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Saudi Arabia intends to invest $600bn in the US

Saudi Crown Prince Mohammed bin Salman told US President Donald Trump that the kingdom intends to broaden investments and trade with the US by at least $600 billion in the next four years.

The comments came during a telephone call to congratulate President Trump on winning a second term. 

During the call, Mohammed bin Salman wished “the friendly American people more progress and prosperity under the President's leadership,” state-owned Saudi Press Agency reported.  

The Crown Prince also noted the ability of the US administration to create economic prosperity and opportunity in the country through anticipated reforms, and expressed the kingdom’s willingness to participate in such opportunities for partnership and investment.  

The investment is promising by any standard, accounting for more than half of the kingdom’s gross domestic product. 

The White House did not publish any statement regarding the call but the Saudi report said both leaders also discussed cooperation between the two countries to promote security and stability in the Middle East.

Details suggesting proposed trade deals or the nature of these investments were not disclosed. 

US goods and services trade with Saudi Arabia was valued at an estimated $46.6 billion in 2022, of which exports accounted for $21.6 billion. 
The kingdom’s foreign direct investment in US (stock) was worth $6.8 billion in 2022, rising 7% on the previous year, according to the Office of the United States Trade Representative. 

 

Islamic Finance
Islamic finance roundup: Saudi secures Shariah-compliant credit facility

Here's a roundup of key developments across the Islamic finance ecosystem during the month of January

Editor's note: We welcome you to our first roundup of the year, beginning with news from the kingdom, which has secured a hefty Shariah-compliant facility. Pakistan's UBL will convert all its branches to Islamic banking in two provinces. 

 

Company News


Malaysia

Luno launches Shariah-compliant Ethereum staking

Luno has become the first regulated digital asset exchange to offer Shariah-compliant Ethereum (ETH) staking, certified by Amanie Advisors.

This service is available in Malaysia and allows investors to stake Ethereum starting at 0.00001 ETH or RM1, with potential annual rewards of up to 3%, distributed weekly. Rewards are given in Ethereum and may fluctuate based on network conditions. (Fintech News)

 

Pakistan

UBL converts KP and Balochistan branches to Islamic banking system

United Bank Limited (UBL) has announced that it has converted all its branches in Balochistan and Khyber Pakhtunkhwa to Islamic banking, in compliance with a new law mandating that all financial institutions adhere to Shariah law by 2027.

 

This shift follows a December 2024 law passed by the National Assembly, driven by the Federal Shariat Court’s order to eliminate interest (riba) from the financial system. (TechJuice)

 

Kazakhstan

ITS launches first Shariah-compliant index fund in Central Asia and the Caucasus
ITS has launched the first Shariah-compliant Exchange-Traded Fund (ETF) in Central Asia and the Caucasus, named ITS Shariah (ITSS).

In its initial offering, 500,000 shares were sold at $10 each, raising $5 million. The ETF is listed on the AIX exchange at the Astana International Financial Centre and is managed by IPS Capital, supported by a Shariah supervisory board. (GlobeNewsWire)

Malaysia

KAF Digital Bank gets green light to commence operations
The Islamic digital bank consortium led by KAF Investment Bank Bhd has received approval from Bank Negara Malaysia and the Ministry of Finance to begin operations on December 20, 2024.

The consortium, which includes KAF IB, Carsome, MoneyMatch, Jirnexu, and StoreHub, passed the operational readiness review. It was one of five groups awarded digital bank licenses by BNM in April 2022, and one of two under the Islamic Financial Services Act 2013. (The Edge)

 

Investment


Saudi Arabia

Saudi Arabia secures $666m Shariah-compliant revolving credit facility

The National Debt Management Center (NDMC) announced the arrangement of a Shariah-compliant revolving credit facility of $2.5 billion to support Saudi Arabia’s general budgetary needs.

Arranged with three financial institutions, this three-year facility aligns with the kingdom's public debt strategy, emphasizing diversified funding sources at competitive rates while adhering to established risk management frameworks and the annual borrowing plan. (Zawya)

Saudi Arabia

Saudi’s Al Akaria secures $186m Islamic facility from Bank Al Jazira

Saudi Real Estate Co. has obtained a Shariah-compliant banking facility of 700 million riyals ($186 million) from Bank Al Jazira.

The loan includes a one-year short-term option and a long-term maximum tenor of 10 years, secured by a promissory note and real estate mortgage.

The financing will support the company's ongoing and new projects, expansion investments, and allow for up to 100 million riyals to address working capital needs. (Zawya)

Halal Industry
Halal industry roundup: BRF expands Middle East footprint with investment

Here's a roundup of key developments across the halal industry ecosystem during the month of January

Editor's note: We welcome you to our first roundup of the year, which begins with news from Saudi Arabia, of course. Brazilian food giant BRF has bolstered its regional presence with another investment in the kingdom, while Malaysia is looking to build on its position to increase the number of halal exporters this year. 

 

Company News


Saudi Arabia / Brazil

BRF expands Middle East footprint with poultry investment

BRF, Brazilian food company, has acquired a 26% stake in Saudi Arabia’s Addoha Poultry Company for $84.3 million, enhancing its presence in the Middle East’s halal food market.

The investment includes $57.6 million directed towards improving Addoha's production capacity and operational efficiency.

The deal aligns with Saudi Arabia's Vision 2030 initiative to diversify the economy and strengthen food security, building on BRF's 50 years of operations in the region. (Halal Focus)

 

Trade Developments


Malaysia

HDC aims to boost Malaysia’s halal exporters this year 

Halal Development Corporation Bhd (HDC) aims to increase the number of halal exporters from Malaysia to 2,443 this year, up from 1,600 in December 2024.

As a key agency under the Investment, Trade and Industry Ministry, HDC's CEO, Hairol Ariffein Sahari, emphasized the need to identify potential local halal companies.

He noted that Malaysian firms face challenges in exporting halal products, such as the absence of a halal compliance manager, difficulty in pinpointing halal markets, and a “wait-and-see” mentality. (Selangor Journal)

 

Vietnam / Morocco

Ambassador charts path in green energy, halal industry

Morocco’s Ambassador to Vietnam, Jamale Chouaibi, highlighted significant advancements in bilateral relations in 2024, focusing on collaboration in green energy and the halal industry.

In an interview during the Lunar New Year, he noted that high-level visits and economic partnerships have fortified ties. (Morocco World News)

Islamic Finance
Islamic ETFs find favour among investors, though growth challenges persist

Exchange-traded funds (ETFs) have become a cornerstone of the global investing landscape, offering investors a flexible, cost-effective way to diversify their portfolios. 

These instruments often track major indices like the S&P 500 or the MSCI Index, offering liquidity and exposure to various asset classes. For Sharia-compliant investors, Islamic ETFs combine portfolio diversity with the ethical principles of Islamic finance.

An exchange-traded fund is a basket of securities, such as stocks, commodities or bonds, that is listed and traded on an exchange. Sharia-compliant ETFs are screened to ensure compliance with Islamic law, excluding companies involved in prohibited activities.     

Accordingly, Islamic ETFs have experienced steady growth, particularly in regions like the Middle East, North Africa, and Southeast Asia. Assets under management of ETFs linked to Islamic Indices have risen from $326 million in 2018 to $2.33 billion by end of September 2023, according to an S&P report. 

Hadeel AbuShoumar, product head at Dubai-based Alkhair Capital, believes Islamic ETFs are well-positioned thanks to their appeal to a broad range of investors.

“They’re [Islamic ETFs] perfectly positioned to become a go-to option for retirement and pension funds in MENA and Southeast Asia,” she said. “These regions have huge expat populations and significant local wealth that could be funnelled into Sharia-compliant funds.”

Given that Islamic finance aligns with the broader environmental, social, and governance (ESG) principles, the growth of the Islamic ETF market has also been bolstered by a rising demand for ethical investing.

Access to halal assets
One of the key advantages of Islamic ETFs is their ability to provide access to halal assets that are otherwise difficult or costly for individual investors to purchase directly. 

For example, Sukuk, a Sharia-compliant instrument with similar characteristics to a bond, is becoming widely available. But high transaction costs and limited market options often make it challenging for retail investors to access it independently. 

Sefian Kasem, head of investment specialists, ETF Strategy at HSBC Asset Management, sees significant potential for growth in this area. 

“[As] Sukuk markets continue to grow at pace, we believe there is likely to be a richer range of funds and ETFs covering different segments of the Sukuk market, in turn broadening out the range of fixed income risk profiles available to Sharia-compliant investors globally,” he explained.

Islamic ETFs can also be structured to target specific sectors, giving investors more focused options. AbuShoumar says there is an opportunity to develop thematic ETFs.

“There’s room for innovation here - imagine thematic Islamic ETFs that focus on sectors like clean energy or tech,” she said. “[Plus], as more people see the overlap between Islamic finance and ESG principles, there’s an opportunity to attract socially conscious investors, Muslim and non-Muslim alike.”

Despite potential diversity for Islamic ETFs, the market remains heavily concentrated in a few asset classes, gold being the dominant one. Shariah-compliant gold-backed ETFs have become the most popular product in this space, owed to the bullion’s status as a ‘safe haven’ asset, particularly in precarious economic times. 

That could potentially hinder growth and innovation, say some market practitioners.

“The Islamic ETF universe market cap is dominated by a massive, physically-backed gold product,” said Akber Khan, acting chief executive officer of Al Rayan Investment. “Incumbent ETF issuers haven't really been bothered to offer a multi-asset Islamic product suite while most Islamic managers have been slow off the mark.”

But HSBC’s Kassem believes there is enormous scope to create a broader range of Sharia-compliant ETFs that can do a better job of spanning conventional asset classes, including public equities and fixed income. 

Barriers to growth
To create a gamut of Sharia-compliant ETFs, key challenges that erode asset growth must be addressed. 

Liquidity remains one of the most significant obstacles. While conventional ETFs benefit from deep pockets due to the size and maturity of the underlying markets, Islamic ETFs often struggle with smaller scales and limited funds. 

“For Islamic ETFs, there’s a lack of tradability and liquidity, and the market offering is still small when compared to conventional ETFs. This is because primarily in many OIC (Organisation of Islamic Cooperation) nations, ETF development has not received much attention as there are more pressing priorities like bankability, let alone availability of Sharia-compliant investment products,” said Bashar AlNatoor, head of Islamic finance at Fitch Ratings.  

The situation differs for Sukuk-focused ETFs. “With Sukuk markets, the liquidity profile is a little different and closer to emerging markets’ fixed income rather than developed markets’ fixed income,”  added Kassem.

Moreover, many Islamic ETFs are listed in emerging markets, where regulatory frameworks and financial infrastructure are still being developed. This impedes daily trading activity, bid-offer spreads, liquidity and ultimately, pricing, added Al Rayan Investment’s Khan.

Fitch Ratings’ AlNatoor added: “In many cases there is large room for development mainly due to a developing ETF ecosystem and legal infrastructure in general. In the long-term, there is a lot of potential for Islamic ETFs, however, short-to-medium term headwinds remain.”

The cost structure of Islamic ETFs also presents a huge barrier to their adoption. Regular Sharia screening and monitoring are essential to ensure fund compliance, which can often lead to higher operational costs compared to conventional ETFs.

“It can be difficult for retail investors to access halal ETFs. There are difficulties with regards to trading costs in different geographies,” explained Monem Salam, executive vice president at US-based Saturna Capital. “This is largely related to tax legislation and other related costs in different markets.”

However, to ensure that management, administrative, operational and other practices are Sharia-compliant is equally important, added Sefian Kasem. Additional processes require monitoring by a credible Sharia board and carry associated costs.

“They are essential to ensuring Sharia compliance, but having said that, we believe it is important for asset managers like us to ensure that these costs are correctly and fairly balanced versus additional requirements associated with Sharia-compliant investment funds,” he explained.

The general lack of awareness regarding these assets also chips away at their growth, given that relevant information on what separates an Islamic ETF from its conventional peer is largely absent. AbuShoumar believes that educating the public about Islamic ETFs will be key to increasing adoption.

“Financial institutions need to make it easier for people to understand what these funds are and why they matter,” she said. “Working with fintech platforms or even social media influencers could make a huge difference in reaching younger audiences.”

All
Gaza ceasefire deal announced after 15 months of war

Qatar, Egypt and the United States have announced that Israel and Hamas have reached a multi-phased deal to end the Gaza conflict, releasing Israeli hostages in exchange for captives. 

The agreement, which will enter into force on Sunday, January 19, will end 15 months of brutal war in Gaza that has laid waste to the enclave and killed more than 46,000 Palestinians. 

US President Joe Biden said in a statement on social media platform X that this deal will halt the fighting in Gaza, surge much needed-humanitarian assistance to Palestinian civilians, and reunite the hostages with their families. 

The agreement will be implemented in three stages. The first stage, which will last for 42 days, will see a complete ceasefire and withdrawal of Israeli forces from densely populated areas as well as the release of Israeli hostages, in exchange for a number of Palestinian prisoners. It will also include intensifying the safe entry and distribution of humanitarian aid in Gaza, rehabilitating hospitals, health centers, and bakeries.

The second phase will include a permanent end to the war, and the withdrawal of Israeli forces from Gaza. The third phase will include a major reconstruction plan for Gaza. 

Qatar’s prime minister and minister of foreign affairs, Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, said that Qatar, Egypt and the United States will work together to ensure the implementation of the ceasefire deal, Qatar News Agency reported. 

"For 411 days, meetings have continued with our partners and the two parties to the conflict until we reached this long-awaited moment," Qatar premier said. "But this is just the beginning.”
 

Halal Industry
Dry Airlines - 10 carriers that don’t serve alcohol

Practicing Muslims do not consume alcohol, as it is impermissible in Islam.

Many Muslims also avoid gatherings or restaurants where alcohol is served or consumed. However, air travel becomes fairly tricky especially if you are a frequent traveller and wish to eschew the services of a carrier that offers alcoholic beverages. 

Here are 10 airlines in Muslim-majority countries that do not serve alcoholic drinks onboard its flights. 

Saudia 
Saudi Arabia’s national carrier does not serve
alcohol, neither does it allow passengers onboard its flights to carry or drink alcoholic beverages. 

Air Arabia 
Sharjah-headquartered low-cost carrier, Air Arabia, does not permit alcohol onboard its flights. 

Kuwait Airways 
Alcohol is prohibited on Kuwait Airways flights. Passengers cannot carry it also, even if they have a layover, transit, or connecting flight.

Jazeera Airways 
Kuwaiti low-cost carrier does not serve alcohol on its flights.  

PIA (Pakistan International Airlines)
Karachi-headquartered national carrier PIA does not permit passengers to consume alcohol aboard an aircraft, whether purchased as duty free or obtained otherwise. 

Egyptair
Egyptair is the state-owned carrier of Egypt. The airline does not serve any alcoholic beverages on any of its flights. 

Airblue
Airblue is a private airline, headquartered in Pakistan’s capital, Islamabad. The airline does not serve alcohol on its flights. 

Iraqi Airways
Baghdad-headquartered Iraqi Airways is Iraq’s national carrier. It is a dry-airline and does not serve alcohol, as stated on its website

Royal Brunei
Brunei’s national carrier does not serve alcohol on any of its flights. 

Biman Bangladesh Airlines
The carrier does not serve alcohol on any of its routes. 

Halal Industry
Hong Kong could import halal food for Muslim tourists, says official

Hong Kong may import halal food for Muslim tourists, a government official has said, as the city ramp up efforts to accommodate Muslim visitors. 

Warner Cheuk, deputy chief secretary, said that as Hong Kong develops into a Muslim-friendly tourist destination, halal food could be brought in from abroad, according to local media reports. 

"Hong Kong may not have many Muslims, but we need to make a lot of halal food. There are many Muslim countries in Asean, and we can attract restaurants and import food from these nations," RTHK English News reported him as saying.

Measures to attract visitors from the Middle East and Southeast Asia region were announced in chief executive John Lee’s policy address last year.

Among his proposals were the introduction of Arabic language services in taxis and at the airport, the creation of halal restaurant lists, and the establishment of prayer facilities in hotels. 

The number of halal-certified restaurants in the city has surged to 142, up from just 63 in 2022. By the end of 2025, the Incorporated Trustees of the Islamic Community Fund (also known as the Board of Trustees, or BOT) aims to certify over 500 halal establishments.

Nixie Lam, BOT advisor and a legislative council member from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) told Salaam Gateway last November that to support this goal, an enhanced halal certification system is being introduced. 
 

Islamic Finance
How Offa is helping streamline Shariah-compliant property finance in the UK

UK-based Islamic property finance provider, Offa, is looking to obviate shortcomings in traditional real estate finance, whilst dispelling misconceptions regarding Sharia-compliant financing.  

We speak with Sagheer Malik, chief commercial officer and managing director of retail at Offa, on the company's offerings and its growth plans moving forward. 

How has Offa's new buy-to-let (BTL) service fared since its launch?
Malik: There has been a huge amount of interest in our Sharia-compliant BTL product since we launched it. 

For too long we had seen customers facing old-fashioned and cumbersome systems when they attempted to obtain Sharia-compliant finance – with mountains of paperwork to supply and fill in, and long waiting times for decisions.

Sagheer Malik, chief commercial officer, Offa

We changed all of that with the launch of our BTL product, using a modern, end-to-end digital system so that our customers can potentially get a fair decision within minutes, depending on credit rating and risk criteria.

How will the acquisition of the Alburaq Islamic home finance portfolio benefit customers? 
Malik: Purchasing Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio was a landmark deal, and our chief financial officer, Amir Firdaus, was responsible for this.

More than 350 customers have been seamlessly migrated to our servicing platform, and they will now have access to a wider range of Sharia-compliant property re-financing options, including Sharia-compliant bridge and BTL.

Both myself and Sultan Choudhury, our executive chairman, are very much familiar with Alburaq’s clients because we helped distribute this book almost two decades ago – so we are delighted that these customers are now coming home to us.

What are some of Offa’s short- to medium-term expansion plans?
Malik: We will continue to grow both organically, focusing on the speed and quality of service and expanding our product range, and also through acquisitions.

The Alburaq deal is a perfect example of this strategy, and you can expect to hear more announcements from us in 2025.

What are the key challenges in offering Sharia-compliant finance products in the UK? 
Malik: The image of Sharia-compliant finance has been that it takes a long time and mountains of paperwork before customers can get a financing decision. Right from the outset, we at Offa have been working hard to change that image, leading the industry by example.

We are demonstrating through our ultra-quick, modern and paperless systems that Islamic home finance can offer service levels equivalent to those in the conventional finance world, and even beyond.

For example, we can give a finance decision to most BTL customers within the same day of application and for many we can give offers within eight days. The fastest time from application to offer so far has been approval on the same day and offer by the next day.

What are the key trends that will dominate the Islamic property fintech landscape in 2025 and beyond? 
Malik: We have caused a stir in the UK’s Islamic finance industry with game-changing speed and a focus on customer satisfaction.

I hope that we can raise the game for the whole industry in 2025, because the real winners from that will be the people we are focused on: customers who need fast home finance decisions. 

Islamic Lifestyle
Philippines partners with AirAsia to beckon Muslim travellers 

The Philippines’ Department of Tourism has partnered with low-cost carrier AirAsia Philippines, to promote the country as a Muslim-friendly destination.

The department has recognised AirAsia Philippines as the first Muslim-friendly airline for offering halal-certified meal options on all Z2 domestic and international flights, the carrier said in a statement Friday.  

“AirAsia Philippines takes pride in breaking barriers to travel and making our services more inclusive for all, especially for our Muslim travelers. We are very bullish,” said AirAsia Philippines CEO Ricky Isla.

“We understand that airlines play a vital role in the halal promotion as we are one of the frontiers of consumer journey in tourism.”

The Philippines, which hosts around 15 million Muslims, has launched a serious of initiatives to bolster its halal industry, including a strategic plan to double locally produced halal-certified products and services by 2028. The Boracay island opened a special beach dedicated for Muslim travellers last September in an attempt to become a more inclusive travel destination.   

AirAsia Philippines will continue to increase its offerings for Muslim travellers, including a new menu from the airline’s inflight F&B brand, effective January 16. 

Philippines tourism secretary Christina Garcia Frasco said that as part of their strategy to become a Muslim-friendly tourism destination, it has been ensured that Muslim tourists touchpoints across the country are properly addressed. 


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