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The IFN Turkey Report 2016

It is with great delight that we launch the inaugural IFN Turkey Report, an insightful review of the Turkish Islamic finance landscape exploring its performance, prospects, challenges and opportunities for future growth and development.

Turkey has always been a bright spot for Islamic finance and the Republic continues to demonstrate strong political will to advance its participation finance industry by supporting development with various legislative and regulatory initiatives and top-down measures. Yet, it has not always been an easy journey for the Eurasian country, with 2016 bringing unexpected and unforeseen difficulties.

Viewed as one of the more promising emerging nations, commanding one of the world’s 20 largest economies, Turkey is for the first time since 2009 facing negative economic growth; and has to yield to limiting growth factors moving into 2017 as it wrestles with political instability at home and abroad, with multiple terrorist attacks and a failed coup staining the country’s economic, social and political fabric.

But not all is lost, particularly for its interest-free finance market. Development may have been slow since its inception three decades ago, but the pace has changed dramatically in recent years as both regulators and market participants strive to push the industry forward: new regulations are being issued, new players are entering the participation banking scene and there is a general consensus that more corporates are considering tapping the Shariah compliant capital markets to raise funds.

In this report, we are pleased to present a series of informative and analytical articles by the leading lights of the industry who share their discerning views on the Turkish participation banking sector, Sukuk market and legal landscape. We also provide you with key insights from our high-level IFN Turkey Dialogue designed to lay the foundations for a roadmap for the country’s participation finance industry as well as exclusive interviews with market stalwarts including the chairman of Borsa Istanbul.

It was a pleasure producing this report and we wish you an insightful and enjoyable read, and we look forward to continue supporting the Turkish participation finance industry.
 

 

Contents: 

FORUM OVERVIEW

Impetus toward Islamic finance in Turkey remains strong
On the 28th September, Borsa Istanbul hosted another highly successful incarnation of the IFN Turkey Forum, which was characterized by vibrant debate and enthusiastic attendance from both local and international players keen to leverage on the opportunities within the country’s nascent Islamic finance industry.

 


IFN TURKEY DIALOGUE 2016

In September 2016 in conjunction with the IFN Turkey Forum 2016 and supported by Borsa Istanbul, REDmoney Group held the second Turkish edition of its groundbreaking series of high-level, closed-door industry dialogues. Designed to establish a working roadmap for the progression and evolution of Islamic finance in Turkey, the invite-only event comprised a distinguished array of senior regulators and market leaders, along with a select group of international representatives.


BANKING

An overview of interest-free investment finance in Turkey
When we talk about Islamic finance in Turkey (also commonly referred to as interest-free finance), participation banks come to mind. It is because participation banking focuses on interest-free financial products and services mainly based for production and asset financing, and also because these are the organizations that offer interest-free finance products in banking and other areas of finance. As a matter of fact, an interest-free banking license is given only to participation banks under current regulations AVSAR RADI SUNGURLU writes.


SUKUK

Sukuk in Turkey: The story so far and future prospects
The Sukuk market in Turkey has evolved substantially over the last few years. The evolution has been comparatively quick and helpful. In this article, RIZWAN KANJI and HAMED AFZAL will review some of the key milestones in the development of the market and, going forward, the key challenges and prospects for the market to further grow and evolve.


INTERVIEWS

Istanbul stock exchange strengthens its commitment to Islamic finance
Turkey has demonstrated a sustained commitment to building up its Islamic finance capabilities and despite the recent political uncertainty; this support has not only remained firm but has been scaled up as the authorities seek to cement the country’s position in the global arena through sovereign issuance, corporate support and an improved regulatory framework. Group Managing Editor LAUREN MCAUGHTRY speaks exclusively to the chairman of Borsa Istanbul, HIMMET KARADAG, to learn what the exchange intends for the future of Islamic finance.

An audience with Mohammed Dawood (MD) and Hulusi Horozoglu (HH) of HSBC
We would like to begin by getting your insights on the global Sukuk market.  MD: The international Sukuk market has developed considerably since 2008, where longer tenors and a broader range of issuers are accommodated by the investor base.


CORPORATE SUKUK

Turkish Sukuk market review: A look at corporate Sukuk
METIN TEKECI provides an analytical review of the Turkish corporate Sukuk landscape.


SUKUK REGULATION

Discussions on lease certificate (Sukuk) issuance in Turkey
In this article, UMIT AKKAYA intends to assess, from a legal perspective in the context of the provisions of the applicable legislation, the criticisms over the transfer of title to and pledge of the underlying assets in Sukuk practices in Turkey.

Thursday, 22 December 2016