Egypt revives Sukuk plans; Malta welcomes new Islamic finance association; IDB and China’s Asian Infrastructure Investment Bank link up. Here is what you need to know for this week:
More markets adopt Islamic finance
Morocco, one of the latest regions to tap the Islamic finance landscape, is currently at the final stage of approving legislative texts on Takaful regulations. According to Morocco World News citing the governor of the Moroccan central bank, Abdellatif Jouahri, participation banks have extended a total of MAD1.1 billion (US$114.91 million) in financing.
Algeria is not far behind, with its authorities partnering with UK Islamic finance institutions to leverage their experience and expertise in building an Islamic finance ecosystem, as work is in full swing to draft a new Islamic finance framework, Abderrahmane Raouia, the minister of finance, told members of the People’s National Assembly.
Malta launches MIFA
The Maltese government is set to see progress in its Islamic finance industry with the establishment of the Malta Islamic Finance Association (MIFA), confirming a previous IFN report. Reuben Buttigieg, IFN’s exclusive correspondent for Malta, is the new president of the association whereas Sheikh Bilal Khan is the secretary-general for the first term.
IDB and AIIB to partner
The usage of Islamic financial tools is anticipated to surge, especially in infrastructure funding, as the IDB and China-led Asian Infrastructure Investment Bank (AIIB) have finally formally agreed to carve out a framework allowing the two multilateral financiers to co-finance projects across Asia and potentially Africa. The deal, focusing on infrastructure development, will allow both banks to embark on temporary assignments, secondments and trainings to facilitate the exchange of information and expertise on Islamic finance and integrity mechanisms, among others.
Egypt mulls Sukuk in 2018-19
Egypt may be the next African nation to join the sovereign Sukuk boat as the new finance minister, Mohamed Maait, looks to float a debut dollar or euro-denominated Sukuk paper in the 2018-19 fiscal year starting the 1st July, according to Bloomberg. Mohamed also plans to amend the existing law or draft a new one to facilitate Sukuk issuance.
Qatar records healthy Sukuk market for 2017
Qatar continues to break expectations. Following the rating upgrades and strong performances by Islamic banks, the Sukuk market also proved its prowess by almost tripling its Sukuk issuances in 2017 despite the blockade. Last year, Qatar recorded a total of QAR33.9 billion (US$9.24 billion), higher than QAR17.2 billion (US$4.69 billion) recorded in the previous year.
The clock is ticking on Uganda’s Islamic finance aspirations
Despite expressions of interest by various local and international entities, no applications have been received by the Bank of Uganda for the establishment of Islamic entities thus far, Chimp Reports reported. Time is running out for the African nation as it aspires to launch its Shariah banking industry in four months’ time.
1MDB saga unfolds
As investigations continue in the embattled 1MDB case, a fresh lead was uncovered.
A former special officer of former prime minister Najib Razak, who was also a former Bank Negara Malaysia employee, was remanded by the Malaysian Anti-Corruption Commission (MACC) for seven days to assist in investigations, according to Bernama. Separately, following the analysis of the declassified report on 1MDB, KPMG Malaysia, which was 1MDB’s former auditors, said that the financial statements of 1MDB that it audited between 2010 and 2012 are inaccurate, The Star reported quoting a statement by 1MDB’s board of directors.
Meanwhile, 1MDB removed its president and CEO, Arul Kanda Kandasamy, two days before the end of his garden leave on the 30th June due to "dereliction of duties", The Edge reported citing sources. Treasury Deputy Secretary-General Asri Hamidon was elected as the new chairman of 1MDB, with Muhammad Faiz Azmi, Rashidah Mohd Sies and Wan Mohd Fadzmi Wan Othman appointed as members of a new executive committee.
CBI to launch secondary currency market
As the Iranian rial fell to an all-time low against the US dollar last week due to impending US sanctions, the governor of the Central Bank of Iran (CBI), Valiollah Seif, said that the bank is mulling a secondary currency market in the coming days, Security and Exchange News Agency reported.
JPMorgan to sell stake in SAIB
In line with JPMorgan’s plans to globally wind down non-core holdings and projects, the bank announced that it will be selling a 7.49% stake in Saudi Investment Bank, representing approximately 56.25 million shares for the total amount of SAR759.31 million (US$202.21 million), back to SAIB.
Madura to convert all pawnshops to Islamic
The pawnbroking business in the Indonesian island of Madura is set to become fully Islamic with the conversion of all 87 businesses from the 1st July. Pegadaian Shariah, a pawnbroking company which has 78 branches in Madura, is leading the pack with the conversion of all its branches in the island into Shariah compliant ones, according to Cholil Nafis, the head of Indonesia’s Shariah Pawn Controller Board as quoted by Republika.co.id.