FWU Group awarded ‘Best Takaful Company’ at GIFA 2011

FWU Group, a leading global Takaful company, was awarded the best “Takaful Company of 2011” at the Global Islamic Financial Awards 2011 event, which took place during the Oman Islamic Economic Forum 2011 held in Al Bustan Ritz Carlton Hotel, Muscat.

The event was attended by prominent regional and global industry leaders and dignitaries, including  Yaseen Anwar, Governor of State Bank of Pakistan; Abdulaziz Al-Hanai, vice president of IDB; and Tun Abdullah Badawi, former prime minister of Malaysia.

Commenting after the awards ceremony, Manfred Dirrheimer, chairman and CEO of FWU Group, said: “Our leadership position in the industry is attributed to the successful and long-term strategic partnerships we have developed with local Takaful partners and the distribution agreements with major banks in each market.”

According to Dirrheimer, FWU Group’s unique business model, best product and process innovation, support and full after-sales service including training and customer risk profiling, were the key service quality parameters which helped the group win the award.

“We are honored to receive this award in Oman, a country that presents tremendous opportunities for Islamic finance,” said SohailJaffer, partner and head of International Business Development at FWU Group.”

The efforts deployed by the Sultanate are very encouraging, and the potential is promising. We foresee a bright outlook for the Takaful industry, and we look forward to replicating our successes in Oman and the entire region.”

FWU Group, which received 12 awards in the past and was recognized for its global Takaful expertise, specializes in white label Family Takaful unit-linked investments and offers its bank distribution partners a customized innovative Takaful product family, including savings, education, and marriage plans.

Banks are offered an open-investment architecture where they can incorporate their own Shari’ah-compliant funds into the investments universe. The company also provides a proprietary quantitative investment model for the monthly fund selection and allocation.


Noor Takaful named Best Takaful Operator

Noor Takaful, the Islamic insurance arm of Noor Investment Group was named Best Takaful Operator in the GCC region, at the CPI Islamic Business and Finance Awards, held recently in Dubai.

It is the second time in three years that Noor Takaful has won the award. Noor Takaful has now won seven industry awards since it was launched in 2009.

Dr Ahmed Al Janahi, Managing Director, Noor Takaful said: “Despite the turmoil in the global financial system, Noor Takaful has achieved sustained growth over the past three years and it has consistently out-performed its takaful peers in terms of gross written premiums.

Awards, such as this, remind us of the importance of continuing to deliver on our brand promise of excellence in everything we do, which has been and remains the cornerstone of our success.”

Parvaiz Siddiq, CEO, Noor Takaful, who received the award from Abdulla Al Mansouri, Chairman of financial publisher CPI said: “We are honoured to have won this prestigious award, for the second time in three years.

The region’s insurance landscape is extremely competitive and this award is a testament to our commitment to the highest service levels and providing the most effective and innovative insurance solutions to our current and prospective customers.”

Noor Takaful has committed itself to being at the forefront of the Takaful sector in the Middle East. Its contemporary approach to Islamic insurance has seen it provide a series of innovative products and services for its customers, including the GCC’s first e-Takaful service providing instant quotes and online payment facilities.

Islamic bonds – SA makes its move A possible sukuk

In a move that could position SA at the forefront of the global Islamic Sharia law-compliant sukuk (bond) market, national treasury has called on banks to submit proposals for the issue by government of a sukuk.

“A sukuk would create a benchmark for other emerging markets and corporates,” says treasury spokesman Bulelwa Boqwana.

The nature of the possible sukuk has yet to be clarified and banks involved in the tendering process are not permitted to divulge any information.

But a sukuk would differ markedly from a conventional bond. Islamic Finance Resource, an information service, explains that in their purest form sukuk are ownership claims on physical assets.

A sukuk issue would be to domestic and foreign investors and its size dependent on government’s funding requirements, to be unveiled in the next national budget, says Boqwana. That it would be a success seems assured.

“There is a lot of local and foreign interest in it,” she says.

For SA, a sukuk issue would open the door to a source of foreign investment beyond traditional Western funding, finance minister Pravin Gordhan said in a recent speech. Though not on the vast scale of the Western funding machine, the sukuk market is significant, with new issues in 2010 of US$50bn, Ernst & Young (E&Y) says. Sukuk issues hit $63bn in the first nine months of 2011, according to research firm Zawya Sukuk Monitor.

Behind the sukuk market there is also the huge Islamic financial services asset base, which E&Y puts at $1trillion. Deutsche Bank predicts this total could rise to $1,8trillion by 2016 and drive a significant increase in the global sukuk market, which now accounts for a mere 1% of all bonds in issue.

For Gordhan’s strategy to establish SA as the hub for Islamic product development in Africa, a sukuk issue would be a big step forward. But SA cannot afford to drag its feet. Kenya, which has expressed similar ambitions in Africa’s Islamic finance market, aims to issue its first government sukuk in June 2012. A $500m issue is planned.

Also in the running is Nigeria, which is set to issue its first government sukuk within 18 months. Senegal has also expressed interest in tapping into the sukuk market.


Crescent Wealth aims for $3bn pool by 2019

AUSTRALIA’S first Islamic fund manager Crescent Wealth is aiming high, but will it deliver?

The company “would be happy” with $3 billion under management by 2019, which represents nearly a quarter of the $13bn pool of funds expected to be allocated to Islamic fund managers by then.

That’s a big number given the Crescent Australian Equity Fund, which launched in October, had about $US5.5 million under management, but it isn’t insurmountable given Crescent is the first and only Australian wealth manager specialising in Islamic investing.

CAEF is its first of four planned funds, the others being an International Equity Fund, an Income Fund and a Diversified Property Fund.

All four will form Australia’s first Islamic superannuation option and will be open to both institutional and private investors and will target Muslim community organisations, high net worth individuals as well as institutions both in Australia and offshore.

The group’s recently announced advisory board members include former non-executive director of Citibank Emeritus Professor Dianne Yerbury, former Macquarie Group duo Ted Pretty and Moustafa Fahour, Aon Hewitt chief investment officer Janice Sengupta and deputy chair of WorkCover Nicholas Whitlam.

Aon Hewitt helped seed CAEF – which has a target size of $500m – with an initial investment from its $2 billion fund, the Aon Master Trust, which offers the option of ethical investing and screens out industries such as tobacco, alcohol and gambling.

But even with a growing demographic of Muslims in Australia, Islamic finance is expected to be slow taking off Down Under.


Baito Tower wins 3 awards in Nasser Al-Sabah for real estate excellence

Kuwait Finance House (KFH) Baitok Tower in Kuwait City won three awards from Sheikh Nasser Al-Sabah’s awards for real estate excellence in 2011.

The awards were granted to KFH for best management and best operation of smart towers, in addition to being best commercial market.

KFH AGM for Finanace Sector Emad Al-Thaqeb stated that this award underlines KFH’s pivotal role in the real estate field; especially in the fields of residential and investment real estate through setting up world-class shopping malls and markets.

He noted that the Real Estate Association formed an unbiased committee from engineering professors and representatives of some academic authorities, and that this committee shouldered its responsibility professionally.

He congratulated the winners and thanked the association for taking this initiative. He went on to say that this award is expected to improve quality of real estate projects and encourage the private sector to abide by international construction standards.

It is worth noting that Baitok Tower is located in Kuwait City next to KFH’s main office. The tower consists of 33 storeys and is 165 meters high. It also has four levels for car parking, and was built by Al-Modeer Al-Kuwaiti Holding Company.

Moreover, Al-Thaqeb stressed that KFH’s keenness to expand and develop the real estate market through offering Islamic financial solutions that help Kuwaiti families purchase the house of their dreams.


OnIslam & News Agencies

CAPE TOWN – As Islamic finance grows by leaps and bounds, South Africa National Treasury has invited banks to provide help in structuring the issuance of the government’s first Islamic bonds or Sukuk, in both local and international markets.

“There is a great interest in the Sukuk market,” Treasury Director-General Lungisa Fuzile said in a statement cited by SouthAfrica.info website on Wednesday, December 7.

According to the Treasury, the banking institutions were urged to provide advisory services and in the structuring and issuance of a government Islamic bond.

“This is the first step towards meeting the growing appetite for government backed Shari`ah compliant investments,” Fuzile added.

The successful bidder will also help in structuring, managing as well as coordinating the issuance of sukuk in South Africa for the first time.

Moreover, they will be responsible for obtaining relevant regulatory approvals, as well as securing a listing for the bond both locally and internationally.

The successful bidder will also have to market the bond to investors, indicate underwriting and market-making appetite, facilitate the book building process and provide any additional services required to successfully launch the bond.

Like other forms of Islamic financing tools, sukuk do not receive or pay interest.

It typically operates through actual transactions such as profit-sharing or leasing.

Companies that have issued Islamic bonds make payments to investors using profits from the underlying business, instead of paying interest.

The Sukuk market has reached $111.9 billion in the eight years to 2008, according to the International Islamic Financial Market.

Islam forbids Muslims from usury, receiving or paying interest on loans.

Transactions by Islamic banks must be backed by real assets — not shady repackaged subprime mortgages and banks cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.

Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.


Moderate Islamists claim Moroccan election win

RABAT, Nov 26 (Reuters) – Morocco’s Justice and Development Party (PJD) claimed victory on Saturday in a parliamentary election that should produce a stronger government after King Mohammed ceded some powers to prevent any spillover from Arab Spring uprisings.

The PJD, which finds its support largely among Morocco’s poor, would be the second moderate Islamist party to lead a North African government since the start of the region’s Arab Spring uprisings, following Tunisia.

But the party, which hopes to push Islamic finance but vows to steer clear of imposing a strict moral code on society, will have to join forces with others to form a government.

“Based on reports filed by our representatives at polling stations throughout the country, we are the winners. We won Rabat, Casablanca, Tangier, Kenitra, Sale, Beni Mellal and Sidi Ifni to cite just a few,” Lahcen Daodi, second in command of the moderate Islamist party, told Reuters.

“Our party has won the highest number of seats,” he said Government officials could not immediately confirm the party’s assertion.

The king revived a reform process this year hoping to sap the momentum out of a protest movement and avoid the violence-ridden revolts in Tunisia, Libya, Egypt, Yemen and Syria.

He has handed over more powers to the government, although he retains the final say on the economy, security and religion.

Some 13.6 million Moroccans out of a population of about 33 million were registered to vote in the country’s ninth election since independence from France in 1956.

Voter turnout stood at 45 percent, Interior Minister Taib Cherkaoui said, up from a record low in 2007 when only 37 percent of 15.5 million registered voters turned out. The ministry has not accounted for the change in registered voters.

The polls “took place under normal conditions and a under a climate of mobilisation marked by fair competition and respect of electoral laws”, Cherkaoui told reporters.

The first results will be issued later on Saturday, the minister added. In contrast to previous elections, Friday’s vote was expected to be a closely-run contest between PJD and a new coalition of liberals with close ties to the royal palace.

But Mustapha Al Khalfi, a member of PJD’s politburo, sounded a note of caution among the cries of victory.

“We have to wait for the final results because there was a lot of fraud, so we hope that it will not cost us what should be a resounding victory for our party,” he said.

Lahcen Haddad, a prominent member of the so-called Alliance for Democracy, declined to comment.


Driss Yazami, who heads the official National Council for Human Rights, told the private Aswat radio that observers had recorded violations, including some potential voters being given food. “It did not reach a scale that can affect the overall course of the polls,” Yazami said.


The king will pick the next prime minister from the party that wins the biggest number of seats. But whichever party or bloc comes first is unlikely to be able to form a government on its own.

PJD has said it aims to obtain a majority by joining forces with three parties in the current governing coalition, including the left-wing Socialist Union of Popular Forces (USFP) and the nationalist Istiqlal of Prime Minister Abbas Al Fassi.

Economists are keen to see the polls leading to the creation of a cohesive government that would be able to narrow a growing budget deficit, cut a 30-percent-plus youth unemployment rate and address the needs of 8.5 million destitute Moroccans.

Since becoming king in 1999, King Mohammed won international praise for his efforts to repair a dark legacy of human right abuses under the 38-year rule of his late father King Hassan. But his reform drive lost momentum over the last few years.

There remains a vocal minority who say his revived reforms are not enough. Thousands of people joined protests in several cities last weekend to back calls for a boycott of the election.

“Today marked a victory for the boycott,” said Najib Chawki, an activist with the February 20 Movement, which has been leading protests since February to demand a British- or Spanish-style monarchy and an end to corruption.

“Only 6 million out of 21 million Moroccans eligible to vote took part in the polls. This sends a strong signal to authorities that Moroccans are not buying the proposed reforms. We will not give up until our demands are met,” Chawki said.


Saudis invest $6bn to train professional elite

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights.

Saudi Arabia has spent $6bn this year on foreign study scholarships for almost 250,000 students and family members, its finance minister said, part of a huge public spending programme being rolled out amid turmoil in the wider Middle East.

Ibrahim al-Assaf, finance minister, said the education investments, while expensive, could help transform Saudi society by giving a needed boost to its cadres of trained engineers, lawyers, doctors and information technology specialists.

The largesse comes as the oil-rich kingdom grapples to implement an estimated $130bn spending package announced after – but not, officials say, in response to – the uprisings in the Arab world.

Saudi Arabia has not experienced mass revolts but it has faced protests in its eastern region, a youth unemployment problem and attacks by activists on what they say is the slow pace of political reform.”

Mr Assaf said in an interview that he did not “think the comparison is even there” with Arab countries where people have risen up against their leaders, partly because of economic grievances.

“The wealth [in Saudi Arabia] has been spread over the population … when it comes to housing, when it comes to welfare, when it comes to free education, free health, scholarships outside for all citizens,” the minister said.

Mr Assaf said the number of students on an overseas study scholarship named after King Abdullah, the Saudi monarch, had grown from a few thousand some years ago to about 120,000 this year, accompanied by about the same number of dependants. The minister said the spending – averaging about $25,000 per person this year – covered not just tuition fees but also other items such as living allowances, medical insurance and flights to and from home.

The scholarship programme was aimed at correcting a past failure to focus “on the right skills and the right education”, Mr Assaf added.

Some observers say the scholarship programme could have a big impact on the country’s political direction when the students come home.

The programme runs alongside large new investments in infrastructure and social benefits announced early this year whose long-term cost is unclear. A programme to build 500,000 houses is expected to begin next year.

One foreign businessman eager to be involved in the new projects said: “There is a feeding frenzy of companies and princes working out how the money will flow.”

Unemployment benefit payments of 2,000 riyals a month are due to be implemented after the start of the Islamic new year this week, while public sector workers have received a bonus equal to two months’ salary.

Economists say the kingdom also faces other significant drains on its finances, such as its notoriously heavy domestic energy consumption. Subsidies keep petrol so cheap that residents can fill the tank of a small car for as little as $10.

The largesse has led some analysts to forecast that even a country as oil-rich as Saudi Arabia, the world’s largest exporter of crude, would need international prices to stay near current highs of about $100 a barrel to sustain the spending boom.

The break-even oil price the kingdom requires to balance its budget will jump from $68 a barrel last year to $88 this year and $110 in 2015, according to estimates in March by the Institute of International Finance, a leading industry group.

Mr Assaf said estimates of a future budget break-even price of $80 a barrel or more were “not accurate”, adding that this year’s spending was “abnormal” because of the investment announcements. Analysts say Saudi Arabia also enjoys a huge cushion from it massive foreign exchange reserves.

Paul Gamble, head of research at Jadwa Investment, a Saudi bank, said: “They are going to last a decade comfortably – over which time they can change policies.”


Brokers expand as demand for Islamic finance soars

Private client interest in Islamic financial products is growing at record levels, the Middle Eastern head of Saxo Bank said today.

The Danish bank and online brokerage has begun offering Middle Eastern investors access to internationally-listed Islamic equity products, aiming to capitalise on the booming demand for Shariah-compliant cash and exchange-traded fund products.

The bank has partnered with Middle Eastern fund manager IdealRatings to identify compliant stocks and equity-based ETFs across 25 international exchanges, offering local clients access to a broader range of investment options. All stocks must be passed by a Shariah Review Bureau before being offered to investors, Saxo said.

Jakob Beck Thomsen, chief executive of Saxo’s Dubai office, said: “Middle Eastern flows are growing strongly. There’s a big local appetite for international equities and products, from both private and institutional clients.

“Mena activities now account for around 6% of our total revenues – double what they did a couple of years ago, even at a time of significant growth for us elsewhere. We continue to have a strong focus on the region and ambitious growth plans.”

Under Shariah law, Islamic banks are forbidden from charging interest on loan products. Excessive speculation or the creation of financial uncertainty for investors is also prohibited.

Not all states are subject to such doctrinaire rules, however. Iran, under its ruling Shia regime, offers investors open access to equities, commodities and a limited number of equity derivatives on its Tehran-based exchanges.

Other international brokers are known to be upping their headcount in the region, keen to offer investors access to the Middle East’s vast oil reserves and solvent capital markets, and offer local clients exposure to international products in return.

GFI Group, the US interdealer broker, has ramped up headcount in the region this year. Its Middle East franchise pioneered international investor access to Islamic bonds.

Thomsen added: “Islamic finance is still in its infancy. There’s still a lack of standardisation and agreement of investment rules. Despite that, the market is still growing at some 25% a year. There’s now more than $1 trillion invested globally in Islamic financial products.”


Dubai support less likely for JAFZA’s $2 billion Islamic bond

The 7.5 billion dirhams ($2.04 billion) JAFZA sukuk along with the $1.25 billion floating rate note from DIFC Investments, a unit of Dubai International Financial Centre, are considered among Dubai government-linked obligations in 2012 with the greatest chance of encountering repayment issues, Tommy Trask, director, corporate ratings, at S&P told reporters.

While the base assumption continued to be that both maturities would be met on time and in line with their original terms, Trask said, the ability for the Dubai authorities to step in with assistance for JAFZA was more complex and less likely.

“The difference between the two is there’s a higher likelihood of government intervention on DIFC than on JAFZA,” Trask said.

“In the case of JAFZA, it’s a strategic asset also but the way to support it is a bit more complex because of the legal structure.

It is owned by Dubai World and we have a precedent in the government supporting it financially but not sufficiently for it to avoid a restructuring which, under our criteria, would constitute a default.”

Dubai World got $9.3 billion of new capital from the Dubai government as part of its $25 billion restructuring last year, following the conglomerate’s shock announcement in November 2009 that it could not meet its debt obligations.

At 1115 GMT, the DIFC sukuk due in June was trading at 93.828 on the bid side, while the JAFZA paper , maturing in November 2012, was seen at 92.750.

A number of other regional corporates in the Gulf region have significant maturities in 2012, including Abu Dhabi’s Aldar Properties and Saudi real estate firm Dar Al Arkan , Trask said.

Refinancing these obligations would prove trickier due to the withdrawal of European banks from the region’s lending market, he added, although local banks are currently showing signs of filling the funding gap, S&P’s associate director, infrastructure finance Karim Nassif said.

“Last year, the proportion of debt investment into the region was probably more internationally biased versus local and regional banks”.

“Now there’s been a shift and, depending on who you talk to, there’s a consensus around 60/40 local versus international. So that puts the onus more on local banks going forward.” ($1 = 3.6730 UAE dirhams) (Reporting by David French; Editing by Dinesh Nair and Jon Loades-Carter)