the results of a recent offi cial public consulting services. and the Republic of North Ossetia- questionnaire conducted online showed Alania. that only 14.1% support Islamic fi nance, It is expected that in September 2015 27% are against it, 32.8% do not have any the Malaysian-Russian consortium Timur Rustemov is the deputy chairman of knowledge about it and 26.1% are against (that includes members such as IBFIM, the Association for Development of Islamic it because they are not Muslims. These UNIRAZAK, IBFD Fund) will complete Finance (ADIF). He can be contacted at results prove the need for an Islamic the feasibility study for establishing [email protected]. fi nance awareness campaign in Russia. Islamic banks or introducing Islamic

Islamic ϐinance gaining ground in Kazakhstan

KAZAKHSTAN the managing director, Shamsun Anwar globally and locally. It also explains Hussain, welcomed participants and current legislation for Islamic fi nance By Timur Rustemov shared his experience at CIMB Islamic in Kazakhstan, provides terminology and its contributions to the development and a list of the most common Despite the fact that during the of Islamic fi nance industry in Malaysia. misunderstandings about Islamic summer season, universities in fi nance and shows the real examples of Kazakhstan are closed for the holidays, Overall, the participants learned not Islamic fi nance transactions. the Education Committ ee of the only about Islamic fi nance, but also Association for Development of discovered how the Islamic lifestyle can Even though Kazakhstan is a secular Islamic Finance (ADIF) has conducted be embedded with professionalism and state, in recent years the development a few notable educational events inside the modern lifestyle. Currently, ADIF is of Islam has gained tremendous growth and outside of Kazakhstan for students planning to enhance cooperation with that gives a positive impact to the local as well as lecturers. INCEIF and is making preparations Islamic fi nance institutions. The most to launch a graduate program titled recent offi cial data shows that about With full support of the National Bank ‘Islamic Finance Practice’ in Almaty. 70% of the population are Muslims and of Kazakhstan and in collaboration with the number of mosques throughout the the Association of Higher Education country exceeds 2,470. Institutions of Kazakhstan, ADIF ran a six-day ‘Train the Trainers in Islamic Even though In addition, the Education Committ ee of Finance (ToT)’ program for more than 60 ADIF has started negotiations with the lecturers from all regions of the country. Kazakhstan is Department of Expertise and Resolution The objective of the ToT program was to of the State Authority of Islamic Aff airs, disperse the knowledge about the main a secular state, in the State Agency of Religious Aff airs subsectors of Islamic fi nance (Islamic and other government bodies to conduct economics, Islamic banking products recent years the an awareness program by distributing and services, Islamic trade fi nancing, development of the Islamic fi nance brochures via home fi nancing, etc) in a way that is mosques. The Islamic fi nance industry suffi cient for them to conduct classes for Islam has gained in Kazakhstan will benefi t once the undergraduate students. people become more acquainted with tremendous growth the alternative fi nancial system. The program was delivered in 13 modules and participants were hosted that gives a positive The next event for ADIF in partnership in the Tau Turan resort in Belbulak with other members is the preparation Mountain. One of a kind in Kazakhstan, impact to the local of a book in Islamic fi nance that the program received positive feedback can serve as a reference guide for from universities since many lecturers Islamic ϔinance professionals and university lecturers in found it very interesting and useful. Kazakhstan. Funded by the Ministry of ADIF expects to have more participants institutions Higher Education, the research project from local universities and educational needs to cover the latest updates in institutions of the Commonwealth of global Islamic fi nance infrastructure, Independent States (CIS) during the Besides that, ADIF is starting an practices of Islamic accounting and second part of the ToT program that will information campaign among the audit, and the experiences of regulatory be conducted in Almaty in January 2016 students of Kazakhstan and CIS states and supervisory bodies in Islamic during the winter holidays. to promote education in Islamic fi nance fi nancial institutions in selected (at the undergraduate, graduate and countries. Another educational event that was postgraduate levels) in universities of conducted at the same time with Malaysia, the UAE, Bahrain and the UK. Since ADIF’s mandate includes the ToT program was a study trip to participation in the development of Malaysia for 25 postgraduate students As part of the Islamic fi nance awareness human talent in Islamic fi nance in registered in the graduate program of program in Kazakhstan, the Education Kazakhstan, it is expected to publish the National Bank of Kazakhstan. The Committ ee of ADIF also initiated, new literature in Islamic fi nance in fi ve-day ‘Connecting the Dots in Islamic developed and published information Russian and Kazakh languages in the Finance’ advanced seminar organized materials on Islamic fi nance. In July forthcoming years. by the Center of Executive Programs 2015, ADIF in collaboration with the at INCEIF gave an opportunity for National Bank of Kazakhstan prepared Timur Rustemov is the deputy chairman of participants to acquire world-class the fi rst brochure about Islamic fi nance the Association for Development of Islamic knowledge in Shariah, Islamic banking, in the country. Available in Kazakh Finance (ADIF). He can be contacted at Takaful, Islamic capital markets and and Russian languages, the brochure [email protected]. Islamic accounting and auditing. At the consists of 55 pages and covers the end of the seminar, the group made an basics of Islamic fi nance products and industry visit to CIMB Islamic, where structures, and current market trends

Integration of stock exchanges in IFN Sector Correspondents CROSS-BORDER FINANCING Pakistan Fara Mohammad, director of Islamic fi nance, Foot Anstey CAPITAL MARKETS: Suhail Ahmad, CEO, Hikmah Capital Corp PAKISTAN had proposed a merger of all three exchanges into a single national stock DERIVATIVES By Muhammad Shoaib Ibrahim Suhaimi Zainul - Abidin, treasurer for Gulf-Asia Shariah exchange for the whole country. The Compliant Investment Association and advisor to 5Pillars demutualization of the stock exchanges GLOBAL ECONOMIC OUTLOOK The demutualization committ ees of Tariq Alrifai, expert, Islamic investment products and and integration will assist in bringing market trends the Karachi Stock Exchange (KSE), the market on par with global markets, LAW (EUROPE): the Lahore Stock Exchange (LSE) and Ayhan Baltaci, att orney at law, Bereket & Baltaci Law Firm and increasing stock values due to the the Islamabad Stock Exchange (ISE) LAW (MIDDLE EAST) inheritance of LSE and ISE assets. Bishr Shiblaq, head of Dubai offi ce, Arendt & have agreed in principle to integrate Medernach the three stock exchanges to form Competition between the local stock LEASING: one national stock exchange, ie the Youssef Aboul-Naja, Ijarah specialist, a supranational exchanges will also be avoided banking institution Pakistan Stock Exchange (PSE). In this allowing them to consolidate their MERGERS & ACQUISITIONS: regard, a formal MoU was signed on Tushar Garg, associate, bulge bracket investment complete energies in att racting foreign the 27th August 2015, in the presence bank investments. The PSE will now be able MICROFINANCE (ASIA): of the federal fi nance minister, senator Dr Mahmood Ahmed, executive vice-president and to continue trading and have bett er director training, Islami Bank Training and Research Muhammad Ishaq Dar. Academy resilience against any economic or MICROFINANCE (AFRICA): fi nancial crises whenever they occur. Mansour Ndiaye, director of microfi nance, Assistance and Regarding the occasion, Dar said that Consulting for Development The proposed exchange can also support the new integrated capital market PRIVATE BANKING & WEALTH MANAGEMENT: local and international investors to trade Thomas Woods, product development, wealth would be well received and soon will management, The Islamic Bank of Asia shares with a stock exchange at the be regarded as an emerging capital PRIVATE EQUITY & VENTURE CAPITAL: country level. Arshad Ahmed, partner, Elixir Capital market. He further added that Pakistan’s economy is continuously growing on PROJECT & INFRASTRUCTURE FINANCE Pakistan’s capital market is performing Anthony Coleby, head of corporate commercial the back of the government’s hard work department, Said Al Shahry Law Offi ce (SASLO) very well and it ranked third in 2014 REAL ESTATE and comprehensive economic policies. among the top 10 best-performing Philip Churchill, founder partner, 90 North Real Estate Pakistan will now get its due share in Partners markets in the world. The index of the REAL ESTATE (MIDDLE EAST): the international capital market and will KSE exhibited outstanding performance Yahya Abdulla, head of capital markets — Middle East, be counted among the fast developing Cushman & Wakefi eld and touched historic, unprecedented REGULATORY ISSUES (ASIA) markets of the world. The government is Intan Syah Ichsan , chief operating offi cer, Samuel Aset levels in terms of value and volume. Manajemen committ ed to ensure that the PSE would th During the year ended the 30 June REGULATORY ISSUES (MIDDLE EAST): meet international standards. Mohammad Abdullah Malik Dewaya, head of Shariah 2015, the benchmark KSE-100 Index compliance and audit, Maisarah Islamic Banking Services posted a return of 17.5% versus 41.2% in RETAIL BANKING: Chowdhury Shahed Akbar, offi cer, Southeast Bank, The the fi scal year of 2014. Bangladesh. RISK MANAGEMENT: The said integration process of three Dr Ken Baldwin, CEO, Islamic Financial Analytics integration exchanges will further enhance the size SECURITIES & SECURITIZATION: Nidhi Bothra, executive vice-president, Vinod Kothari process of three of Pakistan’s capital market and this will Consultants help to reduce market fragmentation STOCK BROKING & TRADING: Athif Shukri, research analyst, Adl Capital and create a strong case for att racting exchanges will STRUCTURED FINANCE: investment from local and international John Dewar, partner and head of Islamic fi nance, Milbank, markets. This will also provide a Tweed, Hadley & McCloy further enhance the SUKUK strategic forum to exchange knowledge Anthony Coleby, head of corporate commercial size of Pakistan’s and expertise for a sustainable and department, Said Al Shahry Law Offi ce (SASLO) long-term development of the equity SYNDICATED FINANCE Damir Galiev, portfolio manager, AK BARS Bank capital market and debt markets. TAKAFUL & RE-TAKAFUL: Dr Sutan Emir Hidayat, assistant professor and academic and this will help Muhammad Shoaib Ibrahim is CEO and advisor for Islamic fi nance, University College of Bahrain TAKAFUL & RE-TAKAFUL (AFRICA): the managing director of First Habib Uwaiz Jassat, acting head of Islamic banking, Absa Islamic to reduce market Modaraba. He can be contacted at shoaib@ Banking TAKAFUL & RE-TAKAFUL (EUROPE): habibmodaraba.com. Ezzedine Ghlamallah, director, Solutions Insurance and fragmentation Islamic Finance in France (SAAFI) TRADE FINANCE Anthony Coleby, head of corporate commercial department, Said Al Shahry Law Offi ce (SASLO) TREASURY PRODUCTS: Nafi th ALHersh Nazzal, Islamic banking specialist, certifi ed fi nancial and investment advisor A couple of years ago, in order to att ract IFN Correspondents are experts in their respective fi elds strategic investors for demutualized and are selected by Islamic Finance news to contribute designated short sector reports. For more information stock exchanges, the Securities and about becoming an IFN Correspondent, please contact Exchange Commission of Pakistan [email protected]

Islamic finance in Mauritania: Rapid growth and challenges

The start of Islamic finance in Mauritania goes back to the last century when Al Baraka Bank was given a license by the Central Bank of Mauritania (BCM) to operate as an Islamic bank. The venture capital of Al Baraka Bank reached MRO500 million (US$1.57 million), with half of its initial capital subscribed by Al Baraka’s Saudi Arabian unit, while 10% of the capital was subscribed by the BCM and the remaining 40% by Mauritanian businessmen. ELMAMY AHMEDSALEM provides an overview of Islamic finance developments in Mauritania.

MAURITaNIA to fail. Al Baraka Bank was later converted which can standardize the practice in the to a conventional bank named Bank Al market and give a public guarantee that By Elmamy Ahmedsalem Wafa Mauritania Islamic although the these Islamic financial institutions will act word ‘Islamic’ stuck with it even when according to Shariah. In November 1999, the Mauritanian it no longer was a fully-fledged Islamic Islamic Insurance was established to bank. As for Mauritania Islamic Bank or It is worth mentioning that, according to offer Islamic insurance products based Maurisbank, the BCM announced on the the World Bank Annual Report 2013 in on Shariah. By the end of 2006, Mal 1st January 2015 that it has withdrawn the the section ‘Mauritania - Financial sector Irchadat Company was licensed as bank’s license which was obtained in 2013. development strategy and action plan the first company to issue Sukuk in Other Islamic financial institutions started 2013-17’, there are two companies offering Mauritania. In 2008, the National Bank to be harshly criticized by the public, Islamic insurance, namely TAAMIN and of Mauritania (NBM) announced its questioning if they are really Islamic SMAI. However, the activities are more plan to be converted into an Islamic financial institutions. The following are for business promotional purposes rather bank gradually and later, Al Watani for some of the challenges. than compliant to Shariah principles. Also Islamic transactions was introduced as a as mentioned earlier, Al Baraka Bank was subsidiary of NBM. Absence of a regulatory converted to a conventional bank named Bank Al Wafa Mauritania Islamic but kept 2011 was a remarkable point in the growth framework the word ‘Islamic’ even when it no longer of Islamic banking in Mauritania as many Mauritania is one of the very few was a fully-fledged Islamic bank. These Islamic banks and several windows countries that licenses Islamic financial examples can mislead the public in the started offering Islamic banking products. institutions before laying down a legal absence of reinforced Shariah governance At end of July 2015, the BCM had licensed framework that governs these special type by the authorities. Such challenges remain the following fully-fledged Islamic banks: of institutions. So far, Islamic financial and should be overcome before Islamic Mauritania Islamic Bank, Muamalat institutions in Mauritania are governed financial institutions lose the trust of the Assahiha Bank, Bank Popular de by the same regulatory framework that public. Mauritania, The New Bank of Mauritania, is applied to conventional financial and Bank Al Wafa Mauritanie Islamic. institutions. Therefore, practitioners in the market are looking ahead and Lack of awareness and The sharp increase of licenses given to pushing the government to provide banking culture among society Islamic financial institutions can be read them a regulatory framework that takes As shown by latest studies, the percentage as a translation of the government policy into account the unique characteristics of bank accountholders — for both to boost Islamic finance in the country. peculiar to Islamic finance and which does conventional and Islamic financial In addition to that, the BCM governor not put Islamic financial institutions at a institutions in Mauritania — is only 10%. had said in an interview with Bloomberg comparative disadvantage and affect their Among the reasons for this low Business in 2014 that the BCM had competitiveness with the conventional percentage is the religion issue. completed studies on the regulation of finance system. Such a regulatory Mauritania, as a 100% Muslim nation, Islamic banks and Sukuk. In 2012, on framework is critical for the potential tends not to deal with financial the sidelines of the 2nd Islamic Finance growth in the overall Islamic financial institutions believing that their services Maghreb Forum, the government of system in Mauritania. are all about Riba which is unlawful in Mauritania inked a deal which entitled the Islam. Such a belief results in a large part Islamic Corporation for the Development Absence of Shariah of society being uncomfortable with the of the Private Sector to act as the use of all financial services. Therefore, it is transaction advisor for the proposed governance challenging for Islamic financial revolving Sukuk offering by Mauritania The uniqueness of Islamic financial institutions to be accepted easily by the to the tune of US$300 million. This Sukuk institutions is the compliance to Shariah, Mauritanian society. have not been issued yet. and the reinforcement of compliance to Shariah should come from the regulatory Elmamy Ahmedsalem is a Master’s degree Challenges authority which is the BCM in Mauritania. holder in Islamic banking and finance from Although most Islamic financial The rapid growth of Islamic finance in the IIUM Institute of Islamic Banking and institutions have a Shariah advisor(s), Mauritania is facing many challenges, Finance and a researcher in the Islamic money but these advisors are not guided and some of which caused institutions like Al market. He can be contacted at mamysalm@ supervised by a Shariah board in the BCM Baraka Bank and Mauritania Islamic Bank gmail.com.

Islamic ϐinance in Europe: Which way to go?

Earlier in the summer, the writer had an opportunity to att end the IFN Islamic Finance Forum Europe in Luxembourg. The forum brought together industry experts from all over the world to discuss the region’s rising Islamic fi nance market. Europe has strong players in Islamic fi nance including the UK, Luxembourg, Germany as well as the up-and-coming Commonwealth of Independent States (the CIS which includes countries such as Russia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Ukraine). With the Islamic fi nance industry having impressive double-digit growth in most markets where it has its presence, market players old and new have all ramped up eff orts to gain a stronger foothold in this niche market. PROFESSOR SAADIAH MOHAMAD writes.

EUROPE European Markets on the Rise’, I posed the question: “With varied images and By Professor Saadiah Mohamad [the] reputation of Islam in the world currently, does Europe really need Many issues were raised at the Islamic fi nance?” forum. Market leaders and regulators shared their views on the rise of new markets and asset classes in Islamic Financial fi nance. With Europe, in particular Luxembourg, being a fi nancial hub for institutions asset management, it was fi tt ing that the forum discussed the role of Shariah are not willing compliant funds in the global asset to off er Shariah compliant products management industry and there was to offer Shariah because it is not consistent with their a session discussing the trends in the image and branding. He added that European asset management industry. compliant products what was needed is a real player whose DNA does clearly Shariah compliant in The forum also covered recent changes because it is not order to close the gap and not to further in legal and regulatory infrastructure frustrate customers in France. impacting Islamic fi nance in Europe and consistent with their a special presentation by Dr Amat Taap There is an increasing awareness and Manshor, CEO of Finance Accreditation image and interest in Islamic fi nance in other Agency from Malaysia, on initiatives to countries such as Italy, Germany and develop talent and human capital in the branding Belgium. There are no Islamic banks in Islamic fi nancial services industry. Italy yet, but there are fi ve to six events yearly dedicated to Islamic fi nance, A passionate response came from Anouar The most interesting sessions were on clearly refl ecting growing interest. There Hassoune, a Moroccan French who is the crowdfunding and its potential role in has also been an infl ow of investment head of research and strategist for MENA the Islamic world and the session on from the Middle East including in real at the Bank of Tokyo Mitsubishi UFJ, socially responsible investing and the estate and fund management activities. based in Dubai. According to Anouar, social entrepreneurship’s linkage with there is a huge demand for Islamic Islamic and ethical investing. As a country, Germany shares a fi nance in France especially to serve the similarly strong fi nancial architecture basic needs of the Muslim community The turnout was good, with around of supervision with Luxembourg. There like opening a bank account, saving 200 or so participants refl ecting strong is also a long tradition of ethical and money, property fi nancing and life interest in Europe in Islamic fi nance. Christian banks. Out of a population of insurance. Understanding the European context, about 80 million, about 8% are Muslims there is a big potential for Islamic signifying a potential for a niche market There are between 5-7 million Muslims fi nance products to have positioning and of Islamic fi nance in Germany. in France, and there are others, not branding not only as Shariah compliant necessarily Muslims, who might be but as ethical products. Many investors A representative of Belgium on the panel, interested in socially responsible of Islamic products are non-Muslims Ines Wouters, a partner of Legisquadra, investment products. But there is a and the fact that these products are Belgium, spoke with much enthusiasm dearth of Shariah compliant products 100% Shariah compliant shows that and hope for the future of Islamic fi nance in France. Anouar asked: “Why does there appears to be no hindrances in Belgium. “Fundamentally, everything such a large, developed and diversifi ed to these products being accepted by is already there,” she said, in terms of economy such as France fail to serve its non-Muslims. Islamic products can be the legal structure and interestingly, the customers?” marketed to anyone, even in Europe. value system to support it. In principle, the Christians share the same values on According to Anouar, the answer lies During the question and answer the prohibition of Riba and historically with fi nancial institutions; it’s just simply session on the topic ‘Market Snapshot: have shunned the charging of interest. that fi nancial institutions are not willing

Continued

It was only in the early 19th century that real players into the market. For the the Church allowed the use of interest in It’s a chicken fi rst option of going mainstream, business activities. the investment is defi nitely bigger. I and egg believe that the industry has what the But there is now heightened interest to economists call a positive externality, ie look for alternatives to modern interest- situation. With less spillover benefi ts to the wider public in based fi nance and many are somewhat excess of benefi ts to market players. amazed with how similar the premise supply and market and the values of Islamic fi nance are And since Islamic fi nance could and with their own beliefs and values. There presence, awareness should be serving everyone, the wider is thus a lot of potential that could be public indeed means everyone, not done to take advantage of what already is lacking. And with just the Muslims. If Islamic fi nance can exists in Belgium. According to Wouters, off er a good business model and has this should serve as a ‘warning’ to big little awareness, the positive features of good merits banks to move forward and to grab the much like education and health, state opportunity that Islamic fi nance could there is less demand intervention in the form of investment to off er. set up the necessary legal and regulatory and support, hence infrastructure will be justifi ed. Europe has the entire framework and legal infrastructure and a fi nancial it is not surprising Islamic fi nance in Europe has the market that is fully developed and potential to grow from a slightly sophisticated enough to take up the that ϔinancial diff erent trajectory to that which has challenge of Islamic fi nance, an industry happened in the Gulf and Asia. The which, according to Irfan Harris in his institutions seem premise of the positive features of 2014 book, ‘Heaven’s Bankers’, is “rather Islamic fi nance means that the industry technical.” And in most places in Europe, reluctant to could embrace the idea of the Maqasid awareness is still an issue. It’s a chicken Al-Shariah and the Maslahah or to and egg situation. With less supply and supply serve the public interest on maximizing market presence, awareness is lacking. shoulders lie the role of educating and benefi ts and minimizing harm right And with litt le awareness, there is less creating awareness for the public and from the beginning by making sure demand and support, hence it is not potential market players? that not only the commercial aspects surprising that fi nancial institutions seem of business are considered, but the real reluctant to supply. To me, the question is also on how to needs of its people, the customers and make it big in Europe. Should Islamic the wider public are all being taken into Here lies the role for education and talent fi nance go mainstream and be positioned consideration. development. Who is doing it? How as an ethical product for all, regardless many universities in Europe are off ering of race and religion? Or should it remain Isn’t this what Europe is talking about? courses in Islamic fi nance? Out of the in a niche market fundamentally for the The need for real fi nance for real people top six rated Master of Science degrees Muslims? Is it just a matt er of branding to solve real issues? These are indeed in Islamic fi nance off ered globally, two then? hard questions for the real players. are in Europe: Durham University and the Henley Business School at Reading With a rapidly growing Muslim Professor Saadiah Mohamad is a visiting University, both of which are in the UK. population in Europe, there is potential research fellow at the Oxford Center for With such growth in Islamic fi nance, for good business even with the second Islamic Studies. She can be contacted at why aren’t more top universities off ering option. But even this calls for a strong [email protected]. courses in Islamic fi nance? And on whose commitment and big investment from

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Shariah compliant pawnbroking system in Sri Lanka

Traditional pawnbroking seems a more att ractive banking activity than lending. It is common throughout South Asia as well as in East Asia to pawn gold jewelry. The desire of most Asians to hold some of their assets as gold jewelry may be the major reason for the pawnbroking industry’s success. IMRUZ KAMIL explores.

SRI LANKA customer a fee for the services rendered in keeping the valuable asset. The service By Imruz Kamil fee will be charged for a period and may vary depending on the policies of the Pawnbroking is a source of short-term Islamic lending institution. fi nancing generally used by the lower income group to alleviate their cash In the event the customer fails to repay fl ow problems. Pawnbroking diff ers the loan, the repayment period can be from other secured lending as the extended for a further equivalent period; lending institution or pawnbroker takes however, the lending institution will physical possession of the gold at the charge a service fee for extending the time of lending. safekeeping of the asset. If the customer fails to pay after the extension period, Usually, there is a high volume of the collateral will be auctioned to pay off small-sized advances given for a the loan. If there is any surplus after the relatively short period of time and the loan has been sett led, the balance will be rate of interest is generally high. A returned to the customer. access to funds, and the fact that most credit evaluation of the borrower is not customers own the required collateral. required. If the amount is not repaid However, the gold jewelry pawnbroking when it is due, the pawnbroker or the sector in Sri Lanka has been aff ected lending institution can recover the Pawnbroking following the drop in gold prices in the advance by auctioning the collateral. plays the world market. Contrary to traditional pawnbroking The Rahn industry is still new in Sri activity, the Shariah compliant important role Lanka, although Shariah compliant pawnbroking system works on three of providing pawnbroking services had been started Islamic principles: Qard Hasan (interest- by some institutions/individuals in free loan), Rahn (pledge) and Wadiah emergency cash the later part of the 20th century on a (custodian service). Rahn also refers private arrangement basis but were not to an arrangement whereby a valuable for small micro- regulated by the authorities. Amana Bank asset is placed as collateral for a debt. recently launched Rahn services to cater The collateral may be disposed off in the level businesses, to the demand of non-interest-bearing event of default. pawnbroking services for the lower education purposes income group. Within a short period of Shariah compliant pawnbroking off ers time, the bank had captured a good slice several advantages as compared to and social of market share in Shariah compliant traditional pawnbroking. Islamic lending pawnbroking. institutions grant a Qard Hasan loan engagements to the applicant who wishes to pawn Conclusion his or her gold jewelry and no interest In Sri Lanka, pawnbroking activity A customer-friendly Shariah compliant will be charged under the concept is governed under the Pawnbrokers pawnbroking model will satisfy of Qard Hasan, whereby the Rahn Ordinance. Licenses are issued by the customers and bring more profi t to the customer is only required to pay the regulatory authority to undertake a institution. Rahn is seen as a source of amount borrowed, unlike traditional pawnbroking business in Sri Lanka with capital for many activities. It will benefi t pawnbroking where customers will be certain rules and regulations. Licensed the community from various aspects charged an interest (percentage of loan commercial banks, fi nance companies because pawnbroking plays the amount) plus service charges. and specialized pawnbroking agents are important role of providing emergency involved in this business. cash for small micro-level businesses, The Islamic lending institutions accept education purposes and social gold jewelry on a Wadiah concept, Customer demand for pawnbroking engagements. where the institution promises to keep services in Sri Lanka is greater than the the asset in a safe place. In order to demand for loans. This may be explained Imruz Kamil is the head of Islamic fi nance provide security and the safe return of by the simplicity of procedures involved at Richard Pieris Arpico Finance. He can be the gold jewelry, the bank will charge the in pawnbroking, allowing immediate contacted at imruz@rpcfi nance.com.

The world of Islamic asset management

Managing ﬁ nancial assets Islamically compares to its conventional counterpart, with further additional constraints that comply with the ethical standards of Islamic ﬁ nance. Shariah compliant asset management is net of derivatives and toxic instruments, hence its relatively bett er performance during the subprime crisis. The objective in Islamic asset management is not only to protect and grow the assigned capital, but also to ensure that the moral features of the investment are complied with. Islamic management has to be innovative and has to be built on values, while remaining socially and morally responsible. AMMAR DABBOUR and OUASSIM BENDIAB delve further.

ASSET MANAGEMENT companies whose primary business and fi nance, but on top of it, Shariah non- income are linked to: compliance risk has to be measured, By Ammar Dabbour • gambling and casinos especially in terms of the destination of & Ouassim Bendiab • the production or trade of alcohol, the goods and fi nancial leverage. tobacco or pork-based products If one assumes that Islamic fi nance • the entertainment industry serves the economy and not the other Private equity (pornography, music, media, cinema) way round, then Shariah compliant Islamic fi nance is undeniably quite • hotels or restaurants asset management must also redefi ne suitable for managing private equity • conventional fi nancial services its ecosystem and fi t into a model going funds. Sector constraints are the same (banking, insurance) beyond simple asset allocation, by as for investments in listed stocks. • defense industries or services, and providing bett er solutions in structuring Islamic fi nancial contracts are well • any other area that could be identifi ed private placements with tangible tailored to managing a portfolio of direct as non-compliant from a Shariah underlying assets. Any investment participations in unlisted companies. In perspective. should indeed be tangible, useful to this fi eld, Islamic fi nance serves the real the human community and value- economy, and there is nothing more real generating. In practice, eligible assets for Sukuk than entrepreneurship and stands as a management include: equities, Sukuk, Investing in Sukuk is absolutely sub-sector of participative and value- commodities, infrastructure (including permissible, Sukuk being fi nancial creating fi nance. real estate) and private equity. instruments with periodic returns and compliant with Shariah. However, a The concept Eligible stocks number of underlying contracts are Islamic asset management must fi rst to be studied carefully, and the role of The management of an Islamic equity protect and grow the entrusted capital, the asset manager, prior to anything portfolio mainly innovates by self- but should also defi ne itself, ultimately, else, is to analyze each of the investible imposing a fi lter to the stocks in which it as a tool to serve the real economy, Sukuk in terms of their quantitative, invests, and the meticulous monitoring while creating value(s) and adhering to qualitative and ethical features ahead of of such equities. Innovation will also Islam’s ethics. Islamic asset management any underwriting. The secondary market derive from the process by which stocks accompanies investors, and considers liquidity remains a challenge, despite are quantitatively, qualitatively and its advisory mandate as an ethical spectacular improvements (the supply of ethically selected. In addition, the use of requirement. Sukuk jumped by almost 40% between modern, relevant and effi cient technology 2004 and 2013 according to the 2013 IFSI is essential. In the management of an Asset allocation in Islamic asset report). At the end of the day, a Sukuk equity portfolio, the allocation of assets management ultimately entails the portfolio is also a selection of real projects has no Islamic constraints provided target selection of a series of projects, with an in which we invest. shares are the subcomponents of a Shariah underlying, global vision of the objectives compliant investible universe. the economy should look forward to. Commodities The evolution of new technologies and The fi ve basic principles of Islamic equity Investing in commodities can only the internet in particular, opens up new investment are as follows: be made physically. Therefore future horizons for investors: new fi elds for asset 1) The main business of the company contracts, replicating ETFs and management are slowly emerging, such must be in compliance with Islamic commodities-indexed certifi cates are out as participative fi nance and crowdfunding rules and values. of scope, hence the need to restrict this platforms. The inherent advisory role of 2) Income generated from the company’s asset class in managing Islamic portfolios. Islamic asset managers contribute to a secondary activities in sectors viewed more comprehensive and personalized unlawful by Islam must not exceed 5% Real estate and infrastructure off ering in the industry of professional of total revenues. Investment in real estate and investment. In particular, Shariah 3) The debt ratio should be below 33%. infrastructure, in order to meet the compliant asset management is perfectly 4) The liquidity ratio must be less than standards of Islamic fi nance, has to meet suited to private placements structuring 33% (limited leverage). operating and leverage criteria. These with tangible underlying asset classes. 5) The ratio of (liquid and available for assets are not to be neglected, as they sale assets) to (total balance sheet) is contribute to portfolio diversifi cation. The UCITS’s off ering in the MENA/GCC smaller than 0.5. analysis of the risk-return profi le of this region is embryonic, because outstanding Stocks that are excluded include those of asset class is the same as in conventional assets under management are often small and their liquidity remains limited

Continued

(often, valuations are provided on a a general trend toward bett er fi nancial to fi ve years), the ratio of book value to weekly basis). Investors in this region literacy in the recent past, probably thanks market value (or book to market value are still too much skewed toward real to the subprime crisis, which contributed ratio) or its inverse (denoted P/B or P/ estate and commodities; out of Europe, to highlight the fi nancial industry’s BV: price to book value which is higher they can be off ered a winning, innovative excesses; the crisis also demonstrated the for growth stocks and lower for income diversifi cation alternative, which is merits of Shariah compliant management stocks). generating value while remaining ethical that is faithful to its principles and and in accordance with Islam. values, ethics and transparency. Shariah However, do note that the funds which compliant management has provided the are defi ned by a particular style of What market for Shariah proof of its commitment to unite fi nancing asset management do not refer to the to its underlying concept, ie the real quantitative selection criteria as those just compliant asset management? economy. mentioned. The strategies of their asset While demand for Shariah compliant managers are usually defi ned in a larger products is growing about 20% per year, There remains the issue of the scarcity of way. it remains focused on equity funds and expertise in the European market, which Sukuk. is today mainly active in the selection Some specialized advisory companies of funds (funds of funds). Islamic asset have developed indexes intended to It must be noted, however, that Saudi managers are too few and not active represent the performance of diff erent Arabia and Malaysia together account enough; their pedagogy toward customers classes of shares. The particular way in for 69% of total funds under Shariah is still too timid and too ‘ethnic’, while it which these indexes are built varies from compliant management. should be more ethical and more global. one fi rm to the other.

This may seem paradoxical given that Some platforms are starting to emerge in Since the end of May 2002, for global the US is the fi rst market in the world London and Luxembourg. It can probably growth markets, the related asset when it comes to the funds industry, be expected that Shariah compliant asset management strategy has been the most thanks to its diversifi ed economy, management will further shine in the profi table and for the EMEA region, followed by Luxembourg, ranking second years to come in both fi nancial centers, it is the small and mid caps that have worldwide for funds. This is even more so vital in Europe for further incremental performed the best. surprising as the globalization of Sukuk disintermediation. is a fact, particularly in terms of their Islamic asset management has room structuring, the origin of issuers and the What are the kinds of Shariah for innovation by combining sectors, listing of such instruments in Europe: geographical areas and complementarities we have experienced it with the UK compliant funds asset of market fl uctuations and behaviors. and Luxembourg, two recent issuers of management? high-profi le sovereign Sukuk. It is also There’s no specifi c kind of Shariah important to note that the Grand Duchy Mapping of market risks compliant funds asset management. Shariah compliant asset management is of Luxembourg is the European leader in In the early 1970s, several studies have terms of Sukuk listing. subject not only to all risks that may occur highlighted the existence of diff erent asset in conventional asset management but management styles. It thus appears that While Luxembourg should be proud of also to specifi c risks as follows: groups of shares, except by their sector • The ‘Shariatic’ risk: this is the risk of its position within the Islamic fi nancial affi liation, have common characteristics industry, its Shariah compliant asset investing in an asset (shares or funds which help asset managers to create for example) that does not comply management business remains a work in portfolios. Among the portfolio types progress, as London and Switz erland are with the standards of Islamic fi nance. are those associated with small or large Example: the asset manager does quite ahead of the curve in Europe; the capitalization, growth stocks or income- situation is not irreversible though. not react quickly enough in case the based stocks or cyclical stocks. share or the fund loses its eligibility to One can wonder about the reasons behind remain Shariah compliant. An asset management strategy can also • The legal risk in Sukuk as the purchase such concentration in the European combine several of these basic features market for Islamic asset management, or sale of a Sukuk involves a transfer into the so-called ‘large value’ or ‘small of ownership. and the reasons behind the diffi culty with growth’ funds. If the notion of style which a genuine Shariah compliant asset • Currency risk: in the absence of has been given to describe funds or to derivatives, currency hedging is management business is encountering defi ne indexes for tracking performance, across Europe. diffi cult to implement. Fluctuations in it remains to defi ne the precise exchange rates of foreign currencies characteristics of the funds belonging to aff ect the value of assets. Finance in general is an elitist industry, diff erent categories. shallowly democratized and often opaque Ammar Dabbour is the managing director and to the public; and what about Islamic The criteria generally associated with the fi nance, an industry still very young, often Ouassim Bendiab is a director of Euris Group. notion of growth are the P/E or price/ They can be contacted at ammar.dabbour@ misunderstood and subject to far too earnings (higher for growth stocks, low many misinterpretations? euris-group.com and ouassim.bendiab@euris- for income stocks), the profi t growth rate group.com respectively. However, there has been momentum and over a recent period (often taken equal

A quick glance at the case for Takaful windows

The Takaful world has reached a critical stage on its growth trajectory and therefore DAWUD ABDUS-SABOOR opines that it is necessary to take a cursory assessment of the case for Takaful windows in looking toward the future of the industry.

TAKAFUL 3) As the minimum capital needed start-up or subsidiary per regulatory to establish a Takaful window is guidelines, raising the additional By Dawud Abdus-Saboor generally much lower than the capital minimum capital for a Takaful needed for a stand-alone Takaful window may be less burdensome. For new entrant promoter groups as well as existing conventional insurers, there are two choices: Table 1: Takaful regulatory frameworks in selected countries (1) to establish a brand new Takaful Country Regulatory Reference Windows Future Direction company (in the case of a promoter Allowed? group) or an autonomous Malaysia Takaful Act of 1984 No Windows will continue to be subsidiary (in the case of an existing disallowed conventional insurer), or Indonesia 2014 Takaful Regulation Yes and Within 10-year mandatory spin-off (2) to create a Takaful window. No required of window operations in favor of fully-fl edged Currently, there are approximately 200 Takaful entities. New entrants are Takaful operators around the globe, no longer allowed to use a window with 77 in the GCC countries and 16 and have to go fully-fl edged in Malaysia. A rough estimate of the with increased minimum capital number of Takaful windows could be requirements. 200-250, with 43 in Indonesia alone. Pakistan 2005: Conventional insurers Yes Conventional insurers must barred from off ering maintain separate capital accounts The antecedent to the two choices Takaful products for their conventional and Takaful begins with an understanding of the 2012: New Takaful rules businesses. allowing windows 2015: Separate fi nancial statements regulatory framework in the particular and reporting for window jurisdiction where the Takaful products operations, as if they were stand- are marketed or will be marketed. Table alone Takaful operators 1 shows Takaful regulatory frameworks UAE 2010 Takaful Regulation No Unclear with respect to future in selected countries. There are fi ve pros allowance of windows and cons that one could advance in the case for or against Takaful windows as Oman 2011 Takaful Regulation No Unclear with respect to future follows: allowance of windows Nigeria 2013 Takaful Guidelines Yes Window operators must segregate Pros the funds of the Takaful participants 1) Borrowing an analogy from Newton’s from those of the conventional insurance policyholders. Operations laws of motion: “An object in motion must be ‘ring-fenced’ so as to avoid [ie already existing conventional leakage and co-mingling with non- insurance company] tends to remain compliant funds at any point in the in motion [ie easier to establish life cycle. Takaful window] unless an external Kenya June 2015 Takaful Yes Guidelines include: authorization, force [eg regulatory directive] acts Guidelines (Draft) establishment of Takaful model, upon it.” Likewise, “an object at rest segregation of funds, distribution [ie stand-alone Takaful start-up] of surplus, and surrendering of tends to remain at rest [ie harder to certifi cates. establish Takaful operation] unless Egypt No specifi c rules for Takaful Yes Unclear an external force [eg regulatory providers which are framework support] acts upon it”. regulated as conventional insurers 2) In addition to the operational Bangladesh 2013 Takaful Rules (Draft) Yes Eight Takaful operators and 12 framework that can be inherited from windows operate without any a conventional insurance company, specifi c regulation for Takaful, but Takaful windows can benefi t from the draft Takaful rules have recently human resource expertise, specifi cally been circulated by the regulator for technical staff (underwriters, feedback actuaries, claims specialists, and Morocco Draft Law 2015 No Windows will likely continue to appraisers). It is well known that the be disallowed as many Moroccans Takaful industry continues to suff er view Takaful windows as disharmonious with Shariah from a shortage of expertise.

Continued

4) Eff ective regulatory framework windows in favor of replacement by Three cases, by way of anecdotal support for Takaful windows can fully-fl edged Takaful entities, eg Jasindo evidence, in favor of the future for be codifi ed, as is the current case Takaful which due to its success as a Takaful windows include the following: in Pakistan, where legal arbitration window recently became a fully-fl edged between conventional operators and Takaful operator; while other countries, 1) EFU Group, Pakistan’s largest insurer, Takaful players helped construct eg Pakistan, are encouraging the opening plans Takaful windows for both its mutually benefi cial compromises. of new Takaful windows, and, in light life and general businesses. Earlier of the aforementioned cited pros and this year, EFU Life Assurance entered 5) A conventional insurance company, cons, it can be concluded that ‘one size into a bancaTakaful distribution for example, with a strategic doesn’t fi t all’ – in some circumstances agreement with Askari Bank, a blueprint to divest completely from and jurisdictions, eg Africa, Europe, commercial bank with an Islamic marketing conventional products, and US, Takaful windows should be banking network, for EFU Life’s could fi rst establish a Takaful welcomed and embraced, while with window Family Takaful products. window as a transitioning phase, other circumstances and jurisdictions the The Securities and Exchange before eventually becoming a fully- opposite may be true. Commission of Pakistan, Pakistan’s fl edged Takaful operator. insurance regulator, expects that at least half of Pakistan’s 50 Cons conventional insurers will eventually 1) Depending on the strategic barometer Once sufϔicient off er Takaful products. of the conventional company, there could be real challenges placed mass and 2) Jubilee Insurance, Pakistan’s third- upon the Takaful window not to largest private sector insurer, cannibalize the conventional market market penetration has recently launched its highly segment. anticipated Takaful business (both life is reached, Takaful and general) for the Pakistani market. 2) On the Family Takaful side particularly, sales agents, who are windows would be 3) In the fi rst year of its operations, Al able to market both conventional Falaah Takaful, the motor Takaful and Takaful products, may not be obliged to switch to window operated by LOLC Insurance incentivized to sell Takaful products Company of Sri Lanka, has seen its with commissions similar to fully-ϔledged entities, customer base reach 5,000 and gross conventional products. writt en contributions exceed LKR125 since a Takaful million (US$910,707). Although it is 3) Shariah compliance issues associated way too early to cheer loudly, this does with Takaful products may further window always appear to have the ingredients for a confuse consumers who, in most successful and promising undertaking. instances, have litt le knowledge of needs to listen and Islamic fi nance and awareness of the Finally, other pundits, including Takaful diff erences between conventional adhere to the wishes Outsource, concur that between the insurance and Takaful. two polar opposites of having Takaful of the conventional windows or not, there is the question of 4) In many jurisdictions, particularly insurance holding duration. Preference, globally speaking, those in nascent markets, no specifi c is for fully-fl edged Takaful entities. legislation or regulatory guidelines company and cannot Hence, Takaful windows would only exist for Takaful providers (neither be allowed as temporary solutions to Takaful windows nor stand-alone thus operate with full enhance the market share of Takaful. Takaful operators), hence all are regulated as conventional insurers. independence Once suffi cient mass and market penetration is reached, Takaful windows 5) An unfair competitive landscape and drive would be obliged to switch to fully-fl edged exists, from the viewpoint of entities, since a Takaful window always stand-alone Takaful start-ups, as needs to listen and adhere to the wishes of conventional insurance companies As consolidated fi nancial statements the conventional insurance holding are generally more resource-equipped have been the ‘rule rather than the company and cannot thus operate with full to establish Takaful windows than exception’, it is not an easy task to assess independence and drive. stand-alones and bett er able to the individual fi nancial performance of ‘weather the storm’ in the early years Takaful windows, although double-digit Dawud Abdus-Saboor (associate of the of the new business capital strain on growth has been witnessed for several US-based Society of Actuaries), is a co- expenses. years in the Takaful space at large, founder and director of Takaful Outsource, a and obviously Takaful windows have ‘boutique’ professional consultancy serving Indonesia, ‘the sleeping Islamic fi nance contributed to this result. the global Takaful industry. He can be giant’, is phasing out its Takaful reached at [email protected].

its asset-leasing company, Bereket Varlik the Ministry of Finance has approved DEALS Kiralama. the issuance of Sukuk and there will Indonesia Sukuk exceeds be a total of 120 road and railway PNHB announces proϐit construction projects that will be funded target by this Sukuk. Directorate General of INDONESIA: Following the recent payment Bina Marga will hold an early tender for auction of its project-based Sukuk series MALAYSIA: Puncak Niaga Holdings the 2016 fi scal year projects amounting to and Islamic treasury bills series held on (PNHB) has announced on Bank IDR28.3 trillion (US$1.98 billion). the 25th August 2015, the government Negara Malaysia’s website that the of Indonesia has awarded IDR2.5 profi t payment for the stock code Al Othaim debuts Sukuk trillion (US$176 million) of its Sukuk PI130062 under the fi ve-year redeemable SAUDI ARABIA: Al Othaim Real which received total incoming bids of convertible secured Sukuk Ijarah of up Estate and Investment Co has issued IDR6.31 trillion (US$444.08 million). In to RM165 million (US$38.76 million) in SAR1 billion (US$266.44 million) in a statement on the Ministry of Finance’s nominal value will be due and payable th Sukuk, according to Reuters quoting website, the highest bid-to-cover ratio on the 17 September 2015. unnamed sources. The debut facility, was 3.8 for the SPN-S 05022016 series. priced at 170bps over the six-month STS to issue ICP Series 11 SIBOR, was arranged by the investment Noor Bank looks to MALAYSIA: Sunway Treasury Sukuk banking units of Banque Saudi Fransi, Indonesian Sukuk market (STS) was due to issue its RM100 Gulf International Bank and National million (US$23.5 million) Islamic GLOBAL: Noor Bank will be investing Commercial Bank. commercial papers (ICP) Series 11 on more than US$500 million in the the 2nd September 2015, according to a Indonesian state Sukuk as the bank seeks IFC plans third Sukuk sale tender announcement on Bank Negara to increase its Shariah compliant asset Malaysia’s website. The ‘P1(s)’-rated GLOBAL: World Bank’s International holdings, including those from emerging issue will mature on the 2nd October Finance Corp (IFC) has engaged Dubai market countries such as Indonesia, IFN 2015. Islamic Bank, HSBC, National Bank of has learned from Robert Pakpahan of the Abu Dhabi and Standard Chartered Ministry of Finance. Indonesian fi nance Bank to conduct investor meetings minister Bambang Brodjonegoro said SEC plans Sukuk in the Middle East for its proposed that the Sukuk will be in the form of a SAUDI ARABIA: The executive US$100 million Sukuk, which received private placement and the bank would committ ee of Saudi Electricity Company a preliminary ‘AAA’ rating from S&P. realize returns from its purchase as soon (SEC) has agreed to set up a Sukuk According to Reuters, the Sukuk will as possible this year. program of up to US$1.5 billion to fund be listed on NASDAQ Dubai and an capital projects, according to a bourse application will also be made for a Turkish banks apply for fi ling. The utility company also received subsequent listing on the London Stock Sukuk approval to negotiate a US$2.3 billion Exchange. loan facility. TURKEY: Turkish Islamic lenders TSH Sukuk Ijarah’s facility Turkiye Finans and Albaraka Turk Indonesia ready to issue have applied separately to the Capital 100% subscribed Markets Board to issue Sukuk, according Sukuk in 2016 MALAYSIA: TSH Sukuk Ijarah’s to Reuters. Turkiye Finans is looking INDONESIA: The government of privately-placed RM30 million (US$7.11 to raise up to TRY1.5 billion (US$513.2 Indonesia is preparing to issue Sukuk million) Sukuk Ijarah medium-term million) through its wholly-owned unit, in 2016 amounting to IDR12.2 trillion note facility has been fully subscribed, TF Varlik Kiralama, whereas Albaraka (US$856.44 million) which will be used according to a bourse fi ling. The fi ve-year Turk, a unit of Bahrain-based Al Baraka to fi nance several strategic infrastructure paper, which carries a 5.23% profi t rate, Banking Group, intends to raise up to projects such as road and railway will mature on the 24th August 2020. TRY1 billion (US$342.6 million) through constructions. According to Katadata,

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

TBA Saudi Electricity Company US$1.5 billion Sukuk 1st September 2015 TBA Albaraka Turk TRY1 billion Sukuk 1st September 2015 TBA Turkiye Finans TRY1.5 billion Sukuk 1st September 2015 2016 Government of Indonesia IDR12.2 trillion Sukuk 1st September 2015 By 2017 KT Bank EUR100 million Sukuk 11th June 2015 Before end of 2015 National Commercial Bank SAR2 billion Sukuk 24th August 2015 TBA TIME dotCom up to RM1 billion Sukuk 19th August 2015 TBA Almarai SAR2 billion Sukuk 19th August 2015

branch is in the interest of the city’s rapid (BoG) Franklyn Belyne, the regulator is AFRICA growth. waiting for several ﬁ nal requirements New FNB branch inaugurated to be met by the yet-to-be-named bank First Islamic bank in Ghana before it can start operations. It is learned TANZANIA: First National Bank (FNB), that the institution from Saudi Arabia which has an Islamic window, has on the cards had secured a provisional license from inaugurated its eighth branch at Mbezi GHANA: The Republic of Ghana could BoG to start operations last year but Beach in Dar es Salaam. According to welcome its ﬁ rst Islamic bank before had to request for an extension until Tanzania Daily News quoting Silvest the end of this year. According to November due to challenges in meeting Arumasi, the head of product and myjoyonline.com quoting the head of all key banking requirements. digital banking, the opening of the new banking supervision of Bank of Ghana

second asset by end of this year and will BSN converts deposit ASIA be leveraging the existing structure with NAB. products IIC and IBFIM in academic MALAYSIA: Bank Simpanan Nasional collaboration Ramly secures loan to build (BSN) will be converting its BSN MALAYSIA: The International Islamic Islamic Deposit products to a Wadiah College (IIC) has signed an MoU with new factory structure from Mudarabah eff ective the Islamic Banking and Finance Institute MALAYSIA: Ramly Food Industries the 1st September 2015, according to a (IBFIM) for an academic collaboration, (Ramly) has inked an agreement with statement. according to Bernama. The collaboration Shariah compliant Agrobank and Bank aims to produce a pool of well-rounded Pembangunan Malaysia for a syndicated Bill ϐiled to boost Islamic Islamic fi nance graduates and provide fi nancing worth RM274 million (US$64.77 banking in the Philippines enhancement of teaching and learning milllion) to build a new factory at Taman opportunities for students of the IIC Perindustrian Halal Hub, Pulau Indah, PHILIPPINES: A bill — the House Bill particularly in the area of Islamic fi nance, Klang. The RM1 billion (US$236.41 (HB) 5989 ‘An Act amending Republic and to also open up new avenues for million) complex, which would comprise Act No 6848’ or the ‘Charter of Al the IIC to venture into and establish a production factory, Halal logistics, a Amanah Islamic Investment Bank of education links for IBFIM. frozen and dry storage depot, a training the Philippines’ — has been fi led by center, and a research and development legislator Sitt i Djalia Turabin-Hataman NAB provides Islamic department, will be built in three phases to provide the Philippines with the and is scheduled for completion by the necessary framework to expand its Islamic ϐinancing for Crescent Wealth end of 2017, according to Bernama. banking system. The Manila Times AUSTRALIA: The National Bank of CLC launches Islamic Business quoted Turabin-Hataman as stressing Australia (NAB) has closed its debut the need to develop the country’s Shariah Islamic fi nancing deal worth AU$19.9 Division banking industry especially in light of million (US$14.21 million) to fund a real SRI LANKA: Commercial Leasing greater ASEAN integration and economic estate purchase by Crescent Wealth, and Finance (CLC) has introduced advancement. according to Reuters. The funding CLC Islamic Finance in its bid to meet platform designed by NAB uses the the fi nancial needs of many existing Meezan Bank expands branch Wakalah structure. Crescent Wealth and potential customers within the Sri network is using the four-year fi nancing for a Lankan community, according to Daily AU$30.75 million (US$21.95 million) FT. The specialized Islamic business PAKISTAN: Meezan Bank has commercial property acquisition in South division will function as an alternative inaugurated a new branch in Jamia Darul Melbourne, with plans to build a portfolio fi nance solutions provider under the CLC Uloom as part of its branch expansion of commercial assets across the east coast. regulatory license implementing Shariah strategy, according to a press release. The asset manager is looking to secure a compliance fi nance solutions.

EUROPE IFN ONLINE DIRECTORY First French Islamic bank launched Over 4,000 FRANCE: NoorAssur, an Islamic individual fi nance start-up, has launched its fi rst physical branch in Paris and is targeting companies to open another 20 units nationwide in directly 2016, confi rmed the institution to IFN. involved in the NoorAssur was established in 2012 as an online banking service and now has 3,000 Islamic fi nance customers.

government spending. The stake of Al to change the legal framework that will GLOBAL Raya is being sold by Levant Capital and accommodate Islamic fi nancial institutions Gulf private equity ϐirms The Rohatyn Group. to be functional within the Russian legal system. compete for stake in Al Raya Russia keen to collaborate GLOBAL: Three of the biggest private Iranian banks reopen in the equity fi rms in the Gulf, namely Abraaj with Malaysia Group, Fajr Capital and Gulf Capital, GLOBAL: A feasibility study has been UK are competing for a controlling stake in undertaken by Malaysian experts to GLOBAL: Two out of the four Iranian Saudi supermarket chain Al Raya for establish either Islamic banking or banks in the UK (Bank Melli and Persian Foodstuff Co (Al Raya) with a deal worth Islamic banking windows in Russia as International Bank) will resume operations as much as US$300 million, according to the Federation is keen to collaborate with soon, according to the governor of the Reuters quoting unnamed sources. The Malaysia to facilitate and develop its Halal Central Bank of Iran, Valiollah Seif. fi rms lodged initial bids in late July and industry and Islamic banking, according Quoting Seif during a recent meeting with are now due to fi le more comprehensive to Bernama quoting Regions-Russia UK foreign secretary Philip Hammond in proposals before the deadline for second- Association president Linar Yakupov. Tehran, Mehr News reported that Seif also round bids in the next two weeks. The Yakupov added that the results are confi rmed that the UK is keen to invest in sale is expected to proceed despite expected to be out by the end of October, Iran’s stock market. falling oil prices and subsequent lower which will serve as a good foundation

of 2015 with the fi rst phase scheduled for developing the existing stations as well as MIDDLE EAST completion in September 2018. to meet working capital requirements. Noor Bank and Dubai Properties collaborate SASCO secures Islamic loan GEMS reϐinances loan UAE: Private school operator GEMS UAE: Noor Bank has collaborated facility from NCB Education has restructured an existing with Dubai Properties to off er Shariah SAUDI ARABIA: The Saudi Automotive debt with improved terms via a AED3 compliant fl exible property fi nancing Services Company (SASCO) has billion (US$816.55 million) fi nancing, of options, according to a press release. The concluded the signing of the Shariah which approximately two-thirds were fi nancing will be available for a tenure of compliant facility agreement with the Shariah compliant, according to Reuters. up to 25 years with fi nance to value ratios National Commercial Bank (NCB) at a The seven-year facility was provided by of up to 80% for UAE nationals and 75% value of SAR151.82 million (US$40.44 Abu Dhabi Islamic Bank, Dubai Islamic for expatriates on completed projects and million) against a signed promissory Bank, Emirates NBD, First Gulf Bank, 50% for off -plan projects with fi nance note. Included in the facility agreement is Mashreq, National Bank of Fujairah and amounts of up to AED25 million (US$6.8 the Murabahah long-term (seven years) Noor Bank. million). loan amounting to SAR101.12 million (US$26.94 million) (including a one-year Deyaar to fund project with grace period), which is scheduled to be Meethaq upgrades core sett led in semi-annual installments, and banking system Islamic ϐinance also a short-term loan of SAR25.7 million OMAN: Meethaq, the Islamic banking UAE: Thirty per cent of Deyaar (US$6.84 million) scheduled to be sett led window of Bank Muscat, has upgraded Development’s Midtown development in one installment after four months from to the new iMal core banking system, a at International Media Production Zone the withdrawal, in addition to a lett er of Shariah compliant core banking system will be funded by Shariah compliant guarantee amounting to SAR25 million certifi ed by AAOIFI. According to a fi nancing facilities, reported Gulf (US$6.66 million). statement, Bank Muscat is also using Business. The fi rst phase of the AED2.5-3 the iMal Islamic core banking system billion (US$680.46-816.55 million) project According to a bourse fi ling, the facility for its subsidiaries in Saudi Arabia and has been launched and construction is will be used to fi nance purchasing new Kuwait. expected to commence in the last quarter locations, building new fuel stations and

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ASSET MANAGEMENT Tharawat Sukuk Fund Company to be liquidated BAHRAIN: Tharawat Sukuk Fund Company, launched by Tharawat Investment House, will be voluntarily liquidated. According to Trade Arabia, RSM Mezan has been appointed as the liquidator.

EIIB-Rasmala closes its second fund UAE: EIIB-Rasmala has launched the Rasmala Leasing Fund 2, a diversiﬁ ed portfolio of Shariah compliant, asset-backed equipment leases with predominately US-domiciled high quality corporate credit lessees targeting an internal rate of return of 6-7%, net of fees and expenses, and a minimum targeted annual cash distribution of Issuers Forum approximately 8.5%, according to a 13th September 2015 press release. The asset manager has The Ritz-Carlton, Dubai announced the initial closing of the fund International Financial Centre (DIFC) with a target of US$125 million in capital commitments.

Public Mutual declares Harnessing sustainability of a global Islamic finance marketplace distributions MALAYSIA: Public Mutual has declared over RM185 million (US$44.03 The inaugural IFN Issuers Forum, a one-day forum taking place in Dubai will bring together the industry’s million) in distributions for 11 funds leading issuers, arrangers and financial intermediaries to discuss innovation in transactions, asset classes including four Islamic funds. According and Shariah rules. to a press release, a distribution of 1.5 Malaysian sen (0.36 US cents) per unit The forum will bring the industry’s elite to address current trends in Shariah compliant capital raising, was announced for the Public Islamic analyze the key features of global landmark deals and recognize highly successful transactions in the Treasures Growth Fund, 3.75 sen (0.89 global Islamic debt capital markets. US cents) per unit for the Public Sukuk Fund, 1.4 sen (0.33 US cents) per unit for PB Islamic Equity Fund and 3.75 sen for the PB Sukuk Fund. REGISTER FREE NOW at www.REDmoneyevents.com RESULTS BLME LEAD LAW PARTNER UK: Bank of London and The Middle East (BLME) recorded an after-tax proﬁ t of GBP400,000 (US$629,976) for the six MULTILATERAL STRATEGIC PARTNER ASSOCIATE PARTNERS months up to the 30th June 2015 against GBP3.99 million (US$6.28 million) for the corresponding period in 2014. The bank noted in a statement that balance sheet EXECUTIVE PARTNERS HUMAN CAPITAL PARTNER LANYARDS SPONSOR growth is being managed carefully with total assets at GBP1.33 billion (US$2.09 billion) for the ﬁ rst half of 2015 compared RESEARCH PARTNER LEAD MEDIA PARTNER STRATEGIC MEDIA PARTNERS MEDIA PARTNERS to GBP1.28 billion (US$2.01 billion) achieved last year.

Bank Muscat million) achieved in the corresponding common equity Tier 1, Tier 1 and total period in the previous year. According to capital ratios stood at 10.8%, 11.9% and OMAN: For the fi rst half of 2015, Bank a statement, Al-‘Aqar saw a slight year- 14.3% respectively. Muscat, which operates Islamic window on-year increase in total assets to RM1.6 Meethaq, registered 4% year-on-year billion (US$375.46 million) over the same growth in net profi t to OMR89.82 million Maybank period. (US$232.34 million). In its preliminary MALAYSIA: Maybank Group registered results statement, the bank also observed a net profi t of RM3.28 billion (US$777.47 a rise in income from Islamic fi nancing Seera Investment Bank million) in the fi rst half of 2015, marking by 12% to OMR9.21 million (US$23.82 BAHRAIN: Seera Investment Bank a 3.4% year-on-year growth. The group million) over the period compared to reported a consolidated net income of noted in a statement that its Islamic OMR8.22 million (US$21.26 million) US$2.3 million for the fi rst half of 2015 banking business posted a 17.4% increase achieved in 2014. against a loss of US$29.5 million in the in total income over the period driven by same period of 2014. The Islamic bank an annualized 25% expansion in gross Richard Pieris Finance said in a statement that the increase fi nancing which subsequently boosted was due to fees on the acquisition and the bank’s market share to 33.4% from SRI LANKA: Richard Pieris Finance, structuring of a new investment and exits 31.1% a year earlier. As at the 30th June which off ers Islamic fi nancial products from two investments. Total assets as at 2015, Islamic fi nance accounted for 47.9% and services, recorded a post-tax profi t of the 30th June 2015 reached US$198 million of total domestic fi nancing of the group, LKR200 million (US$1.46 million) for the while the capital adequacy ratio stood at up from 43.8% in December 2014. year ending the 31st March 2015. Imruz around 26%. Kamil, the head of Islamic fi nance at the company, told IFN that the fi rm’s Islamic product portfolio has reached LKR1.2 Hong Leong Bank TAKAFUL billion (US$8.78 million) since it began MALAYSIA: Hong Leong Bank, which Jubilee Insurance introduces off ering Shariah services in April 2014, has an Islamic banking subsidiary, for the out of a total asset base of LKR6.5 billion year ended the 30th June 2015 recorded Jubilee Takaful (US$47.57 million). It has also been a 6.2% growth in post-tax net profi t PAKISTAN: Jubilee Insurance has confi rmed that the company is looking to RM2.23 billion (US$528.58 million) launched its Takaful business for the to expand its branch network by opening while fourth quarter earnings reached Pakistani market at an event in Karachi eight units this year. RM615 million (US$145.78 million), up which was jointly hosted by both Jubilee 14.4% against the same period last year. Life and Jubilee General, according to a CIMB Islamic According to a press release, the group’s press release. MALAYSIA: For the fi rst half of 2015, CIMB Islamic posted a profi t before tax of RM257 million (US$61.17 million), a 7.3% year-on-year decline owing to slower activity in the Islamic capital markets, according to a statement. However, over the period, the bank’s Islamic gross fi nancing assets observed an increase of 12.5% year-on-year, accounting for 13.8% of total group loans. Total deposits grew by 8.5% to RM43.5 billion (US$10.35 billion).

EFU Life Assurance PAKISTAN: EFU Life Assurance, which operates Hemayah Takaful, registered growth in after-tax profi t of PKR1.25 billion (US$11.88 million) for the fi rst half of 2015 against PKR878.78 million (US$8.3 million) achieved in the similar period last year. According to its fi nancial statements, earnings per share (basic and diluted) for the period ending June 2015 stood at PKR7.85 (7.42 US cents).

Al-‘Aqar Healthcare REIT MALAYSIA: Al-‘Aqar Healthcare REIT, a member of Johor Corp, posted an after-tax proﬁ t of RM15.26 million (US$3.58 million) for the second quarter of 2015 against RM14.63 million (US$3.43

and its short-term foreign and local SEB keeps ‘AA1/Stable’ Sukuk RATINGS currency ratings at ‘B’, with the outlook rating MARC afϐirms KPSB’s Sukuk on the ratings also affi rmed at stable. According to CI in a statement, Egypt’s MALAYSIA: According to a statement MALAYSIA: MARC in a statement ratings continue to be constrained by the by RAM, Sarawak Energy (SEB)’s has affi rmed the rating of ‘AA-IS’ on fundamental weakness of the economy RM15 billion (US$3.57 billion) Sukuk Kimanis Power (KPSB)’s RM1.16 billion and public fi nances, as well as by Musharakah program (2011/2036) has (US$274.24 million) Sukuk program political and geopolitical risk factors. been reaffi rmed at ‘AA1/Stable’ based on with a stable outlook. The outlook on the the continued strong support from the Sukuk program incorporates MARC’s Qatar’s ratings afϐirmed Sarawak state and federal governments expectations that the power plant’s as well as the group’s robust fi nancial operating performance will be in line QATAR: Fitch in a statement has performance. with projections. affi rmed Qatar’s long-term foreign and local currency issuer default ratings RAM withdraws rating of GFH’s rating and outlook (IDR) at ‘AA’ with a stable outlook, the country ceiling at ‘AA+’ and the short- KLIA’s guaranteed issue afϐirmed term currency IDR at ‘F1+’. MALAYSIA: RAM in a statement has BAHRAIN: Capital Intelligence in a withdrawn the ‘AAA(s)/Stable’ rating statement has affi rmed Gulf Finance Mumtalakat’s Sukuk rating of the KL International Airport (KLIA)’s House (GFH)’s long-term and short-term downgraded RM4.06 billion (US$966.37 million) ratings at ‘BB’ and ‘B’ respectively, with a government-guaranteed Bai Bithaman stable outlook. The ratings are supported BAHRAIN: Bahrain Mumtalakat Ajil notes issuance facility as the airport by GFH’s satisfactory leverage, and the Holding Company (Mumtalakat)’s operator had fully redeemed and moderately improved diversifi cation of RM3 billion (US$714.07 million) Sukuk canceled its Islamic facility. the balance sheet and revenue streams Murabahah program (2012/2032) has in the fi rst half of 2015 following the been downgraded to ‘AA3/Stable’ Moody’s assesses Oman’s consolidation of Khaleeji Commercial from ‘AA2/Negative’ following the Bank (KHCB) (formerly an associate). downward revision of the Kingdom’s government ϐinancing sovereign rating driven by steeper- OMAN: Solid economic growth However, the major rating constraints than-anticipated fi scal deterioration as continues to support Oman (rated ‘A1/ are derived from GFH’s relatively small a result of weak oil prices, according to Negative’); however, the Sultanate’s high asset base (although expanded) coupled RAM in a statement. economic and fi scal reliance on the oil with ongoing concentration risk, just and gas sector and the limited scope for adequate liquidity, limited fi nancial Bahrain down one notch fi scal reforms will add pressure to public fl exibility, and the still challenging BAHRAIN: Following an outlook fi nances in 2015-16, according to a report investment environment exacerbated by revision to negative in April, the outlook by Moody’s on the country. the fall in oil prices, as well as the low on Bahrain’s recently downgraded global return on average assets combined with scale rating of ‘gBBB2(pi)’ and ASEAN- Bangladesh receives ratings volatility in earnings, although the latt er scale sovereign rating of ‘seaAA3(pi)’ is expected to improve due to KHCB BANGLADESH: Bangladesh’s long- has been revised to stable by RAM. The consolidation. term foreign and local currency issuer rating agency in a statement opines that default ratings (IDRs) have been affi rmed Bahrain’s fi scal consolidation eff orts are at ‘BB-’ by Fitch with a stable outlook. CI afϐirms Egypt strained as the country faces considerable The country ceiling is assigned a similar EGYPT: Capital Intelligence (CI) has constraints in reducing subsidies and rating while its short-term foreign affi rmed Egypt’s long-term foreign and social welfare spending as well as weak currency IDR stands at ‘B’. local currency sovereign ratings at ‘B-‘ oil prices.

with him 20 years of experience in local the fi rm, Blenntoft worked for Dentons MOVES and international investment banking UKMEA, according to a statement. Ibdar Bank and will lead promotional eff orts to advance the international profi le of the QFC BAHRAIN: Shariah compliant Ibdar Malaysian capital markets for investment Bank has named Janaka Mendis as its and fundraising opportunities. QATAR: Qatar Financial Center (QFC) new CFO according to a press release. has announced the appointment of Mendis joins from Al Salam Bank Hamed Al-Saadi as its chief fi nancial Bahrain. K&L Gates offi cer and tax offi cer where he will GLOBAL: Global law fi rm K&L Gates be reporting directly to the CEO and has appointed Markus Blenntoft, an assuming a strategic role in the overall Capital Markets Malaysia English-qualifi ed banking and fi nance management of QFC, according to a MALAYSIA: Capital Markets Malaysia lawyer with considerable experience in press release. Hamed will also sit on (CMM) has appointed Azhar Zabidi as debt capital markets and Islamic fi nance, the Executive Committ ee of the QFC its CEO eff ective the 1st September 2015, as a banking and asset fi nance partner Authority. according to a press release. Azhar brings in the Singapore offi ce. Prior to joining

Expected date Company's name Size Structure Announcement Date TBA Saudi Electricity Company US$1.5 billion Sukuk 1st September 2015 TBA Albaraka Turk TRY1 billion Sukuk 1st September 2015 TBA Turkiye Finans TRY1.5 billion Sukuk 1st September 2015 2016 Government of Indonesia IDR12.2 trillion Sukuk 1st September 2015 By 2017 KT Bank EUR100 million Sukuk 11th June 2015 Before end of 2015 National Commercial Bank SAR2 billion Sukuk 24th August 2015 TBA TIME dotCom up to RM1 billion Sukuk 19th August 2015 TBA Almarai SAR2 billion Sukuk 19th August 2015 2016 Government of South Africa TBA Sukuk 13th February 2015 TBA Government of Niger XOF150 billion Sukuk 26th February 2015 Third quarter of 2015 Government of Tunisia US$500 million Sukuk 13th January 2015 2015 Al Baraka Turk Participation Bank US$300 million Sukuk 12th August 2015 2016 Al Baraka Bank (Egypt) US$100 million Sukuk 12th August 2015 2016 Jordan Islamic Bank US$100 million Sukuk 12th August 2015 2016 Al Baraka Bank (South Africa) US$50 million Sukuk 12th August 2015 Fourth quarter of 2015 Government of Ivory Coast XOF300 billion Sukuk 24th April 2015 September Government of Jordan JOD200 million Sukuk 17th June 2015 2015 Government of UAE TBA Green energy Sukuk 12th March 2015 TBA Turkiye Finans US$400 million Sukuk 20th July 2015 TBA Tenaga Nasional Up to RM9.5 billion Sukuk 16th July 2015 TBA Arab National Bank Up to SAR2 billion Sukuk 16th July 2015 TBA Arab Petroleum Investment Corp US$3 billion Sukuk 1st July 2015 TBA Eskom TBA Sukuk 25th June 2015 Fourth quarter of 2015 Republic of Turkey TBA Sukuk 25th June 2015 End of 2015 Kuveyt Türk TRY800 million Sukuk 24th June 2015 TBA 1Malaysia Development RM5 billion Sukuk 18th June 2015 TBA Toyota Capital Malaysia TBA Sukuk 17th June 2015 TBA SapuraKencana Petroleum RM7 billion Sukuk Murabahah 16th June 2015 TBA Sindh Province US$200 million Sukuk 15th June 2015 TBA Grand Sepadu RM210 million Sukuk Murabahah 5th June 2015 TBA Abu Dhabi Islamic Bank US$3 billion Sukuk 29th May 2015 2015 Government of Oman US$1 billion Sukuk 26th May 2015 TBA Masraf Al Rayan TBA Sukuk 14th May 2015 TBA AEON Credit RM1 billion Sukuk Murabahah 13th May 2015 TBA Bank OCBC NISP TBA Sukuk 13th May 2015 TBA Government of Oman OMR200 million Sukuk 11th May 2015 Jun-15 Adira Dinamika Multi Finance IDR500 billion Sukuk 6th May 2015 2015/2016 ﬁ scal year Government of Egypt TBA Sukuk 5th May 2015 2016 Government of Kazakhstan TBA Sukuk 9th April 2015 TBA CIMB Group Holdings RM1 billion Sukuk 9th April 2015 TBA Government of Senegal TBA Sukuk 6th April 2015 TBA Oman Telecommunications TBA Sukuk 23rd March 2015 TBA Zorlu Energy TRY100 million Sukuk 20th March 2015 TBA Turkiye Finans RM2.05 billion Sukuk 20th March 2015 TBA Bank Muscat OMR500 million Sukuk 20th March 2015 TBA Treet Corporation PKR539.51 million Sukuk 9th March 2015 TBA Tulip Maple US$750 million Sukuk 4th March 2015 2015 Gulf Finance House US$230 million Sukuk 26th February 2015 TBA IDB TBA Sukuk 25th February 2015 TBA Qatar Islamic Bank QAR5 billion Sukuk 23rd February 2015

REDmoney Asia ex. Japan 6 Months REDmoney Europe 6 Months

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

2130 1120

1760 1040

1390 960

1020 880

650 800 Mar Apr May Jun Jul Aug Mar Apr May Jun Jul Aug

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

1140 1896

980 1592

820 1288

660 984

500 680 Mar Apr May Jun Jul Aug Mar Apr May Jun Jul Aug

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

1020 1960

890 1670

760 1380

630 1090

500 800 Mar Apr May Jun Jul Aug Mar Apr May Jun Jul Aug

SAMI Halal Food Participation (All Cap) 6 months

2100

1990

1880

1770

1660

1550 Mar-2015 Apr-2015 May-2015 Jun-2015 Jul-2015 Aug-2015

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

REDmoney Asia ex. Japan REDmoney Global REDmoney Asia ex. Japan REDmoney Global REDmoney Europe REDmoney MENA REDmoney Europe REDmoney MENA REDmoney GCC REDmoney US REDmoney GCC REDmoney US 1400 1300

1230 1130

1060 960

890 790

720 620

550 450 Mar Apr May Jun Jul Aug Mar Apr May Jun Jul Aug

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 Mar Apr May Jun Jul Aug Mar Apr May Jun Jul Aug

REDmoney Global Shariah

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

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

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

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

Eurekahedge North America Islamic Fund Index 170 165 160 155 150 145 140 135 130 125 120 115 110 105 Index Values 100 95 90 85 80 75 70 65 60 55 Jul-15 Jan-09 Jun-06 Oct-07 Sep-11 Dec-12 Dec-99 Apr-14 Apr-01 Aug-02 Mar-05 Nov-03 May-10

Top 10 Monthly Returns for ALL Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 CIMB Islamic Small Cap CIMB-Principal Asset Management 5.12 Malaysia

2 QInvest Edgewood Sharia'a QInvest 4.94 Cayman Islands

3 Meezan Tahaﬀ uz Pension - Equity Sub Al Meezan Investment Management 4.18 Pakistan

4 Al Meezan Mutual Al Meezan Investment Management 3.69 Pakistan

5 Amana Growth Saturna Capital 3.51 US

6 Atlas Pension Islamic - Equity Sub Atlas Asset Management 3.16 Pakistan

7 CIMB Islamic Equity Aggressive CIMB-Principal Asset Management 3.04 Malaysia

8 QInvest Eagle Sharia'a QInvest 3.02 Cayman Islands

9 Meezan Balanced Al Meezan Investment Management 2.73 Pakistan

10 Wafa Gestion Cap Al Moucharaka Att ijariWafa Bank 2.69 Morocco

Eurekahedge Islamic Fund Index (0.36) Based on 93.55% of funds which have reported July 2015 returns as at the 31st August 2015

Top 5 Islamic Real Estate Funds by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 Al Dar Real Estate Al Dar Asset Management (ADAM) 4.40 Kuwait

2 Oasis Crescent Global Property Equity Oasis Global Management Company (Ireland) 3.00 Ireland

3 Markaz Real Estate Kuwait Financial Centre (Markaz) 2.51 Kuwait

4 Al-'Aqar KPJ REIT AmMerchant Bank -0.71 Malaysia

5 Al Qasr GCC Real Estate & Construction Equity Banque Saudi Fransi -12.55 Saudi Arabia Trading Eurekahedge Islamic Fund Index (0.67) Based on 100.00% of funds which have reported January 2015 returns as at the 31st August 2015

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

Eurekahedge Islamic Fund Balanced Index over the last 5 years Eurekahedge Islamic Fund Balanced Index over the last 1 year

135 102 130 101 125 100 120

115 99

Percentage 110 Percentage 98 105 97 100 96 95

90 95 Jul-14 Jul-15 Jul-15 Jul-10 Jan-15 Jun-15 Oct-14 Jan-10 Feb-15 Sep-14 Jun-11 Dec-14 Oct-12 Feb-15 Sep-13 Apr-15 Dec-10 Mar-15 Aug-14 Apr-13 Nov-14 Aug-14 May-15 Mar-14 Nov-11 May-12

Top 10 Monthly Returns for Global Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 QInvest GAM Sharia'a GAM International Management 2.66 Cayman Islands

2 Oasis Crescent Global Property Equity Oasis Global Management Company (Ireland) 2.57 Ireland

3 HSBC Insurance Ethical Global Sukuk HSBC Insurance Singapore 2.56 Singapore

4 EFH Islamic Financial Institution USD QInvest 2.14 Luxembourg

5 HSBC Global Equity Index - AEF HSBC Amanah Central Shariah Committ ee 2.12 Saudi Arabia

6 Al Rajhi Global Equity UBS 1.70 Saudi Arabia

7 QInvest JOHCM Sharia'a J O Hambro Capital Management 1.44 Cayman Islands

8 HSBC Insurance Ethical Global Equity HSBC Insurance Singapore 0.85 Singapore

9 WSF Global Equity - USD I Cogent Asset Management 0.72 Guernsey

10 BLME Sharia'a Umbrella Fund SICAV-SIF Global Bank of London and The Middle East 0.55 Luxembourg Sukuk - Class A USD Eurekahedge Islamic Fund Index (0.77)

Based on 95.45% of funds which have reported July 2015 returns as at the 31st August 2015

Top 5 Yield-to-Date Returns for Fund of Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 Al Rajhi Multi Asset Growth Al Rajhi Bank 5.06 Saudi Arabia

2 Al-Mubarak Balanced Arab National Bank 3.85 Saudi Arabia

3 Al Yusr Tamoh Multi Asset Saudi Hollandi Bank 3.24 Saudi Arabia

4 Al Rajhi Multi Asset Balanced Al Rajhi Bank 1.54 Saudi Arabia

5 Al Yusr Mizan Multi Asset Saudi Hollandi Bank 1.44 Saudi Arabia

Eurekahedge Islamic Fund Index 3.02

Based on 100.00% of funds which have reported July 2015 returns as at the 31st August 2015

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

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

Most Recent Global Sukuk Priced Issuer Nationality Instrument Market US$ (mln) Managers 6th Aug 2015 Sarawak Energy Malaysia Sukuk Domestic market 386 RHB Capital, Kenanga Investment Bank, public issue AmInvestment Bank 30th Jul 2015 Kuala Lumpur Malaysia Sukuk Domestic market 289 Maybank, CIMB Group Kepong public issue 9th Jul 2015 Putrajaya Malaysia Sukuk Domestic market 237 Maybank, CIMB Group, AmInvestment Bank Holdings public issue 19th Jun 2015 Maxis Malaysia Sukuk Domestic market 226 CIMB Group public issue 4th Jun 2015 Pengurusan Air Malaysia Sukuk Domestic market 163 Maybank SPV public issue 28th May 2015 Hong Kong Hong Kong Sukuk Euro market 1,000 Standard Chartered Bank, HSBC, National Sukuk 2015 public issue Bank of Abu Dhabi, CIMB Group 27th May 2015 Garuda Indonesia Indonesia Sukuk Euro market 500 Standard Chartered Bank, Deutsche Bank, Global Sukuk public issue ANZ, National Bank of Abu Dhabi, First Gulf Bank, Maybank, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD, Al Hilal Bank, Warba Bank, Noor Bank 25th May 2015 Benih Restu Malaysia Sukuk Domestic market 278 OCBC, RHB Capital, Maybank, CIMB Group public issue 22nd May 2015 Jana Kapital Malaysia Sukuk Domestic market 419 RHB Capital public issue 22nd May 2015 Malaysia Malaysia Sukuk Domestic market 250 RHB Capital Building Society public issue 21st May 2015 Perusahaan Indonesia Sukuk Euro market 2,000 JPMorgan, HSBC, Dubai Islamic Bank, CIMB Penerbit SBSN public issue Group Indonesia III 18th May 2015 Dubai Islamic UAE Sukuk Euro market 750 Standard Chartered Bank, HSBC, National Bank public issue Bank of Abu Dhabi, First Gulf Bank, Maybank, Dubai Islamic Bank 18th May 2015 THP Suria Mekar Malaysia Sukuk Domestic market 280 RHB Capital public issue 15th May 2015 Jambatan Kedua Malaysia Sukuk Domestic market 560 RHB Capital, Maybank, Kenanga Investment public issue Bank, AmInvestment Bank 21st Apr 2015 Noor Bank UAE Sukuk Euro market 500 Standard Chartered Bank, Dubai Islamic public issue Bank, South Indian Bank, Citigroup, Emirates NBD, Al Hilal Bank, QInvest, Barwa Bank 17th Apr 2015 Aman Sukuk Malaysia Sukuk Domestic market 140 RHB Capital, CIMB Group, AmInvestment public issue Bank 8th Apr 2015 Malaysia Malaysia Sukuk Euro market 1,500 Standard Chartered Bank, HSBC, CIMB Sovereign Sukuk public issue Group 6th Apr 2015 Point Zone (M) Malaysia Sukuk Domestic market 219 Maybank, CIMB Group, Hong Leong public issue Financial Group, Aﬃ n Investment Bank, AmInvestment Bank 25th Mar 2015 Khadrawy UAE Sukuk Euro market 913 Standard Chartered Bank, JPMorgan, HSBC, public issue National Bank of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Citigroup, Emirates NBD 25th Mar 2015 Danga Capital Malaysia Sukuk Domestic market 547 RHB Capital, 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 12 1500 18 600 Value (US$bn) 16 10 1250 14 500 Avg Size (US$m) 8 1000 12 400 10 300 6 750 8 4 500 6 200 4 100 2 250 2 0 0 0 0 11253 4 5 6 7 8 9 10 11 12 2 3 4 6 7 8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 2014 2015 2010 2011 2012 2013 2014 2015

Top 30 Issuers of Global Sukuk 12 Months Issuer Nationality Instrument Market US$ Iss Managers (mln) (%) 1 Perusahaan Penerbit Indonesia Sukuk Euro market 3,500 9.6 Standard Chartered Bank, HSBC, CIMB Group, Emirates NBD, SBSN Indonesia III public issue JPMorgan, Dubai Islamic Bank 2 IDB Trust Services Saudi Sukuk Euro market 2,881 7.9 Standard Chartered Bank, Deutsche Bank, HSBC, National Bank Arabia public issue of Abu Dhabi, First Gulf Bank, Maybank, Gulf International Bank, Natixis, CIMB Group, Saudi National Commercial Bank, RHB Capital, Dubai Islamic Bank 3 Dubai Islamic Bank UAE Sukuk Euro market 1,750 4.8 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, public issue Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD, Al Hilal Bank, Noor Bank, First Gulf Bank, Maybank 4 DanaInfra Nasional Malaysia Sukuk Domestic market 1,663 4.6 RHB Capital, Maybank, Bank Islam Malaysia, CIMB Group, public issue AmInvestment Bank, Aﬃ n Investment Bank 5 Malaysia Sovereign Malaysia Sukuk Euro market 1,500 4.1 Maybank Sukuk public issue 6 Petronas Global Malaysia Sukuk Euro market 1,250 3.4 CIMB Group Sukuk public issue 7 Islamic Republic of Pakistan Sukuk Euro market 1,000 2.7 AmInvestment Bank Pakistan public issue 7 Hong Kong Sukuk Hong Sukuk Euro market 1,000 2.7 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, 2015 Kong public issue CIMB Group 7 Hong Kong Sukuk Hong Sukuk Euro market 1,000 2.7 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, 2014 Kong public issue CIMB Group 7 Hazine Mustesarligi Turkey Sukuk Euro market 1,000 2.7 HSBC, CIMB Group, Citigroup Varlik Kiralama public issue Anonim Sirketi 7 Government of Ras UAE Sukuk Euro market 1,000 2.7 JPMorgan, National Bank of Abu Dhabi, Citigroup, Al Hilal Al Khaimah public issue Bank 12 Danga Capital Malaysia Sukuk Domestic market 992 2.7 RHB Capital, CIMB Group public issue 13 Bank Pembangunan Malaysia Sukuk Domestic market 948 2.6 HSBC, CIMB Group Malaysia public issue 14 Khadrawy UAE Sukuk Euro market 913 2.5 Standard Chartered Bank, JPMorgan, HSBC, National Bank public issue of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Citigroup, Emirates NBD 15 Sharjah Sukuk UAE Sukuk Euro market 750 2.1 Standard Chartered Bank, HSBC, Kuwait Finance House, public issue National Bank of Abu Dhabi, Sharjah Islamic Bank 16 Dubai International UAE Sukuk Euro market 700 1.9 Maybank, CIMB Group Financial Centre public issue 17 Mumtalakat Sukuk Bahrain Sukuk Euro market 594 1.6 Standard Chartered Bank, Deutsche Bank, BNP Paribas, Holding public issue Mitsubishi UFJ Financial Group 18 Jambatan Kedua Malaysia Sukuk Domestic market 560 1.5 RHB Capital, Maybank, Kenanga Investment Bank, public issue AmInvestment Bank 19 Prasarana Malaysia Malaysia Sukuk Domestic market 541 1.5 RHB Capital, Kenanga Investment Bank, CIMB Group, Aﬃ n public issue Investment Bank, AmInvestment Bank 20 Sharjah Islamic UAE Sukuk Euro market 500 1.4 Standard Chartered Bank, HSBC, Kuwait Finance House, Dubai Bank public issue Islamic Bank, Abu Dhabi Islamic Bank, Emirates NBD, Al Hilal Bank, Noor Bank 20 Republic of South South Sukuk Euro market 500 1.4 BNP Paribas, Standard Bank, Kuwait Finance House Africa Africa public issue 20 Noor Bank UAE Sukuk Euro market 500 1.4 Standard Chartered Bank, Dubai Islamic Bank, South Indian Bank, public issue Citigroup, Emirates NBD, Al Hilal Bank, QInvest, Barwa Bank 20 JANY Sukuk US Sukuk Euro market 500 1.4 Saudi National Commercial Bank, Goldman Sachs, National Bank of public issue Abu Dhabi, Abu Dhabi Islamic Bank, Emirates NBD, QInvest 20 IFFIm Sukuk UK Sukuk Euro market 500 1.4 Saudi National Commercial Bank, Standard Chartered Bank, public issue National Bank of Abu Dhabi, CIMB Group, Barwa Bank 20 Flydubai UAE Sukuk Euro market 500 1.4 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, public issue Dubai Islamic Bank, Emirates NBD, Credit Agricole, Noor Bank 26 Garuda Indonesia Indonesia Sukuk Euro market 496 1.4 Standard Chartered Bank, Deutsche Bank, ANZ, National Bank Global Sukuk public issue of Abu Dhabi, First Gulf Bank, Maybank, Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD, Al Hilal Bank, Warba Bank, Noor Bank 27 Jana Kapital Malaysia Sukuk Domestic market 434 1.2 RHB Capital public issue 28 Malaysia Building Malaysia Sukuk Domestic market 433 1.2 RHB Capital, DRB-HICOM, AmInvestment Bank Society public issue 29 National Higher Malaysia Sukuk Domestic market 426 1.2 Maybank, CIMB Group Education Fund public issue 30 Sarawak Energy Malaysia Sukuk Domestic market 386 1.1 RHB Capital, Kenanga Investment Bank, AmInvestment Bank public issue 36,498 100

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

Manager US$ (mln) Iss % US dollar 22.1 1 CIMB Group 6,189 51 17.0 Malaysian ringgit 13.3 2 HSBC 4,310 25 11.8 0.6 3 Standard Chartered Bank 3,351 24 9.2 Euro

4 RHB Capital 3,213 40 8.8 Saudi riyal 0.3

5 Maybank 2,961 31 8.1 6 AmInvestment Bank 1,889 24 5.2 Sukuk Volume by Issuer Nation US$ (billion) 12 Months

7 National Bank of Abu Dhabi 1,838 13 5.0 Malaysia 15.4 8 Dubai Islamic Bank 1,638 11 4.5 UAE 6.6 Indonesia 4.2 9 Citigroup 1,149 6 3.2 Saudi Arabia 3.1 10 Emirates NBD 1,110 9 3.0 Hong Kong 2.0 11 JPMorgan 1,003 4 2.8 Turkey 1.2 12 Deutsche Bank 745 5 2.0 Pakistan 1.0 13 Natixis 658 3 1.8 14 Kenanga Investment Bank 559 12 1.5 Global Sukuk Volume by Sector 12 Months 15 Al Hilal Bank 541 5 1.5 11% 16 Noor Bank 475 5 1.3 3% Finance 5% 17 BNP Paribas 462 4 1.3 40% Government 8% Transportation 18 Aﬃ n Investment Bank 424 6 1.2 Construction/Building 19 Kuwait Finance House 407 4 1.1 Oil & Gas Other 20 First Gulf Bank 333 3 0.9 33% 21 Sharjah Islamic Bank 316 3 0.9 22 Saudi National Commercial Bank 294 3 0.8 Global Sukuk Volume - US$ Analysis 23 Mitsubishi UFJ Financial Group 287 2 0.8 24 Gulf International Bank 278 2 0.8 US$bn US$m 25 Abu Dhabi Islamic Bank 260 3 0.7 18 600 16 Non-US$ US$ 500 26 Hong Leong Financial Group 195 7 0.5 14 12 400 10 27 Bank Islam Malaysia 172 2 0.5 300 8 28 Standard Bank 167 1 0.5 6 200 4 100 29 Barwa Bank 163 2 0.5 2 0 0 30 QInvest 146 2 0.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 2010 2011 2012 2013 2014 2015 Total 36,498 133 100.0

Top Islamic Finance Related Project Finance Mandated Lead Top Islamic Finance Related Project Financing Legal Advisors Arrangers 12 Months Ranking 12 Months Mandated Lead Arranger US$ (million) No % Legal Advisor US$ (million) No % 1 Sumitomo Mitsui Financial Group 1,414 2 16.4 1 Salans FMC SNR Denton Group 3,334 2 22.0 2 HSBC 750 3 8.7 2 Milbank Tweed Hadley & McCloy 2,704 1 17.8 3 National Commercial Bank 651 3 7.5 2 White & Case 2,704 1 17.8 4 Riyad Bank 584 2 6.8 4 Linklaters 1,631 2 10.8 5 Samba Capital & Investment 518 3 6.0 5 Cliﬀ ord Chance 1,380 3 9.1 Management 6 Mitsubishi UFJ Financial Group 414 2 4.8 6 Allen & Overy 1,086 5 7.2 6 Mizuho Financial Group 414 2 4.8 7 Chadbourne & Parke 660 1 4.4 8 Al Rajhi Capital 356 3 4.1 8 Baker & McKenzie 433 2 2.9 9 Banque Saudi Fransi 346 2 4.0 9 Norton Rose Fulbright 354 1 2.3 10 National Bank of Kuwait 290 1 3.4 9 Pekin & Pekin 354 1 2.3

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 First Gulf Bank 1,259 15 6.8 th 2 Abu Dhabi Islamic Bank 1,200 7 6.4 30 Mar 2015 Saudi Aramco Saudi Arabia 9,999 3 Samba Capital 1,128 5 6.1 16th Mar 2015 Rabigh Reﬁ ning & Saudi Arabia 2,870 Petrochemical 4 National Bank of Abu Dhabi 1,032 7 5.5 15th Jan 2015 SapuraKencana TMC Malaysia 2,239 5 HSBC 953 10 5.1 18th Jun 2015 Emirates National Oil UAE 1,500 6 Banque Saudi Fransi 906 4 4.9 th 7 Saudi National Commercial Bank 758 5 4.1 19 Nov 2014 Saudi BinLaden Group Saudi Arabia 1,327 8 Emirates NBD 710 9 3.8 8th Sep 2014 Atlantis The Palm UAE 1,100 9 Standard Chartered Bank 693 8 3.7 10th Mar 2015 Port & Free Zone World UAE 1,100 10 Riyad Bank 644 3 3.5 17th Apr 2015 Turkiye Vakiﬂ ar Bankasi Turkey 1,021 11 Abu Dhabi Commercial Bank 634 4 3.4 22nd Mar 2015 Arab Petroleum Saudi Arabia 950 12 Mashreqbank 541 6 2.9 Investments 13 Dubai Islamic Bank 526 5 2.8 28th Jul 2015 GEMS Education UAE 817 14 Noor Bank 512 6 2.7 15 Alinma Bank 490 2 2.6 Top Islamic Finance Related Financing by Country 12 Months 16 Arab Banking Corporation 484 6 2.6 Nationality US$ (mln) No % 1 UAE 6,862 16 36.8 17 Union National Bank 336 6 1.8 2 Saudi Arabia 5,637 6 30.2 18 Barwa Bank 331 5 1.8 3 Malaysia 2,411 3 12.9 19 RHB Capital 322 3 1.7 4 Turkey 1,661 4 8.9 20 Sumitomo Mitsui Financial Group 314 3 1.7 5 Kuwait 661 2 3.5 21 ING 269 2 1.4 6 Qatar 500 1 2.7 22 Gulf International Bank 263 3 1.4 7 Cayman Islands 325 1 1.7 8 India 272 1 1.5 23 Maybank 247 2 1.3 9 Egypt 212 1 1.1 23 AmInvestment Bank 247 2 1.3 10 Oman 55 1 0.3 25 Qatar Islamic Bank 237 4 1.3 11 Italy 51 1 0.3 26 UOB 215 1 1.2 Top Islamic Finance Related Financing by Sector 12 Months 26 CIMB Group 215 1 1.2

28 SABB 197 2 1.1 Oil & Gas 29 Al Hilal Bank 191 2 1.0 Finance 30 Citigroup 180 3 1.0 Professional Services

Top Islamic Finance Related Financing Mandated Lead Arrangers Utility & Energy 12 Months Transportation Bookrunner US$ (mln) No % US$ bln0 128 3 4 5 6 7 1 Maybank 2,239 1 20.5

2 Samba Capital 1,327 1 12.1 Global Islamic Financing - Years to Maturity (YTD Comparison) 3 Abu Dhabi Islamic Bank 1,130 5 10.3 2015 4 Noor Bank 694 3 6.4 2014 5 Saudi National Commercial Bank 666 1 6.1 2013 2012 5 Riyad Bank 666 1 6.1 2011 5 Alinma Bank 666 1 6.1 2010 2009 8 Emirates NBD 431 3 3.9 2008 9 Dubai Islamic Bank 376 2 3.4 0% 20% 40% 60% 80% 100% 0-3yrs 3-5yrs 5-7yrs 7-10yrs 10+yrs 10 National Bank of Abu Dhabi 313 2 2.9

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

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1MDB 8 Euris Group 25 Mitsui and Co 8 90 North 13 Fajr Capital 30 MNRB Holdings 13 AAOIFI 30 Fikra 17 MNRB Retakaful 13 Abraaj Group 30 Finance Accreditation Agency 21 Moody’s 33 Abu Dhabi Islamic Bank 30 Financial Conduct Authority UK 5 Muamalat Assahiha Bank 20 Agrobank 29 First Gulf Bank 30 NASDAQ Dubai 12, 28 Al Baraka Bank 20 First Habib Modaraba 19 National Bank of Abu Dhabi 28 Al Baraka Bank (Saudi Arabia) 20 First National Bank 29 National Bank of Australia 29 Al Baraka Banking Group 28 Fitch 33 National Bank of Fujairah 30 Al Falaah Takaful 27 Fund for Financial Support of Agriculture 12 Al Hilal Bank (Kazakhtan) 12 FundedByMe 5 National Bank of Kazakhstan 12, 18 Al Maali Consulting Group 17 GEMS Education 30 National Bank of Mauritania 20 Al Madina Takaful 13 Great Eastern Takaful 10 National Bank of Tajikistan 12 Al Meezan Investment Management 14 Gulf Capital 30 National Commercial Bank 28, 30 Al Othaim Real Estate and Investment Co 28 Gulf Finance House 33 Noor Bank 9, 28, 30 Al Rajhi Malaysia 10 Gulf International Bank 28 NoorAssur 29 Al Raya for Foodstuff Co 30 HalalSky 3, 6 Offi ce of the Superintendent of Al Salam Bank Bahrain 33 Hemayah Takaful 32 Financial Institutions (Canada) 16 Al-‘Aqar Healthcare REIT 32 Hong Leong Bank 32 Otoritas Jasa Keuangan 13 Albaraka Turk 28 HSBC 28 Oxford Center for Islamic Studies 22 Alix Global 5 IBA-Moscow 12 Panache International 4 AM Best 13 Ibdar Bank 33 Persian International Bank 30 Arab Insurance Group 13 IBFD Fund 17 PineBridge Investments Middle East 13 Arabian Scandinavian Insurance Co 13 IBFIM 17 PitchIN 5 Askari Bank ICD 11, 12, 20 Premier Insurance 13 Association for Development of Islamic Finance 17, 18 IDB 12 Propellar Crowd+ 5 Ata Plus 5 IGI Life Insurance 13 Public Mutual 31 Avicennia 13 IIUM Institute of Islamic Banking and Finance 20 Bahrain Mumtalakat Holding Company 33 INCEIF 17 Puncak Niaga Holdings 28 Bahrain Solidarity Company 13 Infi nity COnsultant 11 PwC 1 Bank Al Wafa Mauritanie Islamic 20 Infrastructure Leasing & Financial Services 11 QFC Authority 33 Bank Melli 30 Insurance Authority(UAE) 13 RAM 33 Bank Muamalat Malaysia 10 International Bank of Azerbaijan 12 Ramly Food Industries 29 Bank Muscat 30, 32 International Finance Corp Reading University 22 Bank Negara Malaysia 28 International Finance Corporation 4, 28 RHB Islamic Bank 10 Bank of Ghana 29 International Islamic College 29 Richard Pieris Arpico Finance 32 Bank of Tokyo Mitsubishi UFJ 21 International Organization of Richard Pieris Finance 23 Bank Pembangunan Malaysia 29 Securities Commissions 1 RSM Mezan 31 Bank Popular de Mauritania 20 Islamabad Stock Exchange 8, 19 S&P 8 Bank Simpanan Nasional 29 Islamic Banking and Finance Institute 29 Sarawak Energy 33 Banque Saudi Fransi 28 Jasindo Takaful Saudi Automotive Services Company 30 Beehive 3, 5, 6, 7 JaZaa Financial Advisory 11 Saudi Electricity Company 28 Bereket Varlik Kiralama 28 Jimah East Power 8 SECP 8, 19, 27 Bina Marga 9 Johor Corp 32 Securities Commission of Malaysia 5 BLME 31 Jubilee General 31 Seera Investment Bank 32 Bonki Rushdi Tojikiston 12 Jubilee Insurance 27, 32 Shariyah Review Bureau 7 Borden Ladner Gervais 16 Jubilee Life 32 Brunei Insurance and Takaful Association 13 Juris Corp 11 SMAI 20 Capital Intelligence 33 Karachi Stock Exchange 8, 19 Standard Chartered Bank 28 Capital Markets Board of Turkey 28 KazAgro 12 Sunway Treasury Sukuk 28 Central Bank of Bahrain 13 Kazakhstan Stock Exchange 12 Syarikat Takaful Malaysia 10 Central Bank of Iran 30 Khaleeji Commercial Bank 33 T’azur Islamic Insurance Company 13 Central Bank of Mauritania (BCM) 20 Khazanah Nasional 13 TAAMIN 20 Central Depository Company of Pakistan 14 Kimanis Power 33 Takaful Halal Insurance 12 CIBAFI 17 KL International Airport 33 Takaful Ikhlas 13 CIMB Islamic 18, 32 Lahore Stock Exchange 8, 19 Takaful insurance Company 13 Cobalt Underwriting 13 Legisquadra 21 Takaful Outsource 27 Commercial Leasing and Finance 29 Levant Capital 30 Takaful Re 13 Crescent Wealth 29 Liwwa 4 Tenaga Nasional 8 Crowdonomic 5 Lloyd’s of London 13 TF Varlik Kiralama 28 Dentons UKMEA 33 Lockton’s Real Estate and Construction 13 Tharawat Investment House 31 Development Bank of Kazakhstan 12 LOLC Insurance Company 27 Tharawat Sukuk Fund Company 31 Deyaar Development 30 London Stock Exchange 28 The Box 4 Draznine Advisory 17 MAA Group 13 The New Bank of Mauritania 20 Dubai Financial Services Authority 13 MAA Takaful 13 Dubai Islamic Bank 28, 30 Malaysian RE (Dubai) 13 The Rohatyn Group 30 Dubai Multi Commodities Center 7 Malaysian Reinsurance 13 Turkiye Finans 28 Dubai Properties 30 Manulife Indonesia UniKL Business School 17 Durham University 22 MARC 33 UNIRAZAK 17 EFU Group 27 Mashreq 30 Vision Insurance Company 13 EFU Life Assurance 27, 31 Massolution 1, 5 VneshPromBank 17 EIIB-Rasmala 7, 31 Mauritania Islamic Bank 20 Wethaq Takaful Egypt 13 Ekvita 12 Maybank Group 32 Wethaq Takaful Insurance Company 13 Emirates NBD 30 Meethaq 30 World Bank 28 Eureeca 3, 5 Meezan Bank 13, 14, 29 Zaman Bank 12

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