The World’s Leading Islamic Finance News Provider (All Cap) 1100 Malaysia Pakistan levels Islamic banks Islamic 1,039.58 1050 fi ghting the playing fi eld cashing in on banks 1000 1,040.92 hard to keep for Islamic fi nance mobile payments unlikely 950 0.12% its Islamic sector with new as the UAE goes to return 900 fi nance tax neutrality cashless...7 to double- W T F S S M T title...6 for Sukuk digit asset Powered by: IdealRatings® transactions...7 growth...10 COVER STORY 7th September 2016 (Volume 13 Issue 36) Financial technology: Force for the future or ϐlash in the pan? Fintech is on the rise — on that much, but what do we actually mean by it? advice and investment management). everyone is agreed. But what does it Before we can evaluate a trend, we need Up-and-coming new trends include actually mean for the Islamic market to classify what it truly entails — which authentication and biometrics, — what is happening, what advantages can sometimes get lost in the crowd. blockchain, cloud computing and big will it bring and why should we get data. excited? It’s easy to start a trend, but In essence, the term fi ntech refers to we need to see real progress before a widely promoted and potentially Islamic advancements we believe it can actually change disruptive alternative to the technology So where does Islamic fi nance fi t in, the world. LAUREN MCAUGHTRY and solutions off ered by traditional and what are the opportunities for a talks to the movers and shakers in the large-scale, highly regulated fi nancial specifi cally Shariah compliant sector? Islamic fi ntech space to ask whether institutions: transforming the In recent months, we’ve seen plenty of these big promises will ever be more fi nancial industry through mobility development in the Islamic arena, and than just the latest buzzword... of technology, ideas and payments. changes are afoot which should support Common themes across the sector growth going forward. Mohammed Here in the pages of IFN we have talked include the monetization of data, fraud Raafi Hossein, CEO of Dubai-based about fi ntech in the past, and we have and identity protection, infrastructure Islamic fi ntech advisory fi rm Finocracy, not been shy about identifying it as one replacement and disintermediation. Key is excited about the prospects. “In just of the most important trends for the themes include payments (where under a year, we’ve worked with some future of Islamic fi nance. But with fi rms such as Apple, Paypal of the leading private and public sector all the excitement surrounding and Alibaba have sprung up institutions in Islamic fi nance and have the sector, it can be easy to lose to off er solutions to replace helped them develop strategies and sight of what it really is — and physical wallets online), build fi ntech solutions, many of which what it hopes to achieve. This lending (with a multitude will be launched within the next 12-18 week, we want to bring you of crowdfunding platforms months,” he told IFN. an update on what is actually matching lenders and happening in the market — borrowers in various ways In April, nine platforms joined forces where the action is, where the through online platforms) to found the Islamic Fintech Alliance innovations are, and what is and investment (with new to boost innovation and support the happening to drive the sector ‘roboadvisors’ such as reach of Shariah fi ntech. “While there forward. WealthFront using are a diversity of platforms within the data analytics to alliance, there are still a number of areas But fi rst — what is fi ntech? provide digitized that are brimming with potential,” noted Everyone has heard the term, online fi nancial continued on page 3 Opening doors to PARTNERPARTNER WITHWITH USUS new opportunities Contact for more information: François-Xavier Chenhalls-Walker Email: [email protected] IFN RAPIDS Volume 13 Issue 36 IAP Integrated expects Emirates Real Estate DEALS to list 20 more ventures Fund acquires residential IFN Rapids ................................................... ..2 Bank Albilad privately on Shariah compliant property in Dubai from IFN Reports: places SAR2 billion Investment Account Binghatt i Developers (US$533.07 million) Sukuk Platform by 2018 • Malaysia fi ghting hard to keep its title • Emaar Properties mandates Modaraba members TAKAFUL UN Global Compact lacks Islamic banking keen on participating in banks for US dollar Sukuk Misr Emirates Takaful Life participation • Pakistan levels the playing fi eld electronic commodity Insurance to have eight Indonesia seeks to raise trading for Islamic fi nance sector with new tax neutrality IDR4 trillion (US$301.2 branches by end of 2016-17 Pakistan’s Islamic banking fi nancial year for Sukuk transactions • Islamic banks cashing million) via Sukuk auction assets and deposits capture in on mobile payments as the UAE goes cashless Emirates Islamic closes 11.4% and 13.2% respectively US$250 million tap of RATINGS • IFN Monthly Review: August — A surge of of total market share fi ve-year Sukuk issuance; RAM reaffi rms ratings on Bursa Malaysia launches activity across multiple markets • Islamic banks att racts strong orderbook Axis REIT Sukuk’s RM155 world’s fi rst end-to-end million (US$38.2 million) unlikely to return to double-digit asset growth Qatar Islamic Bank issues integrated Islamic securities QAR2 billion (US$548.76 second Sukuk as world economies adjust to new normal of exchange platform million) Tier 1 perpetual Capital Intelligence raises Pakistani authorities oil prices • Fund Focus: Asian Tiger Capital Sukuk Al Imtiaz Investment add concept of ‘Shariah Partners’s ATC Unit Shariah Fund to deepen Group’s long-term Putrajaya Holdings to issue compliant company’ and corporate rating to ‘BBB’ Islamic capital markets in Bangladesh • Sovereign Islamic notes worth RM170 ‘Shariah compliant security’ million (US$41.67 million) and enabling provisions Moody’s assigns fi rst-time Sukuk: Malaysia’s sovereign fund and Indonesia’s Khazanah Nasional raises into Companies Bill, 2016 ‘B2’ issuer ratings to the savings Sukuk make the rounds ..................... 6 Maldives; outlook stable US$398.8 million from a Turkey’s political fi ve-year exchangeable uncertainty poses minimal RAM conducts rating Sukuk issuance IFN Analyses: risk for non-Turkish review on Bank Rakyat Sharjah Islamic Bank sells companies and its Sukuk; monitoring Central Asia: Full steam ahead ................................ 13 recent developments US$500 million Sukuk New Pakistani Sukuk Takaful and re-Takaful: An emerging sector .... 14 Indosat lists Sukuk and law amendments grant Capital Intelligence affi rms Case Study: bond facilities with a tax neutrality to Shariah Egypt’s sovereign ratings compliant issuance with stable outlook Jambatan Kedua’s sophomore Sukuk Murabahah 15 combined value of IDR3.46 trillion (US$261.92 million) Kuveyt Turk launches IFN Country Correspondents: on Indonesia Stock Shariah compliant State MOVES Brazil; Russia; Afghanistan; the UK ................ 16 Exchange Subsidized Housing Account Bank Rakyat establishes to boost home ownership Country Feature: FWU Group closes third Board Oversight Committ ee series of Sukuk at US$28.4 Islamic fi nance in Sri Lanka: The time is ripe ....19 Islamic and commercial following detainment of top million banks join Securities executives by Malaysian Anti- Asset Management Feature: Industry Dispute Corruption Commission Resolution Center following Exploring the potential of Islamic contracts to replicate NEWS Capital Market amendment to dispute Authority of Saudi Arabia the benefi ts of conventional short-selling ............. 20 Faisal Islamic Bank’s resolution regulations reconstitutes Board of Sector Feature: mortgage portfolio hits EGP2 million (US$225,506); SEDCO Capital acquires Commissioners as per Re-Takaful initiatives in Indonesia and its eff ects eyes fi nancing of four more minority stake in South Royal Order Korean manufacturer Nedec globally ........................................................... 22 middle-class housing units Syarikat Takaful Malaysia Al Baraka Bank Pakistan appoints Othman Abdullah and Burj Bank to merge in ASSET as new senior independent Islamic Finance news ................................... 24 the next few months; new director; redesignates Deal Tracker .................................................30 entity will hold over US$1.1 MANAGEMENT Mahadzir Azizan as non- billion in total assets independent director REDmoney Shariah Indexes ...................... 31 Azzad Wise Capital Fund Sabana REIT secures crosses US$100 million Bassem Ibrahim Awadallah Eurekahedge Funds Tables ........................33 SG$108 million (US$79.21 mark in net assets replaces Riyad Burhan Kamal as Arab National Dealogic League Tables ..............................35 million)-worth of Islamic Public Mutual declares Bank board member REDmoney Events ...................................... 39 fi nancing facilities to distributions for four restructure existing Islamic funds Subscription Contact................................... 39 borrowings 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. © 2 7th September 2016 COVER STORY Financial technology: Force for the future or fl ash in the pan? Continued from page 1 Raafi . “Moving