Issuu on Google+

February 2014

Islamic Finance Bulletin

Gulf One Lancaster Centre For Economic Research

From the Editor Half-way through the first quarter of this year, markets across the world had swung both ways, profoundly unsure still of the strength of global economy recovery. How the US Federal Reserve in particular would react, having begun to taper its prolonged stimulus programme, was a key concern, mixed with (i) the uncertainties of the state of the Chinese economy, (ii) the ability of emerging markets in Asia to recover from recent capital flight, and (iii) the condition of sovereigns and corporates in the West to emerge convincingly from the post-crisis period. Bonds continued to suffer from the selling pressure of late 2013, but thereupon responded to investors’ search for safe havens once stocks wondered whether the easy money era was drawing towards an end. Gold was bought upon the same motivation, while oil and copper indicated that a lack of fundamental direction was the underlying truth. On the sukuk side, these instruments initially felt the triple effects of emerging-market turbulence, oil-price fragility, and weakened fixed-income sentiment generally. However, in the Gulf arena both local and overseas investors were evidently awaiting their next opportunity to capture yield, welcoming renewed issuance. In this edition we once again document those key trends, besides sampling news and comment on the expansion of Islamic finance, this time featuring Asia especially. Viewpoints are provided by voices from the multilateral bodies the World Bank and the Asian Development Bank, addressing financial exclusion and poverty alleviation -- also the scope that Islamic microfinance has to break through barriers and improve the lives of those who are currently under-banked and need support. Following last month’s item on Indonesia, in this issue we feature Pakistan, and its own vast potential for Shariahcompliant finance to make inroads into existing markets, as well as make a key-turning difference to millions of Muslim customers and entrepreneurs.


Page 2

Highlights Islamic Finance and Asia: The Asia region contains vast potential not only to advance Shariah-compliance across financial and non-financial sectors, but to utilize its methods for poverty alleviation and microfinance projects. Equally, those are matters both of natural demand, in terms of hitherto under-served Muslim populations, and promoting and enabling supply by official policy means. The issues of financial exclusion and distribution of wealth are pervasive concerns that Islamic mechanisms can be employed particularly to address.

Pakistan: As the world’s sixth most populous country, Pakistan has an ample base among its own citizenry to exercise the potential of the various strands of the Islamic economy. Following initial attempts to develop this dimension of economic growth and development in previous decades, a newfound emphasis has been brought to advance the cause of Islamic finance, especially by the central bank’s strategic plan. Claiming an enhanced share of banking business, and taking responsibility for agricultural financing, feature on the agenda.

MENA Markets: Both the stock and bond markets of the GCC states have performed relatively well in recent weeks and months, compared with both developed and emerging counterparts. Confidence has grown not only in the region’s financial standing, but also in its attempts to extend cyclical rebound, elements which to some extent are missing among other blocs. Dubai’s resurgence has been the star turn in this show, while the lingering political tensions in Egypt have been ignored by investors attracted to signs of solidity returning to the economy.

Page 3

Recent Developments in the Islamic Finance Industry UK moves forward with Islamic finance plans

largest economy. Italy’s trade ties with the Gulf are

The UK government has chosen HSBC to handle and

booming, with exports to the UAE reaching 5.5 billion

advise on its debut Islamic bond planned for as early as

euros in 2012, a 16.7% rise from 2011, according to

this year. Other banks are to be mandated closer to the

government data. This month Kuwait’s sovereign

time of the issuance. Law firm Linklaters is expected to

wealth fund has announced that it will invest 500

provide legal support for the sukuk, including its tax and

million euros ($685m) in Italian companies, in

real estate implications. The timing of the sale will depend

coordination with the Italian government’s own

both on market conditions and the required preparation.

strategic investment fund, in line with a similar deal

In addition, the government has launched a new venture

with Qatar last year. Only about 2% of Italy’s

seeking to bolster London’s position as a centre for Islamic

population of 61m are Muslim; yet both bankers

finance by extending its ‘Help to Buy’ mortgage scheme

and academics hope that as Gulf companies and

to loans that comply with Islamic law. Help to Buy was

investors increase their activities in Italy, Islamic

launched last year, and offers banks insurance against the

finance will follow.

risk of lending to home-buyers who cannot afford large

Source: February 20th

mortgage deposits. Britain’s finance ministry announced that property finance plans that cater for Islam’s bar on interest payments would now be eligible in the same way as standard mortgages. Islamic mortgages are to be provided by the Islamic Bank of Britain, which is owned by Qatar’s Masraf Al Rayan. Source: Bloomberg, January 31st &, February 11th

GOLCER perceives that while there has been minor, marginal progress in the industry in continental Europe, witnessed mainly in France and Germany, it seems that Italy is seeking trade and investment with wealthy GCC states through Islamic finance instruments as a way to solve its substantial debt problems. Italian firms raising loans could use Islamic structures

GOLCER finds these initiatives to be active steps following

to attract Islamic banks from the Gulf through,

the UK’s recent official announcements of becoming the

for example, bonds and equities if they were

first non-Muslim nation to support the Islamic finance

certified as Shariah-compliant. Political and

industry and sell sukuk. Last October Prime Minister

legislative hurdles remain an issue for this

Cameron announced the plan to sell £200m ($330m)

attempted boost to the sector.

in securities that comply with Islam’s ban on interest, a development reflecting the “pragmatism and political

Takaful seen struggling in Kuwait

will” that has been pronounced. The issuance of sukuk

Kuwait’s takaful firms are said to be struggling still

will bring a series of benefits to the UK, helping to

in a crowded market with intense competition. This

establish a “fresh global capital” for Islamic finance

perception is borne out by stagnant growth and

alongside Dubai and Kuala Lumpur. According to

persistent losses for those firms, though operating in

PricewaterhouseCoopers, the industry is growing 17% a

one of the world’s richest countries on a per capita

year, and expected to be valued at $2.7trn by 2017.

basis. That reality has caused doubts to be raised about the sector’s long-term viability. Kuwaiti takaful

Islamic finance in Italy might need Gulf support

firms posted a combined 47.4m dinars ($167.7m)

Bankers in Italy are putting efforts towards developing

in premiums in 2012, an 18.7% share of the total.

Islamic finance in the country. Campaigns have been

However, this figure was spread across 11 locally-

launched which seek to benefit from growing economic

incorporated takaful firms, with many companies in

links between the Gulf countries and the eurozone’s third

the sector having failed to post consistent profits. In

Page 4

a market with 32 insurers, takaful firms have said they are

GOLCER finds that this initiative is one of the

facing disadvantages relative to their conventional peers,

important Islamic finance tie-ups during 2014, in

which have been running their businesses in the country for

reaction to the increased competition among many

decades, allowing them to build solid customer bases and

countries contemplating cross-border activity in

large financial surpluses.

the industry. According to Thomson Reuters data,

Kuwait’s landscape in this regard seems to be quite

the two countries represent the largest Islamic

different from the situation in Bahrain, where the central

finance markets globally, holding a combined

bank will release a new regulatory framework for takaful

$682bn in Islamic banking assets. Still, however,

this quarter. The new rules, developed after two years of

there could be some challenges to face, given

consultation with the industry, cover the operations and

the traditional differences in the design and

solvency of takaful firms. They call for a new formulas to

implementation of Shariah-compliant financial

calculate capital and replace free loans (qarad Hassan)

products between the two countries. (See Focus.)

with capital injections. Under the proposed rules, total capital would include both the available capital of the

Morocco intends funds for Islamic finance

shareholders’ fund and the net admissible assets of the

Morocco, the only North African nation with an

policyholders’ funds.

investment-grade rating at Standard & Poor’s, has

Source: Reuters, January 31st & February 11th

announced plans to allow Islamic banking for the

GOLCER thinks that Kuwait’s takaful sector could even

first time, proposing to invest in the industry. The country approved a draft Islamic finance law on

shrink in the coming years, facing a critical position,

January 16th. This document offers a framework to

with reduced profit margins. Takaful firms are required

regulate Islamic banks, and allows for sukuk sales.

to distribute excess profits to policyholders, unlike

It awaits parliamentary approval, but is expected

conventional firms, which account for such surpluses

to be enacted by the middle of this year. The

as profits. The relative underperformance may also be

Moroccan Association of Participative Financiers

attributed to the lack of a supervisory body, which made

estimates total investment in Shariah-compliant

the takaful industry -- not only in Kuwait but worldwide -- vulnerable to sensitive performance results, as well as to uncompetitive practices.

products to reach $7bn by 2018 if the law comes into effect. Source: Bloomberg, January 31st

Saudi Arabia and Malaysia bourses link boosted

GOLCER sees the Islamic finance industry clearly

The stock exchanges of Saudi Arabia and Malaysia

responding to the accelerating demand worldwide

have signed an agreement to foster closer ties

for financing that complies with Islamic law. By

between them, with the aim to promote Islamic

2018 Islamic banking assets are expected to climb

finance. The deal is likely to enhance areas such

to $3.4trn from about $1.7trn in 2013, according

as equities, mutual funds and sukuk, and to build on

to Ernst & Young. Morocco has slowly joined the

sharing expertise and developing human capital.

race, with more than 95% of its population of 34

Saudi Arabia’s stock exchange hosts the largest

million supporting the introduction of banking that

Islamic banks in the world, while the exchange of

adheres to Shariah.

Malaysia has the largest and most liquid market for trading sukuk. Saudi Arabia’s exchange has already addressed, but not yet signed, similar agreements

Islamic finance body IILM plans further issuance

with its Abu Dhabi and Bahrain counterparts.

The Malaysia-based International Islamic Liquidity

Source: Khaleej Times, February 21st

Management Corp (IILM) announced its plans to

Page 5

issue a $490m three-month Islamic bond by the end of

The methodology had previously included only qualitative

February, after expanding its issuance programme to

screens; for example, banning companies involved

$1.35bn in January. The auction of the sukuk is rated A-1

in sectors such as tobacco, alcohol, weapons and

by Standard and Poor’s, according to a filing lodged

gambling. Islamic fund managers in Malaysia now have

with Malaysia’s central bank. The IILM has already sold

six months to drop securities that are excluded from the

$860m of three-month paper this year, aiming to meet

list, which currently has a total of 653 Shariah-compliant

a shortage of highly-liquid, investment-grade financial

stocks out of 914 listed on the Bursa Malaysia.

instruments which Islamic banks can trade to manage

In another move, the Philippine Stock Exchange said it

their short-term funding needs. Shareholders of the IILM

would designate its first Shariah-compliant companies,

are the central banks of Indonesia, Kuwait, Luxembourg,

in a bid to keep Muslims’ money in the country. Another

Malaysia, Mauritius, Nigeria, Qatar, Turkey and the

strengthening player in the sector is Singapore, [whose]

UAE, as well as the Jeddah-based Islamic Development

government has undertaken initiatives in areas such as


taxation, capital markets, REITs, takaful insurance and

Source: Reuters, January 31st

Islamic equity indexes in order to improve Singapore’s

GOLCER views the IILM’s programme as being still in its early stages, and has doubts about the successful, active trading of its sukuk, and even the reasons behind issuing

attractiveness for Islamic finance. Source: Arno Maierbrugger,, Inside Investor, December 2013

these additional sukuk, as the primary dealers have held on to the IILM instruments after auction and there has been little, if any, secondary market trade in them.

The Malaysia-Gulf Cooperation Council (GCC) framework agreement signed in January 2011 was intended to enhance bilateral economic links. Instead, co-operation grew at a disappointingly slow pace, [but

Focus: Gulf-Asia co-operation In October 2013 the Central Bank of the UAE announced it had signed an MoU with Central Bank of Malaysia on the sidelines of the annual IMF/WB meetings, aimed at co-operation, exchange of information and expertise, and training. It would contribute to the realisation of a sound financial system in the UAE and Malaysia, and represents a trend to stronger ties between Islamic finance centres in the Arabian Gulf and Southeast Asian regions, despite traditional differences in the design and implementation of Shariah-compliant financial products.

now] appears to be gaining momentum. Generous tax incentives to encourage commercial banks operating in Malaysia to establish Islamic banking subsidiaries and foreign companies have been drawing in a number of GCC banks to establish operations in Malaysia (e.g. Kuwait Finance House). Conversely, the GCC economies are attractive potential targets for Malaysian investment. Another interesting shift is that Arab countries are now looking to Malaysia to enhance halal standards and promote related products. Until recently, meat and halal products have been largely imported by the GCC from

Source: Khaleej Times, Reuters, November 2013

Australia, New Zealand, Ireland, Brazil, Canada, and the

New Malaysian standards for Shariah-compliant equities that are expected to attract more Islamic investment funds from the Gulf countries were introduced last November by the Malaysian Securities Commission. An improved screening methodology is used that encompasses quantitative filters such as benchmarks for financial ratios, moving closer to the

US. Although Malaysia had taken the lead in developing and modernizing this sector, it has essentially lost out to these competitors in the past. With the Gulf changing its focus to Asia, the food and chemicals industries in Malaysia that are largely bound by halal laws command an edge over other regional manufacturers.

approach generally used in the Gulf. The change is widely

Source: Evelyn Davadason, University of Malaya, June

expected to help further internationalise Malaysia’s Islamic

2013 for Middle East Institute

finance industry.

Page 6

Viewpoint Islamic Finance and the fight against poverty in Asia Interview with Ashraf Mohammed, Asian Development Bank

What level of impact could be expected

from the growth of Islamic finance (IF) in the region, in terms of bringing basic banking

facilities to lower-income groups, and plans for development and poverty alleviation?

Is the ADB promoting or simply facilitating

ADB regards Islamic finance to have great

give details of how that is being done?

the development of the IF sector? Can you

potential in the fight against poverty in Asia. There is a sizable part of the population in the Asia &

Asian Development Bank (ADB) has 14 member countries that have a majority Muslim population,

Pacific region, especially in rural areas, that for

as well as other members with a sizeable

religious, cultural or moral reasons sees Islamic

Muslim component (including India, PRC, the

finance as the only method by which to access

Philippines, Sri Lanka and Thailand). ADB’s

financial services which would otherwise result in

Developing Member Countries (DMCs) represent

their financial exclusion.

approximately 80% of the world’s Muslim

Apart from being a viable alternative to the

population. A number of these DMCs have

conventional interest-based financial system,

developed relatively sophisticated Shariah-

which is prone to extreme risks, the risk-sharing

compliant finance (SCF) industries which

solutions offered by Islamic finance may assist

complement their conventional financial services

in restoring equilibrium, as it encourages and


facilitates investment in real economic activity and

As the premier development institution of Asia,

societal welfare, while prohibiting investment in

ADB is well placed to play a catalytic role in

socially-harmful ventures such as gaming, alcohol and adult entertainment, or risky financial products such as highly-speculative derivative contracts, of

the development of SCF in the region. We can assist in the development of best practice for prudential standards and corporate governance

the kind which led to the 2008 sub-prime crisis.

rules for central banks and securities regulators,

In addition to the important complementary role

to enable them to properly and fairly regulate

that Islamic finance can play in global finance, the

Islamic financial institutions (IIFIs). ADB can also

sector provides an exciting opportunity to expand

play a catalytic role in helping to meet the nascent

the accessibility to finance which can play a more positive role in eradicating poverty. It can address the issue of financial inclusion from two directions:

demand for SCF from the private sector, that is becoming evident in certain DMCs. ADB’s participation in SCF will assist the

one through promoting risk-sharing contracts

development of the SCF industry during its

which provide a viable alternative to conventional

formative early stages in DMCs, an involvement

debt-based financing, and the other through

which will ensure that SCF is being undertaken

emphasizing the socially-responsible principles of

using best international standards.

transparency and prohibition of speculation and exploitation.

Page 7

ADB’s significant role in the development of Shariah-

have smaller shares, but their growth and regulatory

compliant finance in Asia has included:

developments in recent years have enabled them to

be en route to expanding on their volume of Shariah-

Supporting the development of international

compliant banking assets. These countries have

best practice in prudential standards and corporate

demonstrated that if government takes the trouble of

governance for IIFIs, by assisting through technical assistance (TA) and co-operation, standards-setting organizations such as the Islamic Financial Services Board (IFSB), and through knowledge-dissemination activities, e.g. workshops and conferences. •

Advising and assisting DMCs, through TAs

they will derive a huge dividend from private sector participation.

promotes economic or financial stability per se.

Islamic financial institutions, including development

Does your research on the Asian region support

of appropriate supervisory and regulatory laws and

that stance?

frameworks Promoting the use of SCF through co-

The linkage of financial development with economic

financing opportunities with IIFIs such as the

development has already been established.

Islamic Development Bank, and developing and

However, a high level of financial development in a

participating in innovative financing structures such as the Islamic Infrastructure Fund and the International Islamic Liquidity Management Corporation •

strategy to create an enabling environment, then

It has been suggested that Islamic finance

and loans, in capital markets development for

developing an effective strategy and supports that

country is not necessarily any indication of alleviation of poverty in that country. There is growing realization that, in addition to financial development,

Providing credit enhancement in SCF non-

there should be emphasis to promote financial

sovereign transactions such as Pakistan’s Fauji Wind Power Project

stability, which in turn should assist to expand the

How do you perceive the relative roles of the

positive role in eradicating poverty.

of the IF industry?

basic financial services -- such as availability of

Public sector institutions have an enormous role to

management -- can facilitate sustainable growth

accessibility to finance which can play a more

public and private sectors in the regional growth

Enhancing the access to and the quality of finance, mobilization of savings, insurance and risk and productivity, particularly for micro, small and

play in the promotion and development of Islamic finance in their countries. Anecdotal evidence would suggest that those counties that have progressive

medium-scale enterprises. It can be argued that the core principles of Islam lay great emphasis on social justice, inclusion, and

regulatory and supervisory authorities providing

the sharing of resources between different strata of

the necessary legal and regulatory framework to

society, thus reinforcing financial stability. Islamic

establish a level playing-field for Islamic finance

finance further supports financial stability and equity

to take hold and expand are the ones which have

through specific instruments of redistribution of wealth

benefited the most in terms of the contribution that

amongst society as whole, such as Zakat and Waqf.

Islamic finance makes to the economy. Among the developed Islamic banking jurisdictions

Ashraf Mohammed is Assistant General Counsel, Practice

in Asia are Malaysia, Indonesia, Pakistan and

Leader in Islamic Finance at the Asian Development Bank

Brunei. Malaysia is one of the global leaders for

(ADB). The opinions expressed are his own.

Islamic financial services, and held an estimated 9% share of the global Islamic banking assets in 2013. Comparatively, Indonesia, Pakistan and Brunei

Page 8

Viewpoint Islamic Finance and Financial Inclusion: the World Bank’s view

About 700 million of the world’s poor live in

are not relevant for religiously-minded Muslim

predominantly Muslim-populated countries. In recent

individuals and firms in need of financing.

years, there has been growing interest in Islamic finance as a tool to increase financial inclusion

Based on a 2010 Gallup poll, about 90% of

among Muslim populations.

the adults residing in Organization of Islamic Cooperation (OIC) member countries consider

The main issue relates to the fact that many Muslim-

religion an important part of their daily lives

headed households and micro, small, and medium

(Crabtree 2010). This may help explain why only

enterprises may voluntarily exclude themselves

about 25% of adults in OIC member countries have

from formal financial markets because of Shariah

an account in formal financial institutions, which is


below the global average of about 50%.

Islamic legal systems, among other characteristics,

Muslim countries are far from uniform in terms

prohibit predefined interest-bearing loans. They also

of financial inclusion. For example, 34% of the

require financial providers to share in the risks of the

unbanked Afghan population cite religious reasons

business activities for which they provide financial

for not having an account in a formal financial

services (profit and loss sharing). Given these

institution, while only 0.1% of Malaysians do so,

requirements, most conventional financial services

although both countries have similarly high Gallup

Page 9

religiosity indexes (97% and 96% respectively).

proportion of firms identifying access to finance as a major constraint. The negative correlation is greater

This can be traced to the extent to which Islamic

if one focuses on OIC countries and greater still if

financial institutions are present in a given country. An

one focuses on a subset of OIC countries with a

analysis suggests that the size of Islamic assets per adult

religiosity index above 85%.

population is negatively correlated with the share of adults citing religious reasons for not having an account.

These findings, which are mainly driven by small

This correlation is particularly strong if one focuses on the

firms, suggest that increasing the number of

group of OIC countries and, even more, on those OIC

Shariah-compliant financial institutions can make a

countries that show a religiosity index exceeding 85%.

positive difference in the operations of small firms (0–20 employees) in Muslim-populated countries

Based on the Global Findex [Financial Inclusion Index],

by reducing the access barriers to formal financial

for religious reasons, some 51 million adults in the OIC


countries do not have accounts in a formal financial institution. Given that a majority of the OIC population

Efforts to increase financial inclusion in jurisdictions

lives in poverty, Islamic microfinance could be particularly

with Muslim populations require sustainable


mechanisms to provide Shariah-compliant financial services to all residents, especially the Muslim poor,

Global surveys on Islamic microfinance completed by the

people who are living on less than $2 per day.

Consultative Group to Assist the Poor (CGAP) in 2007 and 2012 provide some initial insights into the rapidly growing

One obstacle is the lack of transparency and the

Islamic microfinance industry.

absence of a broadly-accepted standardized process for assessing the compliance of financial

The 2007 CGAP survey found fewer than 130 Islamic

institutions with Shariah guidelines, which makes it

microfinance institutions (MFIs) and 500,000 customers

difficult for many individuals to distinguish between

respectively. Within five years, these figures more than

financial institutions that are operating based on

doubled, reaching 256 MFIs and 1.3 million active clients.

Shariah specifications and institutions that are not.

These figures are on the conservative side because they

Another difficulty has been the lack of information

are based on data for 16 of the 57 OIC member countries

and training on Islamic finance.

(excluding economies such as the Islamic Republic of Iran, Malaysia, and Turkey, which have active Islamic finance

Finally, in their infancy and smaller in scale, Islamic


financial products tend to be more expensive than their conventional counterparts, reducing their

In short, the estimated unmet demand for Shariah-


compliant financial products, in conjunction with the rapid growth of Islamic MFIs, as well as the astonishing

This article is an abridged version of Box 1.4 in the

growth of the overall Islamic finance industry, all point to

Global Financial Development Report 2014: Financial

the growing attractiveness of Shariah-compliant financial

Inclusion, Washington, DC, 2014

products and the supply shortage of such products. Religiosity also has an impact on the access of firms to finance in OIC countries. The number of Islamic banks per 100,000 adults is negatively correlated with the

Page 10

Feature Islamic finance report card: Pakistan by Rachel Latham and Andrew Shouler

Amidst all the talk of Islamic finance hubs inter-

account at a formal financial institution.

nationally -- whether in the Middle East or the Far East or Europe -- there remains much yet

While, not surprisingly, Pakistan was among

to be achieved on purely a domestic basis in

the pioneers of Islamic finance, progress in the

certain, key countries.

1980s and 1990s “met with limited success, largely due to slippages at the implementation

Indeed, can there be a nation that offers great-

and execution stage,” Mr Yaseen Anwar, then

er potential for the growth of Islamic finance (IF)

governor of the State Bank of Pakistan, admit-

than Pakistan, which essentially needs to look

ted at a conference earlier this year.

no further than its own people for the realization of the sector’s critical objective of mutual

Asian Development Bank’s Islamic Finance

development across society?

Team Leader Ashraf Mohammed refers to research citing an inadequate infrastructure

Pakistan has a population of 180 million (mak-

in that era, and insufficiently trained human

ing it the world’s sixth most populous country),

resources, factors that were rectified in the

and is the second largest Muslim nation in the

subsequent period by “a more practical and

world (representing around 97% of its total

gradual approach”.

population). Additionally, the large rural share, 63% of total, is evidently under-banked. Ac-

The re-launched official effort in 2001 envis-

cording to a 2011 World Bank study, roughly

aged Islamic and conventional banks co-ex-

90% of the entire population do not have an

isting, and enabling consumers to do banking

Page 11

within the system of their choice, which opened

ing itself to align its regulatory framework with

the way for the IF sector to succeed, based on

international standards and best practices, SBP

demand-driven impulses.

says it regularly reviews and evaluates the output of the IFSB, AAOIFI, and IIFM for potential use,

With an annual growth rate of over 30% over

keeping in view local circumstances and norms.

the last five years, Shariah-compliant banking is now spread across 80 districts of the country,

Recently the SBP adopted a global standard,

with a network of 1200 branches, and Islamic

from Bahrain-based AAOIFI, for Islamic bonds,

banking assets currently constitute 8-10% of both

to help issuers attract investors from the Gulf and

assets and deposits, according to data last year

elsewhere. The number of individual sukuk issues

produced by State Bank of Pakistan (SBP), the

in Pakistan has eased in recent years, despite the

central bank.

rapid growth of issuance globally.

Key to this advancement has been the crucial

Now the SBP has developed a five-year Strate-

role played by the SBP, with its introduction and

gic Plan (2014-18) in consultation with all rel-

application of key regulatory reforms and pru-

evant parties in the IF sector, to take the industry

dential measures to ensure financial stability and

to its next level of growth and development.

provide a comprehensive, multi-tiered framework to ensure the Shariah conformity of Islamic

Part of this initiative involves a mass-media

banks’ operations.

campaign to raise awareness of Islamic finance among consumers. “There still prevails a signifi-

Today, the IF industry in Pakistan includes five

cant population that is either unaware of Islamic

fully-fledged Islamic banks and five takaful firms,

banking or has confusions and misconceptions

with an additional twelve conventional banks

about its current paradigm,” said then governor

offering services through Islamic windows. The

Anwar at the campaign’s initiation last year.

central bank is also at an “advanced stage” towards issuing a detailed Shariah governance

Meanwhile, the Ministry of Finance has set up a

framework, which would outline roles for direc-

committee to explore areas to promote Islamic

tors, management and Shariah boards.

banking, including studying the conversion of conventional banks onto an IF basis, to submit

In the opinion of the Jeddah-based Islamic

recommendations by this year-end. Propos-

Development Bank (IDB), Islamic finance is

als involving Islamic money markets, and issues

“growing fast” in Pakistan, though facing “chal-

of secondary market liquidity and maximizing

lenges and constraints”, with demand “driven

equity-based financing rather than debt-based

by multiple factors such as a faith-based appeal

financing, will also be explored.

for the Muslim population, the potential to augment financial engineering by blending it with

Collectively, the authorities’ aim is to expand

socially- and ethically-responsive financing;

Islamic banks’ share of the total banking sector

[also to] service high-net-worth clients (whether

to 15% by 2017.

Muslim or non-Muslim), and attract cross-border oil revenue surpluses”.

Commenting on the nature, opportunity and outlook of the IF sector in Pakistan, London-based

The IDB has noted the “pro-active policy” of

Edbiz Consulting has argued that the same strict-

the country’s central bank in this regard. Pledg-

ness that has characterised the country’s view of

Page 12

for Islamic finance’s overall, further growth and

Shariah compliance should enable it to become


a global ‘centre of excellence’ for Islamic banking and finance, by ensuring the authenticity of financial products. Chairman and CEO Humayon Dar has assessed that, in order to achieve parity of market share with conventional counterparts by 2025, Pakistan’s Islamic banks will have to grow

Trends in Islamic Micro Finance (MF) Islamic microfinance currently constitutes less than 1% of the microfinance industry globally, which has 126 institutions in fourteen countries, led by a 36%

by at least the recent rate of 35% per annum for

share located in the GCC.

the intervening period. “This is certainly a steep task, but a realistic target,” he says, and currently “the momentum is in the right direction”.

In Pakistan microfinance and Islamic banking were

Besides the scale of the sector’s potential, one

quently have grown significantly, although Islamic

initiated at the same time, in 2001, and subseMF lags quite far behind broader Islamic finance.

particular dimension that seems to hold promise and most immediate relevance is microfinance, which is especially attuned to the poverty alleviation aspect of Islamic finance, as well as focusing on the social and ethical concerns of self-respect, self-reliance and support for women and the most

While several institutions have launched Islamic microfinance products in Pakistan over the past few years, two providers offer a fully Shariahcompliant product line, one being Akhuwat, op-

vulnerable members of society (see box).

erating primarily on the disbursement of interest-

The SBP’s governor, describing Islamic microfi-

Wasil Foundation, which offers a range of Islamic

free loans through donations, the other being the

nance as a confluence of two industries, has said that financial inclusion is a key strategic goal of the central bank, and stressed that the industry should develop capacity to aid agriculture and SMEs

finance services designed to encourage enterprise and the creation of value chains. According to the Pakistan Microfinance Network, there is “huge potential for these providers to expand outreach in this niche market”, by way of

particularly, both for participants in those sectors and for the economy as a whole, with “every sup-

diversifying the product set as well as extending

port and facilitation” from the central bank.

geographic coverage. However, there is a need

These options include the establishment of fully-

Takaful models, “each with their own strengths

for further funding sources, including the Waqf and and weaknesses in terms of viability in the Pakistan

fledged Islamic microfinance banks, Islamic microfinance services by fully-fledged Islamic banks, and Islamic microfinance divisions in conventional microfinance banks. Allied with the institution’s

context”. Yet, recognition has grown among practitioners about the potential market for Islamic MF, and the scope therefore increased for meeting the needs of

inherent checks on the use of funds, the prospect

the underserved, with special attention to target-

for this segment of IF activity is “positive”, the

ing those who have previously declined conven-

governor stated.

tional microfinance.

Mr Anwar’s recent, acting successor at the State

Sources: State Bank of Pakistan, Reuters, IDB, ADB,

Bank of Pakistan, Mr Ashraf Wathra, has further underlined agri-financing as a policy priority, and indeed invited all key stakeholders to be on board

Page 13

Edbiz Consulting, Kuwait Finance House, Islamic Finance Today, Pakistan Microfinance Network

Stock Markets GCC Gulf markets defied the trend elsewhere, prolonging 2013’s extended rally, with all the region’s bourses recording gains on conventional measures. Boosted by the Expo bid and a storming real estate market, Dubai has continued to stand out, up nearly 12% in January, with the property component up nearly 20%. Abu Dhabi’s index rose smartly too, by some 9%. In both cases, the banking and financial service sectors

being shaken by a series of explosions and the further

have prospered as well. The Saudi Tadawul index

deaths of followers of ousted president Morsi. The

improved moderately from the previously restrained

Egyptian pound has appreciated in this environment,

mood of last year-end, with the retail sector bouncing

which has seen 98% approval by voters of a revised

back. Qatar attracted investors eyeing low stock

constitution. Otherwise, a stock buyback by EFG-

valuations, while Kuwait remained held back, down

Hermes lifted sentiment, as did news that Dubai’s

slightly on the Islamic-based gauge, constrained

Majid Al Futtaim would be investing $2.3bn in the

by political and investment project snags. Better

retail sector in the coming years. Gulf SWFs are said

sentiment supported notable impetus in Bahrain’s

also to be interested.


South East Asia

Egypt / MENA

Asian stocks were very mixed in the latest period,

By late January the Egyptian stock index had climbed

ranging from the weakened Thai bourse, beset by

to its highest level in almost three years, as the

the country’s political disarray and violence, to a

market’s optimism grew in association with relative

resurgent Philippine index, as foreign funds regained

political stability, even while pockets of violence

a degree of confidence following the US Fed-related

continued to spark. The EGX approached a 50% vault

turbulence in emerging markets. Malaysia’s index well

since last year’s military takeover, though experiencing

represented the downbeat mood. While American

volatility along the way. Rallies in support of likely

monetary policy proceeded with the gradual tapering

presidential contender and armed forces chief al Sisi

and emollient outlook of incoming Fed chair Janet

have offset the intermittent concerns, despite Cairo

Page 14

Yellen, both US and Chinese economic data were uneven, limiting the scope for international optimism, with credit prospects tightening in both cases, amid uncertain growth conditions. Sentiment overall was upheld to some extent by positive earnings results. The Philippines and Indonesia especially rebounded well from previous sell-offs. Thailand’s bourse kept surprisingly stable overall considering continuing protests, an emergency decree and an inconclusive election in early February.

Rest of the World Equity markets globally slipped in the period covered, led by falls in Asia and other emerging markets. The key factor promoting turbulence was the decision of the US Federal Reserve to proceed further with its tapering plans for monetary stimulus, that has evidently been upholding overseas investment. In some cases (Brazil, Turkey, South Africa, India) countries have had to respond with higher interest rates to support their currencies, creating another drag on stocks’ performance. US indices were also affected for a while, retreating from all-time highs. For Asia the fluctuating conditions in Chinese credit policy, besides economic sluggishness, were another key influence. Japan’s indices also went conspicuously into reverse, with uncertainty persisting over Abenomics. European bourses remained modestly firm with the sense that the worst of the financial crisis has been left behind, and recovery may be consolidating. A more positive mood emerged later, as Fed chair Yellen promised policy continuity, interpreted as sustaining an easy money stance. US corporate earnings were also predominantly beating prior estimates. Sources: GIC, Global Investment House, Bank Audi, Bloomberg, Reuters, broker reports

Page 15

Islamic Stock Indices Islamic or Shariah compliant indices exclude industries whose lines of business incorporate forbidden goods or where debts/ assets ratios exceed 33%. The increasing popularity of Islamic finance has led to the establishment of Shariah compliant stock indices in many stock markets across the world, even where local Muslim populations are relatively small, such as in China and Japan.

Evolution of Islamic Stock Markets in January 2014 for GCC, Far East, Middle East North Africa (MENA) and Rest of the World markets. Prices represent the closing price of the respective index at 31/1/2014. Percentage Month-to-Month (MTM) Change and percentage Volatility. Source: Datastream

Conventional Stock Indices

Volatility is a measure of uncertaincy of market returns. It is calculated as the standard deviation of the returns in the reported month. The formula for the standard deviation is: Ďƒ=E[(X-Îź)2]1/2

Evolution of Stock Markets in January 2014 for GCC, Far East, Middle East North Africa (MENA) and Rest of the World markets. Price represent the closing price of the respective index at 31/1/2014. Percentage Month-to-Month (MTM) Change and percentage Volatility. Source: Datastream

Page 16

Commodities Oil The market had a slightly bearish tone early in 2014, concerned for world demand in the face of slower emerging markets and the Chinese economy. Brent was hit harder than WTI, allowing the wide spread previously between them to narrow, yet both series were upheld by softer data signals from the US that trimmed the dollar. Supply concerns over the North Sea and Libya also gave support. Inventories at the Gulf Coast surprised on the low side, below the five-year average, and freezing winter weather in the US further boosted Nymex crude. Later in January trade statistics from China gave prices a fillip. Geopolitical concerns as to conflicts in South Sudan and protests in Venezuela provided extra underpinning.

Gold Gold eased further down in January, but picked up again into February, surprising analysts who could see no obvious prospect of the recent trend late in 2013 turning around. The precious metal benefited in part from investors switching from equities because of repeated market jitters. A potential review of Indian import restrictions prompted short-covering. On the other side of the coin, the Fed’s tapering process, and rising interest rates in certain developing countries, dulled the immediate sparkle in the market. Equally, Fed chair Yellen’s declared commitment to monetary accommodation gave a helpful price lift. With the world economy seemingly muddling through, forecasters persisted expecting the rally

following the relative buoyancy of the second half of last year. Emerging market concerns have had

to peter out.

additional depressive effect. The most recent pickup

Copper/Base Metals

commodity prices generally on investment grounds. A

hinged on a declining dollar, which tends to promote

A firmer direction was taken by copper late in

drop in inventories at London-monitored warehouses

January, but only after prices softened sharply

brought extra market cheer, which was then reinforced

earlier in the month upon perceptions of weakness

by better credit numbers out of China and signs of

in the Chinese economy. Analysts have pointed

European recovery.

still to supply outstripping demand in 2014,

Sources: OPEC, Reuters, Bloomberg

Page 17

Bonds and CDS markets GCC Whereas emerging market bonds, like stocks, have been hit by the US Fed’s monetary tapering plans, creating a background of considerable volatility, Gulf trading kept a better profile, with only limited correlation with Treasury benchmarks, and spreads narrowing. Although defensive at the start of the year, regional investors were then looking to add to their books again, though focused on yield. Technical indicators were aligned to assist, and underlying demand was strong, but tending to wait for new issuance. Names such as DEWA and Bahrain were well bid, while much activity was oriented to Kipco’s 5-year issue. International accounts added to the interest further along the credit yield curve. A deal to restructure Dubai’s $10bn debt load helped sentiment. Egypt / MENA Similar momentum was found in the broader region, with the North African bond market showing well, as bonds from Egypt and Morocco were sought by both local and international buyers. The gradual restoration of what investors perceive as a workable political framework promoted trade in Egypt’s 2020 and 2040 eurobond issues, rallying above par. National Bank of Egypt’s issue also improved. January saw foreign exchange reserves rise for the first time in several months, and the government was in talks to secure further aid from the Gulf states. Credit default swaps (CDS) have dropped by over 400 basis points since the military takeover. Economic growth may reach 3.5% this year, according to the finance ministry. Malaysia / South East Asia Trends in Asian bonds were less convincing, having being revealed to be so dependent on US monetary policy, where the easing cycle has been curtailed. Initially in the period covered regional currencies reflected the retreat of international investors, typically holding 20-30% of the bloc’s

sovereign debt, as they had drawn back to the dollar as safe haven. Borrowing costs locally were on the rise as expectations grew of higher yields over time across dollar-related zones. Inflation data also brought pressure to bear, for instance in Malaysia and the Philippines. Malaysian bonds fared reasonably well on a comparative basis, without the uncertainty of elections as are due in Thailand and

Page 18

Indonesia this year. Some improved data on Chinese growth and credit figures lifted Asian currencies later

Sovereign Bond Markets

in the period, aiding market reaction to the collective sell-off that some saw as overdone.

Global Benchmarks Though still in a negative mood during January, at the global level key benchmark series were strengthened into February by signs that assumptions about quickening economic recovery were not so well founded. Bonds for a while advanced in rotation with stocks, which dipped sharply. US data such as car sales, manufacturing and employment generated doubts about the revival, and encouraged thoughts of central bank restraint on interest rate hikes, as were then confirmed by policy statements. The US lead was followed by both core and peripheral European trades, as well as JGBs, with the sense that both the real economy and monetary settings were somewhat limited in giving guidance. In recent weeks the jury has remained out in terms of the market’s likely direction.

Evolution of Bond Markets in January 2014 relative to the previous month. The table reports the price index on which the MTM Change is calculated (month-to-month) and the Yield of sovereign bond maturities typically between 6 months and 25 years. Data as at 31/1/2014.

Credit Default Swap Markets

Source: GIC, Invest AD, Bloomberg, Bank Audi, ADB online, broker reports

Evolution of CDS Spreads in January 2014 relative to the previous month. The index reported here represents the average basis points (bp) of a 5-year CDS for protection against sovereign bonds. Data as at 31/1/2014. MTM Change refers to the change relative to the previous month.

Page 19

Islamic Bonds (Sukuk) The sukuk secondary market was soft in the early

DIP’s main asset is a mixed industrial,

part of the year, reflecting not only the retreat

commercial and residential block, next to

of conventional instruments but also that of

the World Expo 2020 site, according to

emerging markets, and doubts for Gulf energy

documentation. European accounts were much

producers over oil prices.

in evidence in the sale, also Islamic liquidity.

Investors were looking for returns instead from primary issuance, which has been expected by

Conditions otherwise were relatively quiet.

analysts (S&P, Fitch Ratings) and by banks (e.g.

Indonesia announced it would sell retail Islamic

HSBC) to put in a strong performance this year.

bonds this month, offering individual investors

Activity was focused most recently on the

returns clearly above the interest rates given

issuance of Dubai Investment Park’s $300 million

by the country’s leading banks. They would

debut sukuk, with orders finalized at well over

carry a coupon rate of 8.75% per annum,

$4bn, launched at 35bps inside guidance at

compared with bank deposit rates of 5-7.75%.

265bps over mid-swaps, yielding 4.296%.

The government auctioned a combination of

The deal was viewed as well-timed, into a

6-mth and 29-year project-based sukuk in mid-

market lacking Middle East paper, and likely


to trigger other issuers from the region. It

Meanwhile, the UK Treasury (finance ministry)

benefited from fast-improving sentiment towards

declared its proposed sukuk issuance would

Dubai, buoyed by its rapidly rebounding real

take place either in 2014 or 2015 by way

estate sector. The company is owned by Dubai

of a syndicated offering, having previously

Investments, and focused mainly on leasing and

announced plans for a £200m launch.

property management.

Sources: GIC, Invest AD, Bloomberg, Reuters, broker reports

Sukuk is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, Sukuk securities are structured to comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and nontradability in the secondary markets.

Page 20

Perspective Outlook for sukuk gains attention by Andrew Shouler intermediation and integration”, so benefiting Islamic

A flurry of reports recently about the prospects for

debt capital markets.

the sukuk market in 2014 all expect a pick-up in pace, for a number of reasons.

Yet, S&P suggests that “without standardization and

Standard & Poor’s envisages the industry expanding again, following a dip in volumes by some 13%

[the] architecture to support the industry, it is unlikely [to] reach a new dimension”, implying that official attention is necessary to complement potential

in 2013, as the market digested the promised

market supply and demand.

tapering of easy US monetary policy. The agency forecasts total issuance to exceed $100bn for the

Fitch Ratings, meanwhile, says Gulf nations’ efforts

third successive year “if yields remain attractive”,

to become Islamic finance hubs “is also likely to spur

driven by corporate and infrastructure deals in the

sukuk issuance”. Last year’s decline was likely “to

Gulf, and the resumption of Malaysia’s investment

be a blip in the longer-term trend of steady growth,”


it said. Fitch noted “evidence of increasing market efficiency”, with structuring costs having fallen

The UAE and Saudi Arabia are anticipated to lead

significantly, and dealmaking times down “from as

the way in the GCC, “as regulators continue to

much as six months to a few weeks”. It mentioned,

minimize barriers in the market”. Besides impetus

however, the caveat of “the lack of legal precedent

from project spending, economic growth based

over investors’ ability to enforce rights in many

on $100 oil prices will encourage banks as both borrowers and investors, also adjusting their capital bases to meet Basel 3’s gradual implementation.

jurisdictions”. Reported by Bloomberg, HSBC suggested issuance

In Malaysia -- whose sukuk offerings dropped

would probably rebound to a record level this year,

by 25% last year, though maintaining a dominant

echoing the idea of geographic dispersion, and

share of total -- a broad investor base and liquid

observing banks trying to tailor conventional products

market give underpinning. A phase of government

to meet Shariah’s requirements, as in perpetual sukuk.

cutbacks should be eased by GDP growth

US rate volatility might affect timing, but the pool of

exceeding 5% in 2014, with demand for ringgit

Islamic liquidity “remained strong”, and might be

issues liable to be buoyant.

orientated to issuers in local currencies instead.

S&P made note too of investors seeking sukuk in

Moody’s has remarked on the increasing

non-traditional markets, and that “Africa may soon offer a fresh alternative”. Senegal and South Africa have been looking at issuing sukuk, while Tunisia, Egypt, and Morocco have been finalizing their legal frameworks to do so. Multilateral institutions may

internationalization of sukuk, and “growing investor comfort with these instruments”. Longer maturities beyond 5-7 years are appearing, and enhancing the sector’s appeal. Like S&P, though, Moody’s saw the global market as “likely to remain fragmented”, a

further stimulate sukuk activity, either themselves

view which reflects awareness that differing locations

Islamic or representing countries with large Muslim

around the world are tending to compete as much as

populations. The IDB, ADB, and other forums, “are natural and prominent players”, aiming “to facilitate

co-operate, whether for a niche or a comprehensive role, chasing market share in this growing field.

Page 21

call for papers 4th Islamic Banking and Finance Conference (IBF 2014) 23rd to 24th June 2014 Venue: Lancaster University Management School

Keynote Speaker

Thorsten Beck Professor of Banking and Finance, Cass Business School The constraints applied by Islamic banks rendered them more resilient in the recent financial crisis compared to their conventional counterparts. This has attracted the attention of market participants and researchers to their liquidity buffers, leverage ratios, managerial efficiency and bespoke financial products. Islamic banking products are now offered in more than twenty countries and their expanding suite includes bonds, equity indices and insurance. The sector is estimated to exceed $1trillion in value, while growing at about 15% per annum. Among many issues still subject to debate is the purity of Islamic finance in practice, given the need to compete and to operate with customers whose expectations have been formed by conventional banking practices. EIBF centre at Aston Business School in collaboration with GOLCER Lancaster University Management School is organising a conference on Islamic Banking and Finance. The conference aims to provide a forum for an exchange of views on recent developments and to identify key issues/challenges underlying the paradigm of Islamic Banking and Finance in the 21st century.

Original contributions are invited on any of the listed topics: • • • • •

Financial risk and stability Transparency, governance and corporate social responsibility Earnings management and impression management Performance, efficiency and convergence Mutual funds

• • • •

Risk Management, Accountability and auditing Competition Microfinance and SMEs Behavioural finance

Conference Organisers: Dr Omneya Abdelsalam (Aston University), Dr Marwan Izzeldin (Lancaster University)

Special Issue

Journal of Economic Behaviour and Organisation (JEBO) Ana Timberlake Best paper Research Award: £500 Co-editors for the JEBO Special Issue Omneya Abdelsalam, Aston University Mohammed El-Komi, American University of Cairo Ana-Maria Fuertes, Cass Business School Stergios Leventis, International Hellenic University Gerald Steele, Lancaster University

Scientific committee Omneya Abdelsalam (Aston University), Nathan Berg (University of Otago), Rachel Croson (University of Texas at Dallas), Mahmoud El-Gamal (Rice University), Mohamed El-Komi, (American University Cairo), Meryem Fethi (Leicester University), Ana-Maria Fuertes (Cass Business School), Mohamed Shahid Ibrahim (Bangor University), Marwan Izzeldin (Lancaster University), Jill Johnes (Lancaster University), Stergios Leventis (International Hellenic University), Kent Mathews (Cardiff Business School), Khelifa Mazouz (Bradford Business School), Philip Molyneux (University of Bangor), Andrew Mullineux (University of Bournemouth), Steven Ongena (University of Zurich), Vasileios Pappas (Lancaster University), Mohamed Shaban (Leicester University), Mustapha Sheikh (Leeds University), Gerald Steele (Lancaster University), Emili Tortosa-Ausina (Jaume I University), Mike Tsionas (Lancaster University)

For paper submissions please email Marwa Elnahass: Conference Abstract Submission 31st March 2014

Important Dates

Conference Full Paper Submission 27th April 2014

Submission for JEBO Special Issue 1st October 2014

TIMBERL AK E St atistics



Page 22

Special Issue Publication October 2015

Global Forum on Islamic Finance 2014 Conference

Developments and The Way Forward March 10-12, 2014 Lahore, Pakistan Organised by Department of Management Sciences COMSATS Institute of Information Technology (CIIT)

About the Conference The 2nd Global Forum on Islamic Finance (GFIF) will consider the spectacular political and socio-economic developments that we have been witnessing, and their probable effects on the performance and future position of Islamic financial institutions, the regulatory set-ups and popularity of Islamic products being offered to the public, governments and business. Much has been said about the phenomenal growth of the Islamic finance industry over the past decade and the growth rates have been outstandingly impressive. Industry supporters have also lauded how successfully Islamic banking has largely weathered the global economic crisis that engulfed the conventional banking industry. However, despite these achievements, much still needs to be done if the industry is to truly flourish and play its part on the world stage. On this great global forum, COMATS Institute of Information Technology will provide a platform to the leading industry players, academics and researchers to address key factors for achieving scale through novelty to strengthen the Islamic financial institutions and ensure long-term industry stability; GFIF 2014 will thus assist industry players to innovate the next generation of Islamic finance solutions that will meet the increasingly complex needs of corporate borrowers, consumers, issuers and investors; and create the conditions that will enable a more globally harmonized footprint for Islamic financial institutions - that, if achieved, will propel the Islamic finance industry to the next level of success. GFIF welcomes participants from academia, research institutes, corporate world and government sector to share their experiences, learning and research. GFIF comprises various sessions to make it the most comprehensive experience for its attendees.

Conference Topics • Islamic project financing

• Islamic wealth management

• Socially-responsible investment strategy

• Structuring Islamic securitization

• Shariah-compliant risk management

• Market penetration in non-Islamic contexts

• Islamic microfinance

• Business cycles, financial stability & crisis

• Management, leadership and governance of Islamic financial services providers • Corporate social responsibility of Islamic financial institutions

• Principles of Islamic jurisprudence and legal maxims • Housing finance and Shariah-compliant mortgage products

Page 23

Marwan Izzeldin Director Andrew Shouler Editor

Research Team Gerry Steele Vasileios Pappas Marwa El Nahass

DISCLAIMER This report was prepared by Gulf One Lancaster Centre for Economic Research (GOLCER) and is of a general nature and is not intended to provide specific advice on any matter, nor is it intended to be comprehensive or to address the circumstances of any particular individual or entity. This material is based on current public information that we consider reliable at the time of publication, but it does not provide tailored investment advice or recommendations. It has been prepared without regard to the financial circumstances and objectives of persons and/or organisations who receive it. The GOLCER and/or its members shall not be liable for any losses or damages incurred or suffered in connection with this report including, without limitation, any direct, indirect, incidental, special, or consequential damages. The views expressed in this report do not necessarily represent the views of Gulf One or Lancaster University. Redistribution, reprinting or sale of this report without the prior consent of GOLCER is strictly forbidden.

Islamic Finance Bulletin February 2014