Zeti Urges the Accounting Professionals to Engage with Islamic Finance Industry

The globalisation of Islamic finance offers huge potential for greater intermediation of cross border financial flows, especially surplus funds, between economies from different parts of the world, thus presenting new opportunities for the industry. Islamic finance is an increasingly important component of the international financial system and continues to gain global acceptance. As such, strengthening the accounting, financial reporting, auditing and disclosure standards are very much a vital part of this process, as it is for the conventional financial sector.

This was the message of Dr Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, in her keynote address titled ‘Islamic Finance: Strengthening the Global Financial Market’ to the 18th World Congress of Accountants (WCOA) 2010 which was convened in Kuala Lumpur in early November 2010 and officially opened by Malaysian Prime Minister Mohd Najib bin Abdul Razak.

The Congress, with the general theme ‘Accountants: Sustaining Value Creation’, discussed the challenges to the industry in the aftermath of the recent financial crisis. The Congress attracted over 6,000 delegates, of which some 70 per cent were from abroad.

“As we enter this new phase of globalisation in which Islamic finance is very much a part of, the cumulative efforts of the standard setters, the regulators and the industry will raise the potential to address the many challenges before us. We need to leverage on the respective areas of strengths and address the weaknesses with unrelenting perseverance,” declared Dr Zeti.

In a global financial environment that is faced with extraordinary challenges of regulatory reforms and uncertainties, Islamic finance, with estimated funds under management totalling USD1 trillion, is proving to be a positive force. Shariah principles, stressed the Governor, require that financial transactions in Islamic finance be accompanied by an underlying productive economic activity that will generate legitimate income and wealth. As such this connects the sector to the real economy.

Its profit and risk sharing requires the appropriate due diligence, disclosure and transparency, and emphasise the importance of governance and risk management. The Shariah Board in the respective individual financial institutions is an extra layer of oversight. Not surprisingly, despite the turmoil and uncertainties in the global financial system, Islamic finance, she added, has demonstrated its resilience and its continued global expansion during this period, expanding at an average annual rate of 20 per cent and representing one of the fastest growing segments in the financial industry.

The sector has also been able to respond to the changing demands of consumers and businesses by providing the range of differentiated products and services, including consumer financing, asset and wealth management, Islamic insurance and capital markets products.

In Malaysia, for instance, the Islamic banking system accounts for 20 per cent of the total banking system while the Sukuk market accounts for more than 50 per cent of the bond market. Following the liberalisation initiatives in this decade, there is greater foreign institutional presence and substantial foreign participation in Malaysia’s Islamic financial system. The Islamic financial system in Malaysia is also well supported by a robust regulatory and supervisory regime, legal and Shariah framework, and payment and settlement systems that are also important in supporting its sustainability and second to none.

The globalisation of Islamic finance, advised Dr Zeti, has been due to increased liberalisation which has prompted Islamic financial institutions (IFIs) to venture beyond their domestic borders, with the result that there are over 600 IFIs that operate in some 75 countries today. Similarly, it has resulted in increased foreign participation to raise funds in these markets and has also strengthened financial and economic ties between Asia and the Middle East. Indeed, sukuk, which is growing at an average annual rate of 40 per cent, have emerged as an attractive new asset class for investors while becoming a preferred financing and capital raising option for issuers.

Dr Zeti commended the role of the Islamic Financial Services Board (IFSB) in contributing to the orderly global expansion of Islamic finance and to the development of a cohesive cross-border regulatory framework and international best practices for the Islamic financial system. The two new initiatives in 2010 – the establishment of the Islamic Financial Stability Forum (IFSF) as a platform for cross-border engagement among regulators to discuss efforts to achieve financial stability in the Islamic financial system, and the establishment of the International Islamic Liquidity Management Corporation (IILM) in October – a liquidity management infrastructure for Islamic financial institutions – will cumulatively contribute towards the continued resilience of the global industry.

On financial reporting, Dr Zeti observed that applying the existing accounting frameworks and conventions to Islamic financial institutions may prove to be more challenging given the unique features of Islamic financial transactions such as the equity based and profit sharing contracts. Given the risk sharing features of these contracts, it may raise the case for a higher level of transparency for users to better understand and be better positioned to assess the underlying risks and their likely financial impact.

Similarly, there are different views on how conventional accounting concepts, such as reporting based on substance over form, and cash flow discounting principles, can be applied to Islamic financial transactions. As such, Dr Zeti advised greater understanding on these issues to further evolve solutions that would improve the value of financial reporting.

She commended the work done by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) in enhancing cross-border comparability of Islamic financial transactions. At the same time, the newly-established regional Asian-Oceanian Standard-setters Group (OSG) is examining the technical issues in financial reporting of Islamic finance.

“The efforts by AAOIFI and OSG represent important contributions to current efforts to evolve an accounting framework that is appropriate and that will support further the global development of Islamic finance. It is important that the standards setting bodies such as the International Accounting Standards Board (IASB) is engaged in this process to complement, and to leverage on the current global efforts to converge international accounting frameworks,” she urged.

source : mifc

Establishment of International Islamic Liquidity Management Corporation (IILM) Heralds Major Landmark in Liquidity Management in Islamic Finance

Eleven central banks and two multilateral organisations signed the articles of memorandum of the International Islamic Liquidity Management Corporation (IILM), the latest international body to serve the global Islamic finance industry.

The IILM was launched at the the Global Islamic Finance Forum (GIFF) held on 25 October 2010 in Kuala Lumpur in the presence of Malaysian Prime Minister Mohd Najib Tun Abdul Razak; Raja Nazrin Shah, the Crown Prince of the State of Perak and Financial Ambassador of the MIFC initiative; Dr Zeti Akhtar Aziz, Governor of BNM, other central bank Governors, and regulators and dignitaries from the Muslim and non-Muslim jurisdictions, including Mohammed Al-Jasser, Governor of the Saudi Arabian Monetary Agency (SAMA).

“Malaysia,” stressed Malaysian Prime Minister Mohd Najib Tun Abdul Razak who witnessed the launching, “is honoured to have been chosen to host the Corporation. Its ultimate aim is to enhance international integration of the Islamic money market and capital markets and to be better equipped to face any liquidity crisis. I wish to commend the foresight, innovation and leadership displayed by the Islamic Financial Services Board (IFSB), the Taskforce and participating parties for this breakthrough, which surely will help take Islamic finance to a higher level of development.”

Governor Dr Zeti echoed the milestone achievement of the establishment of the IILM which she maintained would enable more effective and efficient liquidity management not only for the Islamic financial institutions but also for the management of Islamic financial portfolios. Dr Zeti also hailed the IILM as a demonstration of international collaboration among central banks. “The greater collaboration among regulators seen in this decade cumulatively serves to contribute towards the continued resilience of the global Islamic financial system,” she added.

The establishment of the IILM was first announced by the Islamic Financial Services Board (IFSB) at the side of the International Monetary Fund (IMF)-World Bank Group Annual Meetings in Washington held in October 2010. In fact, the founding participants signed a Memorandum of Participation in Washington.

A statement from the IFSB said that IILM “will issue high quality financial instruments at both the national level and across borders, in an integrated manner, thereby enhancing the soundness and stability of the jurisdictions in which they operate.”

The Council of the IILM also held its first Board Meeting in Kuala Lumpur on the same day. The founding participants include Bank Negara Malaysia, the Central Bank of Qatar, the Bank of Mauritius, the Saudi Arabian Monetary Agency, the Central Bank of UAE, the Central Bank of Iran, the Bank of Indonesia, Banque Centrale du Luxembourg, the Central Bank of Nigeria, the Central Bank of Sudan and the Central Bank of Turkey. The other two signatories are the Islamic Development Bank (IDB) and its private sector funding arm, the Islamic Corporation for the Development of the Private Sector (ICD).

IILM has an authorised capital of USD1 billion of which USD75 million will be called up.

source : MIFC

“Safe” Islamic Finance Stuck At Hurdle

Despite proving more resilient to the financial crisis than conventional markets, Islamic finance is struggling to reach its full potential, a conference has heard.

Experts gathered in Lucerne last week agreed that much work still has to be done to bridge the gap between the fledgling Islamic financial sector and Western markets. One Swiss expert said the terms Islamic and sharia were hindering the process.

Until recently, there did not appear to be a particularly compelling case for Islamic banking and insurance services for non-Muslim clients. But the out-performance of Islamic products against conventional markets during the financial crash has generated more interest.
“The failure of toxic products [including mortgage-backed securities] during the financial crisis has allowed Islamic finance to gain momentum,” Marc Chesney of Zurich University’s Swiss Banking Institute told the conference on Friday.
Many investments in Islamic finance did take a tumble during the crises years of 2008 and 2009. But sharia laws, which both forbid speculation and demand that all parties share risk as well as profit, stripped out most of the more dangerous toxic products from client’s portfolios.
Such a product might be expected to appeal to many investors who were burned during the crisis or who are now outraged at bankers’ bonuses and perceived greed.

Terminology problem
But Fares Mourad, head of Islamic finance at the Swiss bank Sarasin, pointed out that the marketing of this product has so far won few converts in the Western world. “The terms ‘Islamic’ and ‘sharia’ have helped it develop and reach this stage, but it is now hindering the next stage of reaching Western clients,” he told swissinfo.ch.
Recent moves to ban minarets in Switzerland or the wearing of religious headscarves in France, hardly point to a climate willing to accept a form of finance based on Islamic sharia law, the conference heard.
In addition, the introduction of Islamic finance would also require an overhaul of tax laws and regulations.

Varying interpretations
But even in Muslim countries Islamic finance has far less penetration than the conventional Western model. The conference heard that only around 15 per cent of the market in Malaysia invests its money in Islamic products despite the fact that the country is seen as the standard bearer of sharia-compliant products.
Islamic finance is still in its infancy and is evolving differently from the Western model, making it more difficult to gauge for investors. One problem is that financial products must be approved by Muslim scholars, and interpretation of sharia law varies between individuals.
According to one respected Bahrain regulatory authority, which surveyed the Islamic bond market last year, some 85 per cent of products were actually un-Islamic.
Perhaps little wonder that even Swiss private banks, which pride themselves on their innovation and have far-reaching exposure to Middle Eastern clients, have so far failed to develop their own Islamic products to any degree.
One exception is Bank Sarasin, which claims to be the only private bank in Switzerland with a complete in-house Islamic offering. But Sarasin’s expert Mourad believes the market for Islamic finance will prove too lucrative a lure for other banks before long.
“It lies in the nature of Swiss people to have a look first, evaluate, reflect and then take a decision,” Mourad told swissinfo.ch. “Islamic finance is a new business, but it is only a question of time before we see other private banks in Switzerland offering an A to Z service.”

Ethical competition
However, attracting Western clients could prove more difficult for the Islamic finance sector. Not only could the term ‘Islamic’ put off investors, the model would now have to compete with a rapidly evolving sustainable finance sector that eschews ethically questionable products or big risks.
Socially responsible investing (SRI) is a growing business in Western markets and is seen in part as an antidote to the risky and greedy practices that led to the crisis. For the time being, both SRI and Islamic finance must occupy a similar area, but remain apart, according to Mourad.
“Islamic finance and SRI take a slightly different approach, but both are aiming for wealth preservation and sustainability for the benefit of humankind,” he said. “Both models are looking over the fence and borrowing elements from each other.”
In the meantime, Mourad and many other financial experts will continue with their efforts of trying to construct bridges between Islamic and Western finance in the hope of finding a structure that can join the two in a sustainable way.
Source : turkish weekly

Islamic finance to double in size in 5 years

Islamic finance, which prohibits charging interest, is set to double in size in five years, but the one-trillion-dollar industry must diversify and regulate to realise its full potential, analysts and economic reports say.

Diversification into new territories is also necessary to reduce the risk of exposure and utilise their full potential, they add.

Islamic law not only forbids charging or paying interest, but also bans speculation and investment in sectors deemed haram (prohibited), such as pornography, gambling, arms, alcohol and pork products.

Perhaps the most popular product is Murabaha, which is used to finance a variety of consumer purchases from cars to houses. Sukuk is the equivalent of bonds used to raise funds for large-scale investments.

Under a product called Musharaka, which means partnership, the bank provides the funds to enable the customer to buy an asset, with the two parties agreeing a profit or equity sharing ratio for that asset. Losses are shared on a similar basis.

The broader principle of Islamic finance is based on sharing risk as well as profit.

Despite the number of products offered, Amrith Mukkamala, director of asset allocation at Kuwait and Middle East Financial Investment Co (KMEFIC), believes they are still limited.

“The products (of Islamic finance) that are available for investors are still very limited … compared to high demand,” said Mukkamala, adding that the field of derivatives should be explored seriously.

For his part, Kuwaiti economist Hajjaj Bukhdur believes there are enough products, and that even greater expansion has been subdued by a lack of both sufficient regulation and management skills.

“Islamic finance already has around 30 different types of products and instruments, giving it a large degree of flexibility to meet investors’ demand and continue to expand rapidly,” Bukhdur told AFP.

“But it has two major shortcomings: there are different regulatory systems … and managements have been less competent to realise the full potential,” he said.

Assets of Islamic financial institutions increased five-fold to around one trillion dollars (787 billion euros) between 2003 and last year, but Moody’s Investors Service believes the full potential is at least five trillion dollars.

But for now, it only makes up around five percent of the global financial industry.

In May, speakers at a forum on challenges facing the sector, said it took 40 years to reach one trillion dollars in assets, but now it will take just five years to double.

The number of Islamic financial institutions and banks grew from just a few in the mid-1970s to several hundred now operating in more than 50 countries across the world, and with leading global banks getting into the business.

The International Monetary Fund said last month that the September 11, 2001 attacks on the United States and a sharp rise in oil price and revenue have greatly helped the rise of Islamic finance because more Muslim investors wanted to keep money at home.

In a report in April, Moody’s urged the Islamic finance industry to innovate, particularly in the area of risk hedging, if it is to really thrive.

The combined use of securitisation and derivatives “offers considerable scope for reducing the risk exposures of Islamic financial institutions (IFIs) and thus improving their overall creditworthiness,” the agency said.

“If employed with care, derivatives can enhance efficiency in IFIs through risk mitigation, thereby making them more competitive as well as appealing to customers,” it said.

However, their application in Islamic finance is “highly controversial for reasons of speculation and uncertainty, two practices forbidden under Sharia,” or Islamic law, Moody’s said.

“Islamic financial institutions have to be much more aggressive … as there is a huge potential for growth. So far, they have been far less active than conventional finance,” Mukkamala said.

The 2009/2010 World Islamic Banking Conference Competitiveness Report, produced in collaboration with McKinsey & Company, said Islamic banks must determine their future course of action by exploring new key areas.

“They should enhance and diversify their business mix, by tapping into new growth business lines, such as personal finance, asset management and various areas of investment banking,” it said.

The report, released in December, said that during the global economic downturn, Islamic banks have outperformed conventional units but were not immune from the fallouts.

A number of Islamic banks have also been more strongly affected by non-performing loans than conventional banks, and they also continue to have greater exposure to real estate assets, it said.

Bukhdur attributes much of the impact to slow response by managements to the crisis.

“Islamic financial units were less impacted by the global crisis than conventional banking industry,” he said.

“But conventional banks have reacted quickly, and most of them are almost out of the crisis. On the contrary, the response by Islamic firms was very slow, resulting in a magnified impact. Many Islamic firms have not yet recovered.”

The need to harmonise regulations is also a major issue.

Each Islamic financial unit is normally advised by a Sharia board, which is responsible for interpreting Islamic jurisprudence. That has resulted in somewhat different interpretations by various boards.

The leading regulatory bodies have all been working towards aligning Sharia law principles towards a consistent basis to ensure uniformity.

Bukhdur said Islamic finance will continue to expand, but he believes the main expansion will come from the Islamic units of leading international banks rather than in new independent Islamic financial units.

source : business.maktoob

The going gets tough for takaful industry

Malaysia’a takaful industry is expected to step up its performance now that an additional four operators have been issued licences to start business next year, said industry players.

“With 12 operators in the country now, we have to work harder to gain market share and profits,” said an executive from a takaful group that has been in operation for more than 10 years.

Although Malaysia’s takaful industry has seen tremendous growth in the last five years, it still lags behind its conventional peers in terms of total insurance market penetration and share.

It is understood that the penetration rate for takaful industry in Malaysia is around 10 per cent, compared with 40 per cent for conventional insurance.

Another existing takaful executive said the entry of four new players is against the spirit of consolidation that the regulator has been propagating.

However, he said the regulator may have decided to add more players since the Islamic banking and takaful industry has yet to command 20 per cent of the banking and insurance market share targeted by 2010.

Takaful fund assets comprise only 8 per cent of the total assets of the Malaysian insurance and takaful industry although it has more than doubled in this same period from RM5.87 billion in 2005 to RM10.5 billion in 2008 and RM12.4 billion in 2009.

Prime Minister Datuk Seri Najib Razak said last year that the liberalisation measures, including new licences, are in line with the provisions and timetable set out in the Financial Sector Master Plan (FSMP) announced in 2001.

The government said then that the measures are aimed at enhancing “inter-linkages to leverage on global developments in Islamic finance and reinforce Malaysia’s position as an international Islamic financial hub.”

Takaful fund assets comprise only 8 per cent of the total assets of the Malaysian insurance and takaful industry although it has more than doubled in this same period from RM5.87 billion in 2005 to RM10.5 billion in 2008 and RM12.4 billion in 2009.

Prime Minister Datuk Seri Najib Razak said last year that the liberalisation measures, including new licences, are in line with the provisions and timetable set out in the Financial Sector Master Plan (FSMP) announced in 2001.

The government said then that the measures are aimed at enhancing “inter-linkages to leverage on global developments in Islamic finance and reinforce Malaysia’s position as an international Islamic financial hub.”

In this context, it will be interesting to see how new takaful players would contribute in areas where there are gaps in the financial system and in which there are new areas of growth in the financial system.

The four new licences issued to joint ventures are between American International Assurance Bhd (70 per cent) and Alliance Bank Malaysia Bhd (30 per cent; AMMB Holdings Bhd (70 per cent) and Friends Provident Group plc, UK (30 per cent); ING Management Holdings (M) Sdn Bhd (60 per cent), Public Bank Bhd (20 per cent) and Public Islamic Bank Bhd (20 per cent); and the joint venture between The Great Eastern Life Assurance Co Ltd (70 per cent) and Koperasi Angkatan Tentera Malaysia Bhd (30 per cent).

Existing takaful operators include CIMB Aviva Takaful Bhd, Etiqa Takaful Bhd, Hong Leong Tokio Marine Takaful Bhd, HSBC Amanah Takaful (Malaysia) Sdn Bhd, MAA Takaful Bhd, Prudential BSN Takaful Bhd, Syarikat Takaful Malaysia Bhd and Takaful Ikhlas Sdn Bhd.

In addition, Malaysia has four Retakaful operators, namely, ACR Retakaful SEA Bhd, MNRB Retakaful Bhd, Munchener Ruckversicherungs-Gesellschaft (Munich Re Retakaful) and Swiss Reinsurance Co Ltd (Swiss Re Retakaful); and one International Takaful Operator in AIA Takaful International Bhd. //

source :  btimes.my

Plans for certified syariah experts in Islamic finance

Leading Islamic finance scholars are preparing the first global certification for syariah experts, seeking to bolster the industry’s reputation and make it easier for banks to find qualified advisers.

The International Syariah Research Academy for Islamic Finance in Kuala Lumpur will pick a board of regulators by year-end to issue permits for scholars qualified to sit on syariah boards, said Aznan Hasan, president of the oversight committee. The scholars decide whether financial products meet the religion’s precepts, including a ban on interest payments.

“We are worried that people who aren’t qualified to be syariah scholars may enter and become members of the advisory boards as the market flourishes,” Aznan said in an interview in Kuala Lumpur.

“Banks try to search for competent advisers. Sometimes they get the right person, sometimes they get the wrong person.”

Attempts to set up an organisation with a code of ethics to certify Islamic scholars have been frustrated by differing interpretations of syariah law across the Muslim world, Madzlan Mohamad Hussain, a partner at Zaid Ibrahim & Co, Malaysia’s largest law firm, said in an interview.

Scholars are now required to have recognised university degrees before they can act as advisers to banks and companies.

The council of scholars at the academy includes Sheikh Nizam Yaquby of Bahrain, Mohammad Daud Bakar of Malaysia and Abdul Sattar Abu Ghuddah of Syria, who were all ranked among the top 10 experts in a 2008 report by the Chicago-based Failaka Advisors LLC, an advisory company that monitors and publishes data on Islamic funds.

Yaquby serves on the Islamic boards of 52 institutions, including the New York-based Citigroup Inc and London-based HSBC Holdings plc. Daud advises firms such as the Paris-based BNP Paribas SA, according to the data.

“The whole idea is to further strengthen confidence by making syariah scholars truly professional,” Madzlan said, adding that the majority of experts also have full-time careers.

“The plan will materialise because there’s a need for it.” A shortage of scholars versed in syariah law means they tend to sit on a number of advisory boards simultaneously, which increases the risk of conflicts of interest, according to the Bahrain-based Accounting & Auditing Organisation for Islamic Financial Institutions, or AAOIFI.

“We desperately need an institution that could certify and standardise different Islamic products in the market,” Kaleem Iqbal, a senior executive vice-president at Al Baraka Islamic, a unit of the Bahrain-based Albaraka Banking Group, said in an interview yesterday from Islamabad, Pakistan.

“The banking community will certainly welcome a common platform with a global mandate.”

Syariah-compliant bonds returned 10 per cent this year, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index, while debt in developing markets gained 12.5 per cent, JPMorgan Chase & Co’s EMBI Global Diversified Index shows. The Islamic notes rose 1.3 per cent in August after a 2.6 per cent increase a month earlier.

The spread between the average yield for emerging-market sukuk and the London interbank offered rate narrowed 16 basis points, or 0.16 percentage point, to 385 last month, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index.

Global sales of sukuk have dropped 13 per cent to US$10.1 billion (RM31.5 billion) so far this year, compared with the same period in 2009, according to data compiled by Bloomberg.

The yield on Malaysia’s 3.928 per cent government Islamic note was little changed at 2.72 per cent yesterday and dropped 21 basis points from the end of July, according to prices from Royal Bank of Scotland Group plc.

It reached a record low of 2.63 per cent on August 24. The Islamic finance industry, with US$1 trillion (RM3.1 trillion) in assets, is facing a challenge to develop global standards to attract funds from the world’s 1.6 billion Muslims.

The AAOIFI, whose standards have been adopted in countries including the United Arab Emirates and Qatar, is proposing rules for scholars to reduce the risk of conflicts of interest, Mohamad Nedal Alchaar, secretary-general of the organisation, said in an interview in Kuala Lumpur.

The guidelines by the AAOIFI may address whether syariah scholars can own shares in the institutions they serve and how many advisory boards they can join, he said.

A centralised regulator for scholars will help increase investment because banks will save time in choosing experts to ensure products meet religious principles, said the academy’s Aznan, who also serves on the syariah board of Malaysia’s central bank.

“Global regulation is beneficial, be that through a test of fit and proper criteria as to what makes one qualify as a scholar,” Omar Shaikh, a board member of the Islamic Finance Council in the UK, said in an e-mail yesterday.

source : bloomberg

Nigeria bourse seeks foreign investors to boost economy

Plans to introduce Islamic instruments and bonds to attract investment

Nigeria’s stock exchange is seeking foreign investors as part of its plan to demutualise the bourse and introduce new products including Islamic investments, said Arunma Oteh, head of the nation’s securities regulator.

The Nigerian Stock Exchange is in the “early stages” of demutualisation and will probably hire a new chief executive officer by the end of this year, Oteh, director general of the country’s Securities and Exchange Commission, said in an interview in Bloomberg’s London office. The SEC fired the previous CEO on August 4.

The bourse will consider selling stakes to outside investors, including foreign exchange operators, Oteh said. Building markets for Islamic finance, corporate bonds and exchange-traded funds will help attract investment into sub-Saharan Africa’s second-largest economy and the fifth-largest source of US crude imports, she said.

Restoring confidence

“The role of the stock markets is particularly important as we seek to diversify our economy,” Oteh said.

“The marketplace has to be one that is world class. Allowing both international investors and local investors to look at the exchange as something they can invest in is important.”

Oteh, a former vice-president at the African Development Bank who became head of the securities regulator in January, is trying to restore investor confidence after the benchmark All-Share Index sank 65 per cent from December 2007 to the end of last year amid a banking crisis and reports of market abuses.

The All-Share gauge climbed 0.2 per cent to 24,277.14 yesterday, extending this year’s gain to 17 per cent, according to data compiled by Bloomberg.

The SEC removed Ndi Okereke-Onyiuke as the bourse’s CEO after “inadequate oversight of the exchange, ongoing litigation, allegations of financial mismanagement, governance challenges, and the inordinate delays” on a succession plan, the regulator said last month. Emmanuel Ekazoboh, a partner at Deloitte & Touche, was appointed as administrator.

New listings

The SEC plans to revoke some brokerages’ licenses, Oteh said at a press conference in Bloomberg’s London office on Sunday.

Nigerian Finance Minister Olusegun Aganga is targeting minimum economic growth of 10 per cent as the government improves power and transport capacity, he told reporters in London on Sunday.

The economy expanded by 7.4 per cent in the first half of the year, compared with 5.9 per cent in the same period last year, Aganga said.

The exchange is seeking to increase initial public offerings and Oteh said she expects new stock listings soon from companies in the energy and telecommunications industries.

Building a corporate bond market in Nigeria is a “priority,” Oteh said. Levels of benchmark interest rates, inflation and economic growth are “extremely supportive” for corporate bond issuance and a new tax law has made the debt more attractive for investors, Oteh said.

source : bloomberg