Financial definition

Adb to help in adoption of islamic finance standards


Oct 5 The Manila-based Asian Development Bank (ADB) has signed an agreement with the Islamic Financial Services Board (IFSB) to help member countries adopt the IFSB's prudential standards. The five-year agreement, signed earlier this week, will see the ADB support member countries in legal and regulatory aspects of meeting the IFSB's standards, Ashraf Mohammed, assistant general counsel at the ADB, told Reuters. IFSB guidelines are widely used in the Islamic finance industry, but they are not mandatory - it is up to national regulators to decide whether to adopt them.

"The real test of all this is for financial institutions to apply these standards," Mohammed said. "We will review mid-term in two years to see how it has been effective."At present, the IFSB's membership of regulatory bodies and private institutions such as banks and law firms is concentrated on more developed countries; the majority of its 187 members come from the Gulf and Malaysia.

In contrast, only seven IFSB members come from Indonesia, Pakistan and Bangladesh, the world's three most populous Muslim-majority countries. These are some of the countries where the ADB is most active, as its main objective is poverty alleviation.

In the short term the agreement will focus on Indonesia, Bangladesh, Pakistan, the Maldives, Afghanistan, Kazakhstan and the Philipinnes, Mohammed said. Islamic finance can help to bring people in such countries into the banking system, he said. The agreement includes encouraging countries to align their infrastructure financing needs with Islamic finance, which could help meet Asia's enormous needs for infrastructure spending, said Bindu Lohani, the ADB's vice president for knowledge management and sustainable development. The ADB provided its first fully sharia-compliant financing in May, assisting the Jeddah-based Islamic Development Bank with two partial credit guarantees worth up to $66 million for two wind farms in Pakistan.

Africa money kenya seeks olympics dividend with investment drive


Kenyan athletes competing at the 2012 Olympic Games may be forgiven for thinking they are in London to win medals and achieve sporting glory, but the government of east Africa's largest economy has other ideas. Joining, and possibly outnumbering, the 50 or so medal hopefuls in London will be Kenya's president Mwai Kibaki and a delegation of government officials, heads of state-owned enterprises and bankers, who will be attending a neatly timed investment summit and diaspora conference. In between the 10,000m races and the marathon - events Kenya is expected to win - pitches will be made and deals done and the hope is that a record medal haul for the country and the headlines it brings will help boost investment."Anytime that Kenya wins a medal you find that Kenya's name is mentioned everywhere," Ephraim Ngare, Kenya's High Commissioner to the UK told Reuters. "If you have your national anthem played time and again that's very good for the country. We will take full advantage of that opportunity."Kenya won 14 medals, including six golds, at the 2008 Beijing Olympics, its best ever showing. ENERGY FRONTIER Seasoned frontier market investors are no strangers to Kenya, whose capital markets are advanced by regional standards. An added draw is its potential as a crude oil producer after Tullow Oil announced discoveries earlier this year.

But the Olympics initiative is also aimed at potential investors who may only associate Kenya with its runners, safaris to see big animals and mobile money. Besides the investment summit, which will take place on July 31, Kenya has also taken over a three-storey building next to the Olympic Park in east London, called "Kenya House." It will showcase investment opportunities in Kenya, Ngare said, and host meetings between government officials and companies looking to invest in oil exploration or infrastructure projects. There will also be a diaspora conference on Saturday aimed at the estimated 130,000 Kenyans living in Britain.

GRABBING WORLD'S ATTENTION Taking advantage of sporting events to market a product or a nation is nothing new and Kenya is not the only country planning to woo potential investors during the Olympics. Nigeria will also be holding a 3-day conference in London next week, featuring its president, finance minister and billionaire industrialist Aliko Dangote, among others."When the world's attention is focusing on something and you're able to associate with that you can get part of the goodwill," said Terhas Berhe, managing director of Brand Communications, a brand agency working with the organisers of the Nigeria conference.

Whether sporting success translates into increased investment flows is difficult to measure, but South Africa's drama-free staging of the 2010 football World Cup did help to change investors' perceptions of the country. There is also evidence that sport can help to grow a product's market share. One of Berhe's clients, Ecobank, relaunched a money transfer product during the World Cup, running TV and commercials at half-time during matches. Within a year, revenue for the service grew eight-fold."That's what sports deliver for you," Berhe said. "They deliver an audience at their most engaged."Multiple victories for Kenya at the Olympics will not necessarily move a hard-nosed investor, but having the country's name up in lights can't hurt, said Sven Richter, head of frontier markets at Renaissance Asset Managers."It's quite smart to capitalise on it," he said. Daniel Broby, deputy chief executive at frontier markets boutique Silk Invest, sees parallels between Kenya's runners, many of whom come from the Rift Valley and train barefoot, and a country that has been able to succeed with the resources it has."Their economy is emerging. It's an economy that doesn't have much but they're in it for the long run," he said. "Clearly, there's an analogy to be made there."

African development bank board approves 900 mln euro loan for algeria


ABIDJAN Nov 2 The African Development Bank's board approved a 900 million euro ($1 billion) loan for Algeria on Wednesday aimed at supporting reforms to help the North African nation confront falling oil revenues, it said in a statement.

The money will support the government's efforts to improve domestic revenue mobilisation and the investment climate as well as boosting the efficiency of the energy sector and promoting renewable energy.

Brazil increases offer of subsidized loan by $13 bln


BRASILIA, July 31 The Brazilian government on Thursday raised by 30 billion reais ($13.25 billion) to 80 billion reais the amount of subsidized loans that the state development bank BNDES can disburse under an investment stimulus program. Under the Investment Support Program, known as PSI, several industries can borrow cash from the BNDES at below-market interest rates. The rate differential or costs stemming from the difference between the rate that BNDES pays to borrow and the one it charges clients will be covered by the country's treasury."The measure is to continue with efforts to accelerate the economy," said Joao Rabelo, the undersecretary of economic policy at the Finance Ministry.

The increase in the offer of subsidized loans comes at a time when the government is struggling with a slowdown in tax revenues that could jeopardize its key fiscal goal for the year.

Rabelo declined to detail how the treasury will finance the rate differential.

The measure, which was approved by the country's National Monetary Council, will increase the credit lines for the purchase of buses, trunks and machinery, the official said.

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