Private Equity Participation: New Movement For Islamic Finance?
Private Equity Participation: New Movement For Islamic Finance?
Private Equity Participation: New Movement For Islamic Finance?
(All Cap)
1200
1175
1,109.57
1150
1.08% 1,121.78
1125
1100
Sukuk sector
regains ground
as new trends
begin to emerge
...9
Powered by:
1MDB unlikely
to disproportionately aect
Sukuk market...11
New rules to
bring in more
business for
Malaysian
Islamic banks
...12
IdealRatings
COVER STORY
Challenges to growth
A primary issue is the absence of a
universe of dedicated Islamic private
equity funds, which many feel could be
due to a weighted focus on the Islamic
capital markets including Sukuk
and listed equities meaning that
institutional demand for private
equity has been limited, and
the industry has not necessarily
focused on developing and
marketing products to the same
extent as in other areas while due
to the global financial headwinds
of the last decade, products may not
always have returned as well as
expected. Sukuk has been the
success story, the flag bearer of
Risk averse
One issue is that banks are often
reluctant to make high-risk investments
with client funds in areas where they
are not necessarily experienced
and unlike the major multinational
institutions, Shariah compliant banks
can often lack the necessary expertise to
enter specific markets. Given the past
experiences during the global crisis and
the lack of specialized sectoral resources
within, the banks generally shy away
from entering into private equity
investments, explained Kamran. The
responsibility of managing depositors
money is huge and there is enough
potential in debt markets to deploy such
money for moderate returns from lowrisk businesses.
Another challenge is often the
resistance by the entrepreneurs and
family businesses to let go, separate
management from ownership and be
more transparent in their operations
and reporting standards. But there is
also blame on the investor side they
dont understand the industries very
well, insisted Jawad. Even when they
recruit a team to evaluate these deals,
they tend to go for the generalist type,
continued on page 3
IFN RAPIDS
Volume 12 Issue 22
DEALS
Sukuk Murabahah to
Lembaga Tabung Haji
SP Setias Sukuk
Musharakah program due
and payable on the 15th June
Largest Islamic
microfinance group in
Indonesia plans inaugural
Sukuk; expected first week
of June
RA Holding fully
redeems Sukuk following
monetization of multiple
investments
Keynote address:
Facilitating innovation in the Islamic capital
market ............................................................ 6
IFN Reports:
Asia a key focus for industry leaders
Sukuk sector regains ground as new
trends begin to emerge ADIB charts its
course in equity, credit and retail markets,
setting a precedent in the emirate IFN
Global Trendswatch 1MDB unlikely to
disproportionately affect Sukuk market
Company Focus: Bosna Bank International
New rules to bring in more business for
Malaysian Islamic banks IFN Weekly Poll:
Is Islamic finance in the UAE becoming
overbanked? REDmoney launches IFN
Education; a facilitative medium for Islamic
finance education Sovereign Sukuk:
Regular Sukuk auctions and Omans debut
before Ramadan .................................... 8
IFN Analysis:
Saudi Arabia: Poised for greater growth ............15
Private banking and wealth management in Islamic
finance.......................................................................... 16
Case Study:
Hong Kongs sophomore Sukuk first Wakalah paper
by a triple A sovereign ............................................ 17
Shariah Pronouncement: ....................... 18
IFN Country Correspondent:
Hong Kong; Australia; Kenya .................... 19
IFN Sector Correspondent:
Real Estate; Takaful & re-Takaful .............. 21
Special Report:
Key consideration in making third party
debt order for an Islamic banking account:
An overview of the positions in England and
Malaysia .................................................... 23
Low mortgage rates and Islamic finance: How the
two work together ......................................... 25
Country Feature:
Luxembourg takes steps to strengthen Islamic
finance cooperation ........................................ 26
Islamic Finance news ................................... 27
Deal Tracker ................................................. 34
REDmoney Indexes .................................... 35
Eurekahedge data ....................................... 37
Performance League Tables....................... 39
Events Diary................................................. 43
Company Index ........................................... 44
Subscription Form ....................................... 44
NEWS
TAKAFUL
Al Rajhi Bank Malaysia
forms bancaTakaful
partnership with AIA
PUBLIC Takaful; rolls out
medical plan
RATINGS
S&P arms Oman at A-/A2 with a stable outlook
Outlook for Malaysian
banking system stable
although operating
environment deteriorating,
says Moodys
S&P downgrades
Hannover ReTakafuls
outlook to negative
as capital adequacy
deteriorates
RAM maintains Al Bayan
Holding Companys Sukuk
rating at AA3(s)/Stable
Moodys upgrades
Qatar Islamic Insurance
Company by one notch to
reflect improved and solid
capitalization
MOVES
ASSET
MANAGEMENT
Waha Capital to launch
US$500 million Islamic
infrastructure fund focusing
on MENA and Turkey
RHB Islamic International
Asset Management targets
developed markets with
new retail Shariah fund
Commercial Bank
International hires head of
Islamic banking
Dr Fareed Mohammed
Hadi resigns from
position as chairman
of Shariah Supervisory
Board of Al Hilal Islamic
Banking Services; board
reconstituted
Former CEO of EXIM
Bank now leads Alkhair
International Islamic Bank
Disclaimer: IFN invites leading practitioners and academics to contribute short reports each week. Whilst we have used our best
endeavors and eorts to ensure the accuracy of the contents we do not hold out or represent that the respective opinions are
accurate and therefore shall not be held responsible for any inaccuracies. Contents and copyright remain with REDmoney.
COVER STORY
Private equity participation: New movement for Islamic finance?
Continued from page 1
Asian opportunities
While the Middle East is seeing
increased activity and the US has
long been a focus for private equity
investment especially in real estate,
Islamic investors are broadening
their outlook and seeking the next
opportunity. From a GCC investor
perspective, the next growth markets are
Asia, commented Kamran.
Alex Armstrong, the managing director
and head of financial institutions and
structured finance at
QInvest, agreed. We
have to look outside
the US, Europe and
the GCC for growth
opportunities, and
Asia is certainly
very interesting for
us. QInvest entered
the private equity
sector around two
years ago,
although
it is taking
cautious
steps
500
US$ billion
Barriers to entry
400
300
200
20%
17%
13%
20%
20%
15%
15%
12%
10%
11%
100
5%
N/A
0
2008
2009
2010
2011
2012
Western Europe
Emerging Markets
2013
2014
0%
EM as % of Global Total
Q1 2015
EM Fundraising as %
of Global Total
Positive steps
Yet despite the headwinds across much
of the world, pockets of growth keep
positivity up and while Asia may
be struggling and the Islamic aspect of
the industry faces challenges in terms
of dierentiation, overall emerging
markets are producing encouraging
results. From a slump of 11% in 2013
(down from a high of 20% the previous
year) the total percentage of global
fundraising accounted for by emerging
markets rose back to 15% in 2014 (see
Chart 1) and looks set to keep going this
year.
The GCC is a prime example of a region
where despite the lower oil prices and
strong dollar, private equity is moving
apace. There is definitely capital in
the Middle East but at the same time,
there are a lot of opportunities to deploy
that capital in the Middle East itself,
pointed out Kamran.
From around US$900 million raised in
new money in 2012 and US$700 million
in 2013, the MENA Private Equity
Association expects figures to bounce
continued on page 4
COVER STORY
Private equity participation: New movement for Islamic finance?
Continued from page 3
Asia has
a number
of vibrant and
developing markets.
However, for some
reason Shariah
compliant GCC
capital is not
inding a home in
these
markets
In the last quarter of 2014, the Gulf
saw two of the biggest regional fund
vehicles since the global financial crisis:
the US$750 million GCC-focused GC
Equity Partners Fund III from Abu
Dhabis Gulf Capital (bringing total
assets up to around US$3.5 billion), and
a US$310 million MENA-focused fund
(exceeding the US$300 million target for
NBK Capital Equity Partners Fund II)
from National Bank of Kuwaits NBK
Capital. Major player Investcorp, which
has around US$11 billion under
management, has invested in 13
countries across the US, Europe
and MENA regions over the
past two months, with a deal
around every two months a
record pace for the firm.
Social services
Of the top opportunities
currently driving
private equity, especially
in the Gulf region,
International attraction
International investors are also looking
towards the Gulf with Gulf Capital
commenting at the launch of its latest
fund that 60% of capital came from
investors in Europe, the US and Asia.
Were seeing increasing activity from US
and UK investors into the Middle East.
Also, we are seeing funds start to look
at exiting and realizing investments as
such are approaching the end of their life,
which is leading to increased activity,
said Dowsett.
Newer industry players are now moving
in while regional firms are looking abroad
for collaboration. Abraaj Capital and TPG
in April this year completed a Shariah
compliant debt investment in Saudi food
chain Kudu through a joint vehicle the
first entry into the region for the
US-based TPG. We are working
on a number of PE deals, and
worked with our US oce
on the recent merger of the
Dubai-based Olive Group
with Constellis, Dowsett
confirmed to IFN. We also
continue to work with Dubai
International Capital,
TVM Capital and STC
Ventures, among others,
on a number of matters.
Looking outward
And while hotspots such as the UAE
and Saudi Arabia are attractive,
regional Gulf firms are also turning
their attention towards growing their
outbound investment, raising capital
in the Middle East and deploying it
across global markets and upcoming
investment destinations such as
Africa, which saw overall GDP grow
3.9% in 2014. Gulf Capital this month
announced a US$25 million investment
in an Egyptian petrochemical firm
marking a spate of renewed private
equity interest in the country, which
is already now home to 11 private
equity firms (according to data from
the Emerging Markets Private Equity
Association). Dubais Abraaj Capital,
which manages over US$9 billion in
assets, also recently raised over US$1.3
billion for two Africa-focused private
equity funds. EFG Hermes, which holds
private equity assets of around US$800
million, also sees considerable potential
in Egypt but is looking even further
afield to Europe where last year it
acquired 49% in French wind energy
firm EDPR France for US$208 million.
Working together
But some of the biggest opportunities
will only occur when investment
firms take a cross-border attitude and
start working together to encourage
international equity investment. The
GCC is competing very well and
keeping a lot of new investment dollars
invested in the region, specifically in
Saudi and the UAE, said Jawad. [But]
I would like to see it go towards Asia
and Africa there are a number of
opportunities in the pure private equity
sector where healthy cash-needing
businesses can be invested in and then
taken back to the Middle East where the
investors themselves reside.
Asia has a number of vibrant and
developing markets. However, for some
reason Shariah compliant GCC capital
is not finding a home in these markets
for example, high-potential countries
like Indonesia need more investment
but for whatever reason, the people
who are trying to attract the investment
and the people who have the capital
are not speaking the same language,
he suggested. GCC investors are
continued on page 5
COVER STORY
Private equity participation: New movement for Islamic finance?
Continued from page 4
As family
ofices look to
grow and become
increasingly
sophisticated in
terms of structure
and governance,
private equity sales
offer an alternative
to IPOs and offer
value beyond just
capitalraising
looking for new markets, and the smart
trading houses in Asia and Africa have
Growing up
While challenges remain,
the market is undoubtedly
maturing as sellers understand
the opportunities better. As
family oces look to grow and
become increasingly sophisticated
in terms of structure and governance,
private equity sales oer an alternative
to IPOs and oer value beyond just
capital-raising, in terms of experience,
expertise and encouragement to expand.
However, in order to truly carve a niche
for itself in the mainstream market, the
Islamic industry must focus on its own
strengths rather than emulating the
conventional channel. The investment
unit and the investors together should
participate in the risk and share in the
reward rather than focusing on a
straightforward exchange of funds in
exchange for a promised return.
SHARIAH
PORTFOLIOS
CRAFTED BY
GLOBAL EXPERTS
KEYNOTE ADDRESS
Facilitating innovation in the Islamic capital market
Keynote address by Dr Nik Ramlah
Mahmood, deputy CEO of the
Securities Commission Malaysia (SC)
at IFN Asia Forum 2015 on Tuesday, the
26th May 2015.
1. Let me first thank IFN for inviting me
to speak at this flagship IFN Forum
2015. I am pleased to note that this
event has over the years grown from
strength to strength and is now a key
event in the calendar of the global
Islamic financial services industry.
2. Typically, innovation in the global
capital markets or the financial
services industry is driven by the
industry, by the forces of demand and
supply. The size of global financial
assets which currently stands at
US$305 trillion and is more than
four times the world GDP (US$75.6
trillion) reflects the frenetic pace of
innovation in the financial markets.
Overall, these innovations have
resulted in the increasing variety and
diversity of products and services
and more innovative distribution
channels, thus oering more choices,
lower costs and better returns for
investors and issuers. This process
continues in the pursuit of the
ever-growing commercialization of
financial products and services.
3. Unlike in nascent or developing
markets where regulators typically
have the legal mandate to facilitate
market development, in developed
markets, policymakers and regulators
do not need to provide a helping
hand to facilitate innovation. That
is until and unless the innovation
in the market causes harm to the
investors, threatens the fair and
orderly operation of the market
or poses systemic risks. This is
when regulators will take a more
interventionist role in order to ensure
that the objectives and principles of
regulation are not compromised. We
have seen many examples of this in
many parts of the world, especially
after the global financial crisis.
4. The same hands-o stance, however,
cannot be adopted with respect
to the Islamic financial services
industry and more specifically
the Islamic capital market (ICM).
Policymakers and regulators, whether
in developed or developing markets,
continued...
KEYNOTE ADDRESS
Continued
IFN REPORTS
Asia a key focus for industry leaders
IFN Asia Forum 2015 held on the
25th-26th May in Kuala Lumpur was
a phenomenal success; serving as
an avenue for thought-provoking
discussions on some of the industrys
biggest issues and opportunities.
VINEETA TAN provides an overview of
the two days.
IFN REPORTS
Sukuk sector regains ground as new trends begin to emerge
113
111
109
107
105
103
101
99
12/3
1/20
13
1/31
/201
4
2/28
/201
4
3/31
/201
4
4/30
/201
4
5/31
/210
4
6/30
/201
4
7/31
/201
4
8/31
/201
4
9/30
/201
4
10/3
1/20
14
11/3
0/20
14
12/3
1/20
14
1/31
/201
5
2/28
/201
5
3/31
/201
5
UK
1%
UAE
24%
South Africa
1%
Qatar
Malaysia
13%
10%
Saudi
Arabia
Indonesia
13%
10%
Hong Kong
2%
Source: S&PDJI as of the 19th May 2015
IFN REPORTS
ADIB charts its course in equity, credit and retail markets,
setting a precedent in the emirate
Abu Dhabi Islamic Bank (ADIB)
in a recent statement announced its
intentions to raise capital through
a rights issue and a potential Tier-1
Sukuk issuance. With strong financial
results for the year 2014 and the first
quarter of 2015, NABILAH ANNUAR
takes a closer look at the banks
expansion plans.
Said to have experienced a period of high
growth, ADIB reported 20.7% growth
in net profit in 2014, with customer
financing increasing 18.2% from the
previous year. For the first quarter
of 2015, the bank witnessed a 10.1%
increase in net profit, with net customer
financing growing 13.3% to AED72.3
billion (US$19.67 billion). Expecting this
trend to continue, ADIB has scheduled an
extraordinary general meeting (EGM) at
the end of this month to vote on capitalraising proposals to fuel this growth.
ADIB has experienced a period of
strong expansion and we expect this
growth trajectory to continue. In order to
support our growth, the bank is looking
to raise additional capital and as such
we are now inviting our shareholders to
participate in a rights issue. We are also
keeping our various capital instrument
issuance programs up to date, should an
opportunity present itself in the future
to raise alternative forms of capital,
explained Tirad Al Mahmoud, group
CEO of the bank.
Islamic Finance Q
Qualification (IFQ)
23rd 25th August 2015, Dubai
Key Highlights:
Key Islamic Finance Principles
How Islamic and Conventional Finance Differ
Structuring Rules for Islamic Financial Products
Sukuk & Islamic Securitization
Islamic Asset & Fund Management
Takaful
Financial Statements for Islamic Banks
Corporate Governance for Islamic Finance
www.redmoneytraining.com
dubaicourse@redmoneygroup.com
10
IFN REPORTS
IFN Global Trendswatch
Whats been going on in the world this
week? LAUREN MCAUGHTRY brings
you an update of the most significant
economic, regional and global events,
issues and trends that have the
potential to aect the Islamic finance
industry.
Foreign investors flood into China
with over US$4 billion flowing in
over the past week just as the
Shanghai market plummeted over
6% yesterday.
Chinas falling stock market
combined with a decline in the S&P
500 and weakening oil prices make a
choppy climate for European and US
equity investors.
Brent Crude touches its lowest level
for a month.
11
IFN REPORTS
Company Focus: Bosna Bank International
As Bosnia and Herzegovinas sole
Islamic banking player, Bank Bosna
International (BBI) has over the years
adapted and created a model best
suited to further the Islamic finance
proposition in an environment that is
less than conducive. VINEETA TAN
recently caught up with CEO Amer
Bukvic to bring you an exclusive peek at
BBIs project pipeline and performance.
Exponential growth
Although BBI only account for 3% of the
countrys total banking market share, the
Islamic bank has achieved an average
annual growth of 25% for the last decade,
reflecting the rising acceptance of Shariah
compliant products in the Southeastern
European nation, despite its limiting
regulatory landscape.
From the first time when this market
[welcomed] a bank running its operations
according to Islamic principles, which
was completely unknown to the market
then, and even subjected to prejudices
against Islamic banks, we proudly
emphasize the fact that BBI clients today
come from all ethnic and religious
groups including Christians and Jews,
said Bukvic.
International involvement
Looking ahead
12
IFN REPORTS
IFN Weekly Poll: Is Islamic inance in the UAE
becoming overbanked?
Yes
No
33%
67%
13
IFN REPORTS
Sovereign Sukuk: Regular Sukuk auctions and Omans debut
before Ramadan
Managing liquidity in their respective
countries, Indonesia, Bahrain and
Malaysia have all successfully
conducted their regular Sukuk auctions.
Oman on the other hand which is
pushing the development of Waqf
Sukuk in the Sultanate, has confirmed
during the recent IFN Asia Forum that
it targets to debut its maiden Sukuk
before Ramadan. As usual, NABILAH
ANNUAR keeps abreast of the latest
developments in the sovereign Sukuk
arena.
Country
Amount
Expected date
Oman
US$1 billion
Before Ramadan
2015
Kazakhstan
TBA
2016
Turkey
TRY1.5 billion
TBA
Bangladesh
TBA
TBA
Hong Kong
TBA
US$1.5 billion
TBA
Indonesia
TBA
2015
Ivory Coast
XOF300 billion
2015-20
Kenya
TBA
2016
South Africa
TBA
2016
Senegal
TBA
TBA
Niger
XOF150 billion
TBA
Tunisia
US$500 million
2015
Jordan
JOD564 million
2015
UAE
TBA
2015
Luxembourg
TBA
TBA
Course Highlights:
Identify and manage risk in Islamic Treasury products
Comparative analysis of treasury and risk management products in
various jurisdictions
Application of various Islamic toolkits in the Islamic money markets
Manage foreign exchange instruments and associated rate risks
www.REDmoneytraining.com | enquiry@redmoneytraining.com
14
Islamic funds
Saudi Arabia has a deep funds industry,
reflected by it being the largest fund
domicile of the Arab world. The first
Islamic mutual fund was launched by
NCB in 1987, which also rolled out the
first Shariah compliant global equity
fund. As at the 26th May 2015, there are
182 mutual funds registered as Shariah
compliant on the Saudi Stock Exchange.
Traditionally, funds in the Kingdom
were designed for the retail base in the
public sphere; however, it has been
observed that there is an increasing shift
towards privately placed funds due to
relative ease in establishment.
Sukuk
Despite the depth and breadth of the
Saudi Islamic banking, funds and
insurance sectors, the countrys Shariah
debt capital segment lags behind. This is
attributed to the competitive financing
rates oered by cash-rich banks; there
are more demand for Islamic financing
facilities as compared to Sukuk. This,
however, is expected to change as the
Saudi market prepares to liberalize its
US$568 billion stock market.
According to Aljazira Capital, a total
of US$15.2 billion-worth of Sukuk
was issued out of Saudi Arabia in
2013, marking a 36.4% increase on a
yearly basis. Data from Gulf Bond and
Sukuk Association show that in 2014,
Takaful
Regulated by SAMA, the Islamic
insurance industry in Saudi Arabia is
regulated by the Law on the Supervision
of Cooperative Insurance Company.
Practicing a unique cooperative model,
the country is considered the worlds
largest Takaful market, with 37 licensed
insurance and reinsurance companies,
and 76 brokers as well as 76 insurance
agencies. At US$8.1 billion in premiums
in 2014, the Kingdom is not only the
largest insurance player in the GCC but
also the regions second-fastest growing
market with an eight-year compound
annual growth rate of 20.3%, according
to Moodys Investors Service.
However, despite the astounding
growth of the segment, Saudi Arabia
remains a severely underserved and
highly concentrated market. At 1.1%, the
insurance penetration level of the
Kingdom is the lowest as compared to
regional peers. The industry is also
highly skewed towards the medical and
health insurance segment. However,
Moodys is optimistic that the market
would be more inclusive of other
products including life and non-life
insurance in the coming years buoyed
by the increasing wealth of the
population and greater market
awareness.
117.6 billion
107.58 billion
Amount
100 b
71.24 billion
86.86 billion
55.39 billion
50 b
63.09 billion
0b
2008
2009
Source: Islamic Banking Intelligence
15
2010
2011
2012
2013
Private banking
The private wealth landscape attributes
its growth to be in parallel with market
behavior. In recent years, one of the
major driving factors for private banks
operating in the Shariah compliant scene
is the strength of the Sukuk market.
Private banks make up a relatively
significant portion of each Sukuk
oering. This is demonstrated in Noor
Banks US$500 million Sukuk where
6% of the investors were private banks.
Similarly, this response was also seen
in Malaysias US$1.5 billion sovereign
Sukuk with 1% participation from these
banks; and 4% in DIFC Investmentss
US$700 million Sukuk. Testament to
the instrumental subscription of private
banks in Sukuk issuances, Dubai
Islamic Bank in its Tier 1 issuance last
year ensured the inclusion of a 25%
rebate in order to keep the private bank
community engaged.
On the retail and commercial side,
several initiatives were announced by
various financial institutions to develop
its private banking services. Standard
Chartered, the parent bank of Standard
Chartered Saadiq, stated that it plans
to increase assets under management
in wealth management and private
banking business by at least 10% in 2015.
Bank of London and The Middle East,
the UKs largest Islamic bank, plans
to launch Shariah compliant private
banking services this year in partnership
with Malaysias Bank Muamalat.
Islamic financier Kuwait Finance House
introduced the Visa Infinite, a debit
card exclusively for its private banking
clients. The Islamic Bank of Britain,
following its rebranding to Al Rayan
Bank, itemized that the GBP100 million
(US$152.83 million) capital injection
by its parent, Masraf Al Rayan will
be utilized to enhance its capabilities
and resources including widening its
product and service range to encompass
Wealth management
16
Outlook
With a constructive outlook on Islamic
private banking and wealth management,
industry players especially in the Middle
East favor this promising growth. Wealth
managers should maximize opportunities
in equity markets and new asset classes
while innovative eorts ought to
encompass creation of products, service
level, and the structure of a private
banking business.
CASE STUDY
The Sukuk
issuance will
serve to catalyze
further growth of
the Sukuk market in
Hong Kong and the
Greater China region
as well as attracting
more issuers
and investors to
participate in the
HKSARs Islamic
inance
platform
Attracting interest from a diverse group
of both conventional and Islamic
investors, the Sukuk received orders
from 49 international institutional
investors where 42% was allocated to the
Middle East, 43% to Asia and 15% to
Europe. According to the HKMA, the
success of both this issuance and its
maiden oering last year demonstrates
the robustness and flexibility of the
administrative regions Islamic finance
capabilities. The Sukuk issuance will
serve to catalyze further growth of the
Sukuk market in Hong Kong and the
Greater China region as well as attracting
more issuers and investors to participate
in the HKSARs Islamic finance
platform, armed the central bank.
17
Issuer
Obligor
Size of issue
Tenor
Issuance price
and profit rate
Payment
Currency
Maturity date
Lead managers
Semi-annual
US dollar
3rd June 2020
HSBC, Standard
Chartered, National
Bank of Abu Dhabi,
CIMB
Co-managers
BOCOM Hong Kong
Branch, Maybank, Hong
Leong Islamic Bank,
NCB Capital
Bookrunners
HSBC, Standard
Chartered, National
Bank of Abu Dhabi,
CIMB
Governing law
English/Hong Kong law
Legal advisors
Allen & Overy (issuer
counsel)
Linklaters (arrangers
counsel)
Listing
Hong Kong Stock
Exchange/Bursa
Malaysia (Exempt
Regime)/NASDAQ
Dubai
Underlying assets Selected units in
government-owned
buildings and Shariah
compliant commodities
Rating
AAA (S&P)/Aa1
(Moodys)
Structure
Wakalah
Investor
By geography: Asia
breakdown
(43%), Middle East
(42%), Europe (15%)
By investor type: Banks
(74%), central bank/
sovereign wealth funds
(23%), others (3%)
SHARIAH
PRONOUNCEMENT
This Fatwa is brought to you exclusively by IFN in collaboration with Dar Al Sharia Legal & Financial Consultancy-Dubai. The Fatwa
appearing in this space was obtained by Dar Al Sharia for issues faced by their clients and the documents stated in the Fatwa were
developed at Dar Al Sharia. This Fatwa was compiled by Dr Muhiuddin Ghazi.
www.daralsharia.com
Query:
An Islamic bank has approved a Mudarabah facility for a customer whereby the customer will receive Mudarabah capital
from the bank for investment in Shariah compliant business activities and the realized profit shall be distributed between
the Islamic bank and the customer as per an agreed ratio.
The Mudarabah facility is approved for a period of one year; however, the Islamic bank would like to explore the possibility
of receiving the Mudarabah profit on a quarterly basis, rather than waiting for the maturity of the Mudarabah facility after a
year.
Shariah guidance is sought in this regard keeping in consideration that the customer has no objection to the banks desire.
Pronouncement:
As per Shariah principles governing Mudarabah transactions, the Mudarabah profit can be distributed once it is realized and
the only way to realize the profit is the liquidation of the Mudarabah capital.
Such liquidation may either be actual by converting the Mudarabah assets into cash by way of sale to a third party, or on a
constructive basis by evaluation of the Mudarabah investment as per the current market price.
If the customer considers that it will be possible to liquidate the Mudarabah assets quarterly since the nature of the
Mudarabah project allows it, then the bank can agree with the customer in the Mudarabah agreement that the Mudarabah
investment shall be liquidated for each quarter on the agreed liquidation date, and in case the starting Mudarabah capital
remains intact and the profit has been realized over and above the capital, the actual realized profit shall be distributed
between the parties as per the agreed ratio and a new Mudarabah transaction shall take place based on the new Mudarabah
agreement and by reinvesting the Mudarabah capital by the parties for the subsequent quarter.
However, if actual or constructive liquidation of the Mudarabah facility is not practically possible on each quarter, then the
parties may agree on a periodic distribution of the Mudarabah profit on the basis of on account distribution, provided
that the parties believe the Mudarabah investment continues to remain profitable and there is adequate cash to allow such
distribution.
It is important to note that the on account profit distribution must not be considered as the final profit distribution.
Therefore, a final liquidation of the Mudarabah investment shall be required at the end of the Mudarabah term, and the
amount which was distributed between the parties in advance on the on account basis shall be subject to adjustment that
commensurate with the actual results of the Mudarabah investment.
As such, if it is ascertained that the Islamic bank or the customer was paid in excess of its share of profit, the bank or the
customer shall be required to return the excess amount to the other party.
18
IFN
IFNCOUNTRY
SECTOR
CORRESPONDENTS
One belt, one road
HONG KONG
By Amirali Bakirali Nasir
Prophet Mohammed (SAW) had guided
people to go to China to learn. Was the
advice to go by sea or by road? Either
way, if the focus was on China, then
all roads lead to China. The road could
be a silk road to opportunities for
investments in accordance with Shariah.
19
IFN COUNTRY
CORRESPONDENTS
Taking a closer look at Waratah
Chart 1: Revenue and expense of WGO (2010-14)
By Dr George Mickhail
Revenue
798,316.00
125,332.00
2011
12,532.00
2012
2013
2014
-1,061,191.00
-2,486,266.00
-6,597,472.00
-9,038,037.00
-15,560,000.00
Source: Authors own analysis
Chart 2: Share performance of WGO on the ASX
WGO
-94.87%
5D 1M 3M 6M YTD 1Y 5Y 10Y ALL
+ 300%
+ 200%
+ 100%
0%
- 100%
2010
2011
2012
2013
2014
May 15
May 14
Sep 13
Jan 13
Sep 11
Jan 11
- 200%
Jan 10
Expense
% Change
91,286.00
2010
Jan 09
108,809.00
May 12
AUSTRALIA
2015
Source: ASX.com.au
20
IFN
IFNCOUNTRY
SECTOR
CORRESPONDENTS
Takaful operational guidelines
KENYA
By Mona Doshi
There are new guidelines drafted by
the Insurance Regulatory Authority
(Authority) to permit insurance
companies in Kenya to open Takaful
windows in a similar fashion to the
way conventional banks in Kenya are
opening Islamic banking windows. The
Authority has recognized that Takaful
is one of the ways to increase insurance
penetration in Kenya and increase
the contribution of insurance to the
countrys GDP.
It has therefore issued Takaful
Operational Guidelines (Guidelines),
which are still awaiting parliamentary
approval, to provide guidance for
Takaful operators and establish duties
and responsibilities for such operators.
The Guidelines also set out the manner
in which a Takaful window operator will
conduct itself so that the Takaful business
is totally separate from the conventional
business and there are separate financial
reporting requirements for Takaful
windows from their parent firm.
It was expected that the Guidelines
would come into force on the 1st
The Authority
has recognized
that Takaful is
one of the ways to
increase insurance
penetration
in Kenya
Blue for go
REAL ESTATE
By Philip Churchill
I havent broached politics before, but
here goesI was absolutely delighted
that the Conservatives managed to
achieve a majority in the UK election
two weeks ago, and so, I firmly believe,
were many Islamic investors.
In visits to the Middle East and
Malaysia, investors had been asking
about what I thought would happen
for the past six months or so. I had
been expecting another coalition
government, but had found an article
in The Economist very interesting,
which gave the theory of Shy
Conservative Voters, who will not
reveal their plans to pollsters, but will
put a cross next to the blue candidate
when actually voting.
21
IFN SECTOR
CORRESPONDENTS
The importance of the Sukuk market for
the Takaful industry
TAKAFUL & RE-TAKAFUL
By Dr Sutan Emir Hidayat
Being the Shariah compliant
alternative to insurance, the activities
of Takaful are also divided into
underwriting and investment.
Like insurance companies, Takaful
companies also invest the funds
collected from policyholders into an
investment portfolio. The dierence
is that the Takaful fund can only
be invested in Shariah compliant
investment avenues.
Sukuk default
or a near
default case will
surely affect the
investment income
of Takaful
companies
One of the important investment
avenues for Takaful companies is the
Sukuk market. Currently, despite its
double-digit growth during recent
years, the Sukuk market is still far
less developed than the conventional
bond market. This situation leaves
Islamic financial institutions (IFIs)
including Takaful companies with
limited investment options. As a result,
the situation creates diculties for the
operators to establish a good Sukuk
portfolio.
The situation gets worse when there is
a default or near-default case made by
a Sukuk originator. The recent case of
1Malaysia Development (1MDB) can be
used as an example. In 2009, Syarikat
Takaful Malaysia invested RM85
million (US$23.3 million) in a 30-year
tenure Sukuk issued by Terengganu
Investment Authority, now known
as 1MDB. This long-term investment
currently represents around 2-3%
of the total companys assets. Even
though it is relatively small, the default
Linkedin/
ISLAMICFINANCENEWS
22
TREASURY PRODUCTS:
Nafith ALHersh Nazzal, certified financial & investment
advisor
IFN Correspondents are experts in their respective fields
and are selected by Islamic Finance news to contribute
designated short sector reports. For more information
about becoming an IFN Correspondent, please contact
sasikala.thiagaraja@redmoneygroup.com
SPECIAL
REPORT
A third party
debt order
may only be issued
in respect of a
debt
The person in whose favor the judgment
is obtained is called the judgment
creditor. The person against whom
the judgment is entered is called the
judgment debtor. A third party may
have debt due or accruing due to the
judgment debtor. Upon the application
of the judgment creditor, the court may
make a final order requiring the third
party to pay the judgment creditor the
amount of any debt due or accruing due
to the judgment debtor from the third
party. The amount payable by the third
party is limited to the judgment amount
owing by the judgment debtor to the
judgment creditor and the costs of the
third party debt order proceedings. The
third party would be discharged of his
debt obligation to the judgment debtor
upon payment to the judgment creditor
23
continued...
SPECIAL
REPORT
Continued
24
In an Islamic
bank, not all
accounts opened by
the customers for
placement of money
with the bank create
a debt obligation on
the part of the
bank
Conclusion
A third party debt order may only be
issued in respect of a debt. Against
conventional banks, this order is
normally taken in respect of deposit and
current accounts because these accounts
create a debt obligation on the part of the
bank to the customer. However, in an
Islamic bank, not all accounts opened by
the customers for placement of money
with the bank create a debt obligation on
the part of the bank. The nature of the
relationship between the bank and the
customer created by the opening of the
accounts in an Islamic bank must be
examined to determine whether the
accounts may be subjected to the third
party debt order proceedings.
Abdullah Abdul Rahman is a partner
(Dispute Resolution & Islamic Finance) at
Cheang & Ari while Apnizan Abdullah
is a PhD candidate at the International
Islamic University Malaysia. They can be
contacted at abdullah@cheangari.com and
hureen1508@yahoo.com respectively.
SPECIAL
REPORT
Lease to purchase
Fair enough, you might say, but what
does all that have to do with Islamic
finance and the rejection of the notions of
usury? Well, first you need to remember
that the Lease To Purchase model we
use creates interest-free financing for
Muslims that want to enjoy all the rights
of homeownership in the US and Canada
without running afoul of Shariah law.
It is also important to note the contract
upholds the basic duties, rights and
obligations of a conventional mortgage
while retaining the tax deductibility
benefits.
An example of a lease works this
way. After selecting the property, the
individual puts together a downpayment
on the property that is traditionally
3.5% to 20% or even higher if the person
RESEARCH REPORT?
25
COUNTRY
FEATURE
The private
sector is
and will remain
the leverage of
Luxembourgs
governmental
positioning towards
the world of Islamic
inance
At the same time, Gramegna signed on
the 3rd March 2015 an MoU with his UAE
counterpart Obeid Humaid Al-Tayer.
The relationship materialized within the
framework of development not only in
Islamic finance/banking synergies and
best practices exchange but also on a
larger scale, which will help maintain
Luxembourg as the most attractive
financial place in continental Europe for
the development of the Islamic finance
industry.
In fact, from a more general point of
view, such eorts are developed by
On the ground
While the Islamic finance industry
is expanding in Luxembourg, the
expansion of the consulting and advisory
sector proper to the industry is not to be
underestimated, as it starts exporting its
knowledge and expertise abroad.
It is worth noting that Luxembourg
has seen the emergence of some very
specialized Islamic finance consulting
boutique advisory firms not only
promoting and focusing on this
particular niche, but making Islamic
finance their sole core business, taking
advantage of the expertise they have
been developing for close to a decade.
The scope of the expertise goes from
administration services to product
structuring, encompassing all capabilities
needed to nurture the development of
a strong onshore Shariah compliant
investment activity. Considering such
availability of skills, one can definitely
say that the private sector is and will
remain the leverage of Luxembourgs
26
NEWS
DEALS
27
NEWS
Malaysias GII oversubscribed
MALAYSIA: The Malaysian government
on the 29th May issued government
investment issue (GII) Murabahah
of RM3 billion (US$818.98 million),
receiving 264 bids amounting to RM6.26
billion (US$1.71 billion), according to
an announcement on Bank Negara
Malaysias website.
DEAL TRACKER
EXPECTED DATE
COMPANYS NAME
SIZE
STRUCTURE
TBA
SAR1 billion
Sukuk
ANNOUNCEMENT
DATE
29th May 2015
TBA
US$3 billion
Sukuk
Government of Oman
US$1 billion
Sukuk
US$200 million
Sukuk
Government of Indonesia
IDR10 trillion
Sukuk
TBA
Masraf Al Rayan
TBA
Sukuk
TBA
AEON Credit
RM1 billion
Sukuk
Murabahah
TBA
TBA
Sukuk
TBA
Government of Oman
OMR200 million
Sukuk
AFRICA
AMERICAS
Arcapita divests
28
NEWS
ASIA
www.REDmoneytraining.com | dubaicourse@redmoneygroup.com
29
NEWS
GLOBAL
Infrastructure megabank on
the horizon
GLOBAL: Indonesia and Turkey have
pledged a minimum of US$300 million
each to the proposed Shariah compliant
infrastructure bank to be co-founded
with the IDB, reported Indonesia
Investments quoting Indonesias finance
minister.
The proposition of an Islamic megabank
has been on the cards since 2013. All
parties involved were said to have
conducted ongoing discussions on the
feasibility of setting up the megabank
(See IFN Report Vol 12 Issue 07: Islamic
megabank: A redundancy or a need?).
University of Bolton-Aafaq
Islamic Finance collaboration
MIDDLE EAST
30
NEWS
Alizz expands
st
ASSET
MANAGEMENT
Waha Capital plans Islamic
fund
RESULTS
BIMB Holdings
MALAYSIA: According to its financial
statements, BIMB Holdings registered a
pre-tax profit of US$220.3 million in the
first quarter of the year, an increase from
the US$194.39 million recorded in the
corresponding period of 2014.
Labuan IBFC
MALAYSIA: The Labuan International
Business and Financial Center (Labuan
IBFC) generated a 28% growth in total
Islamic financing in 2014 to US$993.3
million. According to the Labuan
Financial Services Authority (Labuan
FSA)s annual report, Labuan FSAs
strategic directions from 2015-17 will
entail enhancing the development of
Islamic finance, creating synergy for
PIDM
MALAYSIA: Perbadanan Insurance
Deposit Malaysia (PIDM), or Malaysia
Deposit Insurance Corporation, reported
a net surplus of RM290.8 million
(US$79.63 million) for the year 2014,
against a budged of RM261 million
(US$71.47 million). In a statement to
IFN, the government agency which
administers the Deposit Insurance
System and Takaful and Insurance
Benefits Protection System, said that
the four Takaful and Insurance Benefits
Protection Funds stood at RM1.23 billion
(US$336.8 million) as at the end of 2014,
registering a 7% year-on-year growth;
while the deposit insurance funds (one
conventional and one Islamic) amounted
31
Maybank
MALAYSIA: Maybanks Islamic banking
business recorded a 15.4% increase
in total income to RM932.7 million
(US$255.39 million) in the first quarter.
In a statement to IFN, the bank armed
that Shariah compliant finance now
constitutes 46.3% of total domestic
financing for Maybank Group, a rise
from 43.8% in December 2014. Maybank
Group for the first three months saw
net profit grow 6.2% to RM1.7 billion
(US$465.5 million).
The groups Takaful and insurance arm
Etiqa Insurance and Takaful recorded a
9.5% accretion in total general insurance/
Takaful premium and 4.1% increase
in total life insurance/Family Takaful
premium in the first quarter. Pre-tax
profit dropped by more than half to
RM49.89 million (US$13.66 million) from
RM141.22 million (US$38.67 million)
a year earlier due to lower equity
investment gains and decline in MGS/
GII yields. Total assets reached RM27.62
billion (US$7.56 billion), marking a 4.8%
growth from the first quarter of 2014.
NEWS
Al-Madina For Finance &
Investment Co
KUWAIT: Shariah compliant Al-Madina
For Finance & Investment Co for the
first quarter of 2015 reduced net loss to
KWD2.07 million (US$6.82 million) from
KWD7.09 million (US$23.35 million)
the same period last year. Acccording
to a bourse filing, the companys total
assets as at the 31st March 2015 stood at
KWD74.41 million (US$245.09 million), a
31.35% year-on-year drop.
TAKAFUL
IFN ONLINE
DIRECTORY
Europe Forum
Topics to be discussed:
Crowdfunding: The Birth of a New Asset Class?
Cross Border Linkages and Opportunities between Asia and Europe
Key Growth Markets for Islamic Finance in Europe
Reviewing Recent Changes to Legal & Regulatory Infrastructure Impacting Islamic Finance in Europe
What Initiatives Exist to Develop Talent and Human Capital in the Islamic Finance Services
Shariah- Compliant Capital Financing: New Assets and Structures
LEAD PARTNER
ASSOCIATE PARTNERS
IN ASSOCIATION WITH
EXECUTIVE PARTNERS
LANYARDS SPONSOR
32
MEDIA PARTNERS
NEWS
RATINGS
MOVES
Commercial Bank
International
Bank Dhofar
QIIC upgraded
www.islamicnancetraining.com
33
DEAL TRACKER
Expected date
Company's name
Size
Structure
Announcement Date
TBA
SAR1 billion
Sukuk
TBA
US$3 billion
Sukuk
Government of Oman
US$1 billion
Sukuk
US$200 million
Sukuk
26 May 2015
Government of Indonesia
IDR10 trillion
Sukuk
TBA
Masraf Al Rayan
TBA
Sukuk
TBA
AEON Credit
RM1 billion
Sukuk Murabahah
TBA
TBA
Sukuk
TBA
Government of Oman
OMR200 million
Sukuk
TBA
TBA
Sukuk
2 quarter 2015
SAR3.9 billion
Sukuk
TBA
Riyad Bank
SAR4 billion
Sukuk
Jun-15
IDR500 billion
Sukuk
Government of Egypt
TBA
Sukuk
2015
XOF300 billion
Sukuk
2016
Government of Kazakhstan
TBA
Sukuk
TBA
RM1 billion
Sukuk
TBA
Taliworks Corporation
RM210 million
Sukuk Murabahah
TBA
Government of Senegal
TBA
Sukuk
TBA
Oman Telecommunications
TBA
Sukuk
TBA
Zorlu Energy
TRY100 million
Sukuk
TBA
Turkiye Finans
RM2.05 billion
Sukuk
TBA
Government of Jordan
JOD400-500 million
Sukuk
TBA
Bank Muscat
OMR500 million
Sukuk
24 March 2015
Government of Indonesia
IDR2 trillion
Sukuk
Apr-15
Masraf Al Rayan
TBA
Sukuk
Government of UAE
TBA
BNI Syariah
IDR500-750 billion
Sukuk
TBA
Treet Corporation
PKR539.51 million
Sukuk
2015
Sukuk
End of March
SAR3.9 billion
Sukuk
TBA
TBA
Sukuk
TBA
Tulip Maple
US$750 million
Sukuk
TBA
Khazanah Nasional
RM1 billion
Sukuk
2015
US$230 million
Sukuk
2015
Garuda Indonesia
US$500 million
Sukuk
TBA
IDB
TBA
Sukuk
TBA
QAR5 billion
Sukuk
Government of Indonesia
IDR5 billion
Sukuk
TBA
Al Baraka Bank
TBA
Sukuk
Turkish Treasury
TRL1.8 billion
Sukuk Ijarah
TBA
Government of Malaysia
TBA
Sukuk
2016
TBA
Sukuk
3 quarter 2015
SGI-Mitabu
AU$150 million
Sukuk
TBA
US$ 7 billion
Sukuk
TBA
TBA
Sukuk
TBA
QAR3 billion
Sukuk
Government of Indonesia
IDR2 trillion
Sukuk
th
nd
th
rd
th
10 February 2015
34
SHARIAH INDEXES
REDmoney Asia ex. Japan
All Cap
6 Months
Large Cap
Medium Cap
REDmoney Europe
Small Cap
All Cap
2200
1200
1890
1120
1580
1040
1270
960
960
880
650
800
Dec
Jan
Feb
Mar
Apr
REDmoney GCC
All Cap
May
6 Months
Large Cap
Medium Cap
All Cap
Small Cap
2100
1140
1816
980
1532
820
1248
660
964
Dec Jan
Feb
Mar
Apr
REDmoney MENA
All Cap
680
May
6 Months
Large Cap
Medium Cap
1020
1960
890
1670
760
1380
630
1090
Feb
Mar
Apr
Dec Jan
All Cap
Small Cap
2250
Dec Jan
Feb
Medium Cap
Mar
Apr
800
May
Dec Jan
Small Cap
May
6 Months
Large Cap
Feb
Medium Cap
Mar
Apr
REDmoney US
1150
500
Large Cap
REDmoney Global
1300
500
Dec Jan
6 Months
Small Cap
May
6 Months
Large Cap
Feb
Mar
Medium Cap
Apr
Small Cap
May
6 months
2100
2020
1940
1860
1780
1700
Dec-2014
Jan-2015
Feb-2015
Mar-2015
35
Apr-2015
May-2015
SHARIAH INDEXES
REDmoney Global Shariah Index Series (All Cap)
REDmoney Asia ex. Japan
REDmoney Europe
REDmoney GCC
6 Months
REDmoney Global
REDmoney MENA
REDmoney US
1400
1300
1230
1130
1060
960
890
790
720
620
550
Dec Jan
Feb
Mar
Apr
450
May
6 Months
Dec Jan
1900
1860
1550
1520
1200
1180
850
840
500
Feb
Mar
Apr
Mar
REDmoney Global
REDmoney MENA
REDmoney US
2200
Dec Jan
REDmoney Global
REDmoney MENA
REDmoney US
Apr
May
2250
500
Feb
6 Months
May
Dec Jan
Feb
6 Months
REDmoney Global
REDmoney MENA
REDmoney US
Mar
Apr
May
Telecomunication Services
2%
Utilities
2%
Basis Materials
15%
Consumer Goods Services
15%
Technology
14%
Energy
8%
Non-Cyclical
Consumer Goods Services
7%
Industrials
22%
Financials
4%
Healthcare
11%
The REDmoney Global Shariah Index Series powered by IdealRatings consists of a rich subset of global listed equities that adhere to clearly
defined and transparent Shariah guidelines defined by Shariyah Review Bureau in Jeddah, Saudi Arabia.
The REDmoney Shariah Indexes provides Islamic investors with an accurate and Shariah-specific equity performance benchmark with optimized
compliance credibility due to the intensive research conducted to ensure that index constituents do not conflict with the defined Shariah
requirements.
IdealRatings is the leading provider of Shariah investment decision support tools to investors globally, including asset managers, brokers, index
providers, and banks to empower them to develop, manage and monitor Shariah investment products and Shariah compliant funds. IdealRatings
is headquartered in San Francisco, California. For more information about IdealRatings visit: www.idealratings.com
For further information regarding REDmoney Indexes contact:
Andrew Morgan
Managing Director, REDmoney Group
RED
Email: Andrew.Morgan@REDmoneygroup.com
Tel +603 2162 7800
36
FUNDS TABLES
Eurekahedge North America Islamic Fund Index
155
145
135
125
Index Values
115
105
95
85
75
65
Apr-15
Jan-14
Oct-12
Jun-11
Mar-10
Dec-08
Aug-07
May-06
Feb-05
Oct-03
Jul-02
Apr-01
Dec-99
55
Fund Manager
Performance Measure
22.74
Pakistan
20.80
Turkey
17.49
Pakistan
14.19
Turkey
AmIslamic Growth
AmInvestment Management
9.08
Malaysia
8.49
Pakistan
7.70
Pakistan
AmIslamic Balanced
AmInvestment Management
7.40
Malaysia
AmInvestment Management
6.71
Malaysia
10
6.16
Malaysia
Fund Domicile
3.23
Based on 21.57% of funds which have reported May 2015 returns as at the 2nd June 2015
Top 10 Annualized Standard Deviation for ALL Funds since Inception
Fund
Fund Manager
Performance Measure
Fund Domicile
AmIttikal
AmInvestment Management
41.40
Malaysia
35.29
Ireland
AmPrecious Metals
AmInvestment Management
31.31
Malaysia
27.95
UAE
Al Meezan Mutual
26.69
Pakistan
26.65
Pakistan
23.56
Pakistan
23.22
Malaysia
Al Baraka
20.20
Egypt
10
BIMB i-Growth
19.73
Malaysia
8.29
Comprehensive data from Eurekahedge will now feature the overall top 10 global and regional funds based on a specific duration (yield to date, annualized returns,
monthly returns), Sharpe ratio as well as delve into specific asset classes in the global arena equity, fixed income, money market, commodity, global investing (which
would focus on funds investing with global mandate instead of a specific country or geographical region), fund of funds, real estate as well as the Sortino ratio. Each table
covering the duration, region, asset class and ratio will be featured on a five-week rotational basis.
37
FUNDS TABLES
Eurekahedge Islamic Fund Fixed Income Index over the last 1 year
180
103
170
102
160
101
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
May-15
Dec-14
Jul-14
Jan-14
Aug-13
Mar-13
Sep-12
Apr-12
95
Nov-11
90
May-11
96
Dec-10
100
Jul-10
97
Jan-10
110
Oct-14
98
Sep-14
120
99
Aug-14
130
100
Jul-14
140
Jun-14
Percentage
Percentage
150
May-14
Eurekahedge Islamic Fund Fixed Income Index over the last 5 years
Fund Manager
Performance Measure
Fund Domicile
1.84
Pakistan
AmBon Islam
AmInvestment Management
0.22
Malaysia
-0.01
Malaysia
-3.31
Malaysia
-4.21
Malaysia
0.07
Based on 19.23% of funds which have reported May 2015 returns as at the 2 June 2015
Top 10 Annualized Sortino Ratio for ALL Islamic Funds
Fund
Fund Manager
Performance Measure
58.32
Malaysia
25.36
Pakistan
3.29
Pakistan
2.57
Luxembourg
2.16
Turkey
1.78
Luxembourg
1.61
Pakistan
AmIslamic Balanced
AmInvestment Management
1.49
Malaysia
1.30
Turkey
10
AmIslamic Growth
AmInvestment Management
1.22
Malaysia
Fund Domicile
1.85
nd
Based on 23.33% of funds which have reported May 2015 returns as at the 2 June 2015
Contact Eurekahedge
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38
LEAGUE TABLES
Most Recent Global Sukuk
Priced
Issuer
Nationality Instrument
28th May 2015 Hong Kong
Hong Kong Sukuk
Sukuk 2015
27th May 2015 Garuda Indonesia Indonesia
Sukuk
Global Sukuk
Market
Euro market
public issue
Euro market
public issue
Benih Restu
Malaysia
Sukuk
Perusahaan
Penerbit SBSN
Indonesia III
Dubai Islamic
Bank
Indonesia
Sukuk
UAE
Sukuk
Euro market
public issue
750
Malaysia
Sukuk
280
Jambatan Kedua
Malaysia
Sukuk
Noor Bank
UAE
Sukuk
Domestic market
public issue
Domestic market
public issue
Euro market
public issue
Aman Sukuk
Malaysia
Sukuk
140
Malaysia
Sukuk
Malaysia
Sovereign Sukuk
Point Zone (M)
Malaysia
Sukuk
Domestic market
public issue
Euro market
public issue
Domestic market
public issue
Khadrawy
UAE
Sukuk
Euro market
public issue
913
Danga Capital
Malaysia
Sukuk
547
Government of
Ras Al Khaimah
DanaInfra
Nasional
Mah Sing Group
UAE
Sukuk
Malaysia
Sukuk
Malaysia
Sukuk
HSBC Amanah
Malaysia
Prasarana
Malaysia
United
Kingdom
Malaysia
Sukuk
Domestic market
public issue
Euro market
public issue
Domestic market
public issue
Domestic market
public issue
Domestic market
public issue
Domestic market
public issue
Petronas Global
Sukuk
Malaysia
Sukuk
Euro market
public issue
1,250
Sharjah Islamic
Bank
UAE
Corporate BondInvestment-Grade
Euro market
public issue
500
Sukuk
Value (US$bn)
10
8
1000
750
500
250
2
10
11
12
2010
2014
1,500
219
1,000
943
146
203
541
US$bn
US$m
Value (US$bn)
Avg Size (US$m)
18
600
16
500
14
12
400
10
300
8
200
6
4
100
2
0
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
1250
500
US$bn
12
560
39
2011
2012
2013
2014
LEAGUE TABLES
Top 30 Issuers of Global Sukuk
Issuer
Nationality Instrument Market
Sukuk
Domestic market
public issue
2,479
Sukuk
Euro market
public issue
1,750
Sukuk
Euro market
public issue
Euro market
public issue
1,500
12 Months
Iss Managers
(%)
8.4 Standard Chartered Bank, HSBC, CIMB Group, Emirates NBD,
JPMorgan, Dubai Islamic Bank
6.9 Standard Chartered Bank, Deutsche Bank, HSBC, National Bank
of Abu Dhabi, First Gulf Bank, Maybank, Gulf International
Bank, Natixis, CIMB Group, Saudi National Commercial Bank,
RHB Capital, Dubai Islamic Bank
6.0 Standard Chartered Bank, RHB Capital, Maybank, CIMB
Group, AmInvestment Bank, An Investment Bank, Bank Islam
Malaysia
4.2 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi,
Dubai Islamic Bank, Sharjah Islamic Bank, Emirates NBD, Al
Hilal Bank, Noor Bank, First Gulf Bank, Maybank
3.6 Standard Chartered Bank, HSBC, CIMB Group
1,250
3.0
Euro market
public issue
Euro market
public issue
Euro market
public issue
Euro market
public issue
1,000
2.4
1,000
2.4
1,000
2.4
1,000
2.4
Euro market
public issue
Domestic market
public issue
Domestic market
public issue
Euro market
public issue
1,000
2.4
992
2.4
948
2.3
913
2.2
Euro market
public issue
Euro market
public issue
750
1.8
750
1.8
Domestic market
public issue
Euro market
public issue
Euro market
public issue
Domestic market
public issue
Domestic market
public issue
Domestic market
public issue
Euro market
public issue
743
1.8
700
1.7
594
1.4
560
1.4
541
1.3
533
1.3
500
1.2
Euro market
public issue
Euro market
public issue
500
1.2
500
1.2
Euro market
public issue
Euro market
public issue
500
1.2
500
1.2
Euro market
public issue
Euro market
public issue
Euro market
public issue
500
1.2
500
1.2
500
1.2
41,532
100
1
2
Islamic Republic of
Pakistan
7 Hong Kong Sukuk
2015
7 Hong Kong Sukuk
2014
7 Hazine Mustesarligi
Varlik Kiralama
Anonim Sirketi
7 Government of Ras
Al Khaimah
12 Danga Capital
Sukuk
Sukuk
Sukuk
Pakistan
Sukuk
Hong
Kong
Hong
Kong
Turkey
Sukuk
Sukuk
UAE
Sukuk
Malaysia
Sukuk
Sukuk
15 Sharjah Sukuk
UAE
Sukuk
Sukuk
17 National Higher
Education Fund
18 Dubai International
Financial Centre
19 Mumtalakat Sukuk
Holding
20 Jambatan Kedua
Malaysia
Sukuk
UAE
Sukuk
Bahrain
Sukuk
Malaysia
Sukuk
Sukuk
22 Saudi Telecom
Saudi
Arabia
UAE
Sukuk
23 Republic of South
Africa
23 Noor Bank
South
Africa
UAE
Sukuk
23 Kuveyt Turk
Katilim Bankasi
23 JANY Sukuk
Turkey
Sukuk
US
Sukuk
23 IFFIm Sukuk
Sukuk
23 Flydubai
United
Kingdom
UAE
23 Al Hilal Bank
UAE
Sukuk
23 Sharjah Islamic
Bank
Sukuk
Sukuk
Sukuk
Sukuk
Sukuk
Euro market
public issue
Euro market
public issue
US$
(mln)
3,500
2,881
40
LEAGUE TABLES
Top Managers of Sukuk
Manager
12 Months
US$ (mln)
Iss
CIMB Group
6,527
56
15.7
HSBC
4,791
30
11.5
4,083
29
9.8
Saudi riyal
0.8
RHB Capital
3,592
45
8.7
Euro
0.6
Maybank
3,216
36
7.7
AmInvestment Bank
2,258
29
5.4
2,061
16
5.0
Malaysia
1,665
11
4.0
UAE
Emirates NBD
1,453
13
3.5
24.1
US dollar
15.6
Malaysian ringgit
1,332
3.2
11
JPMorgan
1,181
2.8
Hong Kong
12
Deutsche Bank
749
1.8
United Kingdom
13
Al Hilal Bank
697
1.7
14
Natixis
658
1.6
15
564
1.4
16
Noor Bank
547
1.3
17
An Investment Bank
525
1.3
18
507
1.2
19
472
1.1
20
BNP Paribas
442
1.1
21
405
1.0
22
345
10
0.8
23
328
0.8
24
291
0.7
25
287
0.7
26
QInvest
278
0.7
27
278
0.7
28
275
0.7
29
Barwa Bank
230
0.6
30
Morgan Stanley
207
0.5
41,532
136
100.0
4.3
3.7
2.3
Turkey
2.0
1.2
12 Months
12%
3%
4%
Finance
Government
8%
Transportation
43%
Construction/Building
Real Estate/Property
Other
30%
17.0
Indonesia
Citigroup
12 Months
7.9
Saudi Arabia
10
Total
12 Months
2010
2011
2012
2013
2014
US$ (million)
2,822
No
4
%
21.6
Legal Advisor
US$ (million)
No
6,439
26.2
1,606
12.3
3,984
16.2
HSBC
1,036
7.9
3,354
13.6
Riyad Bank
755
5.8
3,109
12.7
2,704
11.0
Linklaters
1,631
6.6
Cliord Chance
1,380
5.6
689
5.3
576
4.4
529
4.0
660
2.7
529
4.0
433
1.8
517
4.0
10
354
1.4
10
Alinma Bank
310
2.4
10
354
1.4
41
LEAGUE TABLES
Top Islamic Finance Related Financing Mandated Lead Arrangers
Ranking
12 Months
Mandated Lead Arranger
1
Samba Capital
US$ (mln)
No
1,258
7.8
12 Months
Credit Date
US$ (mln)
1,077
6.7
1,047
6.5
HSBC
1,012
6.3
898
5.6
816
5.0
Riyad Bank
816
5.0
758
10
4.7
Borrower
Nationality
Saudi Aramco
Saudi Arabia
9,999
Saudi Arabia
2,870
Saudi Arabia
2,350
Malaysia
2,239
Saudi Arabia
1,327
Alinma Bank
710
4.4
8 Sep 2014
UAE
1,100
10
577
3.6
UAE
1,100
11
561
3.5
12
Emirates NBD
468
2.9
Turkey
1,021
13
325
2.0
14
314
1.9
15
Al Rajhi Capital
310
1.9
16
Mashreqbank
286
1.8
17
279
1.7
18
ING
269
1.7
Saudi Arabia
19
Barwa Bank
261
1.6
UAE
20
247
1.5
21
217
1.3
22
UOB
215
22
RHB Capital
215
22
Maybank
22
Saudi Arabia
950
UAE
706
12 Months
No
7,104
43.9
4,116
13
25.4
Malaysia
2,239
13.8
Turkey
1,594
9.9
1.3
Qatar
500
3.1
1.3
India
272
1.7
215
1.3
Kuwait
261
1.6
CIMB Group
215
1.3
Indonesia
90
0.6
22
AmInvestment Bank
215
1.3
27
Al Hilal Bank
191
1.2
28
Citigroup
180
1.1
29
171
1.1
30
SABB
160
1.0
US$ (mln)
No
Finance
Mining
Professional Services
Utility & Energy
US$ bln 0
Maybank
2,239
25.2
Samba Capital
1,327
14.9
845
9.5
666
7.5
2014
Riyad Bank
666
7.5
2013
Alinma Bank
666
7.5
Emirates NBD
302
3.4
Noor Bank
225
2.5
2009
176
2.0
10
HSBC
161
1.8
2008
0%
0-3yrs
10
Citigroup
161
12 Months
US$ (mln)
2012
2011
2010
1.8
20%
3-5yrs
40%
5-7yrs
60%
80%
7-10yrs
100%
10+yrs
42
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9th 11th
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43
COMPANY INDEX
1Malaysia Development
11,22
90 North Real Estate Partners
21
Aabar Investment
11
Aafaq Islamic Finance
30
Aberdeen Islamic Asset Management
8
Abraaj Capital
4
Absa Islamic Banking
33
Abu Dhabi Islamic Bank
10,27,30
Agence Franaise de Dveloppement
30
Agriculture Investment Corporation
12
AIA PUBLIC Takaful
32
Al Baraka Bank Tunisia
31
Al Bayan Holding Company
33
Al Hilal Bank
27
Al Hilal Islamic Banking Services
33
Al Rajhi
15,19
Al Rajhi Bank Malaysia
32
Al Rayan Bank
16
Al-Baraka Bank Syria
31
Albilad
15
Aldwych Chambers
21
Alinma
15
Alizz Islamic Bank
31
Aljazira
15
Aljazira Capital
15
Alkhabeer Capital
4,16
Alkhair International Islamic Bank
33
Allen & Overy
17
Al-Madina For Finance & Investment Co
32
Amanie Holdings
20
AmInvestment Bank
29
Anjarwalla & Khanna
21
Arab Banking Corporation
30
Arcapita
4,28
Arcapita Bank
28
Asian Development Bank
19,30
Asian Infrastructure Investment Bank
19
Australia and New Zealand Banking Group
27
Bandar Malaysia
11
Bank Aceh
29
Bank Bosna International
12
Bank Dhofar
33
Bank Islam Malaysia
12
Bank Muamalat Malaysia
16
Bank Muscat
31
Bank Negara Malaysia
27,28,29
Bank of London and The Middle East
16
BIMB Holdings
31
BNP Paribas
27
BOCOM Hong Kong Branch
17
Bosera Asset Management
7
Bursa Malaysia
17,29
Cagamas
8,27
Canadian University Dubai
30
Capital Market Authority of Oman
14,27
Capital Market Authority of Saudi Arabia 15,16,28
Central Bank of Bahrain
27
Central Bank of the UAE
10,13,30
Cheang & Ari
24
CIMB
17
CIMB Islamic
1,8
Commercial Bank International
33
Commission for Academic
Accreditation of the UAE
30
Constellis Group
4
Dar Al Sharia Legal & Financial Consultancy 18
Dentons
30
Deutsche Bank
19,27
Dhaka Power Distribution Company
30
DIFC Investments
16
Dubai International Capital
4
Moodys
11,15,17,29,33
Morgan, Lewis & Bockius
3
Muscat Securities Market
33
Nakheel
22
NASDAQ Dubai
14,17,28
Nasirs Solicitors
19
National Amanah
28
National Bank (Kenya)
28
National Bank of Abu Dhabi
17,27,30
National Bank of Kuwait
4
National Commercial Bank
15
National Shipping Company of Saudi Arabia 28
Natsionalna Aktsionerna Kompaniia
Naftogaz Ukrainy
23
NCB Capital
17
Nomura Islamic Asset Management
31
Noor Bank
16,27,30
OCBC Al-Amin Bank
8
Olive Group
4
Path Solutions
28
Perhimpunan BMT Indonesia
27
Perusahaan Penerbit SBSN Indonesia III
14,28
PODS
28
Qatar International Islamic Bank
33
Qatar Islamic Insurance Company
33
QInvest
3,27
RA Holding Corp
28
RAM
33
RHB Islamic International Asset Management 31
Royal Bank of Scotland
11
S&P
17,30,33
S&P Dow Jones Indices
9
Saudi Arabia Monetary Agency
15
Saudi Binladin Group
27
Saudi British Bank
27
Saudi Electric
9
Sberbank
29
Securities Commission Malaysia
6,7,8,16,29
Sedco Capital
30
SEDCO Holding Group
16
Seera Investment Bank
30
Shamil Bank
19
SP Setia
27
Standard Chartered
16,17,27,30
Standard Chartered Saadiq
16
State Bank of Pakistan
29
STC Ventures
4
Swiss Bank Corporation
23,24
Syarikat Takaful Malaysia
22,31
Tadawul
15,27
Takaful Insurance of Africa
21
Terengganu Investment Authority
22
TH Plantations
27
Tilal Development Company
31
Topaz Energy and Marine
30
TowerBrook Capital Partners
28
TPG
4
Tun Razak Exchange
11
TVM Capital
4
UAE Banks Federation
30
United Bank of Albania
12
University College of Bahrain
22
University of Bolton
30
University of Wollongong
20
Waha Capital
31
Waratah Resources
20
Warba Bank
27
Ziraat Participation Bank
29
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