Finance

The President, Abuja Chambers of Commerce and Industry (ACCI) Adetokunbo Kayode has urged Nigerian businesses to embrace the Halal financial economy and benefit from the $3trillion business funding used to finance businesses all over the world.

Kayode made this call during a press briefing on the Halal Expo 2020 scheduled for June at the ACCI venue in Abuja, stating that if an economy is as big as $3trillion for any part of the world that will embrace this economy then there is need for the nation’s industrial sector to key into it.

The ACCI President lamented the exploitation by the commercial banks most of who fix their interest rate at 25%, which is on the very high side.

Specifically, he said, the Bank of Industry, Development Bank of Nigeria DBN and other banks who claim they are supporting small and medium scale enterprises (SMEs) are actually strangulating businesses with their exorbitant interest rates.

He, however, said the Halal economy which is worth at least $3trillion, offers a lot of reliefs for prospective businesses out there. “The world is moving and we must move with the world, the Halal economy is huge and we must be of part of it. There is Halal fashion, food and a lot others, why should Nigeria not be part of it. We do not lose anything by being part of it. We can easily reach other African countries and even dominate through the Halal economy. It is still another way of opening doors of opportunity for Nigeria.”

While making a case for halal funding, he said, “As the President of the ACCI where all my people are SMEs and I see poverty I feel that we should charge non interest fee. If non interest finance comes by way of Halal finance all well and good. This is what is new and we must try it because we cannot continue to the same thing the same way every time and expect a different result.”

Doha, Qatar: H E Ali bin Ahmed Al Kuwari, Minister of Commerce and Industry, has stated that Qatar will take advantage of all available opportunities within promising industries, including the vibrant Islamic finance industry, in its ongoing efforts to diversify the local economy.

Delivering an opening speech at the 6th edition of the Doha Islamic Finance Conference in Doha yesterday, the Minister noted Islamic Finance forms one of the core pillars of the Qatari economy. “The financial sector in general and Islamic finance, in particular, remains one of the main pillars of the national economy, as we are still witnessing key measures being taken by our financial institutions such as the Qatar Financial Center inline with our firm commitment to enhance the economic superiority of the State and consolidate its position as a major destination in Islamic finance,” he said.

Highlighting the strength of Qatar’s Islamic finance sector, the Minister noted Qatar is the fifth largest Islamic finance market with banking assets amounting to $120bn, at a growth rate of more than 10 percent in 2018. Recently the Islamic Financial Development Index category issued by Thomson Reuters and the Islamic Corporation for the Development of the Private Sector ranked Qatar’s Islamic finance sector at 46.31 percent compared to the global average of 10.45 percent. The Qatari Islamic finance sector was included in the report of the World Economic Forum as one of the strongest sectors of Islamic finance besides Malaysia, Kuwait, Turkey, Indonesia, and Pakistan, he added.

The Minister said the Islamic finance sector in Qatar is currently witnessing an unprecedented state of recovery and prosperity. Citing the recently released annual Islamic Finance Report issued by the Qatar Financial Centre, he noted the country’s Islamic finance assets grew at a CAGR of 8 percent since 2015 to $129bn in H1 2019, constituting 33 percent of Qatar’s total financial system assets.

Islamic banks in the State of Qatar are actively continuing their work to take advantage of this technology to develop and expand their activities and enhance their capabilities to compete in global financial markets and improve their mechanisms for cross-border transactions, in addition to developing money market products and Sukuk and support in financing infrastructure projects, especially as the State of Qatar understands the importance of financial technology as a strategic tool capable of changing equations and transforming power centers in global financial markets in favor of Islamic finance.

The Minister hoped that the latest edition of the Doha Islamic Finance Conference will delve deeper into discussing the importance and impact of integrating financial technology in the Islamic finance space and that the discussions that the conference will witness will support the formation of a road map for the future.

Addressing the event, the Managing Director of Arwa Bank, Sheikh Mohammed bin Hamad bin Jassim Al-Thani noted the opening of the 6th Doha Islamic Finance Conference comes at a time when the Islamic finance industry is witnessing an important transformation.

For the first time, the world’s largest summit on the Islamic economy is coming to German-speaking Europe.

Hannover:  First announced by Deutsche Messe in the summer of 2019, HALAL HANNOVER, a new business and knowledge-sharing platform for the German-speaking halal community, has already made a name for itself well beyond Germany.

The three-day exhibition and Halal Hannover conference (6–8 March 2020) has also attracted the attention of the 56 member states of the Organisation for Islamic Cooperation (OIC).

The event’s conference program has been officially endorsed by Dubai Islamic Economy Development Centre (DIEDC) and has garnered further international influence with the addition of a Global Islamic Economy Summit (GIES) Round Table, set to take place on 6 March 2020. Now, the event assumes greater significance as it will mark the first time the international series of round tables on the Islamic economy is establishing a presence in German-speaking Europe.

Each GIES round table that takes place outside the UAE features experts from the UAE and the host region, providing an opportunity for dialogue and knowledge exchange between the Muslim and non-Muslim stakeholders of the Islamic Economy.

Owing to their geographic location, many Islamic countries are reliant on food imports from the West. The UAE is a case in point. As the home of a major international airport and some of the world’s leading seaports, the emirate of Dubai serves as the entry point for the large volume of goods – including halal products – that the country imports from Europe. Since 2013, DIEDC has been successfully working on implementing the strategy of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to establish Dubai as the global capital of the Islamic economy.

The GIES round table at HALAL HANNOVER will serve as a precursor to the next Global Islamic Economy Summit (GIES), to be held in Dubai on 9 and 10 November, 2020 on the sidelines of Expo2020 Dubai, under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum.

“The GIES round table is a major boost for HALAL HANNOVER,” said Christoph Schöllhammer, Deutsche Messe’s director for HALAL HANNOVER. “Dignitaries thought leaders and decision-makers from the international halal industry will gather at the event to discuss the benefits, opportunities, and challenges of the international market for halal products and services.”

The round table will take place from 2:30 p.m. to 4:30 p.m. on 6 March 2020 in the conference area of Hall 19/20 at the Hannover Exhibition Centre.

The conference component of HALAL HANNOVER will feature a varied and well-balanced line-up of speakers and topics. Spanning three full days, the event will provide a unique opportunity for attendees to explore current trends and developments in the halal economy and network with industry experts from Austria, Belgium, Croatia, the UAE, Germany, Malaysia, Spain, Switzerland, and Turkey. The program will offer a strong focus on certification and quality assurance of halal products, retail, logistics, Muslim travel, and Islamic banking. The conference presentations will be in both German and English.

For further information on the conference programme, please visit https://halal-messe.de/en/conference/

Crude oil production in Saudi Arabia slowed down considerably last year, from 10,643 BBL/D/1K in December 2018 to only 9,890 BBL/D/1K in November 2019. Steady drops in crude oil production may be attributed to several factors, such as the attendant impact on output, and attacks on the country’s oil fields.

Multiple reports suggest that Saudi Arabia has been trying to persuade other OPEC member nations to cut down production by as much as 400,000 barrels per day. But the Saudi government has denied this. OPEC, one of the world’s largest energy-focused alliances, has cut down its production by 1.2 million barrels (each day) since January of last year, which will be extended through to March 2020. OPEC member countries aim to maintain more stable oil prices by reducing production.

Saudi Arabia’s economy has faced increasing pressures in the global oil market due to its diversification strategies. The Saudi Arabian Riyadh Bank, one of the largest financial institutions in the Middle East, recently revealed that it had invested $26.7 million into a Fintech startup investment program.

Riyadh Bank CEO Tariq Al Sadhan emphasized the need for updating the nation’s financial and technology infrastructure, especially with the latest developments taking place in the global Fintech industry. The ongoing growth and development of this fund are vital to the research and development (R&D) efforts for local startups.

Saudi Arabia’s Monetary Authority (SAMA) has issued more than a dozen Fintech licenses for this experimental program.

Saudi Arabia’s national wealth fund (the Public Investment Fund, or PIF) has become the main growth engine of the nation’s economy. The PIF fund has teamed up with Japan’s Softbank by establishing a $100 billion investment fund (in 2016) for the tech industry. The partnership is only the beginning, as the PIF fund has a planned (estimated) investment value of $2 trillion.

The firm had been planning to secure capital of $100 billion via a public sale of a small stake in Saudi Aramco, the country’s energy company.  The Saudi Arabian Aramco IPO had gone on sale recently and spiked by 10% to $9.38. The surge in its share prices gave the firm a $1.88 trillion valuation, making it the world’s largest publicly listed company. The IPO was introduced on the Saudi Arabian Tadawul, and it easily broke previous records set by Chinese billionaire Jack Ma’s Alibaba IPO, which had been valued at only $25 billion in September of 2014.

The Saudi Aramco led to a huge surge in buying activity in stock markets. At present, the oil giant is worth considerably more than its current $1.7 trillion valuations. But the large investment is still a lot less than what Saudi Arabian residents had been hoping for, mainly because of declining interest from foreign investors.

Saudi Aramco’s chief executive had been expecting a share price of 32 Saudi riyals (per share). The $2 trillion target amount is projected to reach its full potential by the end of this decade. The fund had assets totaling $150 billion in various Saudi Arabian firms (in August 2018), which include the Saudi Telecom Company, Saudi Basic Industries Corporation, and the country’s National Commercial Bank.

The fund has now been tasked with supporting and improving the nation’s economy, and even though it took nearly 40 years to establish, it has been growing quickly.

The sovereign wealth fund had grown to $300 billion in various assets (as of May 2019). Saudi Arabia then shifted its focus towards China for seemingly promising business opportunities. Approximately $50 billion was invested into the American economy during 2018 and 2019, and now the nation’s government is expecting steady growth and development from these strategic investments.

Substantial investments in Saudi Arabia’s budding economy and global markets should allow the PIF fund to establish a commanding international presence with billions of dollars worth of strategic deals across the Middle East region, Asia, Europe, and North America.

The Public Investment Fund teamed up with Blackstone in 2017, to establish a $100 billion investment in US-based infrastructure. Around $20 billion in investments reportedly came from Saudi residents. However, Saudi Arabia’s partnership with SoftBank’s Vision Fund appears to have captured greater attention, as it’s focused on Silicon Valley firms. The fund reportedly invested $3.5 billion in Uber technologies in 2016.

Putrajaya,  – Alliance Islamic Bank Berhad (“Alliance Islamic Bank”), a subsidiary of Alliance Bank Malaysia Berhad, launched its Halal-in-One Program, a halal enterprise ecosystem to help small-and-medium enterprises (SMEs) capitalize on opportunities in the halal segment.

The program offers SMEs to venture into the halal space by offering end-to-end solutions such as business advisory, business matching services, and shariah-compliant financing.

In conjunction with the launch of the program, Alliance Islamic Bank signed a Memorandum of Understanding (“MoU”) with its strategic partner, HQC Commerce Sdn Bhd. The signing ceremony was witnessed by Dato’ Dr. Sirajuddin bin Suhaimee, Director, Malaysia Halal Council Secretariat JAKIM. He also officiated the launch of the program.

“Malaysia is one of the leading players in the global halal industry due to a robust Halal ecosystem, and a continuous focus in developing global Islamic finance. SMEs in Malaysia have the advantage to tap into the global Halal segment, which is expected to grow to US$3.0 trillion in 2023. Yet, as of 2018, 90% of Malaysian SMEs were not Halal-certified,” said Alliance Islamic Bank’s Chief Executive Officer Mr. Rizal IL-Ehzan Fadil Azim.

“Our Halal in One Program offers business advisory services by halal consultants to help SMEs obtain Halal certification from the Department of Islamic Development Malaysia (JAKIM). The SMEs can also attend complimentary Halal awareness training programs we offer. We will complement the advisory service with Halal banking solutions including special financing, payroll solutions, enterprise Takaful, and business matching opportunities for Halal-centric businesses.”

With Halal-in-One, the Bank plans to build an ecosystem comprising strategic partners with various Halal-centric expertise to help business owners expand their business in this sector.

HQC Commerce Sdn Bhd’s Chief Executive Officer, Dato’ Hj. Khairul Shahril bin Hj. Hamzah, said, “The global appetite for Halal products is growing rapidly. Malaysia’s Halal certification system, governed by JAKIM, is well recognized worldwide. This puts businesses in Malaysia at an advantage. Through this partnership with Alliance Islamic Bank, we hope to reach out to more business owners to grow their businesses by tapping into the global Halal market.”

“Our Halal in One Program is an inclusive ecosystem that integrates all the elements a business needs to grow in the Halal segment. These include business advisory and matching, halal certification, and funding. We believe that our efforts will go a long way in supporting the government’s efforts to establish Malaysia as a leading provider of Halal support services, and center of excellence in Islamic finance,” said Mr. Rizal IL-Ehzan.

Under the patronage of the Scottish Government and supported by the UK Government, the 2nd edition of GEFF will delve in-depth into two insightful case studies that focus on the growth of responsible investment in emerging and developed markets.

Edinburgh, Scotland – 03 August 2017: Middle East Global Advisors, a leading financial intelligence platform spearheading the agenda of sustainable and inclusive finance, will convene the second edition of the much-coveted Global Ethical Finance Forum (GEFF) in Edinburgh, Scotland. Based on a strategic partnership with Islamic Finance Council UK (UKIFC), the Forum will be held under the patronage of the Scottish Government, supported by the UK Government and will be hosted by the Royal Bank of Scotland (RBS), building upon the legacy of the inaugural Forum held in September 2015.

The theme for GEFF 2017 – “Ethical Finance: Merging Profit & Purpose”, is in line with the Forum’s aspiration to serve as a platform of convergence and collaboration across the responsible finance universe, and to forge a vision for a more inclusive and sustainable financial system.

Fueled by growing investor concerns pertaining to climate change, the market for sustainable investing has witnessed a steady growth over the years. According to the Global Sustainable Investment Review (GSIA) 2016, sustainable investment now stands at 26% of all professionally managed assets globally, highlighting the significant potential this industry fosters. Prominent sustainable investing strategies include exclusionary screening, ESG Integration and Corporate Engagement/Shareholder Action.

As per the GSIA 2016, Japan showcased the fastest growth in the sustainable investing market during 2014-2016, with the aggregate sustainable investment market in Japan quantified at USD 473.6 billion, up from USD 7.0 billion in 2014. A significant contributor to this was the new information provided by the Japan Sustainable Investment Forum (JSIF) on sustainable investing strategies of large institutional asset owners. Surveys by JSIF revealed corporate engagement and shareholder action to be the most dominant strategy at $289.6 billion, applying to 61 percent of SRI assets.

In February 2014, Japan introduced its very first Stewardship Code. Whilst the principles are voluntary, 201 institutional investors had adopted them as of December 2015. This was then followed by the Corporate Governance Code in June 2015. Both the codes were introduced with a vision to promote and foster engagement between investors and companies, and to open up dialogue in order to encourage companies to improve their return on equity (ROE) and to place greater emphasis on it as a key indicator of profitability and corporate governance.

Interestingly, the world’s largest pension fund, the Japanese Government Pension Investment Fund (GPIF), became a PRI signatory in September 2015 and also established a Stewardship & ESG division, in order to integrate environment, social and governance issues into its investment process effectively.

The changes in Japan’s investment industry can be attributed to a shrinking domestic market Japanese companies are seeing due to the negative demographic trends of a growing aging population which are likely to continue for years to come.

The GSIA 2016, also pointed out that during the period 2014-2016, Malaysia with 30% share in Asia (excluding Japan) is the largest SRI market in the region, as it recognizes Shariah-compliant funds as part of the SRI universe. In 2014, the Securities Commission of Malaysia introduced an SRI framework addressing the dearth of regulations and standards within the Malaysian market, and one that envisioned to serve as a benchmark for developing comprehensive standardized products that appeal to both Islamic finance and SRI markets. It also paved the way for crossovers between the various segments of the responsible finance universe – SRI, ESG and Islamic finance.

In 2006, Bursa Malaysia introduced its Corporate Responsibility framework, followed by Shariah based indices and corporate governance guidelines for listed companies in 2007. This was followed by the launch of the FTSE4Good ASEAN Index in April 2016. The index measure performance of publicly listed companies demonstrating strong ESG performance. These developments signify how Malaysia is focused on mainstreaming ESG integration.

In light of the above developments, GEFF 2017 will spearhead two exclusive case studies focusing on tracking the growth of responsible investment in emerging and developed markets. The sessions aim to analyze the cases of Japan and Malaysia, understand what lessons can be gleaned from them and whether their success can be replicated in other emerging and developed markets.

Across two power-packed days, GEFF 2017 will spearhead a series of sessions focusing on the massive opportunity that lies in mainstreaming ethical finance, one that requires concerted efforts to build meaningful dialogue across its three segments: Environmental, Social and Governance (ESG), Socially Responsible Investing (SRI) and Islamic/faith-based finance. The forum aims to drive thought leadership across a wide range of topics including green bonds, financial inclusion, ethical banking, amongst others, with the vision of bringing ethics to the forefront of business.

The forum will take place on 13th and 14th of September at the Royal Bank of Scotland (RBS)’s prestigious Conference Centre in Edinburgh, Scotland.