Much of September 2024 was dominated by speculation that the Maldives is unable to meet the upcoming 8th October 2024 coupon payment of US$25 million due on its Islamic debt – and potentially triggering the first ever sovereign-issued Sukuk default.
But this concern was eased by the Indian government providing urgent financial assistance in subscribing to the Maldives’ US$50 million government Treasury bill (T-bill) through the State Bank of India. This zero cost, interest-free funding, marks the second emergency loan extended to the Maldives this year, following a US$50 million T-bill subscription made in May 2024.
In addition to the swift T-bill assistance, the Maldives is reportedly negotiating a US$400 million currency swap agreement with India. This potential arrangement, alongside a pre-existing US$800 million line of credit extended to the Maldives in 2019, may provide further relief as the country seeks to stabilize its finances.
Funds and equities
Capping a busy month, the initial subscription opened for the Shariah compliant OQ Exploration & Production IPO of two billion shares at a maximum price of OMR0.39 (US$1.01) from the 30th September 2024 to the 9th October 2024 for individuals, while institutional investors have an extra day on the 10th October 2024.
The Satrix MSCI World Islamic ETF initial subscriptions run from the 19th September 2024 till the 9th October 2024. As South Africa’s first Shariah compliant ETF with offshore exposure, this ETF is set to list on the Johannesburg Stock Exchange on the 22nd October 2024.
The Burj Clean Energy Modaraba made an initial offering enroute to be Pakistan’s first renewable energy investment fund listed on the Growth Enterprise Market. The fund’s portfolio includes solar, wind, energy storage and energy-efficiency solutions.
Arqaam Capital introduced its first set of Shariah compliant derivatives as options trades for bespoke clients. Legal & General launched a new Islamic investment proposition by offering six Shariah funds, handled by HSBC Asset Management, aimed at the British direct contributions pensions sector.
Cur8 Capital launched its new US dollar-denominated income fund with exposure to Shariah compliant, asset-backed financing and leasing facilities in collaterized debt financing and working capital solutions in Uzbekistan and other countries in the Commonwealth of Independent States, the UAE, the UK and the US.
Al Baraka Capital launched a Shariah compliant investment fund, in cooperation with crowdfunding fintech Invia, to channel financing to SMEs.
GIB Capital and Tata Asset Management launched the Shariah compliant GIB Opportunistic Indian Equity Fund while UOB Kay Hian Securities officially launched 16 Shariah compliant global commodity futures including crude palm oil and rubber – traded on Bursa Malaysia Derivatives, New York Mercantile Exchange, Chicago Board of Trade and Singapore Stock Exchange.
The Saudi Capital Market Authority (CMA) approved the offering of Albilad CSOP MSCI Hong Kong China Equity ETF units and the public offering of Jadwa Saudi Equity Fund II on the Saudi Stock Exchange.
Banaa AlTharawat received a financial technology experimental permit from the Saudi CMA to test an investment and real estate funds distribution platform while fintech Kafaa Capital and Ajdar Fintech received the experimental permit to test offerings and investments in debt instruments.
Deals
Bank Islam Malaysia inked an inaugural deal with Nomura Asset Management Malaysia to offer six of the latter’s Shariah compliant funds. Digital securities exchange KLDX inked a deal with the staff cooperative of Malaysia’s national oil giant Petronas to offer the latter’s members investment access to Shariah compliant private market assets.
Areeb Capital acquired a 32 million square meter plot of land in Dammam for SAR12 billion (US$3.19 billion), funded via Islamic financing secured from a consortium of Saudi banks. Dubai-based fund manager Rasmala bought the 60,000 square feet Quora Retail Park in Doncaster, UK via its Shariah compliant Long Income Fund while Saudi Arabian firm Sidra Capital bought a front townhouse and a linked rear mews house on Belgrave Square in London.
Alternate investments
Bybit launched an Islamic Account, certified by ZICO Shariah and CryptoHalal, which is designed for Shariah compliant spot trading for 75 cryptocurrencies. Shariah compliant token Palcoin is targeting a US$10 billion market capitalization by 2030. The token is also aiming for listings at major exchanges.
UAE-based fintech platform Fasset plans to launch government-backed Ethereum Layer 2 blockchain IOWN – which was built for the creation, management and distribution of real-world assets while also aiming to advance the adoption of digital assets in the Islamic finance industry.
Affin Group launched its Diventium private banking service aimed at ultra-high net-worth individuals (UHNWI) with a variety of conventional and Shariah compliant products ranging from luxury-items financing to investments.
Saturna Capital incorporated a range of Shariah mutual funds into its Shifa Health Savings Account, which is designed to help accountholders save and pay for qualified medical expenses.
A third consecutive cut in profit rates was announced by Pakistan’s Central Directorate of National Savings on various national savings schemes and certificates, following a 200 basis points (bps) reduction in the central bank’s policy rate.
Regulations
AAOIFI approved the issuance of the Financial Accounting Standard Discussion Paper ‘Accounting and Financial Reporting Approach for Tawarruq and Commodity Murabaha’. The Central Bank of Iran prepared draft regulations in the field of cryptocurrencies.
Qatar Financial Centre issued the QFC Digital Assets Framework 2024 which establishes the legal and regulatory foundation for digital assets including the process of tokenization, legal recognition of property rights in tokens and their underlying assets.
The Securities and Exchange Commission of Pakistan (SECP) issued new requirements for listed companies and their subsidiaries to issue all Shariah-related interests as separate disclosures. Malaysia will waive due taxes on single family offices to be newly established in the southern Forest City Special Financial Zone.
The Kuwaiti CMA imposed a financial penalty of KWD3,000 (US$9,802.08) on Boubyan Capital Investment Company for its failure to properly maintain customer orders
Significant moves
Safaricom Investment Co-operative is going fully Shariah. Founded in 2009, this Kenyan co-operative invests in real estate, marketable securities and private equity.
Bahrain Islamic Bank CFO Ameer Abdul Ghani Dairi is resigning effective the 30th November 2024. Hazem Ben-Gacem will leave his post as Investcorp’s co-CEO effective 1st November 2024 but will continue his role as the vice-chairman of Investcorp Capital.
Ng Chze How was appointed managing director and CEO of Malaysia’s RHB Asset Management effective the 11th Sept 2024 as well as head of Group Asset Management & Trustee of RHB Banking Group. Moody’s appointed Salman Siddiqui as its associate managing director to oversee ratings and research on insurance across the EMEA region.
