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ISLAMIC FINANCE & CAPITAL MARKETS

ICD provides USD 50 million financing to ALAFCO Aviation

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Islamic Corporation for the Development of the Private Sector (ICD) (https://ICD-PS.org) and ALAFCO Aviation Lease and Finance Company K.S.C.P.(“ALAFCO”) signed a four-year syndicated secured financing agreement for USD 75 million with a USD 50 million participation from ICD making it the lead financier in the transaction.

While the aviation sector plays a crucial role in global connectivity and mobility as well as economic growth, it has been one of the hardest hit sectors during the pandemic. ICD’s financing will strengthen the operations of ALAFCO and help it to be well prepared as economic activities and travel picks up. This transaction was arranged by KFH Capital.

Mr. Ayman Sejiny, the CEO of ICD, commented, “We are very pleased to support ALAFCO in its efforts as a leading player in the aircraft leasing market following Islamic finance principles. ICD is also pleased to work in collaboration with KFH Capital in this transaction. ICD fosters sustainable economic growth in its 55 member countries by financing private sector investments, mobilizing capital from the international financial markets, and providing advisory services to businesses and governments.”

Mr. Adel Ahmad Albanwan, the CEO of ALAFCO said, “I am delighted and pleased to have worked closely with ICD in finalizing the secured financing agreement. The agreement demonstrates the confidence ICD has in ALAFCO‘s business model, its long-term sustainability and the outlook of the aviation sector. I would like to thank ICD for their support and efforts throughout the process. Furthermore, I would like to thank KFH Capital for their contribution and support in advising ALAFCO on this financing arrangement”.

Mr. Abdulaziz Almarzooq, KFH Capital’s CEO stated “KFH Capital is pleased to have advised ALAFCO on this very important transaction given the current aviation market conditions. He added “I would like to thank all the parties involved in making the transaction a success and especially ALAFCO for placing their trust in KFH Capital’s capabilities.”

About ALAFCO:
ALAFCO is a leading aircraft leasing company based in Kuwait and is listed on the Kuwait Stock Exchange. ALAFCO has major institutional shareholders such as Kuwait Finance House (KFH), Gulf Investment Corporation (GIC) and Kuwait Airways Corporation (KAC). ALAFCO operates based on Sharia principles.

ALAFCO’s portfolio consists of 79 Airbus and Boeing aircraft, leased to 23 airlines in 15 countries across Americas, Africa, Asia-Pacific, Europe, and the Middle East. ALAFCO’s remaining order book comprises of 68 new technology aircraft from Airbus and Boeing including 38 A320neo, 10 A321neo, and 20 B737 MAX. Deliveries are scheduled to take place between 2022 and 2028.

About the Islamic Corporation for the Development of the Private Sector (ICD):
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999, to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to its member countries’ governments and private companies, and encouraging cross border investments. ICD’s shareholders consist of the IsDB (rated T ‘AAA’), 55-member countries and 5 financial institutions from the member countries. ICD is rated ‘A2’ by Moody’s, ‘A-’ by S&P and ‘A+’ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collective financing. ICD also applies financial technology (Fintech) to make financing more efficient and comprehensive.

Distributed by APO Group on behalf of Islamic Corporation for the Development of the Private Sector (ICD).


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ISLAMIC FINANCE & CAPITAL MARKETS

The Future of Financial Services Talent

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Cities like Dubai and Singapore have witnessed an influx of financial services professionals from more traditional global financial hubs

The Covid-19 pandemic led to the `Great Resignation’ as many professionals reconsidered elements of their careers, including career progression, compensation, corporate culture, training opportunities, working arrangements, and wellbeing. Employers who are receptive to these new expectations are more likely to attract and retain talent. Financial institutions recognise that they can access a wider pool of talent if they improve their career development programmes.

Since the pandemic, large financial institutions have been providing more career opportunities at new offices in cities such as Dubai, as a way to retain current employees and attract new highly skilled professionals. Dubai offers an enticing array of benefits for international talent, including its strategic location, easy immigration processes and a high quality of life that supports a wide array of lifestyles.

The “Future of Financial Services Talent” report, the third in a series covering recent trends in Dubai’s financial industry, is a collaborative effort between DIFC and LSEG Data & Analytics. It offers an overview of the financial services talent landscape and insights into the new expectations talent has from employers, which will influence management styles in the industry. Furthermore, the report outlines DIFC’s value proposition as a global hub that attracts world-class specialized talent.

Click here to access the full report: 


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ISLAMIC FINANCE & CAPITAL MARKETS

Malaysia As An Islamic Finance Hub: From Humble Seed to Global Sun

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Malaysia’s rise as the world’s premier Islamic finance hub is a compelling tale of vision, perseverance, and unwavering commitment to ethical principles. It’s a story not just of numbers and financial products, but of a nation transforming itself into a beacon of hope for a more equitable and sustainable financial future. Let’s delve into the key chapters of this remarkable journey:

Planting the Seeds: 1960s-1980s – A Spark Ignites

While the concept of Islamic finance predates modern history, its modern incarnation began in the 1960s. In Malaysia, the embers of change were first stoked in the 1980s with the establishment of Bank Islam, the nation’s first dedicated Islamic bank. This pioneering step, however, faced challenges like limited awareness and nascent regulations. The industry remained a small sapling, yearning for sunlight and nourishment.

Blossoming Under Policy Sun: 1990s-2000s – Government Nurturing Propels Growth

The 1990s witnessed a transformative downpour. Recognizing the economic and ethical potential of Islamic finance, the Malaysian government adopted a proactive approach. Landmark initiatives like the Islamic Banking Act of 1989 and the establishment of the International Centre for Education in Islamic Finance (INCEIF) provided the vital nutrients the industry needed to flourish.

With government backing, public trust blossomed. Innovative products like sukuk bonds and microfinance options catering to diverse needs emerged, painting the financial landscape with vibrant hues of Sharia-compliant solutions. By the early 2000s, Malaysia had transformed from a humble sapling to a thriving tree, attracting international investors and solidifying its position as a regional Islamic finance hub.

Beyond Banking: 2010s-Present – Diversification Unfurls New Branches

The past decade has seen the Malaysian Islamic finance ecosystem diversify beyond mere banking. Sharia-compliant insurance, capital markets, wealth management, and fintech solutions have taken root, creating a sprawling canopy of ethical financial activity. This diversification strengthened Malaysia’s position as a comprehensive one-stop shop for global investors seeking Sharia-compliant solutions.

Specifying Milestones:

  • 1983: Bank Islam, the first dedicated Islamic bank in Malaysia, established.
  • 1990: Islamic Banking Act of 1989 laid the legal foundation for the industry.
  • 1993: International Centre for Education in Islamic Finance (INCEIF) established, becoming a global leader in Islamic finance education.
  • 1998: International Islamic Financial Market (IIFM) launched, facilitating cross-border sukuk issuance.
  • 2004: Global Sukuk Challenge launched, driving innovation and growth in the sukuk market.
  • 2008: Financial Sector Blueprint 2009-2015 introduced initiatives to further develop the Islamic finance industry.
  • 2011: Securities Commission Malaysia (SC) established a dedicated Islamic Capital Market Unit.
  • 2016: Financial Services Act 2013 implemented, creating a single regulatory framework for all financial institutions, including Islamic finance providers.

Looking Ahead: A Future Rooted in Innovation and Ethics

Today, Malaysia’s Islamic finance industry boasts a robust infrastructure, a diverse product range, and a thriving ecosystem of players. It contributes significantly to the national economy, attracting foreign investment, creating jobs, and promoting financial inclusion. But Malaysia’s ambitions reach beyond its present borders.

The country is actively embracing technological advancements, with blockchain and big data being explored to enhance reach and efficiency. Research and development initiatives are paving the way for new Sharia-compliant instruments, ensuring Malaysia remains at the forefront of Islamic finance innovation.


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ISLAMIC FINANCE & CAPITAL MARKETS

Nigeria’s Finance Minister Advocates Shift to Islamic Finance for Economic Growth

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Nigeria’s Finance Minister and Coordinating Minister for the Economy, Wale Edun, addressed a gathering in Abuja, shedding light on the Federal Government’s decision to embrace Islamic Finance as an alternative economic model. Edun highlighted the pressing need to move away from “elevated high levels” of interest-based financing, stating that global financial dynamics can no longer sustain such practices.

Speaking at a program organized by the Security Exchange Commission (SEC) and the Islamic Financial Services Board (IFSB), Edun pointed out that both man-made and natural shocks have driven interest rates to unsustainable heights. He emphasized how these elevated rates have become a significant constraint on development, particularly due to the soaring cost of borrowing.

“The detrimental impact of high interest rates makes it impossible to access the funds needed for development, infrastructure, and even social services,” stated Minister Edun, underlining the severe consequences on vital sectors such as infrastructure, education, and healthcare.

In a notable shift towards alternative financing, Edun drew attention to a recent $30 million grant from the United Arab Emirates (UAE), dedicated to climate action and adaptation in Nigeria. What sets this grant apart is that it was funded through Islamic finance principles, signaling a change in the landscape of available resources.

“Funds these days are with those who practice Islamic finance. You better follow the money,” urged Edun, pointing to the increasing prominence of Islamic finance in global financial flows.

Edun stressed the importance of a deeper understanding and utilization of Islamic finance, labeling it “a veritable tool for financing development,” as endorsed by the IFSB (Islamic Financial Services Board). He emphasized the imperative of harnessing the potential of Islamic finance to fuel economic growth effectively.

“With Nigeria’s objective of achieving rapid, inclusive, and sustainable economic growth, it is crucial to learn from the IFSB and educate oneself to make optimal use of this financing tool,” said Edun.


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