Saudi Arabia makes Bond Sales to Fund Deficit, Saudi Arabia makes Bond Sales to Fund Deficit and Islamic Bank Finances Surge 107% in Oman. »
Jeremy Awori, MD Barclays Kenya stated Sharia compliant products should be seen in the context of the merits of their structure as opposed to being seen from a faith based perspective. He added risk management is easier when dealing with Sharia compliant structures due to core assets being used within the financing framework. »
Islamic banking has landed in Germany. The first bank to open in the country managed by the Islamic Sharia law has established its first office in Frankfurt, home to the ECB. »
Sovereign Update: Net foreign assets contracted for four quarters in a row to USD664.4bn in Jun-15, falling by USD72.6bn since their peak in Aug-14; Expectations of higher government debt of USD5.3bn to reduce their elevated budget deficit amid falling oil revenues, continuing government expenditure and war in Yemen. »
SOVEREIGN UPDATES: Fuel subsidies on gasoline and diesel will be abolished by 24% and 29% respectively effective 3rd August. We believe the rationalisation of subsidies could help to bolster government finance from plunge in global oil prices (as the government revenue has fallen about 50% in 2014) and would benefit the economy in the long run. »
Gulf based banks dominate global Islamic Bank rankings with Al Rajhi Bank maintaining its top ranking based on assets of over $82 billion, followed by Kuwait Finance House on $56.8 billion, Dubai Islamic Bank on $33.73 billion and Abu Dhabi Islamic Bank with $30.49 billion in assets. »
GCC Market Update by Rasameel. Over the last month banks in the UAE have preferred conventional bonds issuance whilst Saudi banks have taken the Sukuk route. »
Short Term Sukuk is Recycled money and does not equate to a market Correction. Bank Negara has been in previous years been a prolific issuer of short-term sukuk, which by its very nature is short dated paper with maturity dates of less than one year. It is misleading to use such sukuk to accurately represent market demand as such short term sukuk are re-issued multiple times through-out the year. »
A sub-sector of Islamic Banking which has not evolved as fast as the rest of the wider Sharia compliant financial industry is Islamic Asset Management. $3-4 trillion of wealth may be looking for a Sharia compliant home according to John Sandwick of Safa Invest, who sees potential in development of Islamic Asset Management sector. »
The Bloomberg Malaysia Sukuk Ex-MYR Total Return Index (BMSXMTR) inched lower by 0.05% during the week to 101.3 (vs. -0.02% to 101.38 in week prior). The Dow Jones Sukuk Total Return Index (DJSUKTXR) also dropped by 0.18% W-o-W to 154.7 (vs. +0.11% to 155.0), lowering YTD gains by 18bps to 1.46% (vs. +12bps to 1.65%). »
