The relative resilience of Islamic finance to the financial crisis has highlighted the model’s benefits – with trade finance in particular subject to increasing interest. While factors such as the comparative youth of the Islamic banking sector act as hurdles to immediate sector development, the inherent strengths of the Shariah-compliant model combined with deepening trade flows to and from the Middle East suggest a bright future for Islamic trade finance.
UAE Regional Head of Falcon Group, Nam Sahasra, discusses with GTR the opportunities for trade companies in the Middle East, and the need for diversified funding
While Islamic banking is on a path towards becoming established on a global basis there is, as yet, little standardisation in regard to regulation and products. Writing in this month’s Business Islamica magazine, Carsten Kayatz, Senior Product Manager for Financial Institutions at Commerzbank, highlights that, instead, a multiplicity of regulatory systems governs Islamic finance worldwide. Compliance is always a complex issue under the best of circumstances, in large part because of the need to comply with at least two different legal codes – that of Shari’ah-law, and the regulatory system of the country in which the relevant transaction is taking place. Within this operating environment, flexibility and local knowledge are therefore prerequisites for satisfying the demands of modern, international Islamic finance.
Desperate to encourage economic growth, the government is consulting on whether to allow pension schemes to take a long-term view of gilt yields when calculating discount rates for valuing future liabilities, otherwise known as smoothing. Writing in Financial News this week David Norgrove, Chairman of PensionsFirst and former Chairman of The Pensions Regulator, argues that for smoothing to make sense you must believe that, among other things, the move will reduce costs, drive investment and not set a dangerous precedent. Yet he stresses that there are deep flaws in this thinking. Shareholders and the economy would be better served by cash rich companies doing more to de-risk their schemes, not less. In the past 10 years deficit contributions have totalled around £175 billion, and deficits have hardly changed. Norgrove concludes that we’re well into the end game for many pension schemes and it’s time to recognise that.
To read the news article please click here
To read the commentary article please click here
The latest round of Natixis blogs sees Patrick Artus in FTSE Global Markets explaining how both public and private de-leveraging must play out its course before genuine recovery is possible. This is likely to happen as late as 2015 in the US, 2017 in the UK and 2018 in Europe.
Meanwhile, Nordine Naam offers his weekly update on global forex markets, pointing to renewed political risk in Italy – thanks to a Berlusconi-bounce in polls – and Spain, where the prime minister has become embroiled in corruption accusations.
TFR editor Clarissa Dann interviews Falcon Group founder and chairman Kamel Alzarka on the benefits of non-bank lender regulation.
Technology is central to the treasury function, and one stream gaining particular prominence is the ability to work “in the cloud”. As interest in cloud technology increases, BNY Mellon’s Peter Hazou – Head of Market Development for Treasury Services EMEA – talks to Saket Sharma – Chief Information Officer, Treasury Services – to discover the facts behind the hype:
Louise Bowman of Euromoney describes the various approaches institutional investors are making into the infrastructure debt space (here) and discusses the challenges institutions must contend with when dealing with construction risk (attached).
Following an interview with Benjamin Sirgue, who heads the bank’s Global Infrastructure and Projects group, the advantages of Natixis’ partnership with Ageas are given a full appraisal. Meanwhile, Louise’s second piece carries Benjamin Sirgue’s views on construction risk – and highlights the work Natixis is currently undertaking with the EDHEC Risk Institute to help investors better understand this risk.
“Pension funds and insurance groups are filling the void left by banks in the rapidly changing infrastructure debt market, raising hopes this kind of financing can help spur a global economic recovery, according to Standard & Poor’s,” writes David Oakley in today’s Financial Times.
Celebrating a US$1.6 billion revenue, Falcon Group continues to grow and work its way towards its US$5 billion annual revenue target. It celebrated its success this year with a reception for around 200 guests at the top of London’s iconic Gherkin.