Private placement preference

Public offerings of bonds and Sukuk may dominate the market but there is a growing trend of issuers opting for the private placement route; how does this impact the Islamic issuance and what benefits would it bring? Learn more in this week’s cover.

The IFN Editorial Team takes a look at Iran’s recently-approved Islamic mortgage-backed securities, exploring their structure and potential market impact; asks what would become of Malaysia’s Islamic finance industry should the much-valued tax incentives be removed; analyzes Pakistan’s Islamic equity market; and shines the spotlight on an Australian Islamic financial firm making headway in the Middle East; as well as reviews the Canadian and real estate markets in our analyses. Our IFN Correspondents bring you updates on Indonesia, Morocco and real estate and GSG Attorneys at Law walks us through the Turkish property market. And our resident columnist Daud Vicary shares with us his thoughts in his column.

As usual, we would like to wish our readers an enjoyable and insightful read. Until next week.

Sovereign Sukuk: Business as usual

The sovereign Sukuk space may have been quiet the previous week but activities have picked up this week. DANIAL IDRAKI brings you the usual updates. 

The monthly issue of the Central Bank of Bahrain (CBB)’s BHD43 million (US$113.18 million) Sukuk Salam securities was subscribed by 100%. The expected return on the issue, which begins on the 20th July 2016 and matures on the 19th October 2016, is 2.09% compared with 2.05% for the previous issue on the 22nd June 2016. 

The government of Indonesia issued a sovereign Sukuk facility (SPNSNT 12102016) with a nominal value of IDR2.54 trillion (US$193.55 million) via a private placement, according to an announcement by the Ministry of Finance. The non-tradable Islamic paper, which matures on the 12th October 2016, carries a yield of 5.62% and a discounted coupon payment.

Kuwait, which announced plans to raise funds via conventional bonds and/or Sukuk earlier this month, will tap the market in September, according to Finance Minister cum Acting Oil Minister Anas Al-Saleh, as reported by Bloomberg. Anas also said that the government is currently looking to hire banks to manage the offering and has hired consulting firm Oliver Wyman & Co to establish a debt management office.

A special committee with officials from the Ministry of Finance, sovereign wealth fund and the Central Bank of Kuwait will decide on whether to offer Islamic or conventional debt and whether to sell the debt in tranches. It was previously reported that the government was looking to issue up to KWD2 billion (US$6.61 billion) from the domestic market and up to KWD3 billion (US$9.92 billion) from international markets. 

Oman’s US$500 million privately placed Sukuk facility that was priced with a profit rate of 3.5% per annum was assigned a ‘Baa1’ rating by Moody’s. The US dollar Ijarah trust certificates will mature on the 14th July 2022.

Upcoming sovereign Sukuk



Expected date


US$2 billion



XOF150 billion

July 2016


IRR60 trillion






JOD175 million



PKR79.1 billion











South Africa






Hong Kong

US$500 million to US$1 billion


Ningxia Hui Autonomous Region

US$1.5 billion



XOF150 billion






US$500 million





Shandong Province

CNY30 billion


Sindh Province

US$200 million



KWD5 billion

Sept 2016




Sri Lanka

US$1 billion



US$1 billion


Company Focus: Brexit presents Equitable Financial Solutions an opportunity to lure Islamic funds into Australia

As investors scramble the world over in search of safe haven investments after the Brexit volatility threw the UK into economic and political uncertainty, one of Australia’s Islamic finance companies, Equitable Financial Solutions (EFSOL), is taking advantage of the situation by expanding its presence in the Middle East in order to attract funds from the region into the Australian property market. DANIAL IDRAKI brings you the story.

Shariah compliant investors from the Middle East have typically favored property investments in the UK over the years due to its predictability and upside potential. The situation, however, is changing rapidly as investors look to flee the once-safe investment destination, as the result of the UK choosing to leave the EU presents a convoluted outlook. 

Three of the UK’s largest real estate funds — M&G Investments, Aviva Investors and Standard Life Investments — for example, froze almost GBP9.1 billion (US$12 billion) of assets as they did not have enough cash to immediately repay investors, shortly after the shocking announcement by the UK.“The Middle East investment market is very bearish at the moment, mostly due to geopolitical tensions and developments in Europe, particularly Brexit. Markets that generally Middle Eastern investors were ‘comfortable’ with or were ‘knowledgeable’ about are suddenly being seen as very risky or volatile,” Usman Siddiqui, the managing director of EFSOL, told IFN recently.

EFSOL, which currently manages AU$16 million (US$12.11 million) in assets after it was set up some five years ago, is upbeat that its high-credit grade residential and commercial mortgages will continue to grow steadily with its strategy of attracting Middle Eastern funds into the Australian real estate market. The company also only recently launched its Southeast Asian office in Singapore in April this year to attract funds from the region. 

Besides investing in the real estate market, EFSOL also offers Shariah compliant financing in the form of Musharakah, Murabahah and Ijarah structures for property and automobile purchases. 
Although Australia recently had its fair share of political drama, with the federal election earlier this month being won by the Liberal/National coalition government in a closely fought battle against the Labor Party, it has maintained fairly strong credit ratings over the years. All of the top three rating agencies — S&P, Moody’s and Fitch — have a ‘AAA’ sovereign rating on the Land Down Under. S&P, however, recently cut Australia’s credit rating outlook to negative from stable, followed by Moody’s warning that a political deadlock in handling the country’s budget deficit could similarly result in a negative outlook. 

Despite the minor setback in Australian politics and its impact on credit ratings, Australia has been one of the highest credit-rated countries outside of the EU with uninterrupted growth for the past three decades, and Usman is confident that the market presents a viable alternative opportunity compared to the UK. “Australia was unscathed during the global financial crisis and has maintained the highest credit rating with a stable outlook for many years. For Middle Eastern investors, investing in Australian mortgages is one of the best ways to secure a long-term cash flow during these uncertain times, and frankly, this is the crux of our value proposition,” he affirmed.

According to Australia’s Foreign Investment Review Board’s Annual Report 2014-15, the number of foreign investment proposals continued to grow steadily, with 37,953 proposals receiving foreign investment approval, compared with 24,102 in 2013-14. The real estate sector had a significant increase in approvals with 37,347 approvals in 2014-15, compared with 23,428 approvals in 2013-14, more than tripling the levels of 2012-13. The majority of this increase is related to new approvals and is consistent with the government’s policy to increase the housing stock by channeling foreign investment into new dwellings.

“Our challenge, however, is that a lot of Middle Eastern investors ‘think’ that Australia is either too far away or is not sophisticated enough to provide quality service that they have come to expect locally. EFSOL is here to change this perception, [and] we have set up an office in the Emirates Tower, Dubai, to cater to the investors,” Usman explained.

Regulator suspends Gulen-linked Bank Asya following failed coup; says no bids for takeover received

VINEETA TAN reports on the state of Gulen-tied Bank Asya, following the military coup d’état which the Turkish president is saying Gulen is behind.

No bids were submitted for Islamic financier Bank Asya’s shares resulting in the temporary freeze of the Gulen-linked bank’s operations, announced the TMSF Savings Deposit Insurance Fund a few days after the attempted military seizure of power which left at least 265 dead — a coup President Recep Tayyip Erdogan accused former ally cleric Fethullah Gulen of orchestrating. 

Once the largest Shariah compliant bank in Turkey, Bank Asya has, however, failed to attract buyers to take over its business which was seized by the TMSF in 2015. It was possibly one of the strongest Islamic finance brands in the country once upon a time before the fallout between President Erdogan and Gulen which dragged the bank (and other Gulen-linked entities) through the mud in the last few years. A government probe into the bank, which some pundits saw as a political move to stifle the now US-based Gulen’s significant presence in Turkey, left the bank in financial tatters as it marked the beginning of the exodus of huge deposits and the loss of lucrative government contracts for the Shariah financier. The loss-making bank was seized in May 2015 by the TMSF purportedly due to its failure to fulfill certain obligations, and the process to sell the bank commenced almost immediately.

The timing for Bank Asya’s sale tender could not be more unfortunate as its conclusion was reached a few days prior to a deadly attempted coup. There are grave concerns about Turkey’s economy amid such instability, one that has already been vulnerable to terror attacks prior to the attempted coup d’état which has caused the lira to fall. Deputy Minister Mehmet Simsek, however, reassured the market that the country — one of the better-performing emerging markets – has solid macroeconomic fundamentals and that any repercussion would be short-lived.

Economic woes aside, it is looking even more likely that Bank Asya will be liquidated, bringing the number of participation banks in the country to five — and while the bank may have once been a leader in the space, its dismissal may not be as significant as one may think as it only holds approximately 1% of the market share and the other participation banks are performing well.

Asian Tiger: Pakistan’s Islamic equity market expected to surge

The Pakistan Stock Exchange is expected to see an explosion in Shariah compliant listings this year, following a new tax incentive introduced in July by the federal government to encourage companies to go Islamic. LAUREN MCAUGHTRY explores the positive growth prospects for the sector amid the latest equity boom for Pakistan. 

The equity market in Pakistan is flourishing: and this month Bloomberg named the Pakistan Stock Exchange the best of the Asian markets, with a recent report claiming that the economy had regained ‘tiger’ status. The main index, the KSE 100, has gained 19.42% year-to-date, and the increasing rate of annual growth looks positive for the overall market. Privatization reforms, an improved relationship with the IMF and the latest US$46 billion investment from China in the China-Pakistan Economic Corridor have contributed to the boom — while the upgrade by MSCI to its benchmark emerging markets index for the first time since 2008, announced on the 14th June 2016, is expected to have a significant impact. In a research note released last month, JPMorgan Chase estimated that Pakistan could attract US$220 million in inflows, while EFG Hermes has gone even higher with a predicted US$475 million by mid-2017 as a result of the upgrade. 

The Pakistan Stock Exchange currently has two Islamic indices: the KMI-30 (launched in 2009 as the Karachi-Meezan-30 Index by Al Meezan Investment Management and the Pakistan Stock Exchange, and tracking 30 screened Islamic stocks based on a free-float market capitalization methodology) and the All Shares Islamic Index (launched in 2015 and comprising the full 225-stock spectrum of companies on the exchange that meet Shariah screening criteria). 

The screened list of Shariah compliant securities for the stock exchange is provided by Al Meezan, which recorded a 20.1% return for the KMI-30 in 2015. “With the introduction of [the] KMI-30 Index, there already is awareness about Shariah compliance screening methodology among issuers and many of them try to ensure that their shares and securities fulfill the criteria to be classified as Shariah compliant, so that Islamic banks, Takaful and asset management companies invest in those securities,” explained Mohammad Shoaib, CEO of Al Meezan Investment Management, speaking to IFN. “Given that the Shariah compliant segment of market is growing at a much faster pace than its conventional counterpart, inevitably [listings] by such institutions [will] have the impact of generating more demand for those shares/securities.”

Pakistan has been working hard to develop its Islamic capital market, and the latest incentive is designed to encourage Islamic participation from listed manufacturing firms. Offering an attractive 2% tax rebate, the deal is open to all Shariah compliant companies that derive their income purely from manufacturing activities and which have declared their taxable income for three consecutive years and paid dividends for the last five consecutive years. Recommended by the Securities and Exchange Commission of Pakistan, the rebate is part of a wider set of reforms being introduced to promote the Islamic capital market in the country. 

“The introduction of the new fiscal benefit… is an additional sweetener for the companies,” confirmed Mohammad. “I have come to know of many listed firms who have welcomed this move and are looking for the criteria to be released by [the] State Bank [of Pakistan], so that they can strive to get into the list of eligible companies for [a] 2% reduction in their tax rate.”

The move could have a significant impact on the growth of Islamic finance in the country, as an increasing number of corporates strive to become eligible for the new incentive. At the same time, it will promote the listing of new companies on the stock exchange (as a requirement of eligibility) — thus widening and deepening the Islamic equity market. “An additional benefit of this will be that Islamic financial institutions will have a bigger universe of companies to invest in, which is very important considering their growing size and importance in Pakistan,” pointed out Mohammad.

Where would Malaysia’s Islamic finance industry be without its attractive tax incentives?

Tax incentives for Islamic financial transactions are a main feature of Malaysia’s top-down approach in developing its Shariah finance industry – making its Islamic finance success story almost unparalleled anywhere else in the world. But now that the market is relatively mature, is it time to remove the incentives? More importantly, VINEETA TAN asks, will the industry be able to stand on its own two feet without the support?

Malaysia’s Islamic finance accolades are known to us: it is the largest Sukuk issuer in the world, the largest Islamic banking market in the world after Saudi Arabia, and is the world’s biggest Family Takaful market.

Sukuk issuers, particularly corporates not necessarily involved in the Halal industry, and Islamic mortgage subscribers are likely to attribute their preference for Shariah compliant financial instruments over the conventional to the attractive tax incentives that come with Islamic products.

Incentives extended
Prime Minister Najib Razak’s Budget 2016 revealed that the government is extending many of these tax breaks in order to continue luring capital into the Islamic finance space: Until the end of 2017, Shariah compliant home financing instruments are accorded a 20% stamp duty exemption while any additional costs attached to issuing retail Sukuk (such as due diligence professional fees, advertising cost, Bursa Malaysia and Securities Commission fees and primary distribution fees) will receive further deduction until 2018 as with sales tax on Sukuk Ijarah and Wakalah

Tax incurred from issuing SRI Sukuk are given a five-year extension until 2020 whereas to encourage fund managers to include Islamic funds into their portfolio, exemption from income tax on the statutory income derived from managing Shariah funds are prolonged for another four years until 2020.

While it is all well and good that these incentives are in place to boost the Islamic finance industry, does this mean that the phenomenal growth the Islamic finance pioneer has been experiencing is ‘artificial’? And what happens if they are removed?

Manageable cost
“I do not foresee drastic changes should the incentives be abolished,” a senior industry practitioner tells IFN. “Yes, the cost may be more expensive, but the cost of issuance would be manageable because we already have precedents as to how to execute the sale — the impact would therefore be slight.”

All about demand
Given that it is possible that even a slight premium in cost could push issuers to the conventional market, however, reducing their Shariah compliant debt portfolio may disqualify companies from Bursa Malaysia’s list of Shariah compliant equities therefore excluding them from the investment strategies of a significant pool of investors such as Islamic unit trust funds, Takaful funds, Islamic stock brokers and any other Shariah-seeking investors. 

“This is a question of demand — and the demand for Islamic instruments in Malaysia is robust. Issuers would still want to capture this segment of the investment circle and this is likely to outweigh the slight difference in costs,” commented one source. As at the end of 2015, 73.9% of listed securities are certified Shariah-friendly, according to Securities Commission Malaysia

Beyond price
Moving away from the capital market to the retail space, a C-suite Islamic banker echoed similar sentiments, explaining to IFN that: “Removing the 20% stamp duty exemption would not make a huge difference in the take-up of Islamic mortgage facilities. Yes, at the end of the day, to a non-Muslim customer, the cheaper product wins, but Islamic facilities have their own added advantage: there is no lock-in period for Shariah compliant mortgages and this is something that appeals to customers.” 

So it seems that the Malaysia Islamic finance industry has reached a stage where it would be able to hold its own even without special tax treatments but this is not necessarily true for all segments. Take the Islamic asset management industry for example: Shariah compliant assets under management (AUM) account for less than 20% of total AUM of fund management companies at RM132.38 billion (US$33.05 billion) at the end of 2015. 

“The Islamic fund industry is still lagging behind the conventional market and we need to reach an optimal size first before we can stand on our own — therefore such tax exemptions are a much-needed boost,” the CEO of an Islamic asset management company commented.

Iran turning to Shariah compliant mortgage-backed securities for fundraising

After years of sanctions with very little inflow of foreign investments, Iran is now bracing itself for overwhelming interest by investors that are hungry to capture a slice of its US$400 billion economy, and one particular investment instrument is making headway. The government recently launched Islamic mortgage-backed securities (MBS), approved by the Securities & Exchange Organization (SEO), and is banking on its growth to further expand its capital markets. DANIAL IDRAKI takes a look at the potential of Iran’s Shariah compliant MBS, and wonders if it will attract fresh capital into a newly opened economy.

The Shariah element of MBS
The Iranian capital market regulator has been studying ways to develop the MBS market for some time to ensure that it not only offers fundamental transactions to investors venturing into this new instrument, but also carries with it a solid protection mechanism. 

There may be suggestions that MBS may not be a suitable  investment instrument, what more in the arena of Islamic finance, given the role that the collateral debt obligation played in the US subprime mortgage crisis in 2007/2008 and its subsequent impact on the global economy. 

However, Majid Pireh, a senior expert in Islamic finance at the SEO, noted that issuing Shariah compliant MBS will have to rely on the bank’s receivable, where a debt should arrive from a real transaction. “[Whereas] in conventional MBS, it is not a necessary element for the debt to be from a real transaction,” Majid explained to IFN. 

MBS is not a widely utilized instrument in major markets of Islamic countries, as it uses the debt-trading mechanism, and many Shariah scholars have rejected it, according to Majid. “Iranian scholars, however, have approved debt trading in the secondary market,” he added.

Guaranteeing system
Issuing MBS in Iran does pose its own unique challenge. Due to the economic sanctions over the years, rating agencies have never rated Iranian securities and issuers, leaving a question mark on the viability of MBS. However, it seeks to utilize a guaranteeing system to ensure that investors are protected, in the event of a default. “Guaranteeing is an important element for Shariah compliant investments. In the case of Iranian MBS, the bank itself will be the guarantor for investors,” Majid affirmed. “This way, we will be able to control the Shariah compliant MBS in a more efficient way than conventional MBS,” he added.

Bank Maskan
While local banks are beginning to warm to the idea of Shariah compliant MBS, Bank Maskan, for one, has provided IRR3 trillion (US$99.58 million)-worth of MBS with a yield of 18.5%, and recently committed to issuing up to IRR100 trillion (US$3.32 billion) by the end of the current fiscal year, as announced by the bank’s CEO, Mohammad Hashem Botshekan, during a ceremony to launch the new MBS. “It [Bank Maskan] is a pioneer in this market, and I strongly believe that other Iranian banks are eager to use the MBS instrument for fundraising,” Majid said. 

Foreign investments
With Iran slowly opening up its doors to foreign investments and GDP growth expected to reach 4.2% and 4.6% in 2016 and 2017 (according to the World Bank’s projection) respectively, investors are strategizing to navigate through the exciting yet fairly unfamiliar terrain of the Iranian economy. 

For Shariah compliant investors, the appetite is certainly there, given that the country’s entire financial system is based on Islamic values, and MBS is expected to be a desirable market. “For the internationalization of the MBS market, we will need to issue a large amount in order for investors to be confident and feel safe. The profits and rate of return itself will be attractive to foreign investors,” Majid opined. 

With significant improvement in Iran’s economic outlook, MBS could just be the turning point for more opportunities to come, especially within the Shariah compliant investment universe.

Real estate investment companies’ role in developing Turkish real estate market

As a natural outcome of a developing and expanding economy, increasing population and urban transformation projects in Turkey, financing for real estate investments has become an important issue for the market. BURAK GENCOGLU writes.

The real estate market of Turkey has expanded and demonstrated an outstanding performance during the past couple of years. In addition to the increase in demand and high-quality office and retail space, decreasing interest rates and the mortgage system have been the main reasons for the remarkable growth of the real estate market.

In terms of real estate investments, real estate investment companies (REICs) have a significant role in the Turkish real estate market. Real estate investment trusts are structured as REICs, since ‘trust’ is not a model existing in Turkey. REICs can be defined as the institutions which can only invest in real estate, capital market instruments based on real estate, real estate projects and rights based on real estate. There are currently 31 REICs currently operating in the Turkish real estate market. REICs were introduced more than 20 years ago in 1995 after the Capital Markets Board (CMB) completed the required legal arrangements. 

REICs, which comply with the requirements of the CMB, operate as corporate income tax-exempt stock companies and they are listed on an organized stock market in Istanbul. REICs are also considered as a useful vehicle that offers easy access to the profits of huge real estate portfolios in the real estate market. Therefore, they have attracted the attention of both local and foreign investors. REICs have a high growth potential; however, in order to achieve the desired levels, it is crucial for these companies to have opportunities to boost their investments such as establishing new financing instruments. 

Lease certificates as a financing method for REICs
While REICs play an important role for the real estate market, it is of utmost importance to provide finance for their investments and diversify their financing instruments. REICs traditionally provide financing for their investments through their equity capital or bank loans. However, REICs have also added lease certificates (Sukuk) into their financing sources in recent years. One of the main advantages of REICs is that since they are listed on the stock market, they can also benefit from capital market financing opportunities. 

The real estate market has become more familiar with Islamic finance instruments, namely lease certificates, due to the legislative developments during the past years. However, as an alternative to the traditional financing instruments, lease certificates are still at the development stage. REICs can incorporate asset leasing companies (ALCs), which issue lease certificates, to provide funds to be used by REICs in the investment projects. 

The main regulation regarding lease certificates is the communiqué numbered III-61.1 (communiqué) enforced by the CMB and published on the Official Gazette dated the 7th June 2013 and numbered 28670. The communiqué regulates matters such as the guidelines for defining the lease certificate types, establishment, articles of association of ALCs and rights and assets which can be acquired by these companies. 

As per the communiqué, lease certificates may be issued in five different forms. These are the lease certificates which may be based on: (i) ownership (Sukuk Ijarah), (ii) management agreements (Sukuk Musharakah), (iii) trading (Sukuk Murabahah), (iv) partnership (Sukuk Mudarabah) and (v) contractor agreements (Sukuk Istisnah) or by combining these different structures. Lease certificate holders generate revenues in the same ratio as their percentage on the underlying assets and rights.
As a regulatory requirement, REICs should have a minimum of 50% real estate investment within their portfolio. However, in order to establish the issuance structure of lease certificates, REICs should transfer their real estates to ALCs. Since such a transfer transaction affects the distribution of the REIC’s asset portfolio, it is essential to protect the minimum 50% real estate investment ratio which should be held by the REIC itself. 

Therefore, REICs should direct the financing provided through the lease certificate issuance to new real estate investments which will enable them to meet the minimum requirement. This way, the portfolio distribution of REICs can be protected to comply with the real estate-related investment limit.

Lease certificates are considered as an advantageous method to carry out the securitization of the real estates owned by REICs. The issuance of lease certificates may provide a less costly financing tool compared with bank loans and other traditional methods due to factors such as the ALC and its asset-based structure. Additionally, the Turkish real estate sector attracts a considerable number of foreign investors who prefer to invest in Islamic finance instruments. 

Interest-free and Islamic finance tools have increasing popularity both in Turkey and in the world as they attract the Gulf investors. Therefore, Turkey is enacting legislation to provide a favorable tax regime for investors and issuers to promote Islamic finance instruments such as the lease certificates. 

By promoting the lease certificates to be issued by REICs, investors may benefit from the advantageous regimes stipulated for both REICs and lease certificates.

Burak Gencoglu is the senior attorney at GSG Attorneys at Law, a PwC network firm in Turkey. He can be contacted at burak.gencoglu@gsghukuk.com.

Women and Words: Capturing a diversity dividend in Islamic finance

By Laura Elder, a cultural anthropologist and teaches in the Department of Global Studies at Saint Mary’s College in Notre Dame. Her primary research interests are global political economy, Islam and gender. She can be contacted at lauraeveelder@gmail.com

As seen most recently in the UK, after crises women are often selected to lead recoveries. In times of stability, however, research suggests a partiality toward selecting men for leadership positions both in corporate and governmental sectors. But recent research across the social sciences indicates that gender diversity has positive effects on the bottom line and on the social bottom line as well. If this is the case, then women’s leadership during a time of expansion in Islamic finance should have significantly positive effects. But what is the source of these diversity dividends?

A decade ago, Ronald Burt, an organizational sociologist, showed that people with different social networks within the same organization have viewing blind spots because they cannot access the information available within other networks. Bringing diverse people into such an organization – women for example – means that as outsiders they must broker across the blind spots that divide groups. If they are able to access different information and then translate their insights into policy, people who do not fit within the traditional structures of power and authority in an organization may provide a diversity dividend in terms of efficiency, innovation or profitability. 

Around the world, corporations are now trying to capture this diversity dividend by retaining and promoting those who broker across institutional networks.

For Islamic finance, in particular, one positive effect of diversity may derive from a more expansive view of Maslahah. In both conventional and Islamic banking and finance, the public interest has often been construed to mean whatever is singularly best for the corporate bottom line. Within the body of theory that has developed around commercial partnerships, for example, critiques of inequality in relative bargaining power as well as relative access to information often drop out. Choosing and retaining diverse leadership in Islamic financial services may redress both the public and corporate bottom lines.

The Gulf and Brexit

By Daud Vicary, the president and CEO of the International Center of Education in Islamic Finance (INCEIF), The Global University of Islamic Finance.

Eid Mubarak.

Despite it being Ramadan, it has been a very busy month, which has included a trip to the Gulf just prior to the UK Brexit vote. Something I will comment on later.

The Gulf trip went well. As ever, traveling during Ramadan has its challenges; however, the warmth of the hospitality in both Doha and Dubai was most gratifying. As indeed, was the attentive listening that I received in support of the new Endowment Fund that my university has just launched. Nelson Mandela said that: “Education is the most powerful weapon that we have.” There is no doubt in my mind that this holds true, in particular, for Islamic finance and that public support, whether great or small, will make a tremendous difference to those students who do not have their own means to pay for their education. The future growth of Islamic finance will be dependent on developing the minds and capabilities of these talented people.

On to the Brexit. Like most people, I suppose, I was stunned and shocked by the result. It actually appeared to shock some of those who were campaigning to leave! Judging by the continuing media buzz since the results were made known on the 24th June 2016, there is still a great deal of soul-searching going on. Indeed, some schools of thought believe that the actual exit from the EU may not actually happen. We shall, of course, have to wait and see. The implications for Islamic finance at this point are somewhat unclear, apart from a rather nasty outbreak of enhanced Islamophobia in the UK. To my mind, there could be some impact on the future of London as a major financial center and the UK as an education center, which may in turn have a knock-on effect on the development of Islamic finance in the UK. My crystal ball, which I prefer not to use too often, is showing sure signs of cloudiness! However, I believe we should continue to strive positively toward ensuring that the true value proposition of Islamic finance is revealed and demonstrating that the impact of Islamic finance is beneficial for all humanity. As ever, I am optimistic that we can overcome these sorts of bumps in the road, whether man-made or acts of God, and we will continue to respond and adapt as an industry. This is not a time to jump ship!

Until the next time, there is much to do and not a moment to lose.


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