Quantum Solar: What Happens When Green Sukuk Falter?

The World’s Leading Islamic Finance News Provider

(All Cap) 1300 South Africa’s Two years Mining Astana electricity post-Sukuk blockchain International 1250 1,218.93 1200 1,214.98 provider looks test, Russia is potential: Financial Centre 1150 at domestic and ready to debut Iran turns to works on -0.32% 1100 international Sukuk...7 technopreneurs...7 Islamic Finance W T F S S M T Sukuk...5 Master Plan...8 Powered by: IdealRatings®

COVER STORY 24th July 2019 (Volume 16 Issue 29) Quantum Solar: What happens when green Sukuk falter?

The RM1 billion (US$243.4 million) a total project cost of around RM1.24 immediate impact” from the delay due green Sukuk issuance from Quantum billion (US$301.8 million, funded on an to the project’s suffi cient cash buff ers Solar Park Malaysia (QSP) was the 80:20 Sukuk to equity basis), the 150 MW and sponsor support, with any project biggest green SRI issuance out of project made QSP the largest solar power cost overruns paid by the sponsors Malaysia. Launched to a fanfare of producer in Malaysia — and Malaysia from a RM50 million (US$12.15 million) praise in June 2017 — and shortlisted one of the biggest producers in ASEAN. contingency equity facility backed by a for the IFN Deal of the Year — the bank guarantee. Pre-funding under the transaction was a milestone in Given a preliminary rating of ‘AA-IS’ Sukuk enabled the fi rst profi t payment Malaysia’s debt capital market, paving with a stable outlook by the Malaysian to be made on the 6th April 2018, and the the way for a host of other corporate Rating Corporation (MARC), the project fi nancial service reserve was also met for issuers to ‘go green’. But the project initially looked strong. The equity the second profi t payment. has been plagued by delays, with (around RM250 million/US$61 million, a downgrade in January presaging backed by a solid bank guarantee) was But by the third quarter of 2018, the serious concerns around the viability injected into QSP Semenanjung before cracks were starting to show. of the Sukuk. Could a default by QSP any of the project companies began be imminent? And what impact might major work; and the projected cash What went wrong? this have on Malaysia’s burgeoning fl ow coverage was robust, supported An independent consultant engineer’s market for green Sukuk? LAUREN by 21-year purchase agreements with report in September rated construction MCAUGHTRY explores. Tenaga Nasional (TNB), the state progress at just 68.1% for the Jasin plant electricity provider. Based on a 10-month and 62.3% for the Merchang plant, and What’s it all about? construction timeline, the commercial the CODs were revised to the 22nd and The QSP Sukuk Murabahah, operation date (COD) of the three plants 26th March 2019 respectively. Although issued through the wholly- was originally scheduled for the the Gurun plant achieved COD on st owned Quantum Solar 31 December 2017. the 19th December 2018, by January Park (Semenanjung) (QSP the MARC had downgraded the QSP Semenanjung), was created However, these dates proved Sukuk rating to ‘A+-IS’ and placed it on to fund the concurrent unachievable, and TNB was a negative outlook due to the increased development of three 50 forced to extend the COD risk of termination by TNB of its solar megawatt (50 MW) alternating for all three plants — fi rst power purchase agreement because of st current solar photovoltaic to the 31 March 2018, and the lengthy delays. th power plants: one each subsequently to the 30 June in Gurun (Kedah), 2018. “Completion delay of the plants has Merchang also weakened the overall project cash (Terengganu) and The MARC at fi rst fl ows and strained QSP Semenanjung’s predicted “no Jasin (Melaka). With continued on page 3

IN ASSOCIATION WITH FORUM 29thth AUGUST 2019 SINGAPORE SGX Centre, Singapore 2019 www.REDmoneyevents.com IFN RAPIDS

Volume 16 Issue 29 Gambia’s National Food DEALS Security Processing and ASSET IFN Rapids ...... 2 Bank Negara Malaysia Cooperation IFN Reports: issues Shariah compliant MANAGEMENT • South Africa’s heavily indebted electricity Sarwa Capital’s proposal money market facilities to distribute bonus shares Perth Mint Physical Gold provider looks at domestic and international ETF lists on New York Ministry of Finance of approved by Financial Sukuk • Bahraini Islamic banks race to grab Stock Exchange open banking domination as rules come into Indonesia reopens auction Regulatory Authority eff ect • Company Focus: Off a • Two years of six Islamic papers Faisal Islamic Bank’s Wahed Invest launches Shariah compliant US post-Sukuk test, Russia is ready to debut Sukuk Central Bank of Bahrain’s shareholders approve equity ETF • Mining blockchain potential: Iran turns to 91-day Sukuk Salam capital increase to US$1 technopreneurs to develop digital token and oversubscribed billion GFH Capital acquires smart contract off erings • Astana International Ivory Coast’s economic healthcare portfolio in Financial Centre works on Islamic Finance Central Bank of Gambia’s committ ee approves Islamic the US exceeding US$180 Master Plan touted to make Kazakhstan a Sukuk Salam facilities microfi nance bill million in value regional hub • Turkey adds to Sukuk repertoire oversubscribed Investcorp Technology with sophomore Tier 1 capital Sukuk facility • Gamuda off ers 92-day Banque Islamique du Partners acquires majority Sovereign securities: Seven regular issuers tap Islamic commercial paper Senegal launches Tamweel stake in Contentserv the Islamic capital market ...... 5 for RM50 million (US$12.16 Touch million) Bareksa introduces Bareksa IFN Analyses: Umroh to off er Shariah TAKAFUL Canada: The progressive Islamic fund space . ..10 Bangladesh Bank places compliant mutual funds to Financial technology: Many new green shoots 11 three-month and six-month Cobalt Underwriting and fi nance Umrah pilgrimage Case Study: Bangladesh Government Chaucer Syndicate donate ADIB UK’s fi nancing of portfolio purchase: Islami Investment Bonds Bangladesh Petroleum London’s fi rst-ever Islamic surplus to Teenage Cancer Fortifying UK–Middle East real estate Sunway Treasury Sukuk Corporation to receive Trust relationships ...... 12 places one Islamic medium- US$1.2 billion-worth Shariah Pronouncement: term note and two Islamic of fi nancing from Pak-Qatar Family Takaful Real estate ...... 13 commercial papers International Islamic opens new branch in Back To Basics: Trade Finance Corporation Gulshan-e-Iqbal Brunei raises BN$100 Genius of the tripartite agreement in Ijarah million (US$73.49 million) Bond Pricing Agency Saudi Arabian Monetary fi nancing ...... 14 from short-term Sukuk Malaysia to launch Authority renews Column: Daud speaks Ijarah Malaysia’s fi rst insurance license of Union Potpourri ...... 15 Environmental, Social and Cooperative Insurance IFN Country Correspondents: Central Bank of Kuwait Governance Bond Index Company Hong Kong; Afghanistan; the US; Algeria; Egypt; off ers KWD240 million Series Nigeria ...... 16 (US$785.95 million)-worth IFN Sector Correspondents: of conventional bonds and RATINGS Islamic Microfi nance; Islamic Leasing; Mergers & related Tawarruq facilities RESULTS Konsortium KAJV secures Acquisitions; Halal Industry ...... 20 Sabah Credit Corporation Kuwait Finance House ‘AA- ’ rating from Malaysian Special Reports: IS issues Islamic commercial announces net profi t Rating Corporation for its Islamic fi nance training and development paper worth RM50 million of KWD107.7 million Sukuk program landscape from 2018 ...... 23 (US$12.14 million) (US$352.7 million) for fi rst Islamic banking in Turkey ...... 25 half of 2019 RAM reaffi rms ‘AAA(fg)/ Country Feature: Kazakhstan’s trade ties Stable’ rating on Puncak An uncertain future but Islamic fi nance can lead with the UAE remain on Qatar Islamic Bank Wangi’s Islamic paper the way in the UK ...... 27 solid growth trajectory announces 7.5% net profi t program growth for fi rst half of 2019 Sector Feature: Warba Bank gets nod Islamic fi nance: Boosted by Brexit? ...... 28 for Sukuk not exceeding Dubai Islamic Bank MOVES Book Excerpt: US$500 million reports 13% jump in group Islamic fund and wealth management: A way net profi t for fi rst half of SABB Takaful appoints forward ...... 29 2019 Mohammed Abdulaziz NEWS Alshaya and Sami Jadaan Emirates Islamic reports Al Muhaid as chairman News Briefs ...... 30 Hĳ ra Bank announces 39% jump in net profi t for and deputy chairman Deal Tracker ...... 36 launch of sales of public fi rst half of 2019 respectively REDmoney Shariah Indexes ...... 37 shares Eurekahedge Funds Tables ...... 39 First Abu Dhabi Bank Ajman Bank awards senior International Islamic Dealogic League Tables ...... 42 announces 4% net profi t roles in higher management Trade Finance Corporation REDmoney Events ...... 46 growth for fi rst half of 2019 to Emiratis Subscription Contact...... 46 donates fertilizers to

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.

Quantum Solar: What happens when green Sukuk falter? Continued from page 1 liquidity position in 2019 and 2020, bondholder payments. No contractual “There are inherent risks in any projects necessitating the issuer to undertake defaults,” Mark Ravunni, the head undertaken through a project fi nancing proposed enhancements to the Sukuk of fi nance and asset management at model, be it at the construction phase structure,” warned the MARC. Norway-based Scatec Solar Solutions, or at the operational phase,” agreed QSP’s EPC construction contractor in Rajan. “The issues that QSP has faced, QSP Semenanjung subsequently Malaysia, confi rmed to IFN this week. which were largely related to terrain requested a further COD extension to “[A default is] not likely, so restructuring and weather conditions that had led the 30th April 2019, at the same time [will not be] considered.” to construction delays, are therefore extending the Sukuk walkaway event nothing unusual. How well these risks date (the date on which either party are mitigated and the contingencies could terminate the Sukuk agreement in Completion that are put in place would be key the event that the other party is not of considerations in any project fi nancing good standing or goes into default) to the delay of the assessment.” same date. plants has also Are these challenges unique to green Although the Jasin plant fi nally Sukuk? Of course not. But there is a achieved COD on the 15th April 2019, weakened the overall danger that they could be accentuated the Merchang plant continued to face by the growing trend toward delays (with a predicted COD pushed project cash ϔlows environmentally friendly issuances, back to the 17th May 2019) and in April, which by their nature are likely to be QSP Semenanjung was forced to request and strained QSP project fi nancings rather than the more the Energy Commission (EC) for yet pedestrian working capital requirements. another walkaway clause extension — Semenanjung’s this time to the 30th June 2019 — with the liquidity position What should change? Sukukholders required to grant a waiver So does the regulator have a to avert a default of the Sukuk. in 2019 and 2020, responsibility in this regard? Again, the answer is probably no. What happens now? necessitating It must be stressed that the issuance is “The Securities Commission Malaysia not in default, and the company has so the issuer to (SC) closely monitors all developments far been meeting its fi nancial obligations in the Malaysian bond and Sukuk under the issuance. undertake proposed market, and as a matt er of policy, we do not comment on the credit rating of “Quantum Solar is currently rated enhancements to the any issuer,” said the SC in an emailed fairly highly at ‘A+’ but has been on a statement to IFN regarding the QSP negative watch. The negative watch Sukuk Sukuk. is to highlight the fact that Quantum Solar … missed a timeline to commence structure The SC has been immensely supportive commercial operations on one of its three of green Sukuk issuance, off ering robust solar power plants,” explained Rajan guidelines for potential originators in Paramesran, the chief rating offi cer at What happens next? the form of its SRI Sukuk Framework the MARC, speaking to IFN. “Quantum So what happens next? There is no launched back in 2014. Solar has since been working to rectify question that QSP has had a diffi cult this situation and the rating agency year, and has struggled to meet its “The guidelines have worked well understands that the company has made obligations and make its Sukuk in sett ing the stage for green projects substantial progress in this regard. payments. Players involved in the to take off in Malaysia. As a result, deal have been notably tight-lipped — we are witnessing a rapid growth of The Merchang plant was fi nally arrangers CIMB and Maybank declined such projects and to date have not connected to the Malaysian grid on the to speak with IFN for this story, as did encountered problems to an extent that 31st May 2019 — over two months later QSP legal advisors ZICO Law. warrants a rethink,” noted Rajan. than the predicted COD given to the EC when requesting the second walkaway It seems as if the fi rm has In fact, further regulation could do extension, and only just scraping ahead fi nally managed to meet more harm than good. “Tighter of the 30th June walkaway deadline. its obligations — and in issuance requirements would Following this announcement, the MARC doing so, avert a crisis that squeeze the already limited supply on the 23rd July removed the QSP Sukuk could have had far more of Sukuk in the market. Instead, the from negative watch and reaffi rmed its serious repercussions than individual investors should take on rating at ‘A+-IS’ with a stable outlook. just a single Sukuk failure. the responsibility to screen and fi lter But how did it get to this their universe thoroughly before “All plants have reached COD and point — and could it investing,” pointed out Abd happen again? producing revenue. No delays in continued on page 4

Quantum Solar: What happens when green Sukuk falter? Continued from page 3

Razak Salimin, the head of investment at instance, a default by a company in as green and Islamic fi nance continue to BIMB Investment Management, which the steel or property sector has never converge, Malaysia has the opportunity in 2018 launched the world’s fi rst ESG stopped other companies operating to double down on this growing market. Sukuk fund and employs the S-Ray tool in these sectors from tapping the debt developed by Arabesque, its strategic markets. As at the end of June 2019, eight issuers partner, for its ESG screening. have come to the market under the SC’s “As in any sector, there are many risk SRI Sukuk Framework. Six of these have Interestingly, the BIMB ESG Sukuk Fund factors that can aff ect a company’s issued green SRI Sukuk, raising a total does not hold a position in the QSP performance,” agreed Rajan. “Issuers and of RM2.87 billion (US$698.6 million) to Sukuk — precisely because it did not fi nanciers would consider these factors facilitate fi nancing of projects that benefi t meet the screening requirements. “We while structuring deals that are receptive the environment. Three of them are also do hold other Malaysian green Sukuk,” to investors’ needs and at the same time recognized as ASEAN green bonds. explained Razak. “We prefer Sukuk alleviate their concerns.” backed by projects that are already completed and generating a positive cash IFN contacted other green Sukuk issuers In the event fl ow. Sukuk based on projects still under for their reaction to the QSP Sukuk: construction come with an additional including Tadau Energy, PNB Merdeka of a QSP layer of risk.” and Mudajaya Group (through Sinar Kamiri), but received no response. default, other It must be What comes next? upcoming issuances, Despite the justifi able concerns around stressed that the QSP Sukuk, the struggles of one especially for those issuer should neither represent nor be to going through a the issuance is not the detriment of the wider market. construction stage, in default, and the “Green Sukuk has to be seriously considered and we cannot aff ord to may have to offer company has so far ignore it,” said a source close to the deal. “It is likely that the regulators will higher been meeting its continue to make it a priority to facilitate green issuance. You have to structure yields ϔinancial obligations instruments to suit the demands of the time, so it is inevitable that the market under the will continue to grow — it is a tide that cannot be rolled back.” What about QSP? issuance Given its previous problems, would QSP As such, we are likely to continue to see ever return to the green Sukuk market? new issuers come to market — although There are no indications of a return, What could have happened? whether they come fast enough is a despite new funding requirements on the It looks as if for now, disaster has been diff erent question. horizon. avoided. But what implications would — or could — a Sukuk default have for the “The problem with green Sukuk — and For example, in December 2018 Scatec wider green market in Malaysia? Sukuk in general — remains the liquidity Solar, a preferential shareholder in QSP of the issuances themselves. We need Semenanjung, closed fi nancing for a “Despite the bad news surrounding QSP, more liquidity in the system in order to new 47 MW Redsol project in Northwest we have not seen a negative impact on be able to adjust our holdings,” explained Malaysia, its fourth in Malaysia the other green Sukuk available on the Razak. “Right now, we have to be very following the three QSP plants. With a market. I think each individual Sukuk careful that the Sukuk in our portfolios total investment of approximately US$47 stands on its own merits and has its own are strong enough to be held to maturity, million, the project was funded not cash fl ow characteristics,” said Razak. as there is always the risk that we cannot through Sukuk, but via a non-recourse “Having said that, in the event of a sell it before maturity. That puts a lot of project fi nance facility provided by BNP QSP default, other upcoming issuances, pressure on portfolio, therefore we wish Paribas, covering 73% of the project cost. especially for those going through a to see more initiatives on enhancing construction stage, may have to off er liquidity especially for secondary Yet according to Scatec, Sukuk remain on higher yields or a discounted price to markets.” the table. att ract investors.” The future looks bright, however, “We always consider best available But would a default actually inhibit especially given Malaysia’s commitment fi nance options for our strong growth other issuers from tapping the market? to source 20% of total requirements expectations,” said Ravunni. “Sukuk is Unlikely, if the past is any guide. For through renewable energy by 2025. And one such option.”

South Africa’s heavily indebted electricity provider looks at domestic and international Sukuk

South Africa’s debt-ridden electricity provider Eskom is mulling a US- dollar denominated Sukuk issuance while seeking proposals for a potential domestic Sukuk sale, MARC ROUSSOT reveals. If it materializes, the transaction would be the country’s ﬁ rst corporate Sukuk deal.

Between its ever-growing debt, recurring power cuts and top executives quitt ing their jobs, Eskom has been grabbing South Africa’s headlines for all the wrong reasons over the past few months or even years.

Against this rather dramatic backdrop, the distributor of approximately 95% of South Africa’s electricity released a request for proposals on the 9th July for a potential domestic Sukuk issuance as the company is seeking to diversify sources of debt and execute cost- eﬀ ective funding with acceptable risk.

The proposals must be submitt ed Kusile that are running years behind like a headless chicken as its CEO, by the 7th August and contain schedule and way over budget. Phakamani Hadebe, has resigned and recommendations on a potential will be leaving at the end of July. underlying asset, provide a timeline, propose a size as well as a tenor and The intention Phakamani will be followed by Andre mention an indicative pricing. Lead Pillay, the company’s treasurer and managers will then be picked based of the request a key fi gure in elaborating Eskom’s on the proposals to assist Eskom in the funding plan, who will quit in August. potential domestic Sukuk issuance. for proposals is Both are recognized as fi xed income specialists. “The intention of the request for to test the market proposals is to test the market for the In this context, it remains to be seen potential issuance into the domestic for the potential whether Eskom, assigned a ‘CCC+’ market while simultaneously credit rating with a stable outlook by investigating issuance in the issuance into the S&P Global Ratings and a ‘B2’ long-term international Sukuk market,” Eskom domestic corporate family rating by Moody’s told IFN without elaborating on how the Investors Service, can secure bett er proceeds could be used. market pricing with an Islamic instrument compared to a conventional one. The state-owned electricity provider, with debt now reaching close to ZAR500 This is not the fi rst time that Eskom is billion (US$35.93 billion), is in dire Despite recent tariff hikes granted by the looking to raise funds from the Islamic need of cash as it is even struggling energy regulator, fi nancial support from capital market. Back in 2015, Brian to pay interest on its debt comprising the treasury amounting to ZAR23 billion Molefe, the then-CEO of the company, eight conventional securities — six US (US$1.65 billion) over the next three had announced a global Sukuk issuance dollar-denominated papers and two years and a debt–equity swap proposal which never came to fruition. domestic papers — currently listed on from the Public Investment Corporation the Luxembourg Stock Exchange, with which manages about US$150 billion The deal was announced a year aft er two maturing as early as 2021. and is responsible for the pensions of South Africa’s maiden Sukuk issue more than one million state workers, worth US$500 million. Maturing on the Eskom ended up in this fi nancial Eskom remains massively indebted. 24th June 2020, the sovereign paper was quagmire due to its high operating more than four times oversubscribed cost and the construction of two new Adding on to this already dreadful with an orderbook of US$2.2 billion. coal-fi red power plants in Medupi and situation, Eskom will very soon look

Bahraini Islamic banks race to grab open banking domination as rules come into effect

As the window for banks in Bahrain the second entails the ability of customers to adopt open banking expires, local to easily and eff ectively make payments Islamic banks are engaged in what and transfers between diff erent accounts seems to be a show of one-upmanship through a single application. This would with the leading Shariah banks publicly reduce cost and turnaround time for embracing open banking and engaging customers. fi ntech companies to adapt to an evolving landscape. VINEETA TAN “Open banking is a game-changer, it writes. broadens the horizons for our customers, (APIs) to third parties through its Al off ering new online payment channels Baraka Global API marketplace which In the span of two weeks, three Islamic without the need for credit cards or debit hosts over 25 APIs across six main banks have vocalized their readiness cards, as well as providing access to their categories: accounts, money transfers, to share information and technology as diff erent bank accounts through a single fi nancings, credit cards, information mandated by the Central Bank of Bahrain digital platform,” said BisB CEO Hassan services and investment products. which introduced a regulation last Jarrar. November calling upon the 114 banks “This is a testament of the proactive in the Kingdom, including 21 Islamic Ithmaar Bank confi rmed that it has approach of Al Baraka’s open banking banks, to adopt open banking by the 30th started reaching out to fi ntech companies strategy instead of a reactive approach June 2019. Ithmaar Bank, Al Baraka Bank and other CBB-licensed entities to — by going beyond mere compliance and Bahrain Islamic Bank (BisB) have explore potential consumer-centric with the open banking regulations of the tapped the media engine to amplify their collaborations, with CEO Ahmed Abdul Kingdom of Bahrain that require banks willingness. Rahim commenting that the new CBB to open specifi c APIs to third parties,” rules open up opportunities to involve explained the Islamic bank, which The open banking services cover companies that were previously not through its Turkish unit, launched the two dimensions: fi rst, an Account involved in banking. fi rst digital Islamic bank in Europe, Insha. Information Service, which comprises granting customers access to their Al Baraka Bank, on the other hand, More Islamic banks are expected to bank account data from diff erent banks is taking one step further by off ering follow suit as the digital race becomes through a single unifi ed platform; while application programming interfaces more competitive. Company Focus: Offa

With plans to start operations in estate bridge lending market, both from expansion plans in the UK while September 2019, Off a intends to be Muslim borrowers as well as ethically enabling it to quickly scale up its lending the fi rst provider of Islamic bridge conscious individuals or corporates,” platform. fi nancing solutions in the UK real estate opines Arsalan Akhtar, the senior risk market. The company prioritizes socially and fi nancial analyst at Off a, named aft er Off a, which will be focusing on socially responsible and environmentally King Off a who brought the fi rst Islamic responsible and environmentally friendly friendly property investments. MARC coins into England. property investments, anticipates the ROUSSOT has more. demand to come initially from broker Yet, it is diffi cult to estimate the size of intermediaries due to the competitive First to tap the UK Islamic bridge the UK Islamic bridge fi nancing market, pricing of its solutions against fi nancing market, Off a has developed as it remains completely untapped, but as conventional ones. a portfolio of fi ve Murabahah- a reference, the UK gross bridge lending based solutions, namely residential, market amounted to GBP4.3 billion “Our pricing will be competitive with commercial, refurbishment and planning (US$5.39 billion) in 2017, representing a conventional bridge lenders. There bridge fi nancings, together with a compound annual growth rate of 26% is a myth in the market that Shariah stretched development fi nancing. since 2013. This is forecast to increase to compliant funding is more expensive GBP10 billion (US$12.5 billion) by 2020, than conventional,” states Arsalan. The company, which also aims to according to EY. develop Musharakah-based products, Off a will be funded by a GBP20 million has the ambition to grow its suite of “As a pioneer in this market, we will (US$25.08 million) credit line from a UK ethical and Shariah funding with a gauge its true size. But our extensive Islamic bank but the company is already shared risk ethical fi nancing solution. research indicates the market is in conversations for much larger credit signifi cant in size and growing rapidly,” lines to facilitate big ticket bridge lending “Our Shariah compliant and ethical says Arsalan who adds that Off a has — lower than GBP10 million (US$12.5 products diff erentiate us from the recently raised commitments for several million) — as well as development competition and will meet huge million pounds of working capital lending — up to GBP25 million untapped demand within the UK real to be used in funding the company’s (US$31.35 million).

Two years post-Sukuk test, Russia is ready to debut Sukuk

Following a test Sukuk facility in 2017, diffi cult for Islamic fi nancial companies the Russian wheels are being greased to invest in Islamic assets. So, market again with a potential Islamic corporate participants are waiting for this Sukuk issuance to fund its agriculture issuance. There is strong interest from industry. The Sukuk, currently in the CIS countries, such as Kazakhstan planning stage, may be the push the and Kyrgyzstan, closely economically country needs to establish a sound connected to Russia,” he says. Shariah compliant debt capital market, writes DURGAHYENI MOHGANA If successful, the issuance will be Russia’s SELVAM. maiden Islamic facility, and is expected to set a precedent for other companies According to a document from an and the sovereign itself to tap the Islamic anonymous source as viewed exclusively debt capital market. by IFN, the Sukuk issuance is expected to be US$5–15 billion in size. It will be Stock Exchange, Bahrain Bourse and “A new Sukuk issuance certainly potentially fl oated by Agrofi n Sever- Bursa Malaysia. The goal of the project will have great positive impact on Yug, an SPV of the Higher School of is to att ract long money into the Russian the fi nancial market in Russia. A big Economics (HSE), the team behind the agro-industrial complex and secure fair part of Sukukholders will be Russian Sukuk project. prices for Russian agri exports. Part of institutional investors. If the paper the proceeds will also be channeled to is successful, it will open the gate to The Sukuk facility, which may come expand the industry’s transport and other companies, which are oriented to with a three-year repayment period, logistics infrastructure. the Middle East and Asian countries. is expected to onboard investors from Moreover, the technology involved in Oman, Qatar, Kuwait, Saudi Arabia Dr Ilyas Zaripov, a member of the issuing Sukuk can be a trigger for the and Lebanon, among others. The Sukuk Participating Banking Working Group government or state agencies to prepare paper is planned to be structured under of the Central Bank of the Russian sovereign Sukuk,” Dr Ilyas expounds. the Salam structure, while Musharakah, Federation and the head of the Islamic Mudarabah or hybrid structures are also Finance Educational Program of the According to a source close to the deal, being considered. Plekhanov Russian University of the HSE is currently looking for an Economics, tells IFN that there is a investment partner, and a local bank is Among the exchanges that are under healthy demand for the paper, domestic mulling joining the project. The bank has consideration for listing of the Sukuk are and international alike. “Islamic fi nance until the end of 2019 to decide if it is Abu Dhabi Securities Exchange, Saudi infrastructure is very weak in Russia; it is interested. Mining blockchain potential: Iran turns to technopreneurs to develop digital token and smart contract offerings

An Iranian exchange is spearheading Central Bank Governor Abdolnaser ease foreign investments into its capital initiatives to develop digital token Hemmati confi rmed that the economic markets. Boasting a trading value of off erings as well as smart contract commission set up by the government IRR327.05 trillion (US$7.76 billion) across solutions just as the world’s largest has approved a digital coin-mining its four exchanges and IRR884.34 trillion Islamic fi nancial market gave its mechanism which will later be tabled to (US$20.98 billion) in outstanding Sukuk greenlight to mining cryptocurrencies. cabinet members. as at the end of February 2019, Iran VINEETA TAN reports. is under the pressure of international IFB, which has been progressive in sanctions and escalating tensions with The Iran Fara Bourse (IFB) is seeking exploring, adopting and encouraging the the US to open up its fi nancial markets to collaborate with start-ups on three development of new fi ntech solutions, to att ract international dollars. One way areas the exchange has identifi ed as has channeled resources to understand it is doing so is by positioning itself core priorities: security token off erings, the application of blockchain over the as a regional economic, scientifi c and asset token off erings and smart contracts last 18 months. The exchange, one of four technological power by 2025. for fi nancial transactions, as part of the in Iran, formed a blockchain committ ee, bourse’s wider blockchain strategy. Start- reporting directly to its executive board, Financial regulators such as the central ups and technopreneurs have until the to undertake due diligence on the pros bank and the Securities and Exchange 6th August 2019 to submit blockchain and cons of distributed ledger technology Organization have incorporated fi ntech proposals to the IFB. This comes as and the viability of implementing into their development strategies and are the Islamic Republic, one of two in the blockchain instruments and mechanisms actively engaging the start-up world to adopt a fi nancial system in at a national level for the fi nancial sector. community to assist with bringing to full compliance with Shariah, agreed to In February, IFN reported that the IFB market new tech-driven products as well regulate the energy-intensive activity of was studying methods to facilitate as in engineering-related regulatory crypto mining. Sukuk issuance using blockchain to frameworks.

Astana International Financial Centre works on Islamic Finance Master Plan touted to make Kazakhstan a regional hub

While discussing potential Sukuk We are planning to fi nish it by the end of A sovereign Sukuk issuance has also been issuances with corporates, the Astana the year,” the AIFC told IFN. in the pipeline since 2014 and a US$300 International Financial Centre (AIFC) is million Shariah paper was expected to developing an Islamic Finance Master Kazakhstan has repeatedly expressed its be fl oated in 2018, but the deal has yet to Plan with the technical assistance of intention to become a regional Islamic come to fruition. the IDB. MARC ROUSSOT writes that fi nance hub over the past few years. the blueprint is a bid to develop the While new regulations and standards On the fi nancing side, the most recent industry in Kazakhstan and the broader have been put in place and regulatory developments occurred in 2017 with region where it has yet to take off . bodies established, the country seems Agrarian Credit Corporation, a state- to be lacking traction in achieving owned rural development fi nancing The plan covers a number of issues more concrete steps since 2012 and the company, announcing its intention to start including Islamic banking and Takaful, Development Bank of Kazakhstan’s off ering Islamic products in 2018; Zaman Islamic non-banking institutions, Islamic issuance of a fi ve-year RM240 million Bank completing its transformation into a capital market, Islamic social fi nance, (US$58.36 million) Sukuk Murabahah fully-fl edged Islamic bank aft er a four- Halal sector, capacity-building and facility out of Malaysia. year tedious process; and Al Hilal Bank education, legal framework, Shariah expanding to include the retail market aft er governance, internationalization of The paper was part of a 20-year RM1.5 seven years serving the corporate segment. Islamic fi nance, talent and fi ntech. billion (US$364.77 million) Sukuk program rated ‘AA3/Stable’ by RAM As of December 2018, Islamic Bank “The masterplan aims to establish Ratings but the rating agency withdrew Zaman Bank has assets worth KZT15.08 Kazakhstan as a regional Islamic fi nance the rating in August 2017 at the billion (US$39.32 million) while Al Hilal hub to accelerate national economic bank’s request and the program was Bank has assets amounting to KZT35.08 growth and promote shared prosperity. terminated. billion (US$91.46 million).

Turkey adds to Sukuk repertoire with sophomore Tier 1 capital Sukuk facility

Following the successful issuance of as well as innovative eff orts such as a Turkey’s debut Tier 1 capital Sukuk CPI-indexed instrument. instrument by AlBaraka Turk last year, another bank has followed suit In February 2018, AlBaraka Turk, a in fl oating its Sukuk, dubbed the subsidiary of Bahrain-based AlBaraka nation’s second Tier 1 Sukuk facility. Banking Group, raised US$205 million Kuveyt Turk Katilim Bankasi’s debut via Sukuk, the country’s fi rst-ever Tier 1 paper was placed this week for att empt in Tier 1 Islamic papers. Also a US$200 million with a perpetual tenor. perpetual paper, the issuance carried a DURGAHYENI MOHGANA SELVAM profi t rate of 10%. explores. The latest eff ort by Kuveyt Turk could Advised by Akin Gump, the Sukuk serve as encouragement for other facility was issued via KT One Company, participating banks to venture into a Cayman Islands-incorporated SPV. hybrid instruments to raise capital, which The paper will be listed on the regulated could in turn help to further boost the market of the Irish Stock Exchange, country’s prospering Sukuk market. trading as Euronext Dublin. The Sukuk paper is solely managed by KFH Capital, According to RAM Ratings, Turkey’s whose parent Kuwait Finance House Despite the latest issuance being the Sukuk development is one to watch out (KFH) owns a majority stake in Kuveyt Islamic bank’s maiden Tier 1 instrument, Turk. The perpetual paper has a call Kuveyt Turk is no stranger to the Sukuk for in 2019, following its impressive feat option of fi ve years and an expected space, be it international or domestic. of recording US$4.9 billion in total annual rate of 9.13%. One of the bank’s earliest known issuance volume as at the end of March issuances was a fi ve-year US$500 million 2019. The amount is a substantial The issuance is expected to boost the paper in 2014, followed by a Malaysian increase from the US$378 million bank’s growth by expanding its capital. ringgit-denominated Sukuk issuance recorded a year before. RAM said that “The Basel III compliant Tier 1 capital for RM2 billion (US$485.73 million) in the progress is mainly contributed by the certifi cates will raise the capital adequacy the same year. The bank returned to the fi nancial sector, in an eff ort to meet the ratio of our bank allowing for stronger market numerous times aft er that with issuers’ regulatory capital requirements growth,” said Ufuk Uyan, CEO of various issuances including US dollar- — further proven by Kuveyt Turk’s latest Kuveyt Turk, in an announcement. denominated facilities, short-term papers facility.

Sovereign securities: Seven regular issuers tap the Islamic capital market Despite the summer break, the Islamic Islami Investment Bonds for the total Kuwait capital market has been quite active amount of BDT23.96 billion (US$278.15 The Central Bank of Kuwait auctioned over the past seven days with seven million). KWD240 million (US$785.95 million)- regular issuers placing Islamic papers. worth of three-month conventional MARC ROUSSOT writes. Brunei bonds and related Tawarruq facilities. The government of Brunei printed a 91- Malaysia day Sukuk Ijarah facility for the amount The oﬀ erings received KWD2.61 billion Bank Negara Malaysia placed Shariah of BN$100 million (US$73.49 million). (US$8.55 billion) in bids. papers worth RM52.64 billion (US$12.79 billion) over the past seven days. Saudi Arabia Gambia The Saudi Ministry of Finance issued The Central Bank of Gambia on the 17th Indonesia Sukuk worth SAR5.22 billion (US$1.39 July 2019 sold three-month, six-month The Ministry of Finance of Indonesia was billion) for July, under the Saudi Arabian and one-year Sukuk Salam papers for due to conduct an auction for six Islamic Government SAR-denominated Sukuk GMD10 million (US$199,399) each. All papers on the 23rd July with an indicative program. three papers were oversubscribed. target of IDR8 trillion (US$573.6 million). The outcome of the auction has yet to be Bahrain Separately, the apex bank will place announced at the time of publication. The Central Bank of Bahrain’s monthly three-month, six-month and one-year Sukuk Salam facilities for GMD10 million 91-day Sukuk Salam issuance worth th Bangladesh BHD43 million (US$113.29 million) each on the 24 July. Bangladesh Bank auctioned three-month received bids totaling BHD137.48 million and six-month Bangladesh Government (US$362.22 million).

Upcoming sovereign Sukuk

Country Amount Expected issuance date Date of announcement

South Africa TBA (likely domestic Sukuk) TBA 11th July 2019

Turkey • TRY500 million • 20th August 2019 • 1st July 2019 • TBA (euro-denominated) • TBA • 28th May 2019 • TBA (domestic lease certiﬁ cates) • November 2019 • 2nd November 2018

The UK • TBA • TBA • 21st June 2019

Nigeria TBA 2019 19th June

Mauritania MRU400 million 30th July 27th May 2019

Kazakhstan TBA 2020 17th May 2019

Egypt US$1-1.5 billion Early 2020 10th May 2019

Kenya TBA TBA 6th May 2019

Saudi Arabia • US$3–5 billion • Third quarter • 3rd May 2019 • TBA (domestic Sukuk) • 24th July, 21st August, • 22nd April 2019 18th September, 23rd October, 27th November, 25th December

• TBA (savings Sukuk) • TBA • 6th February 2019

Pakistan • PKR200 billion • By the 6th July 2019 • 29th March • TBA (international Sukuk) • TBA • 4th February • TBA (diaspora Sukuk or bond) • TBA • 29th January 2019

Indonesia • TBA (savings Sukuk) • August and November 2019 • 26th February 2019 • IDR50 billion (Sukuk Waqf) • 2019 • 25th February 2019

Iran IRR435 trillion (over multiple Throughout the ﬁ scal year of 2019-20 14th January 2019 programs)

Sri Lanka LKR310 billion (Sukuk, Samurai 2019 11th January 2019 or Panda bonds)

Canada: The progressive Islamic fund space

Despite lagging in various Islamic ﬁ nance verticals, Canada is doing impressively well in the Shariah compliant fund management space, more so in the past year. DURGAHYENI MOHGANA SELVAM writes.

Regulatory landscape a conventional bank, has an advisor secured Shariah compliance certifi cation Canada has a sophisticated fi nancial off ering Shariah fi nancial advice to for its products. system and one of the world’s safest customers, but it is in the minority. banking infrastructures, as per indicators According to market players, there were Earlier this year, Aya Financial, a on the World Economic Forum’s Global various eff orts underway that were Canadian Islamic fi nance fi rm, was Competitiveness Survey. But despite expected to lead to the creation of at least established. The fi rm introduced allowing Islamic fi nance transactions, one regulated Islamic banking institution Canada’s fi rst Shariah compliant deposit there isn’t a dedicated Islamic fi nance by the end of 2017, but this never product. Winnermax, an institutional regulation in Canada. Islamic transactions transpired. investor based in Toronto, will be are also not accommodated under the launching a Shariah compliant private current tax and accounting framework. Saudi Arabia’s Alawwal Group equity fund called the Aperture Global expanded to Canada last year under Fund I based in the Cayman Islands A joint task force comprising the name of Manzil Group, which has during the summer of 2019. Separately, representatives of the Financial real estate as its primary business focus. ShariaPortfolio, an Islamic wealth Institutions Steering Committ ee Earlier in July this year, Manzil raised manager headquartered in the US, (including the Bank of Canada and the a CA$1.15 million (US$882,105) seed announced plans to open a Vancouver Department of Finance) has considered round, which it will use to commercialize offi ce in Canada by the second quarter of the prospects of amending current a 25-year fi xed rate Halal mortgage — a 2019. regulations to accommodate Islamic fi rst in Canada. The round was led by banks and windows. The government FCT Holdings, Sharia Portfolio Canada The country has an Islamic index: the of Ontario has also agreed to review and Henon Capital. Manzil will use Toronto Stock Exchange launched tax and non-tax criteria with the goal the funds to develop its Murabahah a Shariah index in 2009, namely the of eliminating any biases in favor of mortgage product, and is looking to S&P/TSX 60 Shariah which has 21 conventional fi nance, which could level offi cially launch in the third quarter of constituents, up from last year’s 19, and the playing fi eld for Islamic fi nance. 2019. correlates with the S&P/TSX 60 Index Another notable force in pushing that represents approximately 73% of for a more compromising regulatory Canadian equity market capitalization. Capital markets The Shariah index has a total market landscape is the Toronto Financial Canada has yet to introduce any Services Alliance (TFSA). capital of CA$577.36 billion (US$441.25 Sukuk instruments, although there are billion). opportunities to do so for infrastructure Banking and ϐinance projects, particularly municipal roads, Canada’s Islamic fi nance industry and an issuance from the ‘AAA’-rated Takaful is mostly dominated by mortgage sovereign would likely be successful. The Canadian Islamic insurance fi nancing, as early as in the 1980s. However, tax obstacles remain. market remains small: the Co-operators Provided by cooperatives, the earliest Group was the fi rst local insurer to provider was Ansar Co-operative In the Islamic capital market space, provide Takaful solutions in 2008 in Housing Corporation. the Shariah fund segment is the most collaboration with Ansar Co-operative active: There are several Islamic funds in and Qurtuba Housing Co-op. Sun The fi rst mainstream fi nancial Canada including the Global Iman Fund Life and Manulife, both originating institution to off er Islamic mortgages by Global Growth Assets and an Islamic from Canada, off er Islamic products was Winnipeg-based Assiniboine mutual fund from Bullion Management in Southeast Asia. The demographics Credit Union while the latest to enter Group. Alberta-based Everest Group and mutual insurance model practice the space is Zero Mortgage Canada is also said to be in the process of of Canada make Takaful a proposition which partnered with retail store- transforming its existing mortgage and with encouraging potential. based mortgage brokerage True North real estate funds to be in compliance with Mortgage to off er the Canadian market Shariah. It plans to launch new Shariah Education Islamic home fi nancing products compliant real estate investment funds Several higher education institutions licensed for use in Canada through for Canadian and international investors. off er Islamic fi nance courses including Dubai-based Zero Global. Demand for Centennial College (which off ers an Shariah compliant real estate fi nancing is In 2016, two new Shariah compliant online Islamic fi nance course), the signifi cant: a study launched by the TFSA funds were launched by Ontario- University of Toronto’s Rotman School projected demand for Islamic mortgages based Absolute Wealth: the Absolute of Management (which rolled out the to swell to US$17.7 billion in 2020, almost Sustainable Property Fund and the country’s fi rst MBA course in Islamic nine times over a fi ve-year period. Absolute Sustainable Dividend Fund. fi nance) and McMaster University which In January 2017, another Canadian also off ers an MBA Islamic fi nance Within the banking community, the entity entered the Islamic fi nance space: course through its DeGroote Business Canadian Imperial Bank of Commerce, Goldmoney, an online gold platform, School.

Financial technology: Many new green shoots

Gaining ground, blockchain, cryptocurrencies and assets as well as robo-advisors are changing the way Islamic ﬁ nance has been operating in recent years. Many new regulations and projects have been launched over the past few months in the Middle East and Asia in particular. MARC ROUSSOT brings you the latest developments.

Deϐinition companies like Eiger Trading Advisers, While it was certainly a remarkable Fintech is a concept covering a lot of DDCap and Tamasia. step, the transaction was, nevertheless, ground, making it diffi cult to clearly a very specifi c one. Only two players defi ne what it really is. Fintech includes With 22 companies, including Ethis were involved, the bank and a private everything from artifi cial intelligence Ventures, HelloGold, Sedania As Salam investor, and the paper was privately and blockchain technology, to Capital and PayHalal, Malaysia is home placed on the secondary market. cryptocurrencies and assets, as well as to the largest number of Islamic fi ntech robo-advisors. companies globally. It is followed by Following this deal, the Iran Fara Bourse the UK with 21 companies, such as started looking at using blockchain The Fintech Landscape defi nes fi ntech Arabesque, MercyCrowd, Moneemint technology for Sukuk issuances. companies as those that combine and InsurerHalal. However, it will take some time for the fi nancial services with innovative project to see the light of day as a number technology, particularly through Regulations and framework of matt ers must be addressed by Iran’s over-the-counter exchange starting with internet-based or app-based services. A number of new regulations and the standardization of paperwork. They do not deliver their services frameworks have been created by through a traditional branch network or regulators from Asia and the Middle East Besides the debt capital market, physical units. in particular over the past 12 months. blockchain is now also being used to power Malaysia’s FINTERRA Waqf chain From a diff erent angle, what fi ntech In January, the Central Bank of Iran (CBI) platform, a blockchain-based solution companies have in common are that they unveiled a draft of its cryptocurrency to crowdfund Waqf charity, Islamic are expected to provide greater security, policy in which it plans to maintain the investments and P2P lending. transparency and market effi ciency ban on common cryptocurrencies such while also delivering their products as bitcoin to be used as payment tools and services at a cheaper cost thanks to inside the country. Crypto assets/currencies automation, among others. Blockchain may also be used by crypto A month later, the Central Bank of assets/currencies. This is the case with IFN Fintech Landscape Bahrain (CBB) issued the fi nal rules on Malaysia-based Ibadah, which launched The Islamic fi ntech industry is a range of activities relevant to crypto the iDinar, an Islamic blockchain-based expanding. The IFN Fintech Landscape assets, including licensing, governance, e-token platform in March. The initial is now composed of 120 companies from minimum capital and reporting and value of the one dinar e-token is backed 26 countries currently operating or at cybersecurity for crypto asset services. by one gram of physical gold. the launching phase. There were 102 last year. Over in Asia, the Securities Commission More recently, Bank Melli, Bank Mellat, Malaysia amended its guidelines on Parsian Bank and Bank Pasargad These companies are active in 11 sectors, recognized markets to introduce new launched PEYMAN, a token backed by namely alternative fi nance; blockchain requirements for electronic platforms 30 milligrams of 24-carat gold. and cryptocurrencies; crowdfunding that facilitate the trading of digital and peer-to-peer (P2P) fi nance; data and assets. Also in Iran, the Iran Mercantile analytics; digital banking; incubators/ Exchange has announced that it is ready venture builders; payments, remitt ance Malaysia’s regulator is also working on to trade in cryptocurrencies. This was and foreign exchange; personal fi nance fi nalizing the regulatory requirements for two months aft er the CBI published a management, trading and investment; the issuance of initial coin off erings by draft cryptocurrency policy authorizing robo-advisors; Takatech; and technology, the second half of the year. asset-backed tokens and tokens backed information technology (IT) and by no assets to be traded on the infrastructure. Blockchain mercantile exchange. Blockchain is the new big thing in Islamic Crowdfunding and P2P fi nance is fi nance and history will remember that RAIN, a Bahrain-based cryptocurrency the largest sector with 29 companies Al Hilal Bank closed the fi rst Sukuk exchange operating out of the CBB’s including France’s 570easi and the UK’s transaction using this technology in a regulatory sandbox, has secured a Fatwa Yielders, followed by the technology, deal that sent shockwaves across the from the Shariyah Review Bureau. The IT and infrastructure segment with 23 industry. certifi cate dictates that the sale, purchase companies like Temenos, ICS Financial and custodian activities of RAIN comply Systems and Path Solutions. Al Hilal Bank used blockchain to with the principles of Shariah and trade its US$500 million senior Sukuk includes all cryptocurrencies off ered by Personal fi nance management, trading maturing in September 2023 on the RAIN, namely bitcoin, ethereum and and investment comes in third with 18 secondary market. litecoin.

ADIB UK’s ϐinancing of portfolio purchase: Fortifying UK–Middle East real estate relationships

In June, the UK Islamic real estate of studios and two to three-bedroom market saw a positive development as apartments based in the area of Cedar Tree Investments Islamically Rusholme. ADIB (UK)’s Shariah compliant ﬁ nancing acquired four freehold rental of residential portfolio acquisition properties in Manchester city. The Islamic ﬁ nancing worth GBP24.35 We continue million (US$30.24 million) was GBP24.35 million extended by the UK arm of Abu Dhabi to see strong Islamic Bank (ADIB). DURGAHYENI MOHGANA SELVAM delves deeper. demand from Middle

Sold by Knight Frank’s residential Eastern investors for investment team on behalf of Manchester Apartments (Property and the yield offered by June 2019 Lett ings Division of Beech Holdings) to Cedar Tree Investments, the transaction UK real involved four freehold rental properties across the city with 163 units in total. All estate Cedar Tree Investments are managed by AIMS Investments, one of the largest The transaction is believed to have private and public equity investors in strengthened the investment bridge Obligor Cedar Tree Saudi Arabia. between the UK and the Middle East. Investments “We continue to see strong demand The sale was funded by ADIB UK, from Middle Eastern investors for the Aggregate GBP24.35 million which was advised by CMS, an yield off ered by UK real estate. The principal amount (US$30.24 million) international law fi rm. The four ability to provide them with att ractive properties under the portfolio are Basil Shariah compliant fi nancing solutions in Type of facility Financing facility House, Salisbury House, 51 King Street a short time frame is core to ADIB UK’s and 341 Great Western Street. off er and we look forward to continuing to support Cedar Tree Investments as Structure Commodity Basil House is a Grade II-listed building they grow their UK portfolio,” Paul Murabahah which is currently let on assured Maisfi eld, the head of real estate at shorthold tenancies and includes a ADIB UK said. Use of proceeds Property acquisition ground fl oor commercial unit. Salisbury House is a purpose-built block of 98 ADIB UK is a wholly-owned subsidiary units, comprising a mixture of studio of ADIB, and the fi rst UAE-based bank Acquired Basil House, properties Salisbury House, 51 and one-bedroom apartments. 51 King providing Islamic fi nancial services to King Street and 341 Street is a heritage block comprising a be licensed to operate in the UK. It is Great Western Street basement, ground and fi rst fl oor retail also one of only six fully-fl edged Islamic space of 3,300 square feet; whereas 341 banks in the UK. Great Western Street is a collection Number of units Four properties with acquired a total of 163 units

Tenor Five years

Arranger Abu Dhabi Islamic Bank UK

Seller Knight Frank’s residential investment team on behalf of Manchester Apartments (Property and Lett ings Division of Beech Holdings)

Legal advisor CMS

SHARIAH PRONOUNCEMENT

Available on I-FIKR www.iﬁ kr.isra.my

REAL ESTATE

Query:

The First Investment Company has provided the following oﬀ er: Kuwait Finance House (KFH) purchases real estate properties at a certain price ― note that the real estate properties are mortgaged to a local bank ― on the condition that they remain registered in the seller’s name, not in KFH’s name, in the registry at the Ministry of Justice. KFH enters into a lease agreement with the seller for a period of seven years and promises to sell the real estate to the seller at the market price. The seven-year rent is secured by a lett er of guarantee issued by three local banks. Note that in case the lessee defaults on rent payment, KFH reserves the right to conﬁ scate the lett er of guarantee. Is it allowed to get involved in this deal?

Pronouncement:

Aft er hearing the explanation of the representatives, it became clear that the contract of sale between KFH and the seller contains a condition stipulating that the seller shall then lease the real estate from KFH. The deal includes [another] violation, which is not registering the real estate in KFH’s name. Based upon that, the Fatwa committ ee believes that KFH is not allowed to conduct this deal.

Query:

Is it permissible to swap two real estate properties, mentioning the value of each of them? Note that the contract format is a swap of real estate for real estate.

Pronouncement:

Swapping two real estate properties using a single contract is legally permitt ed, because it is a form of barter that is considered a single deal. Specifying the price of each piece of real estate will not negatively aﬀ ect the transaction, provided that the deal is not structured in two formats, each of them having a price and a contract, and provided that the sale of one piece of real estate is not dependent on the sale of the other.

Issuer:

Kuwait Finance House

This Fatwa series is brought to you by IFN in collaboration with International Shari'ah Research Academy (ISRA). The Fatwa appearing in this space is provided and developed by partner(s) of ISRA.

Genius of the tripartite agreement in Ijarah ϐinancing

The matt er was submitt ed to the Shariah transferred to the Islamic bank. Here, board of the Islamic bank where I was the Islamic bank shall deduct the working at the time and to my surprise, downpayment amount from the total the appropriate Shariah guidance came selling price and make the payment out the very next day. What was it? Let of the balance amount to the seller. us examine. f. Also, in order to start Ijarah The scholars guided that in order for the fi nancing, the Islamic bank Islamic bank to lease the property to the shall make an adjustment of the customer, it ought to be the owner of downpayment amount from the total Sohail Zubairi is the senior advisor with the the property fi rst. In order to do so, the purchase price of the property and Dubai Islamic Economy Development Centre. Islamic bank must enter into a tripartite apply the lease rent on the adjusted He can be contacted at sazubairi1979@gmail. agreement with the parties under the amount and not on the total purchase com. SPA, ie the seller and buyer of the price of the property property. That is the reason it was called Before we commence our discussion on the tripartite agreement, ie between three g. All the other documents required the situation where a customer sells an parties viz. the Islamic bank, the seller to manage an Ijarah fi nancing asset to an Islamic bank and leases it of the property and the buyer under the transaction, approved by the Islamic back from the bank, let us fi rst explore SPA. bank’s Shariah board, shall be signed the tripartite agreement mentioned by me in the last article. by the customer (I will explain the The following were the main features of full set of Ijarah documentation in a the tripartite agreement which to date is later article), and The need for a tripartite agreement is utilized in similar situations: felt when the customer approaches h. It is possible from a Shariah an Islamic bank aft er having made a a. The SPA signed between the seller perspective that, at the customer’s downpayment and entered into a sale and buyer of the property shall request, the Islamic bank may refund and purchase agreement (SPA) with the stand terminated forthwith upon the the downpayment amount to the seller of the asset. signing of the tripartite agreement by customer, instead of adjusting it the three parties As per Shariah principles, by virtue of as explained previously. In such a situation, the Islamic bank’s purchase the SPA, the ownership of the asset gets b. With the termination of the SPA, as price and the amount of Ijarah transferred to the buyer under the SPA per Shariah principles the ownership fi nancing shall equate as one amount. forthwith, irrespective of the fact whether to the property shall get retransferred the payment has been made by the buyer to the SPA seller (the original owner) in full or part. The aforementioned solution worked perfectly at that time as well as until c. The Islamic bank shall replace the As such, when the buyer under the SPA today when it is applied by Islamic banks customer as the SPA buyer for the requests the Islamic bank to fi nance the and fi nancial institutions from the UAE property and all rights and liabilities asset through leasing, the Islamic bank in such situations. of the owner of the property shall get must fi rst purchase the asset from the transferred to the Islamic bank under seller in order to become the owner Although originally the tripartite the SPA earlier signed between the to enable it to lease the asset to the agreement was devised to facilitate Ijarah seller and the bank’s customer customer. fi nancing for ready properties, it was subsequently used extensively in However, the seller is unable to sell the d. The aforementioned will entail that fi nancing off -plan (under construction) asset to the Islamic bank since he has all the terms and conditions of the properties as well. already sold it to the bank’s customer original SPA will come alive for the under the SPA. How to solve this tricky Islamic bank as the new buyer. In The views and opinions expressed in this article situation? other words, the Islamic bank will fi t are those of the author and do not necessarily into the shoes of the customer (the refl ect the opinions of the Dubai Islamic Alright, the jurists say Shariah provides erstwhile buyer). Although it is not Economy Development Centre, nor the offi cial the most logical and fair solution to all a Shariah requirement, the Islamic policy or position of the government of the UAE problems, including money and fi nance. bank may seek the SPA seller to enter or any of its entities. The purpose of this article I remember exactly the same situation into a new SPA is not to hurt any religious sentiments either consciously or even unwitt ingly. arose in 2005/6 when the Islamic home fi nancing transactions had just started e. At the time of signing the tripartite to be off ered by the Islamic fi nancial agreement, the ownership of Next week: Discussion on a fi nancial institutions in the UAE. the downpayment made by the lease and other aspects of Ijarah shall customer under the SPA shall also get continue.

Potpourri

By Daud Vicary Abdullah, the managing heartening to see all the staff aligning business ideas. Some great friendships director of DVA Consulting and a partner at around shared values and more than made and more importantly a solid base Gateway Islamic Advisory. He was ex-CEO willing to take on the next stages of was created for further development. of the International Centre for Education development. in Islamic Finance (INCEIF), The Global So on to Kazakhstan where I chaired the University of Islamic Finance. He can be I was also able to support the initial 4th advisory board meeting for the Astana contacted at [email protected]. launching of the International Federation International Finance Centre (AIFC) as of Red Cross and Red Crescent well as moderated a session at its annual The last month has been an Societies’s Project Wash Astana Finance Days Conference. During interesting mix of travel, initiative which is a green my time there, I was able to review the with visits to the UK and Sukuk facility designed Islamic fi nance plans being developed by Kazakhstan, as well as a to raise funding for the consultants for the AIFC, Kazakhstan and wide variety of activity in elimination of cholera the region. Good progress being made but the fi elds of Islamic fi nance, globally. Like all things still a lot of work and prioritization to be philanthropy, sustainability, that are new and done. education, advisory and innovative, acceptance youth entrepreneurship. All will take time, but the Throughout the month I was motivated topics close to my heart. So, team did get some by the sharing of values. Signifi cantly, the month has been a real very valuable feedback this was also achieved at the 7th cohort potpourri of activity. from the London of the IF4BOD (Islamic fi nance for board market. of directors) program initiated by Bank If there is a thread that links all of Negara Malaysia, where I had the privilege the activity together, it would be I was also proud to be at to moderate and deliver program segments that of ‘values’. Despite the diversity the launch of OtherDOTS to 25 fi nance board directors. In that of countries, activity and focus, all at Level 39 of Canary Wharf. month, the quality of interchange and can be linked through the sharing of This is an important engagement surpassed all expectations. similar values. initiative designed to This was largely as a result of shared support underprivileged values! In the UK, I was able to continue young people in my sustainability assignment developing countries gain As always, there is much to do and not a with a client and was pleased to access to build and develop moment to lose. see signifi cant progress in the year entrepreneurial skills in since we initiated the project. It is order to launch innovative

PITCH DAY 28th July 2019, Dubai

An exclusive opportunity for investors to meet Islamic FinTechs actively seeking investment

EXCLUSIVE PRIVATE EVENT

www.REDmoneygroup.com

Tax considerations for Hong Kong to IFN Country Correspondents AFGHANISTAN: Manezha Sukhanyar former head of Islamic banking, Maiwand Bank boost Islamic ϐinance ALGERIA: Dr Ahmed Tahiri Jouti COO, Al Maali Consultancy Group AUSTRALIA: Christopher Aylward HONG KONG needs. To change this situation, it is partner, Finance and Major Transactions, Madison Marcus advisable if the Hong Kong government Law Firm By Wafee Yeung BAHRAIN: Dr Hatim El-Tahir can consider enforcing a wider scope of director of Islamic Finance Knowledge Center, Deloitt e & tax incentives to help boost the Islamic Touche Hong Kong is one of the top BANGLADESH: M Shamsuzzaman fi nance industry; in particular, the fi rst additional managing director, Islami Bank Bangladesh international fi nancial centers with priority should be placed on Islamic BRAZIL: Fábio Amaral Figueira a track record of three successful partner, Veirano Advogados banking and Sukuk. CANADA: Rehan Huda sovereign Sukuk issuances totaling managing director, Amana Canada Holdings US$3 billion in the previous years, CHINA: Wafee Yeung For the Islamic banking business, Hong subsequent to the amended tax rules managing director, Allalah Consulting Kong may consider granting a profi ts tax EGYPT: Dr Walid Hegazy on profi ts tax and stamp duty which managing partner, Hegazy & Associates exemption for international Islamic banks collectively provide a level-playing fi eld GERMANY: Ahmet Kudsi Arslan for the fi rst fi ve years of their subsidiary’s CEO, KT Bank to issuers and investors when compared operation in Hong Kong, subject to HONG KONG: Wafee Yeung to the conventional bond counterpart. managing director, Allalah Consulting certain qualifying criteria and an annual INDIA: Ali M Shervani review. Stamp duty exemption can also partner, Consigliori Consultants Obviously, tax is a very critical factor INDONESIA: Irwan Abdalloh be granted up to fi ve years on underlying and driving force, along with the head of Islamic Capital Market, Indonesia Stock Exchange instruments executed pertaining to IRAN: Majid Pireh regulatory framework, government head of Islamic fi nance group at the Securities and Islamic banking businesses conducted in policy and market demand, eff ectively Exchange Organization of Iran both the Hong Kong dollar and foreign ITALY: Stefano Padovani strengthening the development of Islamic partner & head of banking and fi nance, NCTM Studio currencies. Legale Associato fi nance in any country or city around IVORY COAST: Abbas Cherif the world. Hong Kong is no exception. CEO, Islamic Finance Intelligence and Management Since Hong Kong does not impose JAPAN: Dr Etsuaki Yoshida Yet, the breadth and depth of the tax any withholding tax, except royalty project associate professor, Kyoto University measures formulated and adopted in KAZAKHSTAN: Shaimerden Chikanayev payments, there should not be any Hong Kong are not sophisticated and partner, Grata Law Firm questions on the profi ts received by KENYA: Tego Wolasa att ractive to further support and boost its retail and product development manager, KCB SAHL Bank resident depositors (individuals) and Islamic fi nance development to a higher KUWAIT: Issam Al Tawari non-resident depositors (individuals managing partner, Newbury Economic Consultancy level. KYRGYZSTAN: Daniyar Mamyrov and corporates) as well as the income consultant, Gateway Islamic Advisory received by non-resident experts in LUXEMBOURG: Nida Khan Undoubtedly, Islamic banking and Islamic fi nance. All in all, tax neutrality doctoral researcher, SEDAN Research Group Sukuk are the two main generators for MALAYSIA: Ruslena Ramli should be accorded to Islamic fi nancial head, Islamic fi nance, RAM Rating Islamic fi nance globally. Hong Kong has instruments and transactions executed to MALDIVES: Aishath Muneeza only got a very limited Islamic banking chairman, Maldives Center for Islamic Finance fulfi ll Shariah requirements. MALTA: Reuben Butt igieg window service as of today, and no president, Malta Institute of Management corporate Sukuk issuances have been MOROCCO: Dr Ahmed Tahiri Jouti For Sukuk issuances, as mentioned in crystallized so far. This refl ects the lack of COO, Al Maali Consultancy Group one of my previous reports titled ‘Hong NIGERIA: Hajara Adeola incentives, especially from the tax fi eld, managing director and CEO, Lotus Capital Kong is ideal for SPVs in Islamic to appeal and capture the confi dence of OFFSHORE CENTERS: Manuela Belmontes fi nance: A tax perspective’, SPVs partner, Maples Group bankers and investors to make use of established solely to channel funds for OMAN: Asad Qayyum this well-established fi nancial platform senior associate, Al Busaidy, Mansoor Jamal & Co the purpose of issuing Islamic securities PAKISTAN: Muhammad Shoaib Ibrahim to off er their quality Islamic banking approved by the Securities and Futures managing director & CEO, First Habib Modaraba services and raise funds via Sukuk for PHILIPPINES: Rafael A Morales Commission of Hong Kong (SFC) are managing partner, Morales & Lumagui certain projects or other commercial not subject to tax or tax administrative QATAR: Amjad Hussain partner, K&L Gates procedures. RUSSIA: Dr Ilyas Zaripov member, Partnership Banking Working Group, Central Bank of the Russian Federation For Sukuk issuers, this means a tax SAUDI ARABIA: Nabil Issa deduction on expenses incurred in the partner, King & Spalding SENEGAL: Abdoulaye Lam issuance of Islamic securities under president & CEO, Global Islamic Finance & Transactions certain principles approved by the SFC, SRI LANKA: Suresh R I Perera principal, Tax & Regulatory, KPMG in addition to the aforementioned full TUNISIA: Mohamed Araar stamp duty exemption on instruments General directorate of External Financing and Sett lements, deputy director of Private Financing and International used to issue Sukuk in both the Hong Relations Department, Central Bank of Tunisia Kong dollar and foreign currencies. Last UAE: Anita Yadav senior director, head of fi xed income research, Emirates but not the least, there is also stamp duty NBD UK: Suhail Ahmad exemption on Sukuk investing and founder of the Financial Network and partner, Gateway trading. Islamic Advisory US: Aliredha Walji Wafee Yeung is the managing director of vice-president, ShariaPortfolio US IFN Correspondents are experts in their respective fi elds and Allalah Consulting. He can be contacted at are selected by Islamic Finance news to contribute designated short country reports. For more information about becoming [email protected]. an IFN Correspondent please contact sasikala.thiagaraja@ redmoneygroup.com

Turkmenistan–Afghanistan–Pakistan–India gas pipeline project

AFGHANISTAN will generate hundreds of megawatt s The successful implementation of the of electricity, which will in turn TAPI project will have considerable By Manezha Sukhanyar generate revenue via transit fees and eff ect on the Afghanistan economy, and taxes, create job opportunities, provide will promote and support investments The peace talks between the Taliban training and capacity-building for and local production. However, how and the Afghanistan government have Afghans as well as promote local the peace process and the presidential reached an advanced level, putt ing an businesses and goods. elections will aff ect the project end to 18 years of war in Afghanistan. implementation is not clear. In March 2019, the Taliban’s meeting For the fi nancing of the TAPI project, with US government offi cials raised the IDB has agreed to provide US$$700 Additionally, in view of the recent hope for peace along with presidential million, with an additional US$300 developments of Islamic banking as well elections to be held in July 2019. million for the remaining portion of the as its acceptance by the wide majority of These developments will have their pipeline. Afghans and the government support consequences not only on the security toward this sector, has the option of situation in Afghanistan, but also on Additionally, the Asian Development providing fi nancing for the TAPI project some ongoing development projects Bank and the Islamic Corporation for via Islamic banking been discussed or and the overall condition of the the Insurance of Investment and Export considered? This is also not clear so we country’s economy. Credit are keen to provide US$500 need to watch this space. million and US$300 million respectively. The Turkmenistan–Afghanistan– Recently, Saudi Arabia expressed an Manezha Sukhanyar is the former chief of Pakistan–India (TAPI) gas pipeline interest to support the fi nancing of the Islamic banking at Maiwand Bank. She can project is one of Afghanistan’s most same project. be contacted at [email protected]. important development projects that

Islamic ϐinance and ethical trends

THE US products and services highlights a given the prominent role that fi nance demand in the US market that is looking plays in entrepreneurial success By Aliredha Walji to be fi lled. Islamic fi nance, with its across many sectors. Their discussions focus on fulfi lling Islamic criteria for centered on the ethical trends that In all parts of the world, people are Halal and Tayyab (usually translated as can be addressed by Islamic fi nance, increasingly interested in purchasing ‘lawful’ and ‘good’), is perfectly poised including fi nancial inequality and and consuming ethically-sourced to meet this demand — not only for US education through the development products. This trend holds true Muslim consumers, but also potentially of programs aimed to raise fi nancial across diverse sectors, from food and for US consumers at large. literacy. The importance of eliminating consumer products to fi nancial services debt and moving instead toward wealth to media and recreation. In addition, Islamic fi nance’s focus on accumulation also emerged as a theme. equity investment, as opposed to debt or According to Global Impact Investing leverage, has powerful implications for Islamic fi nance at its core has to do with Network, three out of four millennials all discussions regarding the ethics of adhering to quantitative and qualitative are willing to pay extra for sustainable excessive debt. The devastating impact metrics that ensure broader screens off erings, and ‘impact-investing’ assets of this type of debt was demonstrated are met by avoiding certain red-fl ag are estimated at US$114 billion as during the worldwide fi nancial crisis of industries like gambling, alcohol, of 2016, according to the State of the 2008, when the overinfl ation of assets tobacco and such. Global Islamic Economy Report 2018/19 during the boom cycle was followed by by Thomson Reuters/Dinar Standard. the Great Recession, with dire hardships When Islamic criteria and ethical The US market is no exception, with aff ecting many individuals as a result. principles such as environmental a very loyal consumer base for ethical sustainability or social responsibility are off erings. Over 80% of US consumers The connections between the brought together, the combination can of socially responsible business brands Muslim economic space and wider lead to the successful acceptance of are willing to pay a greater than 30% ethical trends were the main topic Islamic fi nance not only within the US premium and are willing to repeat of discussion at the 27th June 2019 Muslim community but in US society as their purchases more than three times roundtable strategy session titled a whole. when their needs are met, according to ‘Muslim Entrepreneurs for Social Adnan Durrani, the founder and CEO of Good’, hosted by Dinar Standard. Aliredha Walji is the vice-president of American Halal. ShariaPortfolio. He can be contacted at Practitioners in the fi nance fi eld made [email protected]. The fact that consumers are willing up a large portion of the att endees, to pay so much more for responsible

Islamic ϐinance in Algeria: What is next?

ALGERIA players have started preparing to launch assets but also in terms of innovation if, their own Islamic window and many and only if, all the ingredients and the Dr Ahmed Tahiri Jouti announcements were made. prerequisites are gathered. According to many local experts and In the current political context, launching From another perspective, conventional observers, the regulatory framework new activities seems to be hard especially insurance companies are also interested issued on the 9th December 2018 by the when it comes to state-owned entities. in launching their Takaful activity central bank of Algeria was much below In this context, some of the players have in the presence of two fully-fl edged their expectations. Indeed, for them, postponed the launch of their off ering Islamic banks and two Islamic windows the central bank should initiate larger while some others canceled the public that need Takaful coverage for their projects and frameworks to implement tender related to the accompaniment commitments and to reinforce their a competitive Shariah compliant and the assistance in the implementation credibility and competitiveness. fi nancial system. process of a participative window. In this context, local players can start Moreover, the regulatory framework All in all, the relaunching of the Islamic their Takaful activity since the business is governing solely Islamic windows banking activity in Algeria would fi rst opportunity is already available in a and is not covering existing fi nancial require the establishment of political market that has a low insurance institutions that are commercializing stability and the designation of a penetration rate. Therefore, Takaful can Islamic fi nancial products without any government that is willing to develop the help to improve the Takaful penetration legal or regulatory frameworks. local fi nancial system and to diversify its rate and will constitute a quick win for tools and instruments. the whole sector. Nevertheless, this framework was seen as an experimental step in order to Algeria has a lot of potentialities to Dr Ahmed Tahiri Jouti is COO of Al Maali move faster in the process of sett ing become an important center of Islamic Consulting Group. He can be contacted at up a comprehensive Islamic fi nancial banking not only in terms of the size of [email protected]. system especially since many of the local

EIFA sponsors Sukuk symposium

EGYPT The Sukuk forum was of critical Finally, successful Sukuk issuances in importance for several reasons. First, compliance with the new legislation By Dr Walid Hegazy it highlighted the importance of and regulations will serve as another cooperation between the public and indicator of Egypt’s political and Islamic fi nance experts gathered in private sectors in Egypt. Although economic stability. Egypt this month to att end a forum the FRA is the regulatory authority on Sukuk issuances. The topic was responsible for monitoring Sukuk Now that Egypt has reached the titled ‘Islamic Sukuk — Successful issuances, the members of the EIFA conclusion of its three-year IMF loan Experiences’. The objective was have extensive experience in the fi eld of program, its economy rests at a pivotal to discuss and compare Sukuk Islamic fi nance and are heavily invested stage. issuances in other countries and fi nd in training the new cadre of Islamic commonalities between international fi nance professionals. They outlined Introducing new international Sukuk issuances and potential Sukuk relevant topics to the administrative investment and fi nancing mechanisms issuances in Egypt. The symposium personnel att ending the event, such such as Sukuk can be risky, especially was sponsored by the Egyptian Islamic as the diff erence between Sukuk and as Islamic fi nance scholars are still Finance Association (EIFA) and the conventional bonds, additional Shariah balancing the integration of Sukuk into Financial Regulatory Authority (FRA). compliance standards not included in global markets with maintaining their existing regulations and how Sukuk Shariah compliant nature. Although the legislative framework could be used as investment mechanisms. has been in place since the amendment Still, if the Egyptian government of the Capital Markets Law in 2018 Secondly, Egypt is susceptible to trends continues its cooperation with NGOs and this year’s FRA regulations for in the international Sukuk markets, and and international Shariah compliance Shariah governance, the Sukuk market the country must position itself as a hub regulatory associations such as AAOIFI, is tentative, as potential issuers and for African Sukuk to att ract additional one can forecast a positive outlook for investors fi gure out the optimum ways foreign direct investment. Sukuk in Egypt. to issue Sukuk in Egypt. This forum was especially timely, as the Ministry In the past, Egypt had issued Sukuk Dr Walid Hegazy is the managing partner of Finance has vowed to issue the fi rst regulations, but no practical action was at Hegazy & Partners in cooperation with sovereign Sukuk in the 2019–20 fi scal taken to ensure Sukuk issuance and Crowell & Moring. He can be contacted at year, while ADIB Capital has announced spread public awareness in the country’s [email protected]. that it will oversee the fi rst private fi nancial sector. Sukuk issuance.

More growth opportunities for Islamic ϐinance in Nigeria through public–private partnerships

NIGERIA billion (US$549.99 million) in sovereign to cheaper inter-company loans to fund Sukuk, to address this challenge. However, fi xed assets, while others use equity. By Hajara Adeola population growth and urban migration continue to strain the country’s already The new executive order and the potential In a bid to spur road infrastructure aged facilities, creating a near state of for tax credits may incentivize blue- development in Nigeria, President emergency in some areas. chip corporates to issue long-term debt. Muhammadu Buhari recently issued The att raction is further enhanced by a an executive order on a 10-year public– A case in point is the persistent gridlock provision that allows investors to trade private partnership arrangement tagged on the Lagos–Ibadan expressway, which their tax credits on a securities exchange for as the ‘Road Infrastructure Development serves as a critical link to the country’s liquidity. Following the executive order, and Refurbishment Investment Tax busiest seaport and is arguably the main a consortium of companies has already Scheme’. The scheme aims to encourage corridor for most commercial activities. undertaken to construct 11 roads across the private investors to fi nance the construction of roads and bridges in The diffi culties with transportation six geopolitical zones of the country where return for tax credits which can be used and haulage have adversely impacted they have signifi cant operations. to off set any tax liabilities due to the some of Nigeria’s largest producers government. The government expects including cement manufacturers, sugar We expect Sukuk to feature among their the scheme to channel infrastructure refi neries and fast-moving consumer funding options given that its suitability investment to key economic corridors goods companies. Therefore, deploying for road construction fi nance has been and industrial clusters, thereby reducing tax incentives and public–private established by the success of the federal the strain on public fi nances. The partnerships as captured under the new government’s two Sukuk issuances for that executive order has therefore opened executive order should unlock more purpose. In particular, the transparency the door for corporate debt issuance, capital for infrastructure. provided by the Sukuk structure makes including corporate Sukuk. it the perfect candidate for public– Nigeria is yet to explore corporate Sukuk. private partnerships which are usually President Muhammadu is empowered by This is not surprising and is mainly due accompanied by heavy public scrutiny. the Nigerian constitution to issue executive to structural issues in the corporate debt orders and this is an expedient way to market such as the relatively high cost of The executive order should give the repeal or modify existing laws for public borrowing and lengthy transaction cycles. corporate debt market a boost and benefi t. Nigeria, similar to most developing As a result, there are only a handful of hopefully by extension, the corporate nations, has a signifi cant infrastructure corporate bonds in issue, as fi rms prefer Sukuk market. defi cit which requires an estimated US$30 shorter term bank borrowings and billion in annual investments to rectify. The commercial papers to cover their working Hajara Adeola is CEO/managing director of federal government has utilized various capital requirements. Corporates with Lotus Capital. She can be contacted at hajara. fi nancing options, including NGN200 foreign affi liations typically have recourse [email protected].

KEY RISK INDICATORS MASTERCLASS FOR FINANCIAL SERVICES 17th - 18th September 2019, Kuala Lumpur, MALAYSIA

Reach out to us for more information REGISTER NOW

Patricia Jalleh Founder and CEO (Enterprise Risk Associates, Singapore)

www.redmoneyevents.com [email protected] +603 2162 7800

Microϐinance and Takaful: Can donor risk IFN Sector Correspondents

CROWDFUNDING: Craig Moore capital jump-start both sectors? CEO, Beehive

DEBT CAPITAL MARKETS: Imran Muft i ISLAMIC This sort of fi nancial protection can partner, Hogan Lovells MICROFINANCE contribute, ex ante, to the mitigation of EDUCATION: Dr Kamola Bayram, project director for By Dr Mohammed Kroessin the risk of diversion of donor funding training and research at the International Council of Islamic from development to humanitarian Finance Educators assistance in the case of disasters. This HALAL INDUSTRY: Dr Sutan Emir Hidayat Some 700 million people live in the director, Islamic Financial Education and Research, Muslim world around the poverty line. means not just that assets of poor people National Islamic Finance Committ ee The changing macro environment, are protected but disasters also do not ISLAMIC LEASING: Shoeb Sharieff especially climate change but also slow down, let alone derail low-income president, ĳ ara CDC, ĳ ara Community Development Corp countries’ journey of poverty. increasing urbanization, is likely LAW: Dr Nicolas Bremer to increase their vulnerability and partner, Alexander & Partner threatens to either keep them trapped The case for Takaful LIQUIDITY MANAGEMENT: Raghu Mandagolathur in or returned to poverty due to external For many vulnerable regions, especially managing director, Marmore MENA Intelligence shocks. in the Muslim world, Takaful and re- MERGERS & ACQUISITIONS: Burak Gencoglu Takaful would off er a potential solution partner, Gencoglu & Ergun Law Firm This aff ects also the liquidity of micro to such disaster risk-induced limitations MICROFINANCE: Mohammed R Kroessin lenders — charged with poverty on the supply of microfi nance. Having head of Islamic microfi nance, Islamic Relief Worldwide reduction — when non-performing Takaful against these disasters, at PRIVATE EQUITY & VENTURE CAPITAL: loans remain high as this constrains the both the individual and institutional James R Stull, partner, King & Spalding eff ective recycling of funds. As clients levels, can provide eff ective means for REAL ESTATE: Philip Churchill struggle to repay fi nance, revenues transferring this risk and expanding founder partner, 90 North Real Estate Partners decrease. Microfi nance institutions also fi nancial inclusion outreach. incur higher administrative costs from RETAIL ASSET MANAGEMENT: Muzzammil Dhedhy, chief operating offi cer, Hejaz Financial Services providing fi nance under such constraints. A problem remains, however, in the The asset base of microfi nance RISK MANAGEMENT: Ali Khokha availability of aff ordable Takaful senior manager PwC Luxembourg institutions further decreases through products with the industry heavily extra provisioning as non-performing SHARIAH & CORPORATE GOVERNANCE: relying on middle-income customers in Prof Dr Mohamad Akram Laldin loans increase. Each of these eff ects the GCC or Southeast Asia. This reliance executive director, International Shariah Research Academy reduces net income, and net losses on the on what are currently limited markets for Islamic Finance income statement translate into equity itself seems to have constrained the SRI ETHICAL & GREEN: Dr Mohamed Wail Aaminou, losses on the balance sheet, which means growth of the Takaful industry. general manager, Al Maali Consulting Group that sustainability — one of the twin aims TAKAFUL & RE-TAKAFUL (ASIA): Marcel Omar Papp of microfi nance — is diffi cult to att ain. The question is whether donor funding head of Retakaful, Swiss Re Retakaful

could be used as risk capital to off er TAKAFUL & RE-TAKAFUL (EUROPE): Ezzedine In order to protect themselves from fi nancial protection to some of the 700 Ghlamallah such losses, repayment insurance million people. Possible donors could director, Solutions Insurance and Islamic Finance (SAAFI) oft en features as a mandatory add-on be the IDB and also individual countries TAX: service for clients in many microfi nance such as the UAE which has overtaken Dhana Pillai head, real estate, tax and project fi nance, Al Hashmi Law Firm institutions. Portfolio-level insurance is the US in per capital offi cial development also used as an alternative institutional aid. IFN Correspondents are experts in their respective fi elds mechanism in the conventional sector and are selected by Islamic Finance news to contribute designated short sector reports. For more information about that may be particularly suitable for This would not only jump-start the becoming an IFN Correspondent, please contact sasikala. events that cause large portfolio losses Takaful industry — if it is willing to focus [email protected] such as natural disasters.

on scaling aff ordable products to poor people — but would also provide stability to a fl edgling Islamic microfi nance sector. It would also unlock further private sector capital. All these are critical for economic resilience and growth and could be a game-changer for the development of a number of Muslim- majority countries, some of which are the poorest in the world.

Dr Mohammed Kroessin is the head of the Islamic Microﬁ nance Business Unit of the International Programs Division at Islamic Relief Worldwide. He can be contacted at [email protected].

Fast-tracking the Islamic leasing sector

ISLAMIC LEASING February 2019 launched the Philippine committ ed to Islamic leasing. The National Halal Laboratory and Science London Stock Exchange was the fi rst By Shoeb M Sharieff Centre to promote Islamic fi nance and western fi nancial entity to list Islamic banking that includes Islamic leasing. fi nance and leasing products in 2007. The Philippines takes center stage in July as its central bank plans to MyEG Services, an electronic service At the center of this progress is the fast-track the necessary regulations provider in Malaysia, has launched UK’s largest Islamic leasing bank, Al and rules to develop Islamic leasing. MY EG Islamic Finance (MYEGIF) that Rayan Bank, which has a regulatory Islamic banking law in the country deals with both Islamic fi nancing and framework that looks aft er a variety of needs to be approved by the Filipino Islamic leasing as well as other credit- Shariah compliant products. Several president; however, both Houses of granting services that are free from Riba. big projects in the UK including Congress have passed an existing MYEGIF aims to modernize and be the Olympic Village in Stratford bill. In a nutshell, it means the Shariah compliant at the same time. It have been funded with help from Philippines’s movement toward will use an electronic channel to provide the Muslim community. Five other an Islamic banking structure that Shariah compliant services to businesses Shariah compliant banks in the UK promotes Islamic leasing is picking up and residents. Being a state-run agency, have altogether assets of US$5.5 billion steam. it will also look aft er Islamic leasing with a variety of Shariah compliant interests in Bangladesh and Indonesia. products. Over the last few years, the Philippines The new electronic portal will also cover had two plans in place — fi rstly, it several other diff erent services such as For the past two years, Uzbekistan was trying to att ract Shariah compliant auto insurance and national identity — with a population of 32 million investments from other countries to card replacements. Muslims — has been building an Islamic meet the need for an infl ux of capital to leasing aspect in its economy focusing satisfy its 10 million Muslims with the The UK is gett ing ready to release a on a Shariah compliant system that aim to foster Islamic banking. Secondly, second set of Shariah compliant bonds establishes trade links with like-minded it was looking to increase exports to that makes it the western hub for Islamic economies. countries with a Halal infrastructure. leasing and Shariah compliant fi nancing. John Glen, the UK economic secretary Shoeb M Sharieff is the president and CEO The Philippine Halal Export to the HM Treasury, calmed any fears of Ijara Community Development Corp. He Development and Promotion Board about Brexit by saying that even if the can be contacted at shoeb@ĳ aracdc.com. fast-tracked these plans in 2018 and by country leaves the EU, it will remain

Gulf lenders continue to be attracted to Turkey’s ϐinancial market

MERGERS & stage has been completed by obtaining establish branches within Saudi Arabia, ACQUISITIONS the approval from Turkey’s banking the UAE, Egypt and in other MENA By Burak Gencoglu regulator BRSA. countries which will provide Islamic fi nance services to its customers. A signifi cant acquisition transaction of The deal is signifi cant by being Turkey’s the Emirates National Bank of Dubai largest mergers and acquisitions deal The lenders from the Gulf are att racted (Emirates NBD) is about to be closed since 2012 and a Dubai-based bank’s to Turkey where there are huge in the second quarter of this year. The largest overseas acquisition. Aft er the expansion opportunities with a young Turkish state-owned Anadolu Agency announcement of the deal, the shares of and underbanked population of more reported that the Turkish Banking Emirates NBD jumped as much as 9.3% than 80 million. Regulation and Supervision Agency in Dubai in trading which is the highest (BRSA) has approved the Emirates level since February 2008. Before Emirates NBD’s major acquisition NBD’s acquisition deal of Denizbank of Denizbank, Qatar National Bank shares from Russia’s Sberbank. The deal may also be considered as an bought the National Bank of Greece’s important development for Turkey, Turkish unit Finansbank in 2016 and in Emirates NBD previously signed a new which shows international confi dence the same year, the Commercial Bank of deal to buy Sberbank’s wholly-owned in the Turkish fi nancial sector and Qatar took full ownership of Alternatif Turkish subsidiary Denizbank in return for TRY15.48 billion (US$2.73 billion). As its economy amid slowing economic Bank aft er buying the remaining 25% a result of the slumping Turkish lira, the growth in the country. stake. revised agreement may save the Dubai- based lender up to US$700 million. In terms of the Islamic fi nance Burak Gencoglu is the founding partner of perspective, considering Emirates Gencoglu & Ergun Law Firm. He can be Following the approval of the Central NBD’s branching policy, the completion contacted at bgencoglu@gencogluergun. Bank of the UAE, another important of the acquisition of Denizbank may av.tr.

Integrated Halal ecosystem

HALAL INDUSTRY growing signifi cantly for the last decade. Islamic fi nance still only represents a The country has been ranked No 1 in the small portion of the fi nancial industry By Dr Sutan Emir Hidayat segment by CrescentRating along with in the Republic. As of June 2018, Islamic its neighbor Malaysia. In addition, the fi nance’s market share in the country Since the last decade, the Halal industry country is ranked No 2 in the 2018 GIEI stood at around 8.47% of total fi nancial has been a global phenomenon. Not for modest fashion. assets in Indonesia, according to a report only Muslim countries, but also non- by the Financial Services Authority. On Muslim-majority countries are actively participating in the industry. Some However, the Halal tourism and modest the other hand, the contribution of the of the non-Muslim countries notably fashion segments are not that much Halal industry to the Indonesian economy have been becoming top performers in integrated with the Islamic fi nance by default should be much more than the certain segments of the Halal industry. segment despite Indonesia being listed 8.47% fi gure since Indonesia is the world’s Brazil, for instance, has been the in the top 10 of the Islamic fi nance biggest Muslim country. world’s top producer of Halal poultry segment of the 2018 GIEI (at No 9). It for the last decade. means fi nancial aspects are not taken into Therefore, it is very clear that the consideration in categorizing a product disintegration exists in Indonesia. The Another example is the Kingdom of as Halal. It also means the Halal concept National Islamic Finance Committ ee, Thailand which is included in the top applies to the products and services which has been mandated by the 10 Halal Tourism list in the 2018 Global only with litt le or no consideration to government to coordinate the Islamic Economy Indicator (GIEI). the sources of fi nancing. As a result, implementation of MEKSI, focuses on Actually, there is high correlation there is still a decoupling between how to integrate Islamic fi nance and between segments of the Halal industry. Halal products and services and Islamic other segments of the Halal industry. For example, if a country wants to fi nance. Therefore, strengthening the Islamic fi nance will be strengthened and develop Halal tourism, it must also Halal value chain and Islamic fi nance directed to fi nance the Halal industry develop a Halal food supply chain since has become a very important strategy more. Halal industry players should also the availability of Halal restaurants in developing the country’s Islamic be pushed to take only Islamic fi nancings is part of the requirements of Halal economy ecosystem. and instruments as their sources of tourism. funds. Only with strong integration In fact, the two strategies have been between Islamic fi nance and other Despite the aforementioned good included as Indonesia’s main strategies segments of the Halal industry can a development, the integration between in the recently launched master plan robust Halal ecosystem be in place. Halal food, Halal tourism, modest for the Indonesian Islamic economy or fashion and other segments of the known as MEKSI. The stakeholders of Dr Sutan Emir Hidayat is the director of Halal industry and Islamic fi nance is the Islamic economy in Indonesia realize Islamic fi nancial education and research at still relatively low in many Muslim that the disintegration between Islamic the National Islamic Finance Committ ee, countries such as Indonesia for instance. fi nance and other segments of the Halal Indonesia. He can be contacted at sutan. In Indonesia, Halal tourism has been industry is one of the main reasons why [email protected].

RECOVERY, RESTRUCTURING AND RESCHEDULING FOR ISLAMIC FINANCE FACILITIES 26th - 27th August 2019, Kuala Lumpur, MALAYSIA

Reach out to us for more information REGISTER NOW

Dr. Mohd Johan Lee Managing Partner J Lee & Associates

www.redmoneyevents.com [email protected] +603 2162 7800

Islamic ϐinance training and development landscape from 2018

The approximately US$3 trillion Islamic fi nance industry has seen signifi cant growth over the past 20 years. According to Thomson Reuters, in the past decade, the Islamic fi nance industry has averaged double-digit growth. Even though the Islamic fi nance industry currently is going through a consolidation phase due to the declining growth rates of certain Islamic economies and global geopolitical uncertainties, it is still estimated to continue on a positive growth trend and by 2024, it is expected to increase by 50% in value. MUJTABA KHALID delves further.

Mujtaba Khalid is the Chart 1: Total enrollment in short courses and ADIF (2015-18) head of the Islamic Finance Centre at the BIBF Centre for Islamic Finance highlights Bahrain Institute of Banking and Finance. He 2015 2016 2017 2018 (expected) can be contacted at [email protected].

This is maybe a good sign for the industry and the stakeholders of Total 775 828 837 850 Islamic fi nance at large; however, since 2016, there have been callc by many industry proponents regarding the lack of qualifi ed human resource capital. There have been many instances where Islamic banks around the world have had to hire staff with zero or very basic understanding and ADIF experience of Islamic banking and 18 38 55 87 fi nance. Although Islamic banks are helpless in this situation as they need to fi ll job openings, this practice in Source: Thomson Reuters 2018 Bahrain Report itself exposes Islamic banks to some very unique risks, the least of which is with general Islamic fi nance industry reputational. With increased issues. This is where Islamic fi nance training regulatory The Coventry University launched the comes in; for the industry to progress in Islamic Finance Management program the short to medium term. Professional requirements, in 2018 in partnership with the Bahrain qualifi cations and specialized short Institute of Banking and Finance courses are the answer as opposed to specialized (BIBF). This program is aimed at the a Master’s program or a doctorate. second and third tier of potential future Having said that, for the long run, workshops in the GCC leaders in the Islamic fi nance space as the role of Master of Science and PhD succession planning is something the programs cannot be overstated enough. were particularly industry is greatly suff ering from. This This report will look at the new program also saw the launch of the industry developments in the training successful fi rst-ever Islamic banking e-simulation space, some commentary on the eff ort soft ware. of certain jurisdictions in this space as well as some trends and experiences Scotland also saw the launch of from 2018. by Cambridge IFA and the Durham Islamic fi nance executive education Islamic Finance Summer School. The with the UKIFC partnering with the Islamic finance executive Islamic Finance Leadership program Ethical Finance Hub and Heriot-Watt is aimed at leaders in the Islamic University to launch a three-day education in the UK fi nance industry and focuses on sharing program exploring synergies between In 2018, all of England wanted “football experiences of the well-established Islamic and ethical fi nance. to come home”; unfortunately for them, industry leaders as well as focusing on it did not — however, the UK did see leadership development. The Durham Other notable developments a surge in Islamic fi nance executive Islamic Finance Summer School is The Central Asian (CIS) region, development courses. The two oldest thematic in nature and is aimed at both including Russia, has seen a lot of and most established ones are the industry practitioners as well as new development in the fi eld of Islamic Islamic Finance Leadership program entrants in the space; therefore it deals

Continued

ﬁ nance in the past three or four years. In Russia, the Kazan Summit held under the patronage of the president of the Republic of Tatarstan is a conference-themed event but also includes Islamic ﬁ nance workshops as well as Halal business expos all merged into an almost week-long extravaganza.

The most active eff orts in the CIS region have come from Kazakhstan with the Astana International Financial Center (AIFC) leading the charge to th become an Islamic fi nance hub of the 27 AUGUST 2019 region. Specifi cally in the training space, the AIFC established the Shangri-La Hotel, Jakarta Bureau for Continuing Professional Development (BCPD) which has been actively working on the human capital development of the region in the Islamic fi nance space.

Pakistan has seen some great eff orts over the past four years with the State Bank of Pakistan establishing three centers of excellence in Islamic fi nance. COMSATS University, which is the largest university network in Pakistan and one of the highest globally ranked Pakistani universities, has made invaluable contributions toward the Islamic fi nance education and training space. COMSATS has also been the most active (even more active than the Indonesia is an centers of excellence) when it comes Islamic finance giant to conducting Islamic fi nance training waiting to be awakened, and events from recent years have indeed outside of the major Pakistani cities, stirred the world’s most populous Muslim which is very much required for the nation. Armed with a strong political will, the rapidly growing industry. COMSATS Republic has a firm grip on its title as a worldclass also became the fi rst Pakistani institute Sukuk contender, issuing more sovereign Sukuk than any to partner with an entity from the GCC other nations globally. And the Southeast Asian giant, with over 225 million Muslim citizens, is resolute in broadening its Islamic finance to conduct and develop qualifi cations repertoire beyond Sukuk: equipped with a new 10-year Islamic finance and training programs aimed at the national masterplan, a dedicated national Shariah finance committee headed by the Pakistani Islamic fi nance industry. BIBF president himself and a new Hajj fund agency, Indonesia is working on elevating other and COMSATS will be launching a segments of its Islamic finance industry including banking, insurance and asset management. professional qualifi cation as well as a number of workshops and board-level LEAD PARTNERS MULTILATERAL STRATEGIC PARTNERS training programs in Pakistan.

GCC experience PARTNERS There is a deﬁ nite increase in the uptake of Islamic ﬁ nance short courses as well as Advance Diploma in Islamic Finance (ADIF) enrollments as seen in BADGE & LANYARD SPONSOR Chart 1. With increased regulatory requirements such as the introduction of value-added tax (VAT) and new MEDIA PARTNERS IFRS standards, specialized workshops REGISTER FREE NOW in the GCC such as those titled ‘VAT @REDmoneyevents.com and Implications for Islamic Banks’ and ‘IFRS 9 and Islamic Banking Entries’ www.redmoneyevents.com [email protected] 603 2162 7800 #IFNINDONESIA2019 were particularly successful.

Islamic banking in Turkey

Six participation banks are currently in operation in Turkey — Albaraka Turk (majority-owned by Albaraka Banking Group, Bahrain), Kuveyt Turk (majority-owned by KFH, Kuwait), Turkiye Finans Katilim Bankasi (majority-owned by NCB, Saudi Arabia), Ziraat Katilim (state-owned), Vakif Katilim (state-owned) and Emlak Katilim (state-owned). Total assets are equal to a 5.61% market share as per the ﬁ rst quarter of 2019 (Q1 2019) with a total of 1,129 branches and 15,196 employees. In terms of market share, Kuveyt Turk is leading the rankings followed by Turkiye Finans, Albaraka Turk, Ziraat Katilim, Vakif Katilim and Emlak Katilim. CENK KARACAOGLU explores.

Cenk Karacaoglu is the ȱŗǱȱȱȱȱ¢ȬĚȱ ȱȱȱ¢ȱȱŘŖŗřȱȱŗȱŘŖŗş senior representative for AIMS International Ŝ% Management in the UAE 5.55% 5.ř5% 5.4% 5.Řř% 5.1% and Turkey for strategic 4.87% 4.şŘ% management advisory services. He 5% can be contacted at cenk.karacaoglu@ aims-gcc.com. 4%

Main instruments ř% dominating Islamic banking Though Murabahah, Wakalah, Ijarah, Ř% Istisnah, Sukuk and Takaful are widely used in the Islamic banking sector globally, only a limited 1% number of Istisnah products are off ered by participation banks in Ŗ% Turkey. Murabahah is one of the most successful instruments provided to ŘŖ1řȱ ŘŖ14ȱŘŖ15ȱŘŖ1Ŝȱ ŘŖ17ȱŘŖ18ȱȱ 1ȱŘŖ1ş corporates and SMEs while Ijarah Source: Turkish Participation Banking Association is off ered to SMEs (facilities with a maximum of one year). Turkey should accept and implement an Islamic structure for Murabahah Sukuk is one of the key instruments transactions. Government for Turkish participation banks today, especially Turkish lira Sukuk Likewise in many European countries, support would transactions supported by the Turkish both conventional banks and fully- Treasury that would allow Turkish fl edged Islamic banks are subjected help to increase participation banks to access longer- to the same regulations. Government term sources with an acceptable price support would help to increase the the market share compared to the cost of Murabahah market share of Islamic banking deposits made by local depositors. but even until today, there are still of Islamic Additionally, Wakalah is mainly used diffi culties in increasing the Islamic by treasury divisions for bank-to-bank banking market share to more than 5% banking Islamic fi nancings for six months and in Turkey. longer tenors. aggressively, but upon reviewing the Why Turkish Islamic banks balance sheet performance, Islamic Legislation for participation would not increase their banks achieved almost the same banking percentage of loan growth, net profi t market share and deposits compared to conventional Obviously, we would advocate unique A total of 53 banks have obtained a banks. Therefore, there was no support from the Turkish government license from the regulator from which signifi cant increase in the market share for Islamic banking principles in six are operating as fully-fl edged even with the incorporation of new Turkey. The Banking Regulation and Islamic banks. Chart 1 shows the state-owned Islamic banks, because the Supervision Agency (BRSA), along market share from 2013 to Q1 2019. new banks were sharing deposits and with the Turkish Treasury, shows loan allocation to existing customers strong eff orts in improving the Islamic Even though three state-owned banks of other Islamic banks instead of new banking market share. However, the were added as new Islamic banks in clients. BRSA allows conventional banks to Turkey, the market share is still less include Islamic banking instruments than 6%. In my opinion, the main It is also not correct to comment that like Murabahah into their product reason is not due to conventional Islamic banks in Turkey are not able to off erings as such conventional banks in banks tapping the local market more increase the market share due to their

Continued

INCORPORATING

limited instruments because they also oﬀ er products such as mortgage, car loans and non-cash loans like other banks. Further to this, the capital thh adequacy ratio (CAR) of Islamic banks 4 SSEPTEMBEREPTEMBER 22019019 is similar to conventional banks, so if Islamic banks are facing CAR problems, MansionMansion HHouse,ouse, LLondonondon then conventional banks will also face the same problem.

Upon analyzing the amortization of With six licensed new investments, conventional banks Islamic banks and over 20 international banks offering are more successful in off ering their Shariah compliant financial products, cross-selling instruments. As such, the UK’s Islamic finance industry is a favorite Islamic banks should consider cross- destination for investors, particularly for its flourishing real estate sector. Apart from the banking selling instruments. For instance, if industry, the London Stock Exchange is also one of the most an Islamic bank is providing non-cash active Sukuk-listing destinations, with 67 listed Sukuk and three instruments like lett ers of credit, lett ers Islamic exchange-traded funds to date. On top of this, implications from Brexit has also led the Kingdom to boost its international trade and financial of guarantee or standby lett ers, it is relationships with existing non-EU trade partners, especially with key Islamic finance not aggressively encouraging clients markets from the regions of the Middle East and Southeast Asia. to use its other products like export– Last year’s UK Islamic Finance Week saw many breakthrough sessions in a week-long event, including import receivables, credit cards, salary the official launch of iE5, an Islamic economy accelerator, during IFN Fintech Huddle UK. Following on from accounts, mandates for their Sukuk, the success of 2018, IFN returns to London for the third time for various hard-hitting sessions and discussions in bond issues and such. conjunction with leading European regulators, global standard-setters, world leaders and UK and European Islamic finance practitioners. In addition to cross-selling options, investment banking, private banking SUPPORTED BY ASSOCIATE PARTNER MULTILATERAL STRATEGIC PARTNERS and retail banking instruments are not top of the list for marketing, except at Kuveyt Turk — the largest Islamic bank in Turkey — and the newly established PARTNERS state-owned bank, Vakif Katilim Bankasi. Other banks are not keen on emphasizing investment and private banking instruments.

Eventually, Turkish Islamic banks are targeting to achieve a minimum market IN ASSOCIATION WITH MEDIA PARTNERS share of 10% although it seems even REGISTER FREE NOW achieving a 5.5% market share is @REDmoneyevents.com diﬃ cult without focusing on cross- selling banking performance. www.redmoneyevents.com [email protected] 603 2162 7800 #IFNUK2019

An uncertain future but Islamic ϐinance can lead the way in the UK

Any discussion on the UK fi nancial services industry inevitably necessitates some commentary on the topic of Brexit. Now that the withdrawal date of the UK from the EU has been extended to October 2019, the post-Brexit landscape for the UK fi nancial services sector is currently unknown. Nevertheless, Islamic fi nance is set to play a key role in ensuring that London, as well as the UK, maintains its position as a global center of international fi nance in a post-Brexit world. The rapid growth of Islamic fi nance in recent years in the UK has been led by supportive government policies, an extensive pool of professionals skilled in Islamic fi nance and an open economy that welcomes international investment. LINGXI WANG writes.

Lingxi Wang is a senior Treasury is currently assessing the associate at Foot Anstey. possibility of a second issuance. He can be contacted at According to TheCityUK, which led lingxi.wang@footanstey. a consultation with Islamic banks, com. non-Islamic fi nancial institutions and professional services companies on the With over 20 banks off ering Islamic 2014 UK sovereign Sukuk issuance, if fi nancial services — six of these are a UK sovereign Sukuk facility is not fully Shariah compliant — and more available for Islamic banks in the UK, than US$5 billion of assets held it would be diffi cult, if not impossible, by UK-based institutions that off er for them to meet their regulatory Islamic fi nance services, the UK, requirements to hold liquidity particularly the City of London, is buff ers, notwithstanding the BoE’s one of the leading centers of Islamic establishment of the SCF. fi nance outside of the Gulf and Asia. In recent years, the UK government has The UK has the taken steps to reinforce this position by taking fi scal and regulatory steps second-largest to ensure a level-playing fi eld for Shariah compliant fi nancial products. number of Islamic These have included the removal of double taxation on Shariah compliant ϔintech companies mortgages and ensuring that returns and income payments from Sukuk are after Malaysia treated the same as conventional bonds. investors. Yielders, a crowdfunding To support the growth of Islamic banks platform that assists individuals in the UK and to assist them with with real estate investment, received compliance of the Basel III liquidity In 2018, Al Rayan Bank issued a public its certifi cate of Shariah compliance rules, the Bank of England (BoE) in sterling Sukuk facility backed by in 2017 making it the fi rst Shariah 2017 established the Shariah Compliant UK mortgages, helping to highlight compliant regulated fi ntech company Facility (SCF). This is the fi rst non- the growing importance of the UK in the UK. According to data from IFN interest-based liquidity facility to be Sukuk market. The GBP250 million Fintech, the UK has the second-largest developed by a major western central (US$313.44 million) Sukuk facility number of Islamic fi ntech companies bank and permits UK Islamic banks to was signifi cantly oversubscribed aft er Malaysia. hold sterling deposits with the BoE. In which refl ects the demand for Islamic September 2018, the BoE announced fi nancing instruments and the London One sector of Islamic fi nance with that it will set up an Alternative Stock Exchange as a key venue for the particular scope for growth in the UK is Liquidity Facility, a legal entity to issuance of Sukuk. Takaful. The London insurance market house the SCF. is a global commercial insurance and Islamic fi nance fi ntech is still at the reinsurance hub meaning that the UK The UK sovereign Sukuk facility embryonic stage of development, but has the expertise to assist with the that was issued in 2014 is due for the UK is well positioned to become a growth of the global Takaful market. In redemption in July 2019. The issuance hub for Islamic fi ntech. The fi rst Islamic 2015, the Islamic Insurance Association of the Sukuk in 2014 was an important fi ntech summit was held in London of London was launched to support step for the UK in increasing the in the fi rst quarter of 2019, bringing those working in the UK insurance and profi le of Islamic fi nance alongside together banks, tech entrepreneurs, reinsurance market who deal with conventional fi nancial services. HM professional services companies and Islamic fi nance transactions.

Islamic ϐinance: Boosted by Brexit?

While the lack of clarity around Brexit shows no signs of improving, strong opportunities remain for investors looking to grow their UK property portfolios. The uncertainty of the past two years has undoubtedly had a stagnating eff ect on UK property prices, with some areas noting a signifi cant drop. However, there remains to be an opportunity to invest in a number of stable asset classes including build-to-rent which both local and international investors will fi nd att ractive. MOHAMMED SAQUB and ISHTEYAK HANNAN explore.

Mohammed Saqub is a partner and Islamic fi nance specialist and Ishteyak Hannan is an Islamic fi nance solicitor at law fi rm Shakespeare Martineau. They can be contacted at mohammed.saqub@ shma.co.uk and ishteyak.hannan@ launching in the UK has confi dently market oft en provides Islamic investors shma.co.uk respectively. shown the commitment of the UK — and with safe returns on their investment. also that of the fi nancial institutions in The build-to-rent model forms a part of a Despite Brexit delays discouraging question — to overseas investors. Such recent shift in the UK real estate market, European investments into the UK, banks pride themselves on being able to which aims to provide more varied and relationships with other countries support their clientele in new locations fl exible accommodation that is more further afi eld are blossoming. While across the globe, the UK included. The aligned with modern att itudes to housing manufacturing, healthcare and retail UK continues to support Islamic fi nance and home ownership. sectors are continuing to be squeezed and remains committ ed to making foreign by Brexit uncertainty, the UK’s strong investments rewarding for individuals Importantly, the model meets the needs reputation in the real estate market and businesses from the Middle East of an increasingly transient student and seems to be gaining pace, particularly for and the Far East who prefer to bank in a working population. The schemes are investors looking to take advantage of Shariah compliant manner. proving popular in the UK’s student decreasing property prices. towns and cities, where graduates look Of course, there are concerns that for post-university accommodation and continued political posturing will have a do not necessarily see themselves sett ling The build-to- negative eff ect on foreign banks, including in one location for the long term. Build- Islamic fi nance institutions. Most notably, to-rent schemes oft en feature spacious rent market those that depend on passporting rules, communal living areas, in-built wi-fi and which allow foreign banks to sell services other facilities such as gyms and concierge often provides across Europe from a London base, will services. be paying close att ention to new trade Islamic investors with and immigration agreements. Therefore, Many believe that build-to-rent schemes the UK must continue to work hard to are a legitimate part of the solution to safe returns on their maintain its important role in banking and the UK housing crisis — increasing the Islamic fi nance. supply of good quality homes, while investment providing investors with stable, long-term Although Brexit throws up a number income streams. These key features make of questions, it also encourages greater build-to-rent att ractive to some Middle opportunities for new agreements and Eastern and foreign investors who oft en investments to be made. With this in prefer to hold on to assets as opposed to Unlike many other global markets mind, the UK government must continue the traditional build-to-sell approach. experiencing political and potential to work on trade agreements with economic turbulence, the UK’s regulatory countries outside the EU, especially Against the backdrop of ambiguity and legislative prowess is one of its nations of the GCC including Qatar, around Brexit, the outlook for this sector greatest pulls. Still regarded as a ‘safe Saudi Arabia, the UAE and Bahrain, and appears to be strong. The key to ensuring haven’ for those looking to invest in further afi eld to the Far East. According that the UK remains a hub for banking property, the opportunities — no matt er to YouGov, 77% of GCC investors already and inward investment, including Islamic whether commercial or residential — view the UK as one of the top overseas fi nance, will be to continue with the continue to fl ourish. property investment destinations. message that the UK is very much open for business and understands the Choosing the location for an investment Preservation of wealth is considered as regulations of foreign investment, is important but having trusted banking one of the fi ve necessities in Islam and including those investing in real estate in partners is arguably just as vital. The in a real estate context, the build-to-rent the UK from the Muslim world. increase in foreign bank subsidiaries

Islamic fund and wealth management: A way forward

By Razali Haron and Adam Abdullah compliant option which helps to smoothen also a discussion on how consecutive the process and assure that a fair estate debt-taking behavior can elevate fi nancial This book specifi cally provides updated distribution can be executed to legal heirs well-being and lifestyle satisfaction of information on fund and wealth is also discussed. Also discussed are the households. Nevertheless, regular charity- management with regards to current challenges in current estate planning and giving is identifi ed as a must in lifestyle for policies and best practices. Empirical current resolutions on estate planning and such outcomes to be achieved among the fi ndings, case studies discussions, how Shariah compliant models of Islamic low-income households. seminal as well as recent related literature trust services based on Hibah Mu’allaqEh are gathered in this book to cater to and trust with a declaration of Hibah are This compilation also provides information everyone inside or outside the fund and proposed in providing more effi cient estate on debt from a Shariah perspective and the wealth management industry. planning and management. issues related to the practicality of a debt management program which unravel the With Shariah as the governing principles, The issue of hedging in Malaysia and the gray areas that require the future focus of the fund and wealth management industry understanding of Islamic crowdfunding as researchers. A study on India revealed that has remarkably fl ourished throughout an alternative instrument of fi nancing for political challenges, lack of confi dence, the years. Parallel with the consistent and cooperatives’ operation and execution of awareness, education, lack of demand, lack coherent growth, this book off ers insights specifi c projects are also discussed here as of human capital, religious-based and in-depth investigations covering well as the signifi cant diff erences between terminologies, lack of proper Shariah diff erent aspects that may infl uence the risk and return and how a Shariah stock governance and absence of marketing continuous prosperity of this industry and portfolio is considered bett er in terms of strategies have been identifi ed as the key caters to all players in the fi eld. This book is risk-adjusted returns compared to the challenges for the success of Shariah defi nitely a must-have tool for everyone. conventional portfolio. Shariah compliant mutual funds in India. The debt issues in relation to Islamic wealth determinants of Shariah-approved fi rms in Among the related issues discussed management are also put forth using a Malaysia as well as the eff ect of industry are the issuance and trading process of Maqasid-based perspective with examples type in determining the debt level of the Malaysian sovereign ukuk as well as from a case study of Malaysia. There is fi rms are also addressed as well. the structures commonly used in ukuk issuance to address the current trend of demand for Malaysian sovereign ukuk by foreign investors. Waqf is also discussed in this book by looking at how Waqf, when integrated with the element of crowdfunding, can become a sustainable source of funding for the development of Waqf lands that have been left idle due to fi nancial constraints.

A voluntary long-term private investment scheme has been suggested as retirement planning for remisiers responding to the harshness facing the remisiers. The optimal level of gold as a reserve asset to be held in portfolios of central banks in order to enhance the stability of nations in times of economic, ﬁ nancial and/or geopolitical turmoil given gold’s characteristics as a safe haven asset and a store of value is also put forth in this book. The choice between Shariah compliant and non-Shariah compliant stocks, discussion on the factors that inﬂ uence people to choose a Shariah retirement fund, an examination of the importance of the Shariah Governance Framework in a government-linked investment company and the surplus Editors: Razali Haron & Adam Abdullah management in Pakistan’s Takaful Publisher: IIUM Institute of Islamic Banking and Finance Pages: 381 industry with regards to regulations and ISBN: 978-983-44568-4-9 practices are articulated. How Islamic trust services can serve as a viable Shariah

issuance worth BHD43 million receiving one bid and eight bids worth DEALS (US$113.29 million) has received bids BDT1 billion (US$11.61 million) and totaling BHD137.48 million (US$362.22 BDT8.01 billion (US$92.99 million) BNM ϐloats Islamic liquidity million). The paper carries an expected respectively. The proﬁ t-sharing ratio of management papers return of 3.09% and will mature on the the accepted bids was 90:10. MALAYSIA: Bank Negara Malaysia 16th October 2019, according to an (BNM) has sold three Islamic short- announcement. STSSB places IMTN and ICPs term money market instruments for a MALAYSIA: Sunway Treasury Sukuk total of RM10.67 billion (US$2.6 billion), CBG’s Sukuk Salam (STSSB) has issued a one-year Islamic according to separate announcements. oversubscribed medium-term note (IMTN) for the total amount of RM300 million (US$72.98 BNM also sold two short-term Shariah GAMBIA: The Central Bank of th million), according to a statement. The securities for a total of RM11.2 billion Gambia (CBG) on the 17 July 2019 sold three-month, six-month and one- paper carries a 3.75% proﬁ t rate and will (US$2.72 billion). th year Sukuk Salam papers for GMD10 mature on the 16 July 2020. million (US$199,399) each, according BNM further placed three Shariah papers STSSB separately issued two 31-day Islamic for RM10.42 billion (US$2.53 billion). All to a statement. All three papers were oversubscribed. commercial papers (ICPs) for a total of the securities were fully subscribed. RM250 million (US$60.79 million).

BNM in addition placed one Money Separately, the apex bank will be placing Market Tender Qard-Islamic Range three-month, six-month and one-year Brunei sells 91-day Sukuk Sukuk Salam facilities for GMD10 million Ijarah Maturity facility and one Money Market th Tender Murabahah Overnight Borrowing each on the 24 July. BRUNEI: The government of Brunei Acceptance Islamic paper for the total has printed its 171st short-term Sukuk amount of RM10.89 billion (US$2.65 Gamuda offers 92-day ICP Ijarah for the amount of BN$100 million billion). MALAYSIA: Gamuda has issued a (US$73.49 million), according to an 92-day Islamic commercial paper (ICP) announcement by Autoriti Monetari BNM separately sold four short-term amounting to RM50 million (US$12.16 Brunei Darussalam. The 91-day paper Islamic liquidity management tools for a million), according to an announcement. has a rental rate of 1.63%. total of RM9.46 billion (US$2.3 billion). The paper follows the Murabahah structure and is rated ‘P1’ by RAM With the latest series, Brunei has thus far Indonesia reopens Sukuk Ratings. issued over BN$12.98 billion (US$9.54 billion)-worth of short-term Sukuk Ijarah auction th Bangladesh Bank issues securities since the fi rst off ering on the 6 INDONESIA: The Ministry of Finance of April 2006 while the total holdings of the Indonesia has conducted an auction for BGIIBs Brunei government Sukuk outstanding rd six Islamic papers on the 23 July. BANGLADESH: Bangladesh Bank as at the 11th July 2019 stood at BN$322 According to a statement, the auction has auctioned three-month and six- million (US$236.63 million). consisted of the reopening of SPN-S month Bangladesh Government Islami 10012020, PBS014, PBS015, PBS019, Investment Bonds (BGIIBs), receiving PBS021 and PBS022. The indicative target three bids and nine bids worth BDT1.81 CBK places Tawarruq papers for the issuances is IDR8 trillion billion (US$21.02 million) and BDT13.14 KUWAIT: The Central Bank of Kuwait (US$573.6 million). The outcome of the billion (US$152.58 million) respectively, (CBK) has auctioned KWD240 million auction has yet to be announced at the according to a statement. The profi t- (US$785.95 million)-worth of three- time of publication. sharing ratio of the accepted bids was month conventional bonds and related 90:10. Tawarruq facilities. The off erings received KWD2.61 billion (US$8.55 CBB prints Sukuk Salam Bangladesh Bank also auctioned another billion) in bids and carry a profi t rate of BAHRAIN: The Central Bank of Bahrain 3%, according to an announcement. (CBB)’s monthly 91-day Sukuk Salam set of three-month and six-month BGIIBs,

DEAL TRACKER Full Deal Tracker on page 36 EXPECTED DATE COMPANY / SIZE STRUCTURE ANNOUNCEMENT COUNTRY DATE TBA Emirates Strategic TBA Five-year Sukuk 16th July 2019 Investments Company TBA Eskom TBA Sukuk 10th July 2019

TBA DP World TBA US dollar-denominated 9th July 2019 Sukuk 2019 Warba Bank US$500 Sukuk 4th July 2019 million TBA Warba Bank US$2 billion Sukuk program 4th July 2019

SCC issues Musharakah-based involved several international banks to issuances of the bank to TRY2.58 billion implement a proposed restructuring (US$454.29 million) and the total ICP scheme involving the conversion of a issuances in 2019 to TRY5.24 trillion MALAYSIA: Sabah Credit Corporation previously issued Sukuk to new Sukuk (US$922.67 billion). (SCC) has issued one Musharakah-based issuance within the next 90 days, subject Islamic commercial paper (ICP) worth to due diligence by the banks. RM50 million (US$12.14 million). The AEON Credit Service prints 183-day paper is rated ‘P1’ by RAM ICP Ratings, according to an announcement. Saudi closes July Sukuk MALAYSIA: AEON Credit Service has issuance raised RM210 million (US$51.03 million) Kazakhstan maintains strong SAUDI ARABIA: The Saudi Ministry of from one 31-day Murabahah-based Finance has issued Sukuk worth SAR5.22 Islamic commercial paper (ICP) rated ‘P1’ ties with the UAE billion (US$1.39 billion) for July, under by RAM Ratings, according to an KAZAKHSTAN: As Kazakhstan bids to the Saudi Arabian Government SAR- announcement. become a regional fi nancial center and denominated Sukuk program, according fi ntech hub for Central Asia, it is to a statement. maintaining bilateral trade ties with the CBI sells Islamic certiϐicates UAE. Kairat Kelimbetov, the governor of The issuance was divided into three of deposits the Astana International Finance Centre, tranches: the fi rst tranche was issued at IRAQ: The Central Bank of Iraq (CBI) has told Gulf Today that Dubai — and the SAR1.96 billion (US$522.39 million), fl oated 182-day Islamic certifi cates of Dubai International Finance Centre maturing in 2024; the second tranche was deposits worth US$100 million. The apex (DIFC) specifi cally — is a great example fl oated at SAR405 million (US$107.94 bank received two bids amounting to to follow. He also mentioned a plan to million), maturing in 2028; and the third US$33.2 million and awarded US$33 issue Sukuk, as well as working on dual tranche was fl oated at SAR2.86 billion million, according to a statement. The th listings with NASDAQ Dubai. (US$762.27 million), maturing in 2034. facility, which was auctioned on the 15 July 2019, carries a cut-off yield of 2%. Warba Bank gets nod for DP World lists Sukuk Sukuk UAE: NASDAQ Dubai has welcomed the Bumitama Agri places two KUWAIT: Warba Bank has received the listing of a US$1 billion Sukuk facility IMTNs Central Bank of Kuwait’s preliminary and a US$300 million conventional bond MALAYSIA: Bumitama Agri has issued approval to issue Sukuk not exceeding (a tap issuance on a one billion US dollar two Islamic medium-term notes (IMTNs) US$500 million under a Sukuk program bond issued in September 2018) by DP for a total amount of RM700 million not exceeding US$2 billion, according to World, according to a statement. (170.23 million), according to separate a bourse fi ling. announcements. The IMTNs, based on Turkiye Finans issues Sukuk the Musharakah concept, have tenors of The regulator’s fi nal approval is subject TURKEY: Turkiye Finans Participation fi ve years and seven years with profi t to Warba Bank’s submission of the Sukuk Bank has announced via a statement that rates of 4.1% and 4.2% respectively. prospectus. it has fl oated a 60-day domestic Sukuk paper worth TRY150 million (US$26.41 Emaar’s Sukuk delisted Bright Focus to buy back million). The issuance was fl oated via the UAE: Dubai Financial Services Authority Sukuk bank’s subsidiary, TF Varlik Kiralama and NASDAQ Dubai have announced in MALAYSIA: Bright Focus is planning a Sirketi, and was structured for qualifi ed separate statements that they have restructuring exercise to buy back Sukuk investors. delisted Emaar Sukuk’s US$500 million worth RM1.23 billion (US$298.87 facility following complete and fi nal th million), either fully or partially. The latest facility brings the total amount redemption on the 18 July 2019. According to Bernama, the company has of outstanding local currency Sukuk

founder of the organizing teams of the the main purpose for the purchase of AFRICA bank. these fertilizers is to provide farmers Hijra Bank launches sales of with quality input at a subsidized price as they approach the rainy season. public shares ITFC donates fertilizers to NFSC ETHIOPIA: Hĳ ra Bank is set to become FRA approves Sarwa Capital’s one of the few banks in Ethiopia to GAMBIA: The National Food Security practice Islamic banking as it has Processing and Cooperation (NFSC) bonus share issue announced the launch of sales of public has received about 21,340 bags of NPK EGYPT: Egypt’s Financial Regulatory shares, which will be conducted at nine fertilizers from Vietnam, donated Authority (FRA) has announced the diﬀ erent banks. by the International Islamic Trade approval of Sarwa Capital Holdings’s Finance Corporation (ITFC), The Point proposal to distribute three bonus Hĳ ra Bank is being established with a reported. shares for every ﬁ ve shares, increasing registered capital of ETB1 billion the company’s issued capital from (US$34.17 million), reported Capital The NFSC is the body that replaced the EGP119.7 million (US$7.19 million) to Ethhiopia quoting Ahbabu Abdella, the Gambia Groundnut Cooperation and EGP191.52 million (US$11.5 million).

Faisal Islamic Bank increases distributed over 440.19 million shares accommodating Islamic microfi nance, capital instead of the previous 366.8 million News Abidjan reported. shares. EGYPT: Faisal Islamic Bank has BIS launches new application announced its shareholders’ approval of Ivory Coast works on Islamic SENEGAL: Banque Islamique du increasing the company’s authorized Senegal (BIS) has launched its new capital from US$500 million to US$1 microϐinance bill application called Tamweel Touch that billion, according to a fi ling on the IVORY COAST: The Ivory Coast’s enables customers to pay bills, purchase Egyptian Exchange, as reported by Committ ee on Economic and Financial mobile credit and transfer funds, among Arab Finance. The capital will be Aff airs has approved a bill others, Financial Afrik reported.

Bank Islam to provide more ASIA online banking services EUROPE Bareksa launches platform MALAYSIA: Bank Islam Malaysia has Al Rayan Bank recognized by for Umrah savings signed MoUs with licensed e-money LSE INDONESIA: Investment marketplace issuer KiplePay and mobile payment UK: Al Rayan Bank, the UK’s oldest and Bareksa has introduced Bareksa Umroh, provider BerryPay to introduce more largest Islamic bank, has been identifi ed its new platform off ering Shariah online banking options to its customers. in the London Stock Exchange (LSE) compliant mutual funds for customers According to Bernama, BerryPay will Group’s ‘1,000 Companies to Inspire to fi nance their Umrah pilgrimage. provide mobile remitt ance services to Britain’ 2019 report, a report that Bareksa is partnering with Umrah and serve foreign worker account holders celebrates the fastest-growing and most Hajj travel agent Al-Qadri Umrah and by bridging them through a unique dynamic SMEs over 40 sectors. The bank Haji to add value to the savings plan e-banking system of pseudo bank currently serves over 85,000 customers service. accounts to other banked and non- and, as at the end of June 2019, had an banked recipients, and vice-versa. asset book in excess of GBP2.05 billion (US$2.56 billion). BPC to receive ϐinancing from Meanwhile, KiplePay will roll out a new ITFC payment channel for Bank Islam via BANGLADESH: State-run oil marketing quick response, which will allow arm Bangladesh Petroleum Corporation customers to do mobile reloads and (BPC) is set to receive a fi nancing worth in-app marketing. GLOBAL US$1.2 billion from the International Al Baraka collaborates with Islamic Trade Finance Corporation Kazakhstan’s Islamic ϐinance ADIB (ITFC) to import petroleum products in masterplan underway GLOBAL: Al Baraka Banking Group has the 2020 calendar year, Financial KAZAKHSTAN: The Astana signed an MoU with Abu Dhabi Islamic Express reported. The facility carries an International Financial Centre (AIFC) Bank (ADIB) in an aim to allow both interest rate of 4.5%, which the ITFC has appointed ZICO Shariah to create a banks’ collective network to exchange calls a mark-up rate. comprehensive fi ve-year masterplan to customer referrals and fortify processing develop Kazakhstan’s Islamic fi nance customer payments and collections. The BPAM to launch ESG Bond industry. The masterplan’s key elements partnership will also allow both entities Index Series include developing the sectors of to provide their customers with access to wider markets and collaborate on MALAYSIA: Bond Pricing Agency Islamic banking, Takaful and capital cross-selling in the area of payments and Malaysia (BPAM) will launch Malaysia’s market, and integrating Islamic fi nance collections. fi rst Environmental, Social and with Halal industries. Governance (ESG) Bond Index Series on the 25th July 2019, according to a statement.

The BPAM ESG Bond Index Series IFN ONLINE covers Malaysian ringgit-denominated, long-term conventional and Sukuk, classiﬁ ed within the ESG principles. It DIRECTORY also consists of bonds that were issued under or aligned with the Securities Commission Malaysia’s Sustainable and Over 6,955 individual Responsible Investment Sukuk framework, the ASEAN Green Bond companies directly Standards, the ASEAN Social Bond involved in the Islamic Standards, ASEAN Sustainability Bond ﬁ nance industry Standards and the UN Sustainable Development Goals.

due to the bank’s violation of certain fi nancing, expansion in underwriting MIDDLE EAST provisions of the Capital Market Law and IPO management, as well as the ADGM rolls out rules for and a CMA circular, as it failed to establishment of strategic funds in provide the CMA with information sectors including healthcare, education robo-advisors related to it for the fi scal year ended on and fi ntech. UAE: The Financial Services Regulatory the 31st December 2018 within the Authority (FSRA) of the Abu Dhabi specifi ed period, according to a Aafaq Islamic Finance Global Market (ADGM) has established statement. a regulatory framework for robo- considers IPO advisors operating in the ADGM. UAE: Aafaq Islamic Finance, currently a GFH Financial Group closes private non-listed company, is planning According to a statement, the real estate deal to go public in two years, according to framework touches on regulatory BAHRAIN: Shariah compliant GFH Managing Director and CEO Saif Ali Al permissions that may be required to Financial Group has acquired a tech Shehhi in a press statement. The provide robo-advisory services in or offi ces portfolio in the US through its company is considering an IPO, with from the ADGM, as well as how the fully-owned subsidiary GFH Capital, AED635 million (US$172.85 million) in FSRA will apply its authorization according to a bourse fi ling. The deal is capital. criteria in key existing areas of worth over US$100 million. technology governance, suitability and Saudi Marketing Company disclosure, and newer areas such as The portfolio consists of fi ve income- renews Islamic facility algorithm governance. yielding buildings located in Research Tringle Park, which is the largest SAUDI ARABIA: The Saudi Marketing Company has renewed an Islamic The framework also mentions the scientifi c research park in the US. GFH facility worth SAR130 million (US$34.65 FSRA’s requirements, including human will hold 4.75%, GFH’s investors will million) with Al Enma Bank to fi nance oversight over the design, performance hold up to 90.25% of the portfolio with its working capital requirements, and security of the algorithm model; the remaining 5% to be held by Global according to a bourse fi ling. ensuring that the algorithm model is Mutual and its affi liates. not aff ected by possible behavioral The fi nancing, which is extended to the biases; adequate safeguards to protect The investment is expected to make a 30th April 2020, is sponsored by the the integrity of the algorithm model; return on investment of 150% over the Development Bank. and ensuring the outcomes produced by investment period of three to fi ve years the algorithm model are explainable, and will accordingly have a positive traceable and repeatable. impact on GFH’s 2019 fi nancials. Ajman Bank opens new branch Invesco’s ETCs receive Shariah It is to be noted that with the UAE: Ajman Bank has opened a new completion of this deal, the total volume compliance conϐirmation branch in Abu Dhabi’s Dalma Mall, of US and UK real estate transactions featuring state-of-the-art design and UAE: Amanie Advisors in a statement executed by GFH over the last few years cutt ing-edge digital banking and has announced that its Shariah has crossed the US$1 billion mark. payment solutions such as the fi rst supervisory board has performed compact cash Automated Teller System, its annual supervision on Invesco’s National Bonds receives an innovative system that simplifi es and exchange-traded certifi cates (ETCs) for accelerates cash transactions. the year ended the 31st December 2018, license from Saudi CMA and has concluded that Invesco has SAUDI ARABIA: The Capital Market The system is provided by innovation operated in an excellent manner. Authority (CMA) of Saudi Arabia has issued a license to the UAE’s National and technology service provider CNS Middle East (Computer Network The board confi rmed that the audited Bonds Company to conduct investment Systems). certifi cates, namely Invesco Physical fund management, and arranging and Gold ETC and Invesco Physical Silver advising activities in the securities ETC, are Shariah compliant. business, in the Kingdom. The company Iran’s market capitalization has AED7 billion (US$1.91 billion) of and deposits increase Iraqi Deposit Insurance assets under management. IRAN: The total market capitalization Company issues shares of Iran’s four bourses, namely Tehran Alkhair Capital raises capital Stock Exchange, Iran Fara Bourse, IRAQ: The Iraqi Deposit Insurance SAUDI ARABIA: Alkhair Capital Iran Mercantile Exchange and Iran Company has announced the issuance has received approval from the Saudi Energy Exchange, has reached IRR12.28 of shares amounting to IQD45 billion Arabian Capital Market Authority to quadrillion (US$291.29 billion) as of the (US$37.45 million) to the public for raise its paid-up capital from SAR300 21st June, Financial Tribune reported, subscription. million (US$79.89 million) to SAR1 quoting a report by the Statistics and billion (US$266.53 million). Risk Analysis Department of Securities CMA ϐines Bank Albilad and Exchange Organization, published SAUDI ARABIA: The Capital Market The company announced that this new on the Securities and Exchange News Authority (CMA) has imposed a fi ne of injection of capital is to be distributed Agency’s website. It represents a SAR10,000 (US$2,665.38) on Bank across several fi nancial investment 9.3% increase in comparison with the Albilad, which off ers Islamic solutions, products, including support for margin previous month.

Total Iranian deposits meanwhile NBB proposes voluntary Supervisors Network for Greening the reached IRR20.83 quadrillion (US$494.1 Financial System (NGFS). billion) as at the 20th April 2019, the takeover bid to BisB Financial Tribune reported, citing the BAHRAIN: Bahrain Islamic Bank (BisB) According to a statement, the NGFS Central Bank of Iran. It represents a has received a lett er from the National is a community of central banks and 24.2% growth in comparison with the Bank of Bahrain (NBB) expressing the supervisors who exchange experiences, same period a year before. Deposits latt er’s interest in resuming discussions share best practices and contribute include both domestic and foreign in relation to potentially extending to the development of environment currencies. an off er to BisB shareholders, through and climate risk management in the a voluntary takeover bid, subject to fi nancial sector. a short, confi rmatory due diligence TSE increases capital exercise, according to a bourse fi ling. IRAN: The Tehran Stock Exchange The NGFS also helps to strengthen the global response required to meet the (TSE) has held its annual meetings on However, BisB has not received any the 20th July 2019, where the fi nancial goals of the Paris Agreement, and to formal voluntary takeover off er for the enhance the role of the fi nancial system statements of the fi scal year ended the issued shares of BisB. 20th March 2019 were approved. to manage risks and to mobilize capital for green and low-carbon investments The shareholders also concurred with DFSA joins NGFS in the broader context of the majority for the TSE’s capital UAE: The Dubai Financial Services environmentally sustainable increase to IRR2 trillion (US$47.44 Authority (DFSA) has become one of the development. million), funded by retained earnings fi rst regulatory authorities in the MENA and contingent reserves. region to join the Central Banks and

the surplus, touted to be the ﬁ rst-ever SAMA renews insurance TAKAFUL Shariah compliant surplus in London, amounted to GBP4,700 (US$5,851.47). license of UCIC Cobalt distributes Islamic SAUDI ARABIA: The Saudi Arabian Monetary Authority (SAMA) has surplus to charity Pak-Qatar Family Takaful UK: Chaucer Syndicate, operating an renewed the license of the Union Islamic insurance window through the opens new branch Cooperative Insurance Company (UCIC) Shariah compliant services provided by PAKISTAN: Pak-Qatar Family Takaful to issue general and health insurance Cobalt Underwriting, has announced has opened a new branch near Expo policies in the Kingdom for a period of that it has donated a surplus from its ﬁ rst Centre, on the main university road in three years starting the 20th Rabea’ Al year of operations in 2015 to the Teenage Gulshan-e-Iqbal in Karachi, according to Awwal 1441H (17th November 2019). Cancer Trust. According to a statement, a press release.

bank now stand at QAR154.6 billion grew 5% to AED61.1 billion (US$16.63 RESULTS (US$42.21 billion), driven by continued billion). Kuwait Finance House growth in fi nancing and investing activities. KUWAIT: The chairman of Kuwait First Abu Dhabi Bank Finance House (KFH), Hamad UAE: First Abu Dhabi Bank has Abdulmohsen Al-Marzouq, has Dubai Islamic Bank announced in a press release its net announced that it has recorded a net UAE: Dubai Islamic Bank has reported a profi t for the fi rst half of 2019 amounting profi t of KWD107.7 million (US$352.7 13% jump in its group net profi t for the to AED6.3 billion (US$1.71 million), million) for the fi rst half of 2019 (H1 2019) fi rst half of 2019 to AED2.75 billion showing a growth of 4% from the for KFH shareholders, an increase of (US$748.55 million) from last year’s previous year. 13.13% compared with KWD95.2 million AED2.44 billion (US$664.17 million). (US$311.76 million) recorded in the same According to a statement, its total income RAKBANK period in the previous year. grew 25% to AED6.98 billion (US$1.9 UAE: The National Bank of Ras Al billion), while its net operating income Khaimah (RAKBANK) has reported a Total fi nance income for H1 2019 reached rose 16% to AED4.7 billion (US$1.28 consolidated fi rst-half net profi t of KWD460.5 million (US$1.51 billion), an billion). AED554.9 million (US$151.04 million) in increase of 8.6% from 2018. 2019, up 28.5% year-on-year, according to Emirates Islamic an offi cial statement. Its net interest Qatar Islamic Bank UAE: Emirates Islamic has reported a income and net income from Islamic QATAR: Qatar Islamic Bank has 39% jump in its net profi t to AED673 fi nance grew 1.6% year-on-year to announced its net profi t for the fi rst half million (US$183.2 million) for the fi rst AED1.4 billion (US$381 million), and of 2019 amounting to QAR1.43 billion half of 2019. According to Khaleej Times, non-interest income increased by (US$389.2 million), representing a the bank’s total income rose 10% AED108.3 million (US$29 million) to growth of 7.5% over the same period in year-on-year to AED1.3 billion AED614.2 million (US$167 million). the previous year. Total assets of the (US$353.86 million), while total assets

Wahed FTSE USA Shariah ETF. Listed Investcorp Technology on NASDAQ, the fund provides ASSET exposure to US large and mid-cap fi rms Partners closes deal that comply with Shariah principles. BAHRAIN: Investcorp Technology MANAGEMENT Screening is undertaken by Yasaar Partners, a European lower middle Perth Mint lists gold ETF on Research, the FTSE USA Shariah Index’s market technology investor, has Shariah consultant. acquired a majority stake in Contentserv, NYSE a provider of product information US: The Perth Mint, which off ers Shariah management soft ware, for an compliant gold investment products, has GFH acquires healthcare undisclosed consideration, according to a listed its Perth Mint Physical Gold ETF portfolio press release. (exchange-traded fund) on the New York BAHRAIN: GFH Capital, a subsidiary of Stock Exchange (NYSE), according to an GFH Financial Group, has acquired a The acquisition is the sixth deal from its announcement. diversifi ed senior healthcare portfolio in US$400 million Fourth Technology Fund the US, in partnership with Madison and the second acquisition of a soft ware Wahed Invest launches debut Marquett e. The deal exceeds US$180 company in the DACH region ETF million in value, and consists of six (Germany, Austria and Switzerland) income-yielding senior healthcare within a year. US: Halal-focused investment fi rm properties located in the US states of Wahed Invest has launched its debut California, Washington and Michigan. exchange-traded fund (ETF) — the

RM200 million (US$48.57 million) review period with one of its generating RATINGS (2014/2022), according to a statement. facilities exceeding the unplanned MARC assigns ‘AA-IS’ to KAJV outage rates. MARC views the The enhanced rating refl ects an generating facilities would remain Sukuk irrevocable and unconditional guarantee susceptible to operational and technical MALAYSIA: Malaysian Rating extended by Danajamin Nasional, which issues arising from their age and Corporation (MARC) has assigned an enhances the credit standing of the design. ‘AA-IS’ rating to Konsortium KAJV’s IMTN beyond Puncak Wangi’s stand- Sukuk Wakalah program worth RM1 alone credit strength. Fitch updates Sukuk rating billion (US$243.28 million), according to criteria a statement. The rating action refl ects the KEV’s Sukuk Ijarah afϐirmed credit strength of the Terengganu state GLOBAL: Fitch has updated its MALAYSIA: MARC has affi rmed government to meet the unconditional criteria for rating Sukuk, applicable to its ‘AA+IS’ rating on Kapar Energy and irrevocable payment obligations on originator-backed (or asset-based) Sukuk Ventures’s (KEV) RM2 billion (US$486.55 the facility payment certifi cates issued structures. Fitch’s analytical assumption million) Sukuk Ijarah with a stable for work done for the Kuala Terengganu under these criteria is that the structure outlook, according to a press release. Utara water supply project. of the Sukuk and the underlying transactions provide for full recourse to KEV, which is a 60%-owned subsidiary Puncak Wangi’s IMTN the originator, and the Sukuk rating is of Tenaga Nasional, owns and operates driven solely by the originator’s rating. program reafϐirmed Kapar Power Station which has four MALAYSIA: RAM has reaffi rmed generating facilities with a combined The update does not aff ect or change the ‘AAA(fg)/Stable’ rating on Puncak nominal capacity of 2,420 MW. The existing transactions, and does not apply Wangi’s guaranteed Islamic medium- power plant has continued to face to asset-backed Sukuk. term note (IMTN) program of up to operational challenges during the

vice-president — head of administration, experience in telecommunications, MOVES Hajar Mohammad Al Mazam was banking, and oil and gas. SABB Takaful named as the vice-president — head of information technology and Saqr SAUDI ARABIA: SABB Takaful has Waha Capital Hamdan Alzaabi was appointed as the announced in a bourse fi ling the UAE: Waha Capital, which off ers vice-president — head of branches appointment of Mohammed Abdulaziz Islamic fi nancing solutions, has network. Alshaya and Sami Jadaan Al Muhaid as announced in a statement that it has the chairman and deputy chairman appointed Amr Al Menhali as its new respectively of the board of directors. Bank Dhofar CEO. Amr, whose appointment will be OMAN: Bank Dhofar has announced the eff ective in September 2019, currently Ajman Bank promotion of Dr Tariq Saleh Mohamed sits on the boards of several companies Taha to deputy general manager and operating in the fi nancial sector and is UAE: Ajman Bank has announced in a chief digital banking and information also a board member of the UAE press release the promotion of three of offi cer, eff ective the 21st July 2019. Dr Banking Federation. its senior executives. Omar Abdulla Tariq has more than 23 years of AlNuaimi was appointed the assistant

Expected date Company/country Size Structure Announcement Date TBA Emirates Strategic Investments TBA Five-year Sukuk 16th July 2019 Company TBA Eskom TBA Sukuk 10th July 2019 TBA DP World TBA US dollar-denominated Sukuk 9th July 2019 2019 Warba Bank US$500 million Sukuk 4th July 2019 TBA Warba Bank US$2 billion Sukuk program 4th July 2019 TBA Cypark Resources RM550 million Sukuk program 3rd July 2019 TBA Tropicana Corporation RM2 billion Unrated perpetual Sukuk 24th June 2019 program TBA UK TBA Sukuk 21st June 2019 TBA BankIslami Pakistan PKR2 billion Sukuk Mudarabah 14th June 2019 TBA The First Group US$135 million Sukuk 13th June 2019 TBA CIAF Leasing US$50 million Sukuk 12th June 2019 TBA Telekosang Hydro One RM470 million Green Sukuk 7th June 2019 20th August 2019 Turkish Treasury TRY500 million Two-year lease certifi cate 4th June 2019 TBA Turkish Treasury TBA Euro denominated fi xed rent 28th May 2019 rate lease certifi cates TBA Dayang Enterprise Holding TBA Sukuk program 21st May 2019 2020 Kazakhstan TBA Sukuk 17th May 2019 TBA Turkish Airlines TBA Sukuk or bonds 8th May 2019 TBA Kenya KES250 billion Sukuk or bonds 6th May 2019 Third quarter of 2019 Saudi Arabia US$3–5 billion Sukuk 3rd May 2019 TBA Securities and Exchange IRR10 trillion Sukuk 2nd May 2019 Organization of Iran TBA Meezan Bank PKR6 billion Tier 2 Sukuk 1st May 2019 TBA FlyDubai TBA Sukuk or combination of Sukuk 29th April 2019 and bank loans 2019 Saudi Real Estate Refi nance SAR4 billion Sukuk 24th April 2019 Company Over the next 10 years Oman Aviation Group US$6 billion Sukuk 24th April 2019 TBA Masood Textile Mills PKR5 billion Sukuk 12th April 2019 Fiscal year starting Egypt TBA Sukuk 12th April 2019 July 2019 TBA Pakistan PKR200 billion Sukuk 29th March 2019 TBA Permodalan Nasional TBA Exchangeable Sukuk or bonds 22nd March 2019 TBA National Iranian Oil Company IRR20 trillion Sukuk Manfaat 15th March 2019 TBA Persian Gulf Petrochemical Plant IRR10 trillion Sukuk Ijarah 14th March 2019 TBA Alliance Islamic Bank RM300 million Islamic commercial paper 14th March 2019 program TBA Alliance Islamic Bank RM2.5 billion Sukuk Program 14th March 2019 TBA Social Security Organization IRR6 trillion Sukuk Ijarah 12th March 2019 TBA Saipa Co IRR7 trillion Sukuk Murabahah 12th March 2019 TBA Dubai Islamic Bank US$1 billion each Additional Tier 1 Sukuk and 8th March 2019 Tier 2 Sukuk TBA Rail Pardaz Seri IRR1 trillion Sukuk 7th March 2019 Throughout 2019 IDB US$2 billion Sukuk 1st March 2019 TBA Pasukhas Green Assets RM17 million First tranche of ASEAN Green 26th February 2019 SRI Sukuk Throughout 2019 Indonesian Ministry of Finance TBA Three savings Sukuk and one 25th February 2019 retail Sukuk TBA Emirates Islamic US$2.5 billion Sukuk Program 22nd February 2019

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 1300 1300

1130 1180

960 1060

790 940

620 820

450 700 Feb Mar Apr May Jun Jul Feb Mar Apr May Jun Jul

REDmoney GCC 6 Months REDmoney Global 6 Months

All Cap Large Cap Medium Cap Small Cap All Cap Large Cap Medium Cap Small Cap 900 1600

810 1460

720 1320

630 1180

540 1040

900 450 Feb Mar Apr May Jun Jul Feb Mar Apr May Jun Jul

REDmoney MENA 6 Months REDmoney US 6 Months

All Cap Large Cap Medium Cap Small Cap All Cap Large Cap Medium Cap Small Cap 900 2600

840 2340

780 2080

720 1820

660 1560

600 1300 Feb Mar Apr May Jun Jul Feb Mar Apr May Jun Jul

SAMI Halal Food Participation (All Cap) 6 months

2350

2190

2030

1870

1710

1550 Feb-2019 Mar-2019 Apr-2019 May-2019 Jun-2019 Jul-2019

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 1750 1650

1510 1400

1270 1150

1030 900

790 650

550 400 Feb Mar Apr May Jun Jul Feb Mar Apr May Jun Jul

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 2500 2600

2150 2160

1800 1720

1450 1280

1100 840

750 400 Feb Mar Apr May Jun Jul Feb Mar Apr May Jun Jul

REDmoney Global Shariah

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

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

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

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

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

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

Eurekahedge North America Islamic Fund Index Eurekahedge Islamic Fund Gold Index

180 120 160 100 140 120 80 100 60 80 60 40 Percentage Percentage 40 20 20 0 0 Jul-16 Jan-19 Jun-14 Jun-19 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Oct-17 Feb-16 Sep-15 Dec-16 Apr-15 Aug-18 Mar-18 Nov-14 May-17

Top 10 Monthly Returns for Asia Pacifi c Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 CIMB S&P Ethical Asia Pacifi c Dividend ETF CIMB-Principal Asset Management (S) 6.20 Singapore 2 CIMB Islamic Asia Pacifi c Equity - MYR CIMB-Principal Asset Management 5.80 Malaysia 3 CIMB Islamic DALI Asia Pacifi c Equity Growth CIMB-Principal Asset Management 5.20 Malaysia 4 TRIM Syariah Berimbang Trimegah Asset Management 4.65 Indonesia Based5 onWSF 62.96% Asian Pacificof funds - USD which I have reported December 2018Cogent returns Assetas at the Management 28th January 2019 4.60 Guernsey 6 CIMB Principal Islamic Equity Growth Syariah CIMB-Principal Asset Management 4.56 Indonesia 7 CIMB Islamic Small Cap CIMB-Principal Asset Management 4.56 Malaysia 8 TRIM Syariah Saham Trimegah Asset Management 4.20 Indonesia 9 CIMB Islamic DALI Equity CIMB-Principal Asset Management 4.09 Malaysia 10 CIMB Islamic Equity Aggressive CIMB-Principal Asset Management 3.74 Malaysia Eurekahedge Islamic Fund Index 1.02 Based on 31.11% of funds which have reported June 2019 returns as at the 22nd July 2019 Top 10 Monthly Returns for Middle East/Africa Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 AlAhli Saudi Small and Mid-Cap Equity NCB Capital 4.98 Saudi Arabia 2 Saudi Companies The Saudi Investment Bank 4.96 Saudi Arabia 3 Boubyan Multi Asset Holding Boubyan Capital Investment 4.25 Kuwait 4 AlAhli Saudi Trading Equity NCB Capital 3.99 Saudi Arabia 5 Al Baraka Hermes Fund Management 3.25 Egypt 6 AlAhli GCC Trading Equity NCB Capital 3.04 Saudi Arabia 7 NBAD Islamic MENA Growth First Abu Dhabi Bank 2.99 UAE 8 AlAhli GCC Growth and Income NCB Capital 2.98 Saudi Arabia 9 Old Mutual Albaraka Equity - Class A Old Mutual Investment Group 2.22 South Africa 10 Emirates Global Sukuk Limited USD Institutional Emirates NBD Asset Management 1.66 Jersey Share Class (Acc) Eurekahedge Islamic Fund Index 1.87 Based on 42.86% of funds which have reported June 2019 returns as at the 22nd July 2019 Top Annualized Returns for Islamic Gold Funds Fund Fund Manager Performance Measure Fund Domicile 1 DSAM Kauthar Gold Tocqueville Asset Management -3.32 Cayman Islands 2 Deutsche Noor Precious Metals Securities - Class A DWS Noor Islamic Funds -4.36 Ireland 3 Precious Metals Securities AmInvestment Management -7.00 Malaysia Eurekahedge Islamic Fund Index -3.48 Based on 100% of funds which have reported June 2019 returns as at the 22nd July 2019

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

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

115 104

102 110 100

105 98

96 100 94

Percentage 95 Percentage 92

90 90 Jul-18 Jan-19 Jun-18 Jun-19 Oct-18 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Feb-19 Sep-18 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Dec-18 Apr-19 Mar-19 Aug-18 Nov-18 May-19

Top 6 Islamic Money Market Funds by 3 Months Returns Fund Fund Manager Performance Measure Fund Domicile 1 TA Dana Optimix TA Investment Management 2.39 Malaysia

2 Atlas Pension Islamic - Money Market Sub Atlas Asset Management 2.29 Pakistan

3 Meezan Tahaﬀ uz Pension - Money Market Sub Al Meezan Investment Management 2.26 Pakistan

4 TA Islamic CashPlus TA Investment Management 0.90 Malaysia

5 CIMB Islamic Money Market CIMB-Principal Asset Management 0.00 Malaysia

6 CIMB Islamic Deposit CIMB-Principal Asset Management -0.02 Malaysia

Eurekahedge Islamic Fund Index 0.85 Based on 28.57% of funds which have reported June 2019 returns as at the 22nd July 2019 Top 10 Sortino Ratios for ALL Islamic Funds Fund Fund Manager Performance Measure Fund Domicile 1 AlAhli Diversiﬁ ed Saudi Riyal NCB Capital 41.93 Saudi Arabia

2 AlAhli Diversiﬁ ed US Dollar NCB Capital 28.87 Saudi Arabia

3 Atlas Pension Islamic - Debt Sub Atlas Asset Management 27.63 Pakistan

4 Meezan Tahaﬀ uz Pension - Debt Sub Al Meezan Investment Management 24.92 Pakistan

5 TA Islamic CashPlus TA Investment Management 11.47 Malaysia

6 CIMB Islamic Money Market CIMB-Principal Asset Management 6.61 Malaysia

7 Atlas Pension Islamic - Money Market Sub Atlas Asset Management 3.95 Pakistan

8 Amana Participation Fund Institutional Shares Saturna Capital 2.77 US

9 Emirates Global Sukuk Fund Limited USD Emirates NBD Asset Management 2.45 Jersey Institutional Share Class (Acc) 10 Taurus Ethical B Taurus Asset Management 2.39 India

Eurekahedge Islamic Fund Index 0.17 Based on 39.5% of funds which have reported June 2019 returns as at the 22nd July 2019

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

Disclaimer Copyright Eurekahedge 2016, All Rights Reserved. You, the user, may freely use the data for internal purposes and may reproduce the index data provided that reference to Eurekahedge is provided in your dissemination and/or reproduction. The information is provided on an “as is” basis and you assume and will bear all risk or associated costs in its use, and neither Islamic Finance news, Eurekahedge nor its aﬃ liates provide any express or implied warranty or representations as to originality, accuracy, completeness, timeliness, non-infringement, merchantability and ﬁ tness for any purpose.

Most Recent Global Sukuk Priced Issuer Nationality Instrument Market US$ (mln) Managers 11-Jul-19 Dubai World UAE Sukuk Euro market 1,000 Barclays, Citigroup, Deutsche Bank, Dubai public issue Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Standard Chartered Bank 25-Jun-19 Sharjah Islamic Bank UAE Sukuk Euro market 500 Abu Dhabi Islamic Bank, Arab Banking, public issue Citigroup, Deutsche Bank, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Kuwait Finance House, Standard Chartered Bank 20-Jun-19 Permodalan Nasional Malaysia Sukuk Domestic market 107 Malaysian Industrial Development Finance, public issue RHB Bank 29-May-19 Kuwait International Kuwait Sukuk Euro market 300 Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank public issue Bank, Kuwait Finance House, Kuwait Projects, Standard Chartered Bank 24-May-19 Pengurusan Aset Air Malaysia Sukuk Domestic market 262 AmInvestment, CIMB Group, RHB Bank public issue 16-May-19 CIMB Group Malaysia Sukuk Domestic market 180 CIMB Group public issue 9-May-19 RHB Bank Malaysia Sukuk Domestic market 120 RHB Bank public issue 7-May-19 Majid Al Futt aim UAE Sukuk Euro market 600 Abu Dhabi Islamic Bank, Dubai Islamic Bank, Capital public issue Emirates NBD, First Abu Dhabi Bank, Gulf International Bank, HSBC, Standard Chartered Bank 2-May-19 Saudi Telecom Saudi Sukuk Euro market 1,250 First Abu Dhabi Bank, HSBC, JPMorgan, Kuwait Arabia public issue Finance House, Samba Capital, Standard Chartered Bank 2-May-19 Serba Dinamik Malaysia Sukuk Euro market 300 Credit Suisse, HSBC Holdings public issue 24-Apr-19 Khazanah Nasional Malaysia Sukuk Domestic 485 Maybank, RHB Bank market private placement 18-Apr-19 KLCC Property Malaysia Sukuk Domestic market 121 AmInvestment Bank, CIMB Group, Maybank Holdings public issue 17-Apr-19 Islamic Development Saudi Sukuk Euro market 1,500 Credit Agricole, Emirates NBD, First Abu Dhabi Bank Arabia public issue Bank, Gulf International Bank, HSBC, JPMorgan Natixis, Standard Chartered Bank 3-Apr-19 Lembaga Pembiayaan Malaysia Sukuk Domestic market 734 AmInvestment Bank, CIMB Group, Maybank Perumahan Sektor public issue RHB Bank Awam 26-Mar-19 Sharjah UAE Sukuk Euro market 1,000 Arab Banking Corporation, Dubai Islamic Bank, public issue HSBC, KFH, Sharjah Islamic Bank, Standard Chartered Bank 21-Mar-19 DanaInfra Nasional Malaysia Sukuk Domestic market 935 AmInvestment Bank, CIMB Group, HSBC, public issue Maybank, RHB Bank 19-Mar-19 Qatar Islamic Bank Qatar Sukuk Euro market 750 Barclays, Barwa Bank, Credit Agricole, National public issue Bank of Kuwait, QInvest, QNB Capital, Standard Chartered Bank 14-Mar-19 SME Bank Malaysia Sukuk Domestic market 147 AmInvestment Bank, Kuwait Finance House, public issue Maybank 11-Mar-19 Ĳ M Corporation Malaysia Sukuk Domestic market 159 CIMB Group public issue 4-Mar-19 Prasarana Malaysia Malaysia Sukuk Domestic market 368 CIMB Group, Kenanga Investment Bank, public issue Maybank, RHB Bank

Global Sukuk Volume by Month (billion) Global Sukuk Volume by Quarter (billion)

US$bn US$bn US$bn Volume Average deal value US$bn 10 0.7 20 0.7 9 Volume Average deal value 0.6 18 0.6 8 16 7 0.5 14 0.5 6 0.4 12 0.4 5 10 4 0.3 8 0.3 3 0.2 6 0.2 2 4 0.1 1 0.1 2 0 0.0 0 0.0 1 2 3 4 5 6 7 8 9 10 1112 1 2 3 4 5 6 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2018 2019 2014 2015 2016 2017 2018 2019

Top 30 Issuers of Global Sukuk 12 Months Issuer Nationality Market US$ (mln) Tranches Managers Saudi Arabia Saudi Arabia Euro market 2,000 1 BNP Paribas, Citigroup, HSBC, JPMorgan, Mizuho, Samba Capital public issue Saudi Electricity Saudi Arabia Euro market 2,000 2 Citigroup, First Abu Dhabi Bank, HSBC, Mizuho, MUFG, Natixis, public issue Standard Chartered Bank, Sumitomo Mitsui Financial Group Turkey Turkey Euro market 2,000 1 Citigroup, KFH, Standard Chartered Bank public issue Indonesia Indonesia Euro market 2,000 2 Deutsche Bank, Dubai Islamic Bank, HSBC, Mandiri Sekuritas, public issue Maybank Oman Oman Euro market 1,500 1 Gulf International Bank, HSBC, JPMorgan, Kuwait Finance House, public issue Standard Chartered Bank Islamic Development Saudi Arabia Euro market 1,500 1 Credit Agricole, Emirates NBD, First Abu Dhabi Bank, Gulf Bank public issue International Bank, HSBC, JPMorgan, Natixis, Standard Chartered Bank Islamic Development Saudi Arabia Euro market 1,300 1 CIMB Group, Citigroup, Dubai Islamic Bank, Gulf International Bank public issue Bank, HSBC, LBBW, Natixis, Standard Chartered Bank Saudi Telecom Saudi Arabia Euro market 1,250 1 First Abu Dhabi Bank, HSBC, JPMorgan, Kuwait Finance House, public issue Samba Capital, Standard Chartered Bank Dubai World UAE Euro market 1,000 1 Barclays, Citigroup, Dubai Islamic Bank, Emirates NBD, First Abu public issue Dhabi Bank, HSBC, JPMorgan, SG Corporate & Investment Banking, Standard Chartered Bank Sharjah UAE Euro market 1,000 1 Arab Banking Corporation, Dubai Islamic Bank, HSBC, Kuwait public issue Finance House, Sharjah Islamic Bank, Standard Chartered Bank Dubai World UAE Euro market 1,000 1 Barclays, Citigroup, Deutsche Bank, Dubai Islamic Bank, Emirates public issue NBD, First Abu Dhabi Bank, HSBC, Standard Chartered Bank DanaInfra Nasional Malaysia Domestic market 935 6 AmInvestment Bank, CIMB Group, HSBC, Maybank, RHB Bank public issue First Abu Dhabi Bank UAE Euro market 850 1 Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, Kuwait public issue Finance House, Saudi National Commercial Bank, Sharjah Islamic Bank, Standard Chartered Bank DanaInfra Nasional Malaysia Domestic market 772 5 Aﬃ n Hwang Capital, AmInvestment Bank, CIMB Group, Maybank, public issue RHB Bank Abu Dhabi Islamic UAE Euro market 750 1 Abu Dhabi Islamic Bank, Citigroup, Emirates NBD, First Abu Dhabi Bank public issue Bank, HSBC, JPMorgan, Sharjah Islamic Bank, Standard Chartered Bank Tenaga Nasional Malaysia Euro market 750 1 BNP Paribas, CIMB Group, Citigroup, HSBC public issue Dubai Islamic Bank UAE Euro market 750 1 Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, public issue JPMorgan, Kuwait Finance House, Sharjah Islamic Bank, Standard Chartered Bank Qatar Islamic Bank Qatar Euro market 750 1 Barclays, Barwa Bank, Credit Agricole, National Bank of Kuwait, public issue QInvest, QNB Capital, Standard Chartered Bank Islamic Development Saudi Arabia Euro market 739 1 Credit Agricole, LBBW, Natixis, Standard Chartered Bank Bank public issue Perbadanan Tabung Malaysia Domestic market 736 3 Bank Islam Malaysia, Maybank Pendidikan Tinggi public issue Nasional Lembaga Pembiayaan Malaysia Domestic market 734 6 AmInvestment Bank, CIMB Group, Maybank Perumahan Sektor public issue RHB Bank Awam Tenaga Nasional Malaysia Domestic market 731 2 AmInvestment Bank, CIMB Group, Maybank public issue DanaInfra Nasional Malaysia Domestic market 725 6 AmInvestment Bank, Bank Islam Malaysia, CIMB Group, Kenanga public issue Investment Bank, Maybank, RHB Bank Lembaga Pembiayaan Malaysia Domestic market 721 5 Aﬃ n Hwang Capital, AmInvestment Bank, Bank Islam Malaysia, Perumahan Sektor public issue CIMB Group, Maybank, OCBC, RHB Bank Awam Bahrain Mumtalakat Bahrain Euro market 600 1 BNP Paribas, Citigroup, HSBC, National Bank of Bahrain, Standard Holding public issue Chartered Bank Majid Al Futt aim UAE Euro market 600 1 Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD, Capital public issue First Abu Dhabi Bank, Gulf International Bank, HSBC, Standard Chartered Bank Abu Dhabi UAE Euro market 500 1 Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates Commercial Bank public issue NBD, First Abu Dhabi Bank, HSBC, JPMorgan, Nomura, Standard Chartered Bank Aldar Properties UAE Euro market 500 1 Abu Dhabi Islamic Bank, Barclays, Dubai Islamic Bank, Emirates NBD, public issue First Abu Dhabi Bank, HSBC, JPMorgan. Standard Chartered Bank National Central UAE Euro market 500 1 JPMorgan Cooling-Tabreed public issue Qatar International Qatar Euro market 500 1 Al Khalĳ Commercial Bank, Barclays, Barwa Bank, Maybank, Islamic Bank public issue National Bank of Kuwait, QNB Capital, Standard Chartered Bank

Top Global Islamic Bookrunners 12 Months Sukuk Volume by Currency US$ (billion) 12 Months Bookrunner Parents US$ (mln) Iss %

1 Maybank 4,080 46 9.78 Indonesian Rupiah 2 Standard Chartered Bank 3,688 29 8.84 Malaysian Ringgit 3 CIMB Group 3,647 47 8.74

4 HSBC 3,577 25 8.58 US Dollar

5 RHB Bank 2,532 36 6.07 US$ bln 0 5 10 15 20 25 6 AmInvestment Bank 2,379 32 5.70 7 Citigroup 2,209 12 5.29 Sukuk Volume by Issuer Nation US$ (billion) 12 Months 8 JPMorgan 2,052 11 4.92 Japan UK 9 First Abu Dhabi Bank 1,750 17 4.19 Qatar Oman 10 Kuwait Finance House 1,706 9 4.09 Bahrain Turkey 11 Dubai Islamic Bank 1,664 15 3.99 Indonesia Saudi Arabia 12 Emirates NBD 1,031 11 2.47 UAE Malaysia 13 Gulf International Bank 836 5 2.00 02468101214161820 14 Natixis 785 4 1.88 15 Aﬃ n Hwang Capital 762 12 1.83 Global Sukuk Volume by Sector 12 Months 16 BNP Paribas 641 3 1.54 Finance 17 Mizuho 583 2 1.40 Government 18 Deutsche Bank 574 3 1.38 Others Real Estate / Property 19 Samba Capital 542 2 1.30 Utility & Energy 20 Barclays 516 6 1.24 Transportation 0 5 10 15 20 21 Bank Islam Malaysia 508 3 1.22 22 Kenanga Investment Bank 486 7 1.16 Global Sukuk Volume - US$ Analysis (billion) 23 Credit Agricole 479 3 1.15 US$bn 24 Sharjah Islamic Bank 475 4 1.14 18 Total 25 Mandiri Sekuritas 450 10 1.08 16 14 26 Abu Dhabi Islamic Bank 392 6 0.94 12 10 27 Sinarmas Sekuritas 369 1 0.88 8 4 28 LBBW 347 2 0.83 2 0 29 Arab Banking Corporation 257 3 0.62 1Q 2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 30 MUFG 250 1 0.60 2014 2015 2016 2017 2018 2019

Top Islamic Finance Related Project Financing Legal Advisors 12 Months Top Islamic Finance Related Project Finance Mandated Lead Arrangers 12 Months Legal Advisor US$ (million) No % Mandated Lead Arranger US$ (million) No % 1 Allen & Overy 3,018.58 3 27.48 1 BNP Paribas 672.20 3 6.12 2 Linklaters 2,243.00 2 20.42 2 HSBC 627.21 3 5.71 3 Latham & Watkins 1,418.33 2 12.91 3 Credit Agricole Corporate & 602.30 3 5.48 4 Al Busaidy Mansoor Jamal & Co 768.33 1 7.00 Investment Bank 4 International Counsel Bureau 768.33 1 7.00 3 SG Corporate & Investment 602.30 3 5.48 Banking 4 Loyens & Loeﬀ 768.33 1 7.00 5 Standard Chartered Bank 538.92 3 4.91 4 Salans FMC SNR Denton Group 768.33 1 7.00 6 Banco Santander 536.38 2 4.88 8 Cliﬀ ord Chance 650.00 1 5.92 6 Credit Suisse 536.38 2 4.88 9 Covington & Burling 198.25 1 1.81 8 NATIXIS 536.38 2 4.88 10 White & Case 191.00 1 1.74 9 Ahli United Bank 487.13 3 4.44 10 Zamakhchary & Co 191.00 1 1.74 10 Kuwait Finance House 312.37 3 2.84

Top Islamic Finance Related Financing Mandated Lead Arrangers Top Islamic Finance Related Financing Bookrunners 12 Months 12 Months Mandated Lead Arranger US$ (mln) No % Bookrunner US$ (mln) No % 1 Mashreqbank 1,363 6 17 1 First Abu Dhabi Bank 1,483 12 11 2 First Abu Dhabi Bank 1,312 5 17 2 Emirates NBD 1,234 11 9 3 Emirates NBD 787 5 10

3 Mashreqbank 1,182 10 9 4 HSBC 470 3 6

5 Credit Agricole 340 2 4 4 Abu Dhabi Commercial Bank 894 6 7 5 MUFG 340 2 4 5 Standard Chartered Bank 794 6 6 5 Standard Chartered Bank 340 2 4

6 HSBC 645 6 5 8 Dubai Islamic Bank 335 2 4

7 Dubai Islamic Bank 566 5 4 9 Warba Bank 250 1 3 10 Noor Bank 233 2 3 8 Commercial Bank of Dubai 493 4 4

9 Credit Agricole 373 3 3 Top Islamic Finance Related Financing Deal List 12 Months Credit Date Borrower Nationality US$ (mln) 9 MUFG 373 3 3 28-Jan-19 Emirates Global Aluminium UAE 6,545

11 Samba Capital 371 2 3 1-Nov-18 Duqm Reﬁ nery & Oman 4,610 Petrochemical Industries 12 Saudi National Commercial Bank 359 3 3 20-Dec-18 BAPCO Bahrain 4,104

13 Noor Bank 317 4 2 26-Nov-18 Al Dur Power & Water Bahrain 1,634

11-Sep-18 Emaar Properties UAE 1,500 14 Arab Banking Corporation 313 4 2 24-Dec-18 Atlantis The Palm UAE 1,100 15 Kuwait Finance House 258 4 2 18-Dec-18 Deira Mall UAE 844 16 BNP Paribas 248 2 2 20-Dec-18 Egyptian General Petroleum Egypt 750

16 Intesa Sanpaolo 248 2 2 18-Dec-18 Kuwait Food (Americana) Kuwait 627

16 Natixis 248 2 2 26-Feb-19 Allana International UAE 600

16 SG Corporate & Investment Banking 248 2 2 Top Islamic Finance Related Financing by Sector 12 Months

20 Warba Bank 244 4 2 3.5 3.0 21 Citigroup 215 1 2 2.5 2.0 21 Export Development Canada 215 1 2 1.5 1.0 21 ING 215 1 2 0.5 0.0 Finance Real Estate/Property 24 Arab Petroleum Investments 166 2 1

25 Ahli United Bank 149 3 1 Global Islamic Financing - Years to Maturity (YTD Comparison) 2015 26 Riyad Bank 133 1 1 2016 26 Saudi Fransi Capital 133 1 1 2017

28 Mizuho 125 1 1 2018

28 RAKBANK 125 1 1 2019 0% 20% 40% 60% 80% 100% 30 National Bank of Kuwait 101 2 1 0-2yrs 3-5yrs 6-10yrs 11-15yrs 14-14yrs 16-20yrs 20+yrs

Top Global International Sukuk Managers 12 Months International Sukuk Volume by Currency US$ (billion) 12 Months Bookrunner US$ (mln) No %

1 Standard Chartered Bank 3,554 25 13.25

2 HSBC 3,288 21 12.26 Euro

3 Citigroup 2,209 12 8.23

4 JPMorgan 2,052 11 7.65 US Dollar 5 First Abu Dhabi Bank 1,750 17 6.52 0 5 10 15 20 25 6 Dubai Islamic Bank 1,664 15 6.20

7 Kuwait Finance House 1,657 8 6.18 International Sukuk Volume by Sector US$ (billion) 8 Emirates NBD 1,031 11 3.85 12 Months

9 Gulf International Bank 836 5 3.12 Finance

10 Natixis 785 4 2.93 Government

11 BNP Paribas 641 3 2.39 Real Estate/Property

12 Mizuho 583 2 2.17 Utility & Energy

13 Deutsche Bank 574 3 2.14 Transportation

14 Samba Capital 542 2 2.02 0246810

15 Barclays 516 6 1.92 International Sukuk Volume by Issuer Nation US$ (billion) 16 Credit Agricole 479 3 1.79 12 Months

17 Sharjah Islamic Bank 475 4 1.77 Bahrain 18 Maybank 471 2 1.76 Turkey 19 Mandiri Sekuritas 400 1 1.49 Indonesia 20 Abu Dhabi Islamic Bank 392 6 1.46 Saudi Arabia 21 CIMB Group 350 2 1.30 UAE 22 LBBW 347 2 1.29 012345678 23 Arab Banking Corporation 257 3 0.96 International Sukuk Years to Maturity 24 MUFG 250 1 0.93 2015 24 Sumitomo Mitsui Financial Group 250 1 0.93 2016 26 Barwa Bank 179 2 0.67 2017 26 National Bank of Kuwait 179 2 0.67 2018 26 QNB Capital 179 2 0.67 2019 29 Credit Suisse 150 1 0.56 0% 20% 40% 60% 80% 100% 1-5yrs 6-10yrs Perpetual-Perpetual 30 Saudi National Commercial Bank 121 1 0.45

Are your deals listed here? If you feel that the information within these tables is inaccurate, you may contact the following directly: Mimi Lee (Media Relations) Email: [email protected] Tel: +852 3698 4715

JULY 2019 21st IFN US Forum Washington DC

th 28 IFN Fintech Pitch Day Dubai IFN Sovereign Sukuk 21st Washington DC Dialogue AUGUST 2019 NOVEMBER 2019 27th IFN Indonesia Forum Jakarta 12th IFN Kuwait Forum Kuwait City

29th IFN Singapore Forum Singapore 13th Private Investors Forum Kuwait City SEPTEMBER 2019 14th IFN Jordan Forum Amman 3rd Private Investors Forum London DECEMBER 2019

th UK Islamic Finance Week 4 London Global Islamic Fintech 2019 1st Manama Huddle

9th IFN Turkey Forum Istanbul IFN Green & Sustainable 3rd Kuala Lumpur Finance Forum

OCTOBER 2019 MARCH 2020

16th IFN Japan Forum Tokyo 8th IFN World Leaders Summit Dubai

How to subscribe: [email protected] Each subscriber will receive:

INDIVIDUAL SUBSCRIPTION TEAM-WIDE SUBSCRIPTION • 50 issues of Islamic Finance news • Daily news alerts • 1 Year at US$1,400 nett • 1 Year at US$3,650 nett • 2 Years at US$2,520 nett • 2 Years at US$6,570 nett • Exclusive login details (Max: 5 Individual Subscriptions) • Unlimited access to entire archived library • All additional supplements, guides and reports COMPANY-WIDE SUBSCRIPTION GROUP-WIDE SUBSCRIPTION

• 1 Year at US$5,250 nett • 1 Year: US$12,500 • 2 Years at US$9,450 nett • 2 Years: US$22,500 (Max: 10 Individual Subscriptions) (Unlimited Subscriptions)

Chitra Kunchiraman Karthik Thivan Dharani Eswaran Subscriptions Development Manager / Head - Legal (Global) Subscriptions Manager Subscriptions Manager Tel: +603 2162 7800 (ext 59) Tel: +603 2162 7800 (ext 24) Tel: +603 2162 7800 (ext 14) Email:[email protected] Email:[email protected] Email: [email protected]

Senior Journalist & Marc Roussot Head of Finance & Hamiza Hamzah Multimedia Editor [email protected] Administration [email protected] Managing Editor Vineeta Tan Journalist Durgahyeni Mohgana Selvam [email protected] [email protected] Managing Andrew Tebbutt Director andrew.tebbutt @REDmoneygroup.com Contributing Lauren McAughtry Head of Hasnani Aspari Editor [email protected] Production [email protected] Managing Director Andrew Morgan Senior Contributions Sasikala Thiagaraja & Publisher [email protected] Editor [email protected] Senior Production Norzabidi Abdullah Published By: Senior Copy Kenny Ng Manager [email protected] MALAYSIA UAE Editor [email protected] Suite 22-06, 22nd Floor PO Box 126732, 3rd Floor, Senior Graphic Eumir Shazwan Kamal Bahrin Menara Tan & Tan X2 Tower, Jumeirah Lake News Editor Nessreen Tamano Designer [email protected] 207, Jalan Tun Razak Tower (JLT), Jumeirah Bay, [email protected] 50400 Kuala Lumpur, Malaysia Dubai, UAE Tel: +603 2162 7800 Fax: +603 2162 7810

DISCLAIMER All rights reserved. No part of this publication may be reproduced, duplicated or copied by any means without the prior consent of the holder of the copyright, requests for which should be addressed to the publisher. While every care is taken in the preparation of this publication, no responsibility can be accepted for any errors, however caused. NE-IFN16/29