"KFH-Research" wins Best Islamic Finance Research Firm Award from IFN

Al-Mukhaizeem: 15 awards bestowed since inception 6 years ago
Kuwait, November 8th 2013

"KFH-Research" wins Best Islamic Finance Research Firm Award from IFN

“KFH-Research” wins Best Islamic Finance Research Firm Award from IFN

KFH -Research LTD, a subsidiary of Kuwait Finance House ” KFH ” was awarded the Best Islamic Finance Research Firm Award from IFN, a leading Global Islamic Financial Magazine and News Service. This award was voted by the Islamic finance industry practitioners, clients, leading corporations, financial investors and issuers of sukuks. As such, the award is prestigious because KFH -Research was voted by KFH competitors and clients as Best provider of Global Research, beating other Global consultants and leading Banks in the GCC.

This award is the 15th award of Excellence bestowed on KFHR since inception 6 years ago.

KFH -Research Chairman Eng. Fahad Khaled Al-Mukhaizeem stated in a press release that bagging such award from a prestigious entity attests to the outstanding researches and reports that the company does and marks the unmatched global coverage, analysis, accuracy of forecasts and talent of the team at KFHR, based in Malaysia and Kuwait.

Al-Mukhaizeem explained that the company is working to strengthen the links between the bodies, economic research and statistical institutions in Kuwait and the Middle East with their counterparts around the world .

This will effectively support collaboration, and lead to expand and develop data study. He went on to say that the company also plays role in achieving institutional integration, and benefiting from the economic researches to meet the challenges and better understand the capital markets referring to the memorandum of understanding MoU inked with the Central Administration of Statistics (CAS) as an attest to the development of Islamic finance and research, not to mention the preparation of studies, statistics, and reports.

Moreover he mentioned the awards bagged which are Best Islamic Finance Research Firm 2013 – IFN, Best Islamic Research House 2013 – The Asset , Best Consulting Service 2013 – The Asset, Best Islamic Research House 2012 – The Asset, Best Consulting Service 2012 – The Asset, Best Islamic Finance Research House 2011 – The Asset, Best Islamic Research Firm 2011 – IFN, Contribution to Islamic Finance – International Islamic Finance Forum 2010, Outstanding Contribution to Islamic Finance – Failaka-Amanie Symposium 2010, Best Islamic Research Company 2010 – IFN, New Provider for Islamic Finance Research – KLIFF 2008, Contribution to Research in Islamic Finance 2009 – International Islamic Finance Forum 2009, Best Islamic Research Company 2009 – IFN, Best Islamic Research Company 2008 – IFN, Best Research in Islamic Finance – Master of Islamic Funds Award 2007.

It is worth noting that Kuwait Finance House ( KFH ) has established KFH -Research in Malaysia, in order to enrich the Islamic banking field through offering a base of specialized researches and studies.

-Ends-
© Press Release 2013

http://www.zawya.com/story/KFHResearch_wins_Best_Islamic_Finance_Research_Firm_Award_from_IFN-ZAWYA20131108040412/

Turkey to overcome secular qualms with Islamic bond

Turkey’s government plans its first-ever issue of Islamic bonds this year, overcoming sensitivities about Islamic finance in the secular republic as it seeks to tap a rich pool of investors flush with oil money.

A sovereign sukuk issue from an economy regarded as one of the most progressive and successful in the Muslim world would signal intent on Turkey’s part to play a bigger role in Islamic finance. The size of the global sukuk market is estimated at more than $100 billion.

“It will be like ringing a bell and attracting all the attention,” said Murat Cetinkaya, deputy chief executive for treasury at Kuveyt Turk, an Islamic bank that has been a trend-setter for corporate sukuk issues in Turkey.

“Other issuances will follow the sovereign and Turkey will be on the agenda in this market constantly…as a frequent issuer.”

Despite espousing Islamic values, Prime Minister Tayyip Erdogan’s government shied away from taking the plunge with a sukuk issue during its first decade in power, out of fear of giving ammunition to critics who accuse the ruling AK Party of seeking to roll back state secularism by stealth.

“For a few billion dollars of funding there could be negative results in domestic politics,” said a deputy chief executive at a leading Turkish bank, who declined to be named because of the political sensitivity of the subject.

In 2008, the Supreme Court came close to shutting down Erdogan’s AK Party after ruling it was a centre of Islamist activity. But since then, the government has won the upper hand over old foes in the military and judiciary.

Few Turks question the AK Party’s economic management, and having overseen a near tripling in per capita income, the party was re-elected for a third term in office last June.

Moreover, even borrowers outside the Islamic world have entered the sukuk market in the last few years, giving less reason for Turkey to hold back.

“Now the sukuk has become an instrument that even Germany and France are using,” the banker said. “And in domestic politics, Erdogan is much stronger.”

So there was hardly a murmur of dissent when Deputy Prime Minister Ali Babacan, who oversees the economy, announced last month that the government planned to issue a sovereign sukuk this year, using legislation already in place.

“Turkey could very easily issue a couple of billion dollars worth of sukuk. It will probably issue $500 million or $1 billion at first and see how it goes,” said Osman Akyuz, secretary general of the Participation Banks’ Association of Turkey.

“An issuance by the Treasury would provide depth to the instrument and it will be sold with confidence.”

Royal Bank of Scotland economist Timothy Ash, a Turkey watcher, was also upbeat. “The market is potentially big – guess the sovereign could easily raise several billion.”

Islamic finance bans the use of interest, so theoretically, investors in a sukuk acquire partial ownership of an asset and share in its returns rather than receiving a stream of coupon payments.

By any other name

Although the sukuk market is tiny compared to the trillions of dollars of conventional international bond issuance, sukuk have been a relatively stable source of funding during the global financial crisis because of their conservative Islamic investor base.

Because of secular sensitivities, Islamic banks are called “participation banks” in Turkey and sukuk are referred to as “participation certificates”.

The country has used Islamic finance methods since the late 1980s through private financial institutions that were recognized as participation banks in 2006. There are four participation banks now operating in Turkey: Albaraka Turk , Bank Asya, Kuveyt Turk and Turkiye Finans. Kuveyt Turk, a unit of Kuwait Finance House, issued the country’s first sukuk in 2010.

Last October, following legislative changes to accommodate sharia-compliant transactions, Kuveyt Turk issued another sukuk for $350 million, and the strong demand demonstrated Turkey’s potential to become a major fresh source of Islamic bonds for investors keen to diversify their portfolios.

Albaraka Turk, the Turkish unit of Bahrain’s Albaraka Banking Group, and Bank Asya have formulated plans for sukuk issues of as much as $500 million, but have so far held back because of weak market sentiment globally due to the European debt crisis.

Despite that, the Turkish economy’s buoyancy, which produced growth of over 8 percent last year, and high yields compared to other emerging markets have increased investor appetite for Turkish assets, including sovereign debt issues.

Possible prop for bridge project

Ratings agency Fitch said last month that plans by sovereign borrowers outside the Middle East and other largely Islamic regions to tap the sukuk market could meet pent-up demand from Islamic institutional investors and banks to diversify their bond holdings.

That is good news for Turkey as it needs backing for huge infrastructure projects, having run into difficulties due to an international financing crunch. The government was forced to cancel a tender in January for the North Marmara Motorway Project, which involves a highway looping north of Istanbul and includes construction of a third bridge across the Bosphorus strait dividing Turkey’s European and Asian sides.

In April, the government will launch a fresh tender, and some bankers see the sukuk market providing a possible solution to the financing problem.

“Turkey needs investments and the sovereign sukuk could be used for financing of some projects, especially the third Bosphorus Bridge and highway projects,” said Akyuz of the Participation Banks’ Association.

Not only could a sukuk be specifically designed for the project, according to Is Investment Strategist Ugur Kucuk, it would also pull in investors who want to avoid international capital market volatility.

“A sovereign sukuk issue which is indexed to revenues to one of the Bosphorus bridges, or to some highway revenues, could be both attractive for investors and for the Turkish Treasury doing its first issue,” said Kucuk.

http://thedailynewsegypt.com/stock-market/turkey-to-overcome-secular-qualms-with-islamic-bond.html

 

 

Jakarta Becomes Magnet of Shari`ah Assets

Taking a share of the booming Islamic finance industry, Indonesia is becoming a magnet of Shari`ah-compliant assets from all around the globe.

“We are on the lookout for any good Indonesian acquisition, if the price is right,” Mohamed Azahari Kamil, the Kuala Lumpur-based chief executive of Asian Finance Bank Bhd, the Malaysian unit of Qatar Islamic Bank, told the Gulf Times on Thursday, February 9.

“We have to be quick as the Indonesian market is becoming more competitive.”

Several banks from the Middle East and Europe are seeking to open branches in Indonesia, the world’s most populous Muslim country.

For instance, Al Rajhi Bank, Saudi Arabia’s largest, is mulling opening new branches in the country.

“The Indonesian market is certainly on our radar,” said Mudassir Amray, the bank’s head of wholesale banking in Kuala Lumpur.

“The size of the Muslim population, the country’s economic growth and investment-grade rating will help in attracting more diversified investors, particularly from the Middle East.”

Several Gulf banks as Qatar Islamic Bank, Kuwait Finance House and Standard Chartered Saadiq also have operations in the country.

Indonesia, the largest economy in South-east Asia, has been trying to develop its Islamic finance industry to catch up with neighboring Malaysia, the world’s biggest sukuk market.

Islamic finance in Indonesia has grown an average 38 percent annually over the past five years.

However, Islamic financial assets still account for less than 4 percent of total banking holdings in the country.

To help lure more Shari`ah-compliant assets, Bank Indonesia has proposed tax breaks to boost the Islamic finance industry in the country.

In 2010, the Indonesian government unveiled plans to issue billions of dollars of Islamic bonds (sukuk).

Sukuk, which conforms to Islam’s prohibition of usury, typically work as profit-sharing vehicles.

Firms that issue Sukuk make payments to investors using profits from the underlying business, instead of paying interest.

The money, however, can’t be invested in alcohol, gambling, tobacco, weapons or pork.

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

Global sales of sukuk have reached $6.6bn in 2012, from $2bn a year earlier, according to data compiled by Bloomberg.

Boom

Indonesian officials expect a boom in the Islamic finance industry in the country.

“We expect a Middle East bank to buy a big Islamic bank in Indonesia,” said Riawan Amin, chairman of the Indonesia Shari`ah Bank Association in Jakarta.

“This will change the face of Shari`ah-compliant banking in Indonesia.”

Dubai-based Standard Chartered Saadiq, an Islamic bank set up by the London-based lender in 2008, plans to add to the 11 branches offering Islamic services at PT Bank Permata, the Indonesian lender in which it owns a 44.5% stake.

“We have seen growth momentum in the Indonesia Islamic industry over the last two to three years,” said Wasim Saifi, the Singapore-based global head of Islamic and consumer banking.

“Along with capital, foreign banks can bring in expertise as Indonesia provides a very good opportunity looking at its population and growth.”

Starting almost three decades ago, the Islamic banking industry has made substantial growth and attracted the attention of investors and bankers across the world.

A long list of international institutions, including Citigroup, HSBC and Deutsche Bank, are going into the Islamic banking business.

Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.

http://www.onislam.net/english/news/asia-pacific/455748-indonesia-becomes-magnet-of-shariah-assets.html

Islamic finance solves economic problems, says KFH-Bahrain CEO

Kuwait Finance House-Bahrain CEO and MD Abdul Hakim Al-Khayyat said that Islamic banking has numerous advantages and capabilities that allow it to play a pivotal role in solving many economic problems in the GCC.

Al-Khayyat added that Islamic banking is not operating at full swing yet, either as a result of lack of legislations or opportunities.

He stressed that having a highly ethical Islamic financing system and the efficient collaboration among local and international institutions will contribute to the prosperity and development of the society and economy.

He went on to say that Islamic banking services have paved the way for the future, and have become one of the most important alternatives that many economies worldwide seek. He noted that Islamic financing is based on real long-term guarantees, since it relies on assets.

Moreover, he mentioned that governments need to issue more Sukuk, in order to provide short-term liquidity instruments.

However, since legislations that organise the issuance of Sukuk in some countries are lacking, this significant instrument has been rendered obsolete, which erodes the efforts of Islamic banks to help markets overcome their crises.

Furthermore, he explained that Islamic banks can play an efficient role in solving the housing problem through its role in construction projects and real estate development, not to mention several instruments that finance that sector, such as Murabaha, Ijara, and others.

He remarked that KFH-Bahrain shoulders several major real estate projects, such as Durrat Al-Bahrain residential and entertainment project that costs $3 billion. The project occupies 20 square kilometers, and is expected to be as big as Manama City once it is complete.

In addition, there is Al-Waha industrial project that establishes industrial compounds; thus increasing national income through attracting foreign investments. Diyar Al-Muharraq is another giant project that consists of residential and commercial units for people middle class and rich people.

http://www.cpifinancial.net/v2/News.aspx?v=1&aid=10296&sec=Islamic%20Finance

 

 

Islamic finance to be probed at key forum

MANAMA: The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the World Bank are co-hosting a key conference in Bahrain.

The two-day AAOIFI-World Bank Annual Conference on Islamic Banking and Finance will be held from Sunday at the Crowne Plaza.

It is being held under the auspices of the Central Bank of Bahrain.

The forum will discuss challenges in applying conventional international accounting standards, challenges in implementing Basel III capital adequacy standard, distribution of Islamic insurance surplus, potential of Islamic finance to promote international trade, and potential of real estate investment trusts in Islamic finance.

“AAOIFI is proud to organise the high-level annual conference which has become a key source of knowledge and information for central banks and regulatory authorities, Sharia scholars and finance industry professionals,” said AAOIFI secretary general Dr Mohammed Nedal Alchaar.

He added that the active involvement of the World Bank in organising the conference provided a clear indication on the growing importance of the Islamic finance industry and further confirmation of Bahrain’s position as a leading international Islamic finance centre.

The conference will be followed on Tuesday by an interactive workshop by the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

SWIFT is the organisation that provides an international platform for more than 9,000 member institutions, including Islamic financial institutions, in 209 countries to exchange standardised financial messages.

The workshop is on automation and standardised transaction processing for Islamic finance to highlight the ISO 15022 Murabaha messaging solution and discuss other potential messaging requirements for Islamic finance.

The major partner for the conference is National Commercial Bank.

The conference is also supported by Albaraka Banking Group, Bahrain Islamic Bank, Ernst & Young, Ithmaar Bank, Kuwait Finance House, Bahrain Institute of Banking and Finance and International Turnkey Solutions.

http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=315847

Kuveyt Turk prices $350 mln sukuk at par leads

Oct 20 (Reuters) – Kuveyt Turk, the Turkish arm of Kuwait Finance House , has priced its $350m five-year sukuk, lead managers said in a document on Thursday.

The paper priced at par with a spread of 447.5 basis points over midswaps and carried a profit rate of 5.875 percent.

HSBC Bank , Liquidity Management House and Standard Chartered were bookrunners on the transaction, with Abu Dhabi Islamic Bank and Commerzbank joining the trade in a lead manager capacity.

The sukuk has been rated BBB- by Fitch Ratings.

Last year, the Capital Markets Board of Turkey (SPK), the regulatory and supervisory authority in charge of the securities markets, published a statement setting the legal ground for sukuk issues by Turkish companies.

Turkey, which is careful to preserve its secular stance on politics and finance, refers to sukuks as participation certificates and Islamic banks are called participation banks.

http://www.reuters.com/article/2011/10/20/idUSL5E7LK50O20111020

KFH receives student delegation from UCLA to demonstrate Islamic banking

Kuwait Finance House (KFH) received an American delegation from UCLA University. The students met several KFH officials from various sectors, and a lecture was organized for the students to familiarize them with KFH’s long experience in Islamic banking, in addition to its achievements and contributions to the markets it operates in.

The students were also introduced to the differences between Islamic and conventional banking, Islamic services and products, and the outstanding success Islamic banking has achieved during the past few years.

 

The lecture was attended by Chairman of Liquidity Management House (LMH) Emad Al-Menaie, Deputy Manager of Public Relations and Marketing Department Saeed Tawfiqi, Nasser Al-Sanoussi, and Khaled Al-Otaibi.

 

The delegation is in Kuwait to discover Kuwait and its history, and to enrich their knowledge regarding various economic and commercial activities. It is worth noting that KFH is considered to be one of the most prestigious Islamic institutions in the region.

 

Moreover, Al-Menaie talked about the accomplishments made by LMH in Kuwait and overseas, including many issuances for international institutions, not to mention financing governments through Sukuk, such as the governments of Dubai and Ras Al-Khaima, and a German province.

 

He also discussed the Sukuk market and the growing demand that this market is witnessing by governmental and private institutions, in addition to pointing out KFH’s collaboration with other Islamic institutions.

 

Furthermore, Tawfiqi spoke about KFH’s history since it was established in 1978, in addition to its most significant milestones.

 

He revealed that KFH managed to make many local accomplishments, which served as a platform to launch KFH overseas. He applauded the initiative taken by the American students to communicate with their Kuwaiti counterparts, in addition to familiarizing themselves with Kuwaiti institutions and culture.

 

Al-Sanoussi talked about the Commercial Sector at KFH and its role in serving the society, in addition to its advantages and added value it offers to the market compared to similar activities of other banks. He noted that KFH is a pioneer in the consumer financing market in Kuwait. He went on to mention Islamic financing tools that include Murabaha, Ijara, and others, and highlighted Shuweikh cars showroom that managed to collect numerous agencies in one place.

 

The students interacted with KFH officials and asked about the methods and mechanisms followed in Islamic banking. They also praised KFH and its hospitality.

 

KFH Bahrain advising banks on mega merger

MANAMA: Kuwait Finance House – Bahrain (KFH-Bahrain) is advising three local Islamic investment banks that are looking to merge. Speaking at the opening of KFH-Bahrain’s ninth branch at Isa Town Mall yesterday, managing director and chief executive officer Abdulhakeem Alkhayyat said that when the three banks merged they would create a new entity with a capital of $400 million and assets of $500m which would give them a scale which would make them more competitive in the market.

He declined to name the banks but said an announcement about the merger would likely be made in the near future.

“Industry is recovering because the government is investing and spending money in the housing market and giving additional support to small and medium sized companies while helping the economy by increasing government salaries,” he said.

“That is helping the banking sector and other industries to achieve growth.”

The bank continued to broaden its presence in Bahrain’s competitive banking sector and strengthened its expansion plans with the official opening of its branch at Isa Town Mall.

Mr Alkhayyat along with senior bank officials and high-profile invited guests officially inaugurated the Isa Town branch.

“We are delighted with the opening of this branch as we will be able to provide our customers in Isa Town with an enhanced banking experience by offering them even greater convenience and flexibility at all times,” Mr Alkhayyat said.

Each of KFH-Bahrain’s nine branches utilise state-of-the-art technologies to serve their customers swiftly and efficiently with high-quality products and services that are Sharia-compliant.

“Thanks to a strategic initiative adopted to expand KFH-Bahrain’s presence in the local market, our customer base is growing at a rapid pace,” said executive manager and head of the banking group Khalid Rafea.

“We are also committed to ensuring that our customers are able to make better choices in how and where they conduct their banking activities.”

http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=313329

Islamic finance resists equity shift – may stunt growth

Photo

By Liau Y-Sing

KUALA LUMPUR (Reuters) – When Kuwait Finance House Malaysia helped develop a $1.3 billion real estate project in the country in 2005 as a partner in the deal, Islamic equity property ventures were a rarity.

Five years on, the bank is embarking on its fourth building project using a similar equity concept but few others in the industry want to follow the same path, reflecting Islamic finance’s slow and difficult shift away from debt instruments.

Debt funding’s dominance of sharia finance has earned the $1 trillion industry the tag of “copycat” and limited its growth as critics question its ability to offer a fairer way of sharing risks and rewards that truly distinguishes it from conventional banking.

“Profit-sharing or equity structures are the true way of doing Islamic financing,” said Siti Mariam Mohd Desa, Kuwait Finance Malaysia’s real estate advisory director.

“It is a different concept because if you were to give out straight loans, you may as well go to a conventional bank.”

As the global financial system emerges from the debt crisis and banks shy away from assuming added risks, practitioners want Islamic finance to rely more on partnership structures and less on straight financing which they say has created a brand of finance which is sharia compliant in form, but not in spirit.

They say equity financing such as musharaka and mudaraba are closer to the sharia’s aim of ensuring gains and losses are shared equitably and a shift back to it would help banks win new business beyond its traditional markets.

While Islamic finance has flourished in Muslim markets such as the Middle East and Malaysia, many non-Muslims are unconvinced, saying the industry differs from conventional banking only in name.

“We cannot add value in markets which are mimics of conventional markets. At the moment, it’s difficult to see the value-added,” said Safdar Alam, head of Islamic structuring at JP Morgan in Bahrain.

“It’s a real opportunity, with the increased awareness globally of Islamic finance, to demonstrate this value and the difference and benefits. This is a chance that we might miss if we don’t do this well quite quickly.”

But banks’ reluctance to bear the risk of projects funded, companies’ unwillingness to share profits and scarcity of banking capital make equity financing an unappealing proposition.

The recent property slump in the Gulf, where equity financing is more common, badly hit Islamic firms such as Bahrain’s Gulf Finance House and could compound banks’ fears of becoming project partners.

Kuwait Finance Malaysia, which uses the musharaka equity structure to develop real estate, had a non-performing financing level of 6.73 percent in September, more than thrice the industry average.

Its parent Kuwait Finance House, the Gulf state’s top Islamic bank, posted a 24 percent drop in net profit in 2009 to 118.74 million dinars.

NO RISK, NO REWARD

Equity financing models were born out of a belief in Islam that the financier must share the risks if he wants the rewards and that profits should be earned through enterprise.

While equity funding is commonly associated with higher returns, bankers say it may not necessarily be more profitable than debt as the latter allows for higher leverage.

Traditionally, popular Islamic debt-based instruments such as istisna and murabaha have been likened to interest-based loans where banks take limited risks and are guaranteed a return.

But as Islamic finance grew beyond traditional roles such as agriculture financing to funding government budgets and billion dollar real estate projects, some banks began leaning more towards debt instruments to limit their risks.

As banks’ capital grows scarce, they will be wary of parting with large sums to back equity ventures, said Mohammad Faiz Azmi, PriceWaterhouseCoopers’s global Islamic finance leader.

“On the demand side, the issue is are there enough corporates who are essentially willing to give up the upside?” Faiz said, referring to profit-sharing structures.

“The reality is that the people that would want to have equity forms of financing are usually the ones that you want to avoid lending money to anyway.”

Some practitioners say the push for more Islamic equity financing is ill-conceived.

“From the sharia’s perspective, there is no such evidence to support (the view) that Islamic banks or whoever wants to do business should do profit-sharing more than debt-based,” said sharia scholar Aznan Hasan, who advises Barclays Capital London and Malaysia’s stock exchange operator Bursa Malaysia.

“Whether it is debt or equity that suits you better, it depends on commercial and business decisions, not sharia matters.” ($1=3.205 Malaysian Ringgit)

(Editing by Kim Coghill)

(For more business news on Reuters Money visit www.reutersmoney.in)

http://in.reuters.com/article/businessNews/idINIndia-48026020100427?sp=true