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.
Tunisia will delay its planned issue of $500 million in Islamic bonds until the third quarter of the year to allow parliament time to amend a law concerning the sale, Finance Minister Hakim Ben Hamouda said on Monday.
Tunisia had initially said it would issue the Sukuk by the end of last year.
TUNISIA, where citizens started voting for a new parliament, plans to raise $500 million (R5.4 billion) from the sale of sukuk by the end of next month, according to Finance Minister Hakim Ben Hammouda. Citigroup, Natixis, Standard Chartered and Qatar-based QInvest “expressed their willingness to co-operate” and consultations were ongoing, Hammouda said on Friday.
Hong Kong, Indonesia and Pakistan are banking on pent-up investor demand as they look to raise up to a combined US$3.5bn in the fast-growing Islamic bond market.
The three sovereign sukuk issues, including a planned US$1bn debut from Triple A rated Hong Kong, are set to launch before the end of September.
Few Asian issuers have targeted the global sukuk market in the past, and the glut of deals comes as governments across Asia are looking to attract Islamic investors from outside the region.
Zitouna Takaful, Tunisia's first Islamic insurance company, has said that it captured 1 percent of the insurance market in the country last year and expects its market share to increase to 2.5 percent this year.
Mr Makrem Ben Sassi, CEO of Zitouna Takaful, said that the company has to capture business in the savings market. He said in an interview with the Leaders news website that in the developed countries, savings products account for 60 percent of an insurer's business while the remaining 40 percent comprises risk products. In Tunisia, however, 20 percent of an insurance company's business is generated from savings products with 80 percent from risk products. He noted that in Tunisia, there is also potential in the pension savings market.
Tunisia's parliament has passed a law that will allow the state to issue Islamic bonds, or sukuk, a move that could help narrow a gaping budget deficit and boost foreign currency reserves, which have fallen to critically low levels.
Finance Minister Elyess Fakhfakh told parliament that his ministry planned sometime in November or December to issue a sovereign sukuk to raise $700 million.
Tunisia's first issue of a sukuk (Islamic bond) is likely to be postponed to next year, adding to pressure on government finances, because of disruptions to legislative business, said a top government official.
Finance Minister Elyess Fakhfakh told Reuters in April that Tunisia planned to issue a sovereign sukuk this July to raise $700 million. He said the government was in the final stages of pushing through legislation to permit the issue, and hoped parliament would approve the bill by end-April or early May.
Responding to increased interest in developing Islamic finance, the International Monetary Fund (IMF), Central Bank of Tunisia (CBT), ) and the Islamic Development Bank (IsDB), organized a three-day regional conference in Tunis on December 17 to exchange knowledge and share experience in building technical capacity in Islamic Banking and Sukuk Markets.
It has been reported that Tunisia plans to issue Islamic bonds early next year as the North African country seeks to reform its banking sector and diversify sources of funding, the central bank governor said on September 29th 2012.
"Tunisia will begin issuing Islamic bonds early next year ... This is part of the draft budget for 2013," Tunisian central bank governor Chadli Ayari told Reuters on the sidelines of a banking seminar.
It has been reported that supportive socio-political factors and economic incentives shouldaccelerate the growth of Islamic banking activities in North Africa from currentlow levels, according to a new report
published by Standard & Poor's Ratings.
Services titled "Prospects For Islamic Banking In North Africa Improve Following The Arab Spring." Islamic banking started to emerge in North Africa in the 1970s when Egypt was among the first countries in the Arab world to authorize the establishment of pioneer Islamic banks.