Bahrain Said to Raise $435 Million From Privately Placed Sukuk

Bahrain, whose junk rating was lowered by Moody’s Investors Service, tapped the dollar bond market for a second time in three months, according to two people familiar with the matter.

The Gulf nation appointed Noor Bank, Bank ABC and Kuwait Finance House to arrange a $435 million, privately placed Islamic offering, the people said, asking not to be identified because the information is private. The three-year debt will have a profit rate of 325 basis points over midswaps. Moody’s on Saturday reduced Bahrain’s long-term rating one notch to Ba2, two levels below investment grade.

The island state is attempting to shore up state finances pressured by low oil prices. Bahrain’s vulnerability to a decline in crude increased since 2009 when government expenditures started to rise in response to the global economic slowdown and civil unrest in the country. The sovereign last tapped the dollar bond market in February when it raised $600 million, a week after S&P Global Ratings cut the nation’s credit grade to junk.

Spokesmen for Bahrain’s central bank, Kuwait Finance House and Bank ABC didn’t immediately respond to calls or e-mails. No one at Noor Bank was immediately available for comment.

(Bloomberg / 15 May 2016)

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The securities are issued by the CBB on behalf of the Government of the Kingdom of Bahrain.

Manama, Apr. 19 (BNA): The Central Bank of Bahrain (CBB) on Monday said the monthly issue of the Sukuk Al-Salam Islamic securities for the BD 43 million issue, which carries a maturity of 91 days, had been oversubscribed by 143%.

The expected return on the issue, which begins on 20 April 2016 and matures on 20 July 2016, is 2.08% compared to 2.09% for the previous issue on 23 March 2016.

The securities are issued by the CBB on behalf of the Government of the Kingdom of Bahrain.

(Bahrain News Agency / 19 April 2016)

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Malaysia, Bahrain and UAE lead growth in Islamic finance

Among the GCC countries, Bahrain maintained its second position globally, while the UAE switched positions with Oman to come third, with the latter dropping to fourth. Saudi Arabia, which is the world's second biggest jurisdiction in terms of Islamic finance assets, jumped to sixth from ninth overall, said the report released by Thomson Reuters and Islamic Corporation for the Development of the Private Sector.

The report, which was released for the third consecutive year, examines the key statistics and trends across five indicators that are deemed to be significant for measuring the development of the $1.8 trillion Islamic finance industry. These include Quantitative Development, Knowledge, Governance, Corporate Social Responsibility and Awareness. These indicators are tracked across 108 countries, which had contributions in all or some of these indicators.

Pakistan, Jordan, Hong Kong, India, Botswana and Ivory Coast are some of the countries that have demonstrated positive movements in the IFDI 2015 ranking.

"As the leading Islamic finance institution supporting private sector development across the Islamic world, we recognise that the industry requires effective holistic measures to focus our efforts to facilitate and ensure inclusive financial sector development," said Khaled Al Aboodi, CEO of ICD.

In 2014, global Islamic finance assets climbed to $1.814 trillion, representing a 9.4 per cent rise from $1.66 trillion in 2013.  This increase was driven by strong growth in all sectors - Islamic banking, takaful, sukuk and Islamic funds. The value of assets in the Islamic finance sector is expected to increase by 10 per cent per annum over the next five years, reaching $3.24 trillion by 2020.

"The Islamic finance industry has demonstrated tremendous growth over the last few years. We have seen the industry develop a conducive eco-system that made it possible for many countries to enter this space. Currently, there are more than 1,000 Islamic financial institutions most of which are located in the GCC and Southeast Asia and we expect this  number to increase significantly in the next decade," said Nadim Najjar, Managing Director, Middle East & North Africa, Thomson Reuters

The number of Islamic finance degrees and courses as well as research papers increased in 2014, with 2013 leaders Malaysia, Bahrain, and Jordan retaining their leadership positions on the Knowledge Indicator for 2014.

Some 378 institutions offered Islamic finance education in 2014. Malaysia and UK lead 36 countries that offer Islamic finance degrees, with 141 institutions offering Islamic finance courses.

Bahrain and Malaysia maintained their respective first and second positions on the overall Governance indicator, which considers three factors: Regulations, Corporate Governance, and Shariah Governance. There remains a huge gap between the two leaders and the rest of the countries.

Bahrain, Malaysia, Pakistan, Nigeria, and Indonesia are the jurisdictions with the most complete set of Islamic finance regulations. These are the jurisdictions providing best practice models for Islamic finance governance, and which are considered as models by new markets such as France, Germany, Ghana, and Russia.

(Khaleej Times / 04 December 2015)

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Bahrain's growing stature in Islamic banking underlined

Manama, Nov 16 (BNA): CEO Khalid Hamad of Banking Supervision at Central Bank of Bahrain highlighted Bahrain's leading standing attained in the world of Islamic banking through the adoption and development of the Islamic banking.


In a press conference held today at the Bahrain Stock Exchange to review the details of the World Islamic Banking Conference 2015, Hamad asserted that many of the developed and developing countries have resorted to Bahraini expertise and its qualitative initiatives in the field of Islamic banking. 

He attributed Bahrain's success to the sound Islamic banking policies followed, commitment to legitimate controls and implementation of best accounting and auditing standards in the Islamic banking sector. He called for investing in education, training, agriculture and health areas. 


(Bahrain News Agency / 16 November 2015)
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Bahrain: Government Islamic Sukuk Ijara trading commences

 Bahrain Bourse has announced the listing of the Government Islamic Lease Securities (Sukuk) that has been issued by the CBB on behalf of the Government of Bahrain through registered brokers at Bahrain Bourse. The Sukuk will be traded under the symbol GILS23.SUK.

The BD200 million securities issued at a par value of BD1 each on 9th July 2015 for a period of 10 years ending on 9th July 2025. The returns (rent) on these securities will be paid every six months on 9th January and 9th July every year throughout the period of this issue. The annual rate of return will be 5.00%.

As of Sunday 2nd August 2015, investors will be able to sell and buy Sukuk by placing their orders through the brokers who will feed them into the trading system. The system will automatically match the orders in accordance to the price priority then time priority, with a minimum of BD 400 per transaction in the primary market.

Following the listing of this issue, the number of conventional bonds and sukuk issues listed on BHB reached 10 issues with an approximate total value of US$ 3.993 billion.

It's worth to mention that Bahrain Bourse has issued on 1st February 2015 the Guidelines on Trading Debt Instruments on Bahrain Bourse. The Guidelines organize trading the debt instruments in the secondary market in the Bourse during trading sessions that start daily from 9:30 am until 1:00 pm from Sunday to Thursday. 

The guidelines also clarify the types of orders, board lots and the tick size applied in the debt market. The guidelines also present the pricing mechanism in the debt market which shows the seller investor will receive the full amount of the transaction which includes the Sukuk value plus the coupon which will be automatically calculated by the system.

(Bahrain News Agency / 01 August 2015)
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New liquidity initiatives benefit Bahrain, UAE Islamic banks

Dubai: The recent launch of one-week Sharia-compliant contracts with the central bank will benefit Bahrain’s Islamic banks because they broaden the range of options available for short-term liquidity management, said Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings.

In a recent move the UAE Central Bank started accepting a wide range of sukuk as collateral for banks to access its special lending facility from April 1, 2015. “This will help the UAE’s Islamic banks, which often hold these securities,” said Al Natoor.

Bahrain’s one-week facility is based on a wakalah contract, where the regulator invests cash on behalf of the lender.

Most Islamic Bank liquidity management instruments consist of low-profitability assets, such as cash and central bank deposits. Sukuks are primarily offered as over-the-counter instruments and only a limited amount of them are listed on developed and liquid exchanges.

It is widely expected that the implementation of Basel III and its new liquidity coverage ratio LCR will increase offerings of liquidity management instruments while issuers are likely to list more of their sukuk on exchanges and that some regulators will start to accept sukuk as collateral for liquidity provisions.

Bahrain and UAE-based Islamic banks have so far held excess liquidity either in cash or monthly offerings of central bank sukuk, with maturities between three and six months. This placed them at a disadvantage to conventional banks, which have a wide range of interest-earning liquidity management options available.

“Efforts to develop Sharia-compliant liquidity tools are picking up in several Gulf countries, notably Oman. These tools will be important for Islamic banks to boost their competitive positions, all the more so as the pace of growth in Islamic financial services is outstripping conventional banking growth in the region,” said Al Natoor.

Islamic finance is set to expand as large numbers of relatively under-banked Muslims seek banking services in line with economic development in their home countries, and some countries with large Muslim populations seek to invest their wealth in Sharia-compliant instruments.

The UAE’s Islamic banking assets total $100 billion, the fourth-biggest in the world after Iran, Malaysia and Saudi Arabia, according to Dubai government data. Bahrain has $43 billion. In the UAE, the central bank has expanded the list of eligible collateral for its Sharia-compliant overnight facility to include assets other than the regulator’s Islamic certificates of deposit.

“Regulatory and tax limitations could hold back the development of Islamic banking, as could a lack of workable tools that accommodate Sharia rules. Bahrain and the UAE’s introduction of new liquidity management tools marks a small but important step towards overcoming some of these challenges,” he said.

(Gulf News Banking / 13 April 2015)

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Bahrain Sukuk Mauled as Oil Drop Imperils Plans

The Gulf nation’s dollar-denominated sukuk that mature in 2018 have dropped 1.3 percent since the end of September, compared with an average 0.8 percent gain for more than 30 Islamic sovereign dollar bonds tracked by Bloomberg. Only the five-year $1 billion sukuk issued by Pakistan, where Islamic militants have killed more than 50,000 people since 2001, have performed worse.

The decline underscores how oil’s 45 percent slide since last year is hurting a country whereStandard & Poor’s estimates crude accounts for 65 percent of fiscal revenue and yet has oil reserves that are less than 0.1 percent of neighboring Saudi Arabia. The retreat threatens to jeopardize some of the $30 billion of infrastructure projects the government is planning to sustain economic growth and becalm protests by the majority Shiite population, according to Commerzbank AG.

“Bahrain is a bit more sensitive because they don’t have a lot in reserves as Saudi or others to keep supporting their projects,” Apostolos Bantis, a credit analyst at Commerzbank in Dubai, said by phone on Dec. 17. “They will have to cut costs and stop some of the projects they’re working on. There is a risk of political unrest.”

Low oil prices will “exacerbate” existing structural weaknesses in Bahrain’s public finances and may lead to a 10 percent decline in government revenue next year, S&P said in a Dec. 12 report, revising the country’s debt outlook to negative from stable.

Protest Deaths

Brent crude, the benchmark grade for more than half the world’s oil, sank to $59.27 a barrel last week, the lowest since May 2009. Bahrain requires an average oil price of about $120 a barrel to balance its budget, according to S&P.

Home to the U.S. Navy’s fifth fleet and the smallest crude oil producer in the Gulf, Bahrain witnessed some of the worst popular unrest in the region amid turmoil triggered by revolutions in Tunisia and Egypt.

Shiites, who make up a majority of the nation’s 1.3 million people, were demanding rights equal to those of Sunnis, including appointments to senior government and military posts. That spurred a string of projects and social expenditure from the government to help avoid further discord.

“The kingdom is set to invest up to $30 billion in key infrastructure projects over the coming years, across a range of sectors including transport, housing, manufacturing, energy, healthcare and education,” Jarmo Kotilaine, the chief economist at the Manama-based Bahrain Economic Development Board, said by e-mail yesterday, projecting growth of more than 4 percent in 2014. “Mounting infrastructure spending is an important driver while even the oil sector has surprised on the upside.”

Structural Weakness

As part of its development plan, Bahrain is spending $743 million for three power plants, $82 million on a 120-bed oncology center and the construction of more than 4,000 residential homes.

The yield on Bahrain’s 2018 Islamic notes jumped 54 basis points to 2.7 percent in the quarter through Dec. 19, compared with an 17 basis-point increase to 4.4 percent for Middle East sukuk on average, according to JPMorgan Chase & Co. indexes.

Bahrain and Oman will be the countries in the Gulf Cooperation Council most susceptible to lower oil prices in its report this month, according to Moody’s Investors Service. Bahrain has reserve assets of about $5.4 billion, including gold and foreign currencies, compared with $745 billion for Saudi Arabia, government data show. Bahrain’s deficit may widen to more than 7 percent of gross domestic product next year, Moody’s said.

“Running a deficit for one year is not a big deal and manageable,” Bantis said. “But if they keep running deficits then they will be in big trouble.

(Bloomberg / 22 December 2014)

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New opportunities open for Islamic banking in Bahrain

With a strong and well established financial services sector, Bahrain’s role in expanding the global reach of sharia-compliant financing looks set to broaden further through three developments firmed up in July. Two new partnerships were announced last month that will expand the number of Islamic Financial Services (IFS) institutions in the kingdom, while an agency already active in the sector is furthering its work to globalise the industry.

On July 9 a joint venture was formed between the kingdom’s Economic Development Board (EDB) and the Islamic Corporation for the Development of the Private Sector (ICD), an arm of the Islamic Development Bank (IDB), to promote the sector by offering training, software and sharia-compliant financing.

A week later, a second partnership offering training programmes and research was announced between the UK-based consultancy Islamic Finance Advisory and Assurance Services (IFAAS) and the Bahrain Institute of Banking and Finance (BIBF), a business education provider.

Finally, the International Islamic Financial Market (IIFM), a non-profit based in Manama, is working on a contract template for sukuk (Islamic bonds), due in early 2015, which it hopes will standardise the product into a form that will be more accessible to Islamic businesses around the globe.

Such efforts aim to bolster the rising popularity of IFS in the financial world. In the past five years, global Islamic financial assets grew by a compound annual growth rate of 22.8% a year, reaching $1.8trn at the end of 2013, according to a June report by Kuwait Finance House (KFH). Of this, $75.1bn is being actively managed by Islamic funds – after a 4.9% rise in the first half of 2014 – while the number of such funds has grown from some 800 in 2008 to 1069 as of mid-June.  

Progress through partnership

Under the first of the two partnerships, the ICD will establish a new enterprise, called Ijara Company after a type of Islamic leasing agreement, through which it plans to lend assistance to small and medium-sized enterprises (SMEs) in Bahrain. The agreement includes setting up both a training centre and a centre for developing software on Islamic financial products, with the intention of exporting any tools it creates to foreign markets. “The new Ijara Company will add to the wide range of sharia-compliant products and services on offer, particularly for SMEs,” said Kamal bin Ahmed, the EDB’s acting chief executive. To supplement this, the two agencies will also discuss the possibility of setting up a special fund to invest in SMEs based in Bahrain.

The second agreement, signed July 16, focuses on education and research. The BIBF, which already provides instruction in both conventional and Islamic finance, will use the partnership with IFAAS to launch new training programmes and conduct research, drawing from the latter’s experience in the IFS industry since 2007. From offices in Paris, Manama and Birmingham, UK, consultants at IFAAS conduct audits, develop products, carry out feasibility studies and assist with regulatory compliance. The first new course being offered by the partnership, “Fundamentals of Finance and Banking Operations”, is scheduled to be held in September in English; others to follow will be taught in French and Arabic.

Training centres are key to sustaining the rapid growth of IFS. According to Barry Cosgrave of finance group Shearman & Sterling, the industry has long been viewed with caution by conventional investors due to the general mystique surrounding such concepts as sukuk, takaful (Islamic insurance) and musharakah (joint ventures). “Much of this was down to a simple lack of understanding of what were perceived to be mysterious structures with complicated names,” he wrote last month in Acquisition International, a finance journal. “However, as an increasing number of sukuk have run through the maturity cycle, it has provided an illustration of how Islamic instruments bear many of the characteristics of conventional finance products.”  

Setting standards for sukuk

As awareness grows, standardising IFS instruments is seen as a way to help facilitate their wider acceptance. The new contract template being developed by IIFM should boost the importance of sukuk – which already accounts for 15% of total sector assets, the second-largest category after Islamic banking (80%), and well above the portion from real estate investments, according to the KFH. The main business of the IIFM, an industry non-profit, is to harmonise practices in the sector by creating specifications and templates for finance contracts.

With a working group composed of representatives from the IMF, the IDB and a range of other banking institutions, the agency will look at several different structures, including mudaraba (profit-sharing agreement), wakala (management fees) and sukuk that can be converted or exchanged.

Lack of accepted standards has been one factor holding back new issuances, as IFS clients are reluctant to invest where the details of sharia-compliance are hazy or the authority on which they are based questionable.

Even with such hindrances, sukuk has seen rapid growth. Global Islamic bonds reached $117bn in 2013, spread over 811 issuances, according to Zawya, a MENA news outfit run by Reuters. The IDB issued $1bn in five-year sukuks in July, following a $1.5bn sale in February and a $100m round in April, with plans for another issue of about $500m in May 2015.

(Oxford Business Group / 15 August 2014)

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Meethaq, pioneer of Islamic banking in Oman signs MoU with Al Salam Bank, BMI Bank of Bahrain

Muscat: Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, Al Salam Bank Bahrain, and Bahraini retail and commercial banking institution BMI Bank, have signed an memorandum of understanding (MoU) to collectively pool expertise, technologies and resources. 

They have agreed to work together across a range of Islamic banking activities including Islamic syndications, particularly those issued in Oman, treasury transactions, liquidity management products and Islamic trade finance transactions.

The MoU was signed at BMI Bank's headquarters by Sulaiman Al Harthy, group general manager, Meethaq Islamic Banking; Yousif Taqi, CEO of Al Salam Bank; and Jamal Al Hazeem, CEO of BMI Bank, said a press release.

"Meethaq is delighted to sign the MoU with Al Salam Bank and BMI Bank, and we will work together to offer various Islamic finance products covering treasury, trade finance and capital market in Oman. 

Meethaq is working to strengthen its operations in the Sultanate, which is witnessing substantial growth in the Islamic banking industry. We consider our partnership with Al Salam Bank and BMI Bank a great advantage to maximise favourable opportunities, and thereby expand our coverage," said Al Harthy.

"Since its inception in 2013, Meethaq has emerged as a leading Islamic banking service provider in Oman, and has enhanced its reputation within the region through investments in staff, systems and controls besides the timely launch of several world-class Shari-based products and services. Our organisations share mutual principles, values and expertise, and we are therefore pleased to sign this MoU. We look forward to enhancing this partnership in the coming years," added Al Hazeem. 

(Times Of Oman / 08 June 2014)

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Bahraini bank Al Baraka plans sukuk in South Africa, Pakistan

DUBAI (Reuters) - Bahrain-based Al Baraka Banking Group said it is considering issuing subordinated Islamic bonds through its South African and Pakistani units to boost their regulatory capital.

The Islamic bank's plans come at a time when sovereign sukuk are expected from both countries later this year. [ID:nL5N0JA34X] [ID:nL6N0NK1WR]

The lender has operations in 15 countries across the Middle East, Asia and Africa.

Al Baraka is working with the authorities in South Africa and Pakistan over launching Islamic bonds there, said Chief Executive Adnan Ahmed Yousif.

While details have not been finalised, the prospective deals could mirror the $200 million capital-boosting sukuk issued by Al Baraka's Turkish unit last year, Yousif said. That deal enhanced the bank's Tier 2, or supplementary, capital.

"We will try to do it as a subordinated, to raise capital adequacy ratios," he said.

Islamic banks typically obtain their funding from retail deposits and short-term syndicated Islamic loans, but subordinated deals are increasingly being used as Basel III global banking standards are phased-in across the globe.

In Pakistan, for instance, Islamic banks must maintain a minimum paid-up capital of 6 billion rupees ($60.9 million), a requirement that will be raised to 10 billion rupees by the end of 2016.

Unlike most other Islamic banks, Al Baraka has built the bulk of its business outside the Gulf and southeast Asia. In South Africa, it operates the only full-fledged Islamic bank in the country, with seven retail branches.

Its franchise in Tunisia switched this year from an offshore bank license to a full commercial banking permit, with plans to open 25 branches there in the next three years.($1 = 98.4650 Pakistani rupees)

(Reuters Africa / 19 May 2014)

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Kazakhstan and Bahrain to promote Islamic banking in Kazakhstan

Kazakhstan and Bahrain will be working to promote Islamic banking in Kazakhstan, Tengrinews.kz reports, citing President Nazarbayev’s official website.

“The two sides have expressed their intention to promote Islamic banking in Kazakhstan. We are interested in Bahrain’s practices in this realm as the country is a major center of Islamic finances”, President Nazarbayev said following his talks with King of Bahrain Sheikh Hamad bin Isa bin Salman Al-Khalifa in Astana April 14.

The two sides condemned terrorism and extremism in all its manifestations, called to strengthen measures to counteract transnational and organized crime, illicit turnover of narcotic drugs and weapons, as well as to counteract other types of crimes posing threats to the global peace and stability.

Kazakhstan and Bahrain have agreed to place a priority emphasis on cooperation in investments, trade, agriculture, banking, and to further ties in education, culture and science. They have agreed to encourage interaction between universities and culture entities and facilitate exchange of students.

For more information see:http://en.tengrinews.kz/politics_sub/Kazakhstan-and-Bahrain-to-promote-Islamic-banking-in-Kazakhstan-252934/

Use of the Tengrinews English materials must be accompanied by a hyperlink to en.Tengrinews.kz

(Tengkri News / 15 April 2014)

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Bahrain-UK in major Islamic finance deal

LONDON: Bahrain and the UK yesterday agreed a joint framework to enhance collaboration on Islamic finance at the UK-Bahrain Islamic Finance Summit held in London.

A memorandum of understanding (MoU), signed by Senior Foreign Office Minister Baroness Sayeeda Warsi and Central Bank of Bahrain Governor Rasheed Al Maraj set out plans to boost co-operation through an education and skills programme and the establishment of a working group devoted to the development of Islamic finance-driven trade and investment between the two countries.

Islamic finance is currently growing 50 per cent faster than conventional banking and is worth £1.3 trillion ($2.2trn) globally reaching an expanding market of over two billion people.

It accounts for over 25pc of banking in the Gulf.

Over the last six months, the UK has successfully hosted two major Islamic finance events - the World Islamic Economic Forum and the Global Islamic Finance and Investment Conference.

"I am delighted to host today's UK-Bahrain Islamic Finance Summit," Baroness Warsi said.

"It is an honour to welcome so many prominent experts from both countries at this first bilateral Islamic Finance sovereign summit of its kind in the UK.

"As a leading global financial centre, the UK has a great track record on Islamic Finance.

"We have more than 20 institutions offering Islamic finance and six wholly Sharia-compliant banks.

"We also have over 12 universities offering related specialist courses and qualifications," she added.

"This year we celebrate the 200th anniversary of UK-Bahrain relations.

"As well as the close and longstanding relationship enjoyed by our two countries, Bahrain is considered an established innovator in Islamic finance.

"It issued the first international sovereign sukuk in 2001, which drove the GCC Islamic capital market.

"And with the largest concentration of Islamic finance institutions in the region, Bahrain is one of the pre-eminent Islamic finance centres in the Gulf," she said.

"We have much to share about how to grow the industry successfully.

"To underscore this ambition, a MoU was signed at the summit, which gives the UK and Bahrain a strong framework on which to develop our ongoing collaboration," she added.

"Today marks an important day in the long history of Bahrain-UK relations as the two countries will be extending significant co-operation to each other to promote Islamic banking and finance," Mr Al Maraj said.

"A joint committee has been formed for this purpose and an MoU has been signed.

"Both the UK and Bahrain have their strengths in Islamic finance education, training and practice, and their co-operation will open new opportunities for the Islamic finance industry." he added.

(Gulf Daily News / 10 April 2014)

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Bahrain asked to focus on Islamic banking in Pakistan

KARACHI: Bahrain should look into unmatched business opportunities in Pakistan with a special focus on project-based financing and Islamic banking, said President FPCCI Zakaria Usman while speaking at a meeting of Bahrain-Pakistan Business Council on the eve of three-day official visit of Bahrain’s King Sheikh Hamad bin Isa bin Salman Al-Khalifa to Pakistan.

Bahrain’s Minister of Industries and Commerce Dr Hassan A Fakhro, Bahrain’s Minister of Transport Kamal Muhammad Ahmed, Chairman Bahrain Chamber of Commerce and Industry Khalid Almoayed, Federal Minister of Commerce Khurram Dastagir Khan, former President FPCCI Zubair Ahmed Malik VPs FPCCI Khurram Sayeed, Babar Khan Durrani, Sheikh Imtiaz and Adnan Adeel and large number of businessmen of both the countries were also present on the occasion.

Zakaria Usman said that Pakistan is the closest neighbour of Bahrain in region that has a vibrant economy, 413 financial institution, and facility of low cost of living but bilateral trade remained modest to $400 million which is tilted in favour of Manama.

Almost 400 Pakistani companies are working in Bahrain and the number is rising which prove that the size and economic structure of both the brotherly countries is different but they are sharing many similarities.

The FPCCI chief said that Pakistan is emerging from economic and political turmoil after more than a decade and are experiencing new economic beginning to move Pakistan forward which is a great opportunity for foreign investors.

Zakaria Usman said that Bahrain has central location in gulf with a highly diversified economy and that enhanced linkages will boost flow of investments. Pakistan can learn from Bahrain’s economic diversification and expertise in energy sector.

The business leader said that an early trade treaty between the two countries would benefit each other as Pakistani textiles should find place in US market due to Bahrain’s FTA with America and Manama can explore markets neighbouring Pakistan.

He also stressed that Pakistan is an ideal market for investments, especially in the light of GSP plus status which has been granted for a decade. He also emphasised that Pakistan offers best investment opportunities in the region while is has been introducing new concepts for investments.

Pakistan offer best investment policies as almost 700 foreign companies operating in and making profits in Pakistan, a heaven for investors and a country of four seasons with population of youth standing at 60 percent.

Many MoUs were signed on the occasion including one between FPCCI and Bahrain Chamber of Commerce.

(Daily Times / 20 March 2014)

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Bahrain’s minister lauds Islamic banking growth in Pakistan

KARACHI: Shaikh Ebrahim Bin Khalifa Al-Khalifa, Bahrain’s Minister for Housing and Chairman Board of Directors Meezan Bank Ltd, has said that Pakistan has huge potential for project based financing in sectors including energy, health, food, pharmaceutical, housing for which Islamic banking industry has more suitable solutions. 

During a meeting of the senior officials of the State Bank of Pakistan the other day, Shaikh Ebrahim, who is also Chairman Board of Trustees Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), appreciated Pakistan’s pioneer position in Islamic banking and paid tribute to Mufti Taqi Usmani for his great contribution.

Shaikh Ebrahim held a meeting with Deputy Governor SBP Saeed Ahmad during which the deputy governor welcomed his Royal Highness. Shaikh Ebrahim while acknowledging the significant growth of Islamic banking in the country appreciated the role of SBP for establishing a conducive regulatory environment for the industry.

He emphasized that the Islamic banking industry needs to play a critical role in enhancing the financial penetration level in the country. He opined that continued research will lead the move from current Shariah compliant products to fully Shariah based products. While focusing on the fundamentals of Islamic banking, he was of the view that the Shariah complaint financial system should make the flow of money to all those sectors critical for the broad based growth of the economy. He stated that the local market of Pakistan has huge potential for project based financing in sectors including energy, health, food, pharmaceutical, housing for which Islamic banking industry has more suitable solutions. 

Deputy governor SBP appreciated the vision of his Royal Highness. He briefed the guest about various projects and schemes currently being under taken having great potential for local and foreign investors. He reassured SBP’s support for Islamic finance initiatives. The deputy governor SBP repeated the resolve of the present Government of Pakistan and the commitment of SBP in promoting Islamic finance in the country. He discussed SBP’s 5-year strategic plan for Islamic banking industry.

Saeed Ahmad said that SBP is considering options to provide a comprehensive facility for Islamic banks to channel their liquidity through Shariah compliant modes. After availability of this facility, Islamic banks will be restricted to channel their surplus funds to conventional banks, failing which regulatory penalty will be imposed. He emphasized that Islamic banks should increase their outreach to SMEs, agriculture and low cost housing sectors.

Deputy Governor also appreciated the work of AAOIFI and Shaikh Ebrahim Bin Khalifa Al-Khalifa’s instrumental efforts and his contribution for the promotion of Islamic banking and related accounting and technical matters. 

(Daily Times / 05 March 2014)

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Bahraini Islamic Bank Al Baraka Q4 net income climbs 23%

Reuters – Bahrain’s Al Baraka Banking Group reported a 23% increase in fourth-quarter net profit on Sunday, and said it would continue expanding its network and issuing further sukuk through its foreign subsidiaries in 2014.

The Islamic lender recorded a net attributable profit of $32m in the three months to 31 December, compared with $26m in the corresponding period of 2012, the bank said in a statement.

The hike came despite a slight decline in total operating income vis-à-vis the same quarter of 2012 to $227m.

For the full-year 2013, net attributable profit gained 9% to $145m, which the bank said was a result of its expanded operations, improvements in asset quality and better cost efficiency.

Al Baraka has operations in fifteen countries predominantly across the Middle East and Africa, including nations which have seen significant economic turmoil in the last year such as Syria, Turkey, Egypt and Sudan.

Adnan Ahmed Yousif, chief executive of Al Baraka, said in the statement that the results posted by the lender could be considered “satisfactory by all standards if we take into account the difficult economic and financial conditions that prevailed in the region and the world as a whole.”

Total assets at the end of 2013 stood at $21bn, up 10% over the end of the previous year. Loans and advances and deposits increased 7 and 8% respectively over the same timeframe.

Al Baraka said it planned to add 81 branches to its network in 2014, in countries including Turkey, Pakistan, Jordan and Egypt. It currently has 479 branches, the statement added.

The bank would also continue its policy of “diversifying financing resources for our subsidiary units through the issuance of Islamic sukuk.”

A senior executive at Albaraka Turk, the bank’s Turkish subsidiary, told Reuters last month it planned to issue sukuk worth between $300m and $400m in 2014, following on from its debut $200m issue in April 2013.

(Daily News Agypt / 24 Feb 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Al Bayan signs $70m Islamic finance facility

Saudi-based Al Bayan Group Holding Company said it has signed a $70 million syndicated Islamic term financing facility with a group of leading regional and international banks.

ABC Islamic Bank, the Islamic finance subsidiary of Arab Banking Corporation, was appointed as the initial mandated lead arranger and bookrunner.  Guidance Financial Group acted as Financial Adviser to Al Bayan.

The facility is Al Bayan’s debut syndication in the regional debt market, said a statement.

The new financing will be used for general corporate purposes and has established new banking relationships outside the company's home market of Saudi Arabia with ABC Islamic Bank, BBK., Emirates NBD Bank, Al-Baraka Islamic Bank – Bahrain, Bank of London and The Middle East and Maybank Bahrain.

Dr Abdulrahman Al Hammad, chief executive officer of Al Bayan, said: “This facility marks our first Islamic funding exercise in the region outside Saudi Arabia. We wish to thank all the participating banks for their support and look forward to working with them in the future.

(Trade Arabia / 23 Jan 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Bahrain tops in developed Islamic finance sector

Bahrain has the second most developed Islamic finance sector, after Malaysia, with total assets worth $47 billion, said a recent analysis.

The analysis was based on the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI), a numerical measure representing the overall health and growth of the Islamic finance industry worldwide.

The indicator measured five key components - quantitative development, governance, social responsibility, knowledge and awareness – which are adjusted for the relative size of each country.   

Bahrain had the second most developed Islamic finance knowledge landscape, with 23 institutions offering degrees and courses in Islamic finance, said the report.

In terms of research, the kingdom had 17 research papers on Islamic finance published in the last three years, of which 12 were peer reviewed.

Bahrain also performed well in terms of governance, with a comprehensive regulatory framework covering all aspects of the Islamic finance industry. This was supplemented with strong sharia governance, with the largest number of Islamic finance scholars based in the kingdom, said the analysis.

The Islamic finance industry in Bahrain also performed well in corporate governance and corporate social responsibility disclosures. In terms of awareness, Bahrain had five seminars and five conferences related to Islamic finance last year and 551 news articles on the subject.

Russell Haworth, managing director, Mena, Thomson Reuters, said:  “This indicator will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry.  The development of Islamic finance infrastructure will be a key driver for the establishment of the Islamic finance industry.”

Dr Sayd Farook, global head of Islamic Capital Markets for Thomson Reuters, said: “The IFDI provides equal importance to all aspects of the industry when assessing its depth and development. Our initial research indicates that Bahrain is one of the leaders in the Islamic finance industry, identifying their development in each category.”

“This research will enable policy makers and practitioner to compare themselves with their peers and prioritise areas that require development to ensure they retain their leadership position,” he said.

The IFDI, which was officially launched at the Global Islamic Economy Summit in Dubai last week, aims to expand the scope of Thomson Reuters' Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry.

(Trade Arabia Business News Information / 04 Dec 2013)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com