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Thursday, 18 September 2014

Pakistan: Helping the needy: Zakat, dowry assistance revised after 31 years

The Provincial Zakat Council has increased the monthly stipend for the needy after 31 years. The raise has been approved for nearly five million recipients of zakat in the province, The Express Tribune has learnt.
This includes dowry grants. The amount has been revised after 20 years. The amount has been raised by up to 100%.
The amount of zakat for a single person has been increased from Rs500 to Rs1,000.
The provincial government had earlier revised the dowry fund in 1994, announcing Rs10,000 for each deserving family. The amount has been raised to Rs20,000.
The eligibility of a family for the fund is determined by the Punjab Baitulmal and charity organisations operating under the Provincial Zakat Council.
The government will start paying the revised zakat and dowry funds from the next month.
The council has informed District Zakat Councils about the raise in the stipends.
A study of the official record revealed that zakat councils in all 36 districts have submitted 21 requests to the council over five years for raising the funds.
Some of the beneficiary families The Express Tribune spoke to said the government should have raised the amount by 500%.
Naseem Bibi, a daily wager, said she was happy with the raise in the dowry fund. “Although the government should have announced a raise of 400%, the current announcement is a welcome move,” she said.
Muzafargarh Zakat Officer Muhammad Adnan said he had received provincial government’s orders for the raise in funds. He said the district zakat office currently had for three months. “We have funds for July, August and September. The beneficiaries will be paid in line with the new directive,” he said.

(The Express Tribune / 14 September 2014)
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Goldman Learns From Debut Flop in Islamic Finance Market

Three years after its first foray into the Islamic capital markets ended without a sale, investors piled in to buy sukuk debt from Goldman Sachs Group Inc. (GS)yesterday as the bank joined the governments of Hong Kong and the U.K. in selling debut Shariah-compliant bonds this year.
The New York-based lender attracted bids for three times the $500 million of sukuk it sold yesterday, according to two people familiar with the deal, who asked not to be identified because the information is private. The five-year sukuk was priced to yield 90 basis points, or 0.9 percentage point, over the benchmark midswap rate, according to the people.
After failing to sell sukuk bonds in 2011 amid criticism the deal didn’t ensure debt would be traded at par, as required by Islamic law, Goldman adjusted the structure this time in a bid to appeal to more investors. The new issue is a Sukuk al Wakala, a Shariah-compliant format in which one party entrusts another to act on its behalf.
Islamic financial assets globally will double to $3.4 trillion in the five years through 2018, according to forecasts from Ernst & Young LLP. The U.K. became the first non-Muslim country to issue sovereign Islamic bonds in June with a sale that lured orders for 10 times the amount offered. Hong Kong raised $1 billion in a debut sukuk last week, with a bid-to-offer ratio of 4.7.

‘New Entrants’

“You’re starting to see a lot of new entrants coming into the sukuk market,” Damian White, a treasurer at Dubai-based Noor Bank, said in an interview yesterday. “The hope is that they will not be one-time visitors, and that it will encourage others.”
David Wells, a spokesman for Goldman in New York, declined to comment on the firm’s issuance of Islamic bonds.
The pricing “seems pretty aggressive at first glance, although we don’t see paper like this very often,” Ahmed Shehada, the Abu Dhabi-based head of advisory and institutions at NBAD Securities LLC, said by e-mail yesterday. “This will attract a different institutional base, mostly sovereign wealth funds and banks looking to manage liquidity and cash.”
Global sales of Islamic bonds have surged 39 percent this year to $33 billion, according to data compiled by Bloomberg, as investors have tapped the expanding pool of liquidity. Issuers from Malaysia are the biggest sellers of sukuk this year, having raised about $14 billion, according to data compiled by Bloomberg.
Abu Dhabi Islamic Bank PJSC (ADIB), National Bank of Abu Dhabi PJSC, Emirates NBD Capital Ltd. and NCB Capital also managed the offering, the people said. Standard & Poor’s rated the issue A-, the seventh-highest investment grade, it said in a statement this month.
(Bloomberg / 17 September 2014)
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