Regional banks are looking to capitalise on Morocco’s plans to introduce Islamic banking (also known as participation banking) services in the country. Morocco’s central bank, Bank Al Maghrib, is developing the regulatory framework for the industry to be ready by 2016.
Egypt's Finance Minister Hany Kadry Dimian said on Thursday he hoped to issue, at the very least, an ijara-structured sukuk at the beginning of the 2015/2016 fiscal year.
He told reporters at a news conference that the ministry had also completed amendments to a sukuk law and a draft had been sent to the Islamic Development Bank for the opinion of the Sharia board.
Islamic banking, which grew out of a religious prohibition on usury and the desire for banking without interest rates, first emerged in Egypt through savings funds operated without interest.
Head of the Egyptian Islamic Finance Association (EIFA) Mohamed El-Beltagy said that Islamic banking clients in Egypt estimated approximately 2.5 million, constitute about 20% of the Egyptian banks clients.
First-time sellers of bonds that adhere to Islam’s ban on interest are poised to revive an industry suffering its worst quarter in more than four years.
Luxembourg and Hong Kong aim to market debut offerings of sukuk next month, while , , and Tatarstan have announced plans for maiden issues. Islamic bond sales have fallen 82 percent to $2.6 billion this quarter compared with the previous three months, their lowest level since the first three months of 2010, according to data compiled by Bloomberg.
With the fall of the Muslim Brotherhood, Islamic finance has lost strong political support in the most populous Arab nation. But economic pressures mean the industry remains likely to grow and the country will eventually start issuing Islamic bonds.
Islamic finance, which obeys religious principles such as a ban on interest payments, was neglected and even discouraged by authorities for ideological reasons in the three decades before the revolution which ousted President Hosni Mubarak in 2011.
Egypt aims to issue a sukuk to international and domestic markets at the beginning of 2014, the country said in its new USD12bn euro medium term note programme.
The Arab nation, rated Caa1/CCC+/B, wants to use Islamic bonds as a diversification tool to broaden the investor base and has been "targeting financing infrastructure and development projects with sukuk issuances", it said.
The Islamic Development Bank (IDB), a Jeddah-based multilateral institution, has called for the creation of a global sharia advisory board that can offer greater uniformity for the Islamic finance industry, its president said on Thursday.
A centralised format to the supervision of sharia-compliant banking products is gaining favour across the globe, as regulators seek to standardise industry practices and improve consumer perceptions.
The second day of the 7th International Takaful Summit, which is being hosted by Egypt for the first time, kicked off today.
The first session discussed takaful prospects for the African market, which panel members said had huge potential but also posed challenges which must be faced and met by the takaful industry if it is to get a foothold on the continent.
Egypt's government is using an ingenious stratagem to try to push a bill authorising issues of sovereign sukuk past Islamic scholars, but even if it passes, the bill may not shield authorities from controversy that could slow issuance.The cabinet last week approved a draft law that would allow the government to issue Islamic bonds; the bill will now be presented for review to the upper house of parliament and religious scholars at Cairo's prestigious Al-Azhar university.
Egyptian Finance Minister Hegazy claims 'Islamic' bonds could substantially reduce Egypt's budget deficit and welcomes Qatar's economic aid.
The new Islamic Bonds (Sukuk) law is expected to generate $10 billion for the Egyptian government, Finance Minister El-Morsi Hegazy was quoted as saying on Sunday.