Coming soon… Issue plans for sukuk around the world

A comprehensive list of the major Islamic bond issues in the global pipeline, compiled as part of the Thomson Reuters Global Sukuk Index.

INDONESIA - The government plans to issue 7.14 trillion rupiah ($572 million) of project-based sukuk next year to finance the development of three infrastructure programmes and develop the sukuk market, the Jakarta Post quoted Suminto, director of Islamic bonds at the debt management office, as saying in mid-December.

The finance ministry plans to sell retail sukuk worth around 20 trillion rupiah ($1.63 billion) in April, an official at the debt management office said in early December.

The government plans to issue global sukuk in the first quarter of next year before the U.S. Federal Reserve starts increasing interest rates, Scenaider Siahaan, a director at the debt management office, told Reuters; he did not give details.

AXIS REIT - Malaysia's Axis REIT said in mid-December that it planned to expand its sukuk programme to 3.0 billion ringgit ($863 million) from its existing size of 300 million ringgit, and extend the programme to a perpetual programme from 15 years.

TURKIYE FINANS - Turkish Islamic lender Turkiye Finans Katilim Bankasi applied to issue 143 million lira ($60.5 million) via sukuk, the Capital Markets Board said in mid-December.

TIRSAN TREYLER - Turkiye Finans received regulatory approval for a 71 million lira sukuk issue by trailer manufacturer Tirsan Treyler Sanayi ve Ticaret, the Capital Markets Board said in mid-December.

1MDB - Malaysia's sovereign wealth fund, 1Malaysia Development Bhd , has postponed the sale of up to 8.4 billion ringgit of sukuk to 2015, two people familiar with the matter said in early December.

GULF FINANCE HOUSE - Bahrain's Gulf Finance House is in talks on buying two asset management firms for a total of up to $500 million and is planning to increase debt to finance the deals, chief executive Hisham al-Rayes told Reuters in early December. He said GFH would have a preference for using sukuk over syndicated loans.

UNITAPAH - Malaysia's UniTapah Sdn Bhd plans to issue up sukuk murabaha of up to 600 million ringgit to refinance a term loan funding construction of the new campus for Universiti Teknologi MARA in Perak, RAM Ratings said in early December.

KENYA - Kenya will issue its debut sukuk in the next financial year to June 2016, not this one as some had expected, its finance minister said at the start of December.

CAGAMAS - Malaysia's state-backed mortgage lender Cagamas will raise up to $2.5 billion with a multi-currency Islamic bond programme, credit agency RAM Ratings said at the start of December.

DRB-HICOM - Malaysian conglomerate DRB-Hicom said in late November it had obtained Securities Commission approval for a perpetual sukuk musharaka programme of 2 billion ringgit.

TURKEY - The Turkish Treasury said in late November it would issue sukuk worth 1.5 billion lira by end-February.

NORTHPORT MALAYSIA - Port operator Northport Malaysia plans to issue sukuk before the end of the year in its first drawdown off a recently established 1.5 billion ringgit programme, bankers said.

(Arabian Business.Com / 28 December 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Al Hilal Islamic Bank launches new savings account

Al Hilal Islamic Bank has launched all-new 'Al Namaa Islamic Savings Account', an investment opportunity for depositors who wish to earn returns on their investments.

By investing in the bank's Al Namaa Islamic Savings Account, the depositor (Rabbul-Mal) authorises the bank (Mudarib) to invest their funds under the unrestricted Mudarabah contract. The bank invests these deposits in its Mudarabah pool along with other deposits and the equity. The profit on the Mudarabah pool is distributed amongst investors, taking into consideration the tenor, amount of the deposit and profit payment frequency for the account.

Abdullah Al Jabri, general manager (Head of Islamic Banking) at ahlibank said, "We are delighted to offer our loyal customers yet another market driven and customer focused product. At Al Hilal Islamic Bank we aim to not only be able to better serve the needs of customers, but also establish our growing reputation as a local bank fully committed to preserving the values of the community." 

"We are pleased to contribute to Oman's aspirations of becoming a hub for Islamic finance, and understand that our suite of customer-centric solutions is crucial to serve and fulfill our customers' needs. We are confident that with products like 'Al Namaa', Al Hilal Islamic will further establish its position as a reliable and trusted banking partner in the Sultanate," he added.

The Al Namaa Islamic Savings Account has several features and benefits that include: 100 per cent capital investment in Sharia-compliant way; high-profit weightages, based on deposit tiers; immediate access to funds with no minimum investment period; and day-to-day checking account which offers flexibility of unlimited transactions through ATM/Debit card and cheque book. Profit calculated on monthly average balance and distributed on monthly basis; cash management, 24-hour a day with simple e-banking, mobile banking, call centre, Al Hilal Islamic banking branches or Visa debit /ATM card accepted, are some of the other advantages.

(Times Of Oman / 29 December 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Russian Banks Warm to Shariah as Crisis Looms

Russian lenders are stepping up efforts to tap Islamic finance as international sanctions and a slump in oil prices push the world’s biggest energy exporter to the brink of a recession.

Vnesheconombank, Russia’s state development bank, is seeking advice from lenders in the Middle East on how to sell its first Islamic bonds, the RIA Novosti state-news service reported Dec. 16. Banks and companies are seeking Shariah financing after the nation’s currency weakened to an all-time low almost two weeks ago, according to the Russian Business Council in Dubai.

The increased efforts underscore how the highest overnight lending rate since at least 2006 and U.S.-led sanctions linked to the conflict in Ukraine are putting a squeeze on banks including Gazprombank and VTB Bank OJSC. Lawmakers rushed through legislation on Dec. 23 allowing the Deposit Insurance Agency to buy stakes in banks before they face bankruptcy proceedings to keep the system stable.

Banks and corporates “want to know how it works and how they can get into this market,” council Chairman Igor Egorov said in an interview at his Dubai office on Dec. 23. “They see an urgent need within one-to-two years, when the hunger for finance will be very acute because at the moment we still don’t see the full effect of sanctions.”

Attitude Shift

Adopting Islamic finance would mark sea change for the predominantly Russian Orthodox nation. Alexei Ulyukayev, who was first deputy chairman of the central bank until last year and is currently economy minister, said in 2011 the industry isn’t of “primary, secondary or even tertiary importance,” Gazeta.ru reported.

The central bank is now considering legislature for Islamic finance following requests from lenders, Governor Elvira Nabiullina said on Nov. 26.

Russia’s economy will probably contract next year and won’t see growth for four consecutive quarters, according to a Bloomberg survey of economists. The ruble declined almost 40 percent in 2014 as Brent crude headed for its biggest drop in six years. It’s the worst performance of about 170 currencies tracked by Bloomberg after Ukraine’s hryvnia. Brent rose 0.9 percent to $60.01 a barrel at 12:11 p.m. in Moscow.

The Bank of Russia increased the interest rate 6.5 percentage points to 17 percent on Dec. 16, which means Islamic banks can offer better deals than their conventional counterparts, according to the Association of Russian Banks.

Sensitive Issue

“There’s a strategic opportunity for Islamic finance to develop in Russia because given the 17 percent rate, clients won’t go to regular banks,” Sergey Grigoryan, head of analysis division at the association, said by phone from Moscow on Dec. 23. “The market is forcing the central bank to take a closer look at the current situation.”

While Muslims make up as much as 15 percent of the nation’s 142 million people, U.S. government data show, a limited understanding of Shariah finance’s principles may delay its development in Russia.

“It’s quite a sensitive area because many people don’t really understand it, or they may see it as a threat, something unknown,” Egorov said. “They don’t understand how business is related to religion.”

Cash Pool

That hasn’t stopped businessmen from exploring the industry. The heads of Russian banks and companies, including Vnesheconombank and Uralvagonzavod, discussed Islamic finance as part of a two-day meeting in Bahrain with their counterparts from the six-nation Gulf Cooperation Council this month, state-run news agency BNA reported Dec. 14.

“It’s now on the agenda,” Egorov said of Shariah-compliant banking. “There’s no reason why Russia should limit itself and not get funds through Islamic finance.”

(Bloomberg / 29 December 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com