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Governor Zeti keynote address on Islamic finance at the EU-Malaysia Chambers of Commerce and Industry (Full text)

Posted on 09 March 2012 by Laxman  |  Email|Print

In a speech at the EU-Malaysia Chambers of Commerce and Industry’s Quarterly Financial Panel Discussion 2012 titled Islamic Finance: New Frontiers in Financing the Economy, The governor of Bank Negara Malaysia, Zeti Akhtar Aziz said the financing method “offers a comprehensive and competitive solution in meeting funding and investment requirements of businesses”.
“Given its international outreach and dimension, and ability to provide a total financial solution, Islamic finance is now at the frontier in which it presents new opportunities to support the economy and overall financial stability,” she said………………………………………..Full Article: Source

Sukuk in Africa inevitable more than anywhere else

Posted on 08 March 2012 by Laxman  |  Email|Print

Political uncertainty and risk could hinder sukuk growth Interest stems from resident Muslims, and Muslim wealth abroad Gambia sold USD 95 million of Salam Sukuk to date High demand by investors could overcome the high cost of selling sukuk.
African states more than ever need to fund growth plans, construction, refinance and spur investment. While reasons to tap the Islamic finance market vary from one state to another, the main ones are:……………………………………….Full Article: Source

The duality of Saudi Arabia’s first sovereign Sukuk

Posted on 08 March 2012 by Laxman  |  Email|Print

The media has reported that the Saudi Arabian General Authority for Civil Aviation’s sukuk, which raised SAR 15 billion, is structured as a Murabaha product. However, if you look closely at the offer document, it is clear that there are two structures - Mudarabah and “questionable” Murabaha.
The sukuk portfolio constitutes 51% Mudarabah and 49% Murabaha. Such a structure would make it a tradable instrument………………………………………..Full Article: Source

Lessons from Islamic and ethical finance for today

Posted on 08 March 2012 by Laxman  |  Email|Print

The notion of the moral economy is intrinsic to all the major faiths, each of which has placed ethical boundaries on the behavior of those active in the market. The ten commandments of the Jewish Torah or Christian Old Testament laid down an ethical boundary - or regulation - for work:
“for six days you shall labor and do all your work. But the seventh day is a Sabbath to the Lord your God; you shall not do any work - you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns”………………………………………..Full Article: Source

Mideast Sukuk issuance seen over $14bln in 2012

Posted on 07 March 2012 by Laxman  |  Email|Print

Mohammed DawoodThe issuance of Islamic bond, or sukuk, in the Middle East could reach over $14bn this year, according to HSBC, as investor demand and the relatively lower volatility of the asset class drive sales.
HSBC forecasts global sukuk volumes of $44bn in 2012, of which the Middle East region could comprise just over 30%, the bank’s Islamic arm Amanah, said. Malaysia will continue to dominate sukuk issuance, with about 60% of total volumes forecast globally………………………………………..Full Article: Source

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Islamic banking in Africa

Posted on 05 March 2012 by Laxman  |  Email|Print

KFH Research prepared a report about the future of Islamic finance in Africa that said that there are various promising opportunities for the growth and development of Islamic banking in Africa; especially North African countries, in addition to Kenya, Nigeria, Senegal and South Africa. It is worth noting that South Africa is a market with great potential for Islamic banking transactions.
In addition, the report mentioned that Africa hosts 38 Islamic finance institutions, and stressed that most African countries have amended their legislations to allow Islamic institutions to operate………………………………………..Full Article: Source

Takaful growth attracts domestic and multinational providers

Posted on 05 March 2012 by Laxman  |  Email|Print

Takaful insurance across the Middle East and South East Asia has seen rapid growth over the past five years. Francesca Nyman reports on what the future looks like for this sector.
The takaful insurance industry has seen remarkable growth over the past five years. Global takaful contributions grew by 31% in 2009 to reach $7bn, and by the end of 2011 the market was thought to have a value of $12bn, according to Ernst & Young………………………………………..Full Article: Source

The future of conventional and Islamic financial products in Libya

Posted on 02 March 2012 by Laxman  |  Email|Print

Following the popular uprising in Libya of 2011, it is still premature for the relevant regulators to consider the overhaul of the financial services industry in Libya, including Islamic finance, the regulation of foreign banks and stock exchange.
The current Banking Law No 1 for 2005 and the Stock Exchange Law No 11 for 2010 are still in force and shall regulate all banking and securities activities at present until being amended…………………………………………Full Article: Source

Islamic finance assets seen topping $1 trillion in 2010

Posted on 28 February 2012 by Laxman  |  Email|Print

Rasheed M. al-MarajIslamic finance will likely expand faster than mainstream banks this year, and its total assets will top $1 trillion as demand for ethical investments intensifies. However, Islamic financial institutions must guard against straying from the basic tenets of Sharia law if they are to avoid the excesses that led to the global economic crisis.
“The regulatory framework needs to keep pace with the rapid growth of the industry, and also to reflect the lessons learned from the global financial crisis,” said Bahrain’s Central Bank governor Rasheed M. al-Maraj………………………………………..Full Article: Source

Islamic wealth management: Fortunes of the rich will reach USD 162 trillion in 2015

Posted on 20 February 2012 by Laxman  |  Email|Print

KFH-Research prepared a report about Islamic wealth management industry around the world. It stated that this industry has great growth potentials during the coming years, in light of the growing number of rich Muslims, constant growth of Islamic assets, and the increasing demand for Shariah compliant services and products in Islamic and non-Islamic countries. It revealed that the volume of Islamic assets reached USD 1.3 billion by the end of last year.
In addition, the report mentioned that the global wealth management sector is expected to grow with an annual average up to 6% from 2012-2015 to reach USD 162 trillion, despite expected slowdown in global economy. Islamic assets have grown at an average rate of 15%-20% per annum over the past decade to reach approximately USD1.3tln in 2011. (Press Release)

Islamic finance for investment managers - Five steps to creating a Shariah compliant portfolio

Posted on 20 February 2012 by Laxman  |  Email|Print

According to the Global Islamic Finance Report 2011,1 the Islamic finance industry is valued at $1.14 trillion across more than 70 countries and is growing at an annual rate of 10%. It has been performing extremely well since its creation 40 years ago, and its expansion has accelerated in the past few years, within emerging economies around the world but also in non-Muslim majority regions like Europe.

Its appeal partly lies in its resilience, due to the fact that it is based in the real economy. The size of the global Muslim population—1.3 billion people across more than 50 countries2—contributes to its attractiveness in the eyes of financial institutions, but more recently, firms have also begun to realise that Islamic Finance is not only relevant for Muslim investors, but that it is a type of ethical investment that can appeal to a much broader audience. In fact, many non-Islamic countries have been adapting their financial regulations to enable and promote the adoption of Islamic financial products within their jurisdictions……………………………………….Full Article: Source

S&P says global crisis has boosted growth in the Sukuk market

Posted on 16 February 2012 by Laxman  |  Email|Print

Standard & Poor’s Ratings Services has published a report examining why sukuk issuance is gaining acceptance in markets beyond its established strongholds in Malaysia, Indonesia, and the Gulf Cooperation Council (GCC) region (see “Global Crisis Boosts Growth In A Lively But Fragmented Sukuk Market”).
In our view, European banks are reducing their overseas exposure as their capital requirements have increased and their domestic economies faltered. Governments in the Middle East and Asia have therefore turned instead to local investors to back their infrastructure projects. Banks in the Middle East and Asia that comply with Sharia law have also demonstrated a strong appetite for new assets that meet their requirements………………………………………..Full Article: Source

Global Sukuk issuances reached $20bln in Jan

Posted on 08 February 2012 by Laxman  |  Email|Print

The momentum of global sukuk issuances has continued during January to reach $20.2 billion an annual increase by 23.1 percent, Kuwait Finance House Research LTD. (KFHR) reported.
According to the report, this huge figure of issuances is due to the $9.7 billion issuance announced by Plus Expressways Berhad, the biggest company in construction and operation of highways in Malaysia………………………………………..Full Article: Source

USD20bln Sukuk in January, restructuring debt driver in 2012

Posted on 02 February 2012 by Laxman  |  Email|Print

January was a remarkable month for the global sukuk industry and marked a very promising start for the year. USD 20 billion sukuk were issued in the month according to Zawya Sukuk Monitor, making January 2012 by far the best month on record in terms of issuance since 1996. Issuance was inflated by two exceptional sukuk in terms of size - Saudi’s General Authority for Civil Aviation (GACA) USD 4 billion sukuk and Malaysia’s PLUS USD 10 billion sukuk.
Three banks from the UAE managed to sell USD 1.3 billion sukuk in January. The three sukuk were sold in the international market, and were met by oversubscription, partly reflecting international investors’ confidence in the financial strength of these banks on one hand, a thirst for Islamic bonds, and a shift away from the deteriorating credit rating of Europe based issuers. ……………………………………….Full Article: Source

The 99pct, money mechanics and Islamic finance

Posted on 02 February 2012 by Laxman  |  Email|Print

This year, the World Economic Forum in Davos had a unique subtitle: The Great Transformation: Shaping New Models. Global corporate leaders, bankers, politicians, policymakers, and a good number of billionaires discussed the challenges to a system that defines their wealth, their roles, and their future.
Meanwhile, outside, camped in igloos, were the critics of the system, the Occupy WEF movement. The 99% were protesting in the cold, seemingly unaware that the culprit behind our current predicament is not the so called 1%, but a thought, held by billions………………………………………..Full Article: Source

Is Islamic finance a failure?

Posted on 30 January 2012 by Laxman  |  Email|Print

Oliver AghaIslamic finance, a faith-based system of ethical finance, is growing while it continues to struggle for its identity; it is torn between the market success of emulating conventional structures and developing genuinely Islamic structures that reflect its spiritual ethos. This article reveals the struggle and highlights the endemic and extraneous pressures that threaten Islamic finance.
The Islamic finance industry is reported to be valued at over $1 trillion, with an estimated annual growth rate of 10 percent . The industry is continuing to grow despite its inherent problems, and some market analysts project it will be valued at anywhere from $3 to $5 trillion by 2016………………………………………..Full Article: Source

The lessons from the Goldman’s proposed $2 bln Sukuk saga

Posted on 30 January 2012 by Laxman  |  Email|Print

As if blue chip investment bank, Goldman Sachs International, did not have any other problems in a global financial market that is already reeling in the aftermath of the banking crisis and in the wake of the ongoing euro zone sovereign debt crisis.
The bank last September announced that it was going to the market to raise financing totaling $2 billion through a Murabaha sukuk issuance………………………………………..Full Article: Source

UAE represents 30pct of global Islamic banking

Posted on 30 January 2012 by Laxman  |  Email|Print

The Shariah-compliant financial services sector in the country represented 30 per cent of the global Islamic banking industry in 2011, says a report.
Abu Dhabi 2011 Report, which has been published by Oxford Business Group in collaboration with ADIB, has revealed the growing demand for Islamic financial services among different customer segments within the UAE………………………………………..Full Article: Source

Sukuk demand outweighs supply, Malaysia top supplier

Posted on 25 January 2012 by Laxman  |  Email|Print

Fitch Ratings says plans by sovereigns outside the Middle East and other largely Islamic regions to tap the sukuk market could meet pent-up demand from Islamic institutional investors and banks to diversify their bond holdings, making the sukuk market a useful source of additional funding over time.
The opportunity to buy shariah-compliant debt from investment grade sovereigns that have not yet tapped the market would be likely to generate strong investor appetite………………………………………..Full Article: Source

Pakistan: Islamic banks profitability up 58pct in Q1FY12

Posted on 24 January 2012 by Laxman  |  Email|Print

The profit of Islamic banking industry (IBI) reached Rs 8 billion by end of the first quarter of 2011-12, showing growth of over 58 percent, as earning’s growth rate of conventional banks having Islamic banking branches is significantly higher than the growth rate of full-fledged Islamic banks.
The study ‘Islamic Banking Bulletin July-September 2011’ released by the State Bank of Pakistan (SBP) revealed that the share of full-fledged banks in overall profit of IBI though declined marginally over this quarter still constitutes major share (55 percent share) of overall profit of the industry………………………………………..Full Article: Source

UAE’s Islamic banks control 30 pct of global Islamic banking

Posted on 23 January 2012 by Laxman  |  Email|Print

Abu Dhabi Islamic Bank (ADIB), in its Abu Dhabi 2011 Report unveiled by Oxford Business Group, highlighted the important role played by the Islamic banking sector in promoting economic and financial growth in the UAE. The report revealed that the UAE Islamic financial services sector represented 30% of the global Islamic banking industry in 2011 and due to the growing demand for Islamic financial services among different customer segments within the UAE.
The report showed that Islamic banks have played a major role in financing UAE infrastructure projects, residential properties for UAE nationals and development of the human capital market through training of national talent. Islamic banking assets in MENA rose to US$ 416 billion in 2010. This represented a cumulative annual growth rate of 20% over five years, compared with less than 9% for conventional banks. (Press Release)

KFH expects global Sukuk issuance to surpass USD 200 bln in 2012

Posted on 18 January 2012 by Laxman  |  Email|Print

Sukuk issuance in 2012 will increase by 25-30% to break the USD 200 billion barrier, despite challenges that face prosperity of this industry, such as the financial struggles of some European countries and their effect on the rest of the world, a report prepared by KFH-Research about the horizons of global Sukuk in 2012 expected.
The report noted that several positive indicators forecast a brighter future for Sukuk during this year, such as the increasing role of governmental issuance that will form the backbone of the market to boost the private sector and finance major developmental projects;……………………………………….Full Article: Source

Bank says global Sukuk issuance to grow to US$44bln this year

Posted on 17 January 2012 by Laxman  |  Email|Print

HSBC Amanah expects global sukuk issuance to grow to US$44 billion in 2012 from US$26.5 billion last year. Malaysia was forecast to account for 60 per cent of the total while the Middle East and North Africa (MENA) region 32 per cent, the bank said.
It also said governments and government-related entities were likely to account for 50 per cent while the finance and corporate sectors 25 per cent each………………………………………..Full Article: Source

Infrastructure Sukuk receives a major boost

Posted on 16 January 2012 by Laxman  |  Email|Print

Shaipudin Shah HarunInfrastructure sukuk has received a major boost when Projek Lebuhraya Usahasama Berhad (PLUS Berhad) last week closed a record landmark RM30.6 billion sukuk issuance program comprising both government guaranteed (GG) and non-government guaranteed AAA-rated (AAA) issuances of varying tenors, sizes and expected returns and yields to maturity (YTMs).
The issuance was through PLUS Malaysia Sdn Bh, which is a jointly-owned special purpose company of UEM Group Berhad and the Employees Provident Fund (EPF), which was set up to acquire the Malaysian business and undertakings including the assets and liabilities of PLUS Expressways Berhad, the major provider of expressway operation services in Malaysia, under a privatization exercise (proposed acquisition)………………………………………..Full Article: Source

Middle East 2012 bond sales to surpass 2011, Morgan Stanley says

Posted on 16 January 2012 by Laxman  |  Email|Print

Middle East and North Africa foreign bond sales will this year surpass last year’s $27.6 billion as borrowers need to pay loans and will increasingly choose bonds, Morgan Stanley & Co. said.
“The bulk will be government and government-related debt issuance” and financial institutions will continue to be “active,” Klaus Froehlich, managing director for capital markets for the Middle East and North Africa told reporters in Dubai today. Offers of Islamic bonds or sukuk will also rise as there is “enormous appetite” for the debt, he said………………………………………..Full Article: Source

Global Sukuk issuance rockets to $85bln in 2011

Posted on 16 January 2012 by Laxman  |  Email|Print

Global sukuk issuance exceeded $85bn last year, more than 90 percent higher than the previous year, Kuwait Finance House Research Limited (KFHR) said.
Its monthly report on the Islamic bond market also said issuance during December fell below the average, hitting $5bn. The report showed that sovereign issuance was the main catalyst for the sukuk market last year, making up $59bn, while companies’ issuance reached $19bn………………………………………..Full Article: Source

Sukuk sales to reach $44 bln this year on demand, HSBC says

Posted on 13 January 2012 by Laxman  |  Email|Print

Sales of Islamic bonds may rise to $44 billion this year as demand outstrips supply and as Asian and Middle East investors tap the market complying with Islamic banking rulings, HSBC Holdings Plc said.
“We expect a significant increase in sukuk issuance this year because it performed well against the financial crisis and liquidity crunch in 2011,” said Mohammed Dawood, managing director of Islamic global markets at HSBC Amanah. “The sukuk market is already off to a strong start in 2012. This January is the busiest we’ve seen in this market.”……………………………………….Full Article: Source

USD 85 bln Sukuk issued in 2011

Posted on 12 January 2012 by Laxman  |  Email|Print

USD 84.4 billion of sukuk were issued in 2011 across the world, an increase of 62% from the USD 52 billion issued in 2010. This made the year the best on record in terms of sukuk issuance according to data compiled by Zawya’s Sukuk Monitor.
Malaysia continued to constitute the main sukuk market worldwide, followed by the GCC, while sovereign issuers were the main drivers of the growth. The global sukuk market now stands at USD 182 billion…………………………………………Full Article: Source

GCC bonds yearly review 2011

Posted on 12 January 2012 by Laxman  |  Email|Print

USD 34 billion of conventional bonds were issued in 2011, slightly down from 2010, while Islamic bonds were up during the same period. Corporate sector accounted for a mere 20.7% of the total, while the rest was issued by sovereign and quasi-sovereign entities.
GCC bonds in 2011 were sold in 12 currencies worldwide, but US dollar dominated with 42% of the total. London Stock Exchange grabbed the biggest share of the listed issued bonds followed by Luxembourg. UAE was by far the biggest issuer of bonds in 2011 with 48% of the total, followed by Qatar and Kuwait………………………………………..Full Article: Source

Study finds UAE as most competitive GCC banking market

Posted on 12 January 2012 by Laxman  |  Email|Print

Abu Dhabi Islamic Bank (ADIB) reports on Wednesday that the UAE remains the most competitive banking market in the GCC, a key finding from its proprietary “GCC Banking Competitiveness Report.”
The recent issue of the report confirms that the UAE remains the most competitive banking market in the region. The country’s population of approximately 8 million is served by 51 banks with more than 840 branches and over 4,000 ATMs, delivering high levels of service, yet lower profitability than its GCC counterparts………………………………………..Full Article: Source

Global Sukuk issuance to rise by up to 30 pct next year

Posted on 03 January 2012 by Laxman  |  Email|Print

Dr Mohammed Daud BakarShariah scholars and Islamic finance practitioners are bullish on the prospect of the global sukuk market next year, estimating an increase of between 10-30 per cent in the value of issuance, despite the gloomy economic outlook due to the eurozone financial crisis.
Syariah scholar Dr Mohd Bakar Daud forecast between 10-15 per cent increase in the value of total global sukuk issuance for 2012 from about US$79 billion he expected to be issued this year………………………………………..Full Article: Source

Saudi Arabia, Asia set to dominate Sukuk market in 2012

Posted on 03 January 2012 by Laxman  |  Email|Print

Asia and Saudi Arabia are inevitably set to dominate the sukuk market in 2012 with high quality quasi-sovereign issuers taking the lead, especially to fund infrastructure and projects in the oil, gas, petrochemicals and transport sectors.
“The outlook for 2012 appears bright,” explained an experienced Islamic banker to Arab News on the condition that he remains anonymous. “The ringgit-denominated sukuk market will continue to dominate with several mega issuances to fund infrastructure development activities and programs. The total sukuk issuance for 2012 is expected to hover between RM50 billion to RM60 billion, which would account for 70 percent of global sukuk issuances for 2012………………………………………..Full Article: Source

Appetite for Sukuk surges across the Gulf this year

Posted on 03 January 2012 by Laxman  |  Email|Print

Companies and governments in the Gulf sold Islamic bonds this year at the fastest clip since 2007, underscoring a trend where borrowers are seeing more appetite for their debt among regional investors in the wake of the sovereign-debt crisis sweeping Europe.
Sales of Islamic bonds, or sukuk, by Gulf issuers reached US$7.3 billion (Dh26.81bn) this year, according to Bloomberg News data. That was 62 per cent higher than last year and the largest amount of Islamic debt on offer in four years………………………………………..Full Article: Source

Malaysia: Growth momentum of Sukuk and bonds poised to continue

Posted on 03 January 2012 by Laxman  |  Email|Print

While there are clouds of uncertainty looming over the global economy, the Malaysian bond market is expected to remain bullish next year, fuelled by the expected implementation of infrastructure projects.
Analysts and observers feel the growth momentum of the sukuk and debt market would continue next year barring any unforeseen shocks stemming from the United States and eurozone debt crisis………………………………………..Full Article: Source

IFAAS study: 85pct of Omani consumers ready to take-up Islamic finance products

Posted on 03 January 2012 by Laxman  |  Email|Print

Omani consumers have expressed a strong appetite for Islamic Finance with a rapid take-up of banking products expected within the first 12 months of being launched. These are key findings published from Oman’s first independent market study, entitled ‘Islamic Finance in Oman - Sizing the retail market’.
The report was independently commissioned and published by IFAAS (Islamic Finance Advisory & Assurance Services), the international Islamic Finance consultancy. ‘Islamic Finance in Oman - Sizing the retail market’, analyses the retail market for Islamic Finance in Oman across all sectors of the financial market, including banking, finance and insurance. (Press Release)

Islamic banking faces liquidity risk: Expert

Posted on 23 December 2011 by Laxman  |  Email|Print

Islamic banking sector is increasingly facing liquidity risk across all geographical regions. The situation is more challenging in the GCC region, said an expert. He called for the industry leaders and the regulators to create new instruments and develop fresh policy tools for the liquidity risk management in the Islamic industry sector.
Dr Salman Syed Ali of Islamic Research and Training Institute, Saudi Arabia, cautioned that the Islamic banking sector might also go the way of conventional banks, unless effective tools are not in place immediately………………………………………..Full Article: Source

Islamic banks: New year, new dawn

Posted on 23 December 2011 by Laxman  |  Email|Print

An obsession with run-of-the-mill products and services has left Middle East Islamic banks closing 2011 in a comatose state with regards to innovation, according to Islamic finance gurus.
For some time observers have warned retail banks that their offering of mundane Islamic credit cards, home loans and Takaful products was unsustainable. These warnings have now reached fever pitch. As another year looms, it seems that without radical change, Islamic banks could sleepwalk towards a crisis of customer apathy as they fail to find a better way forward other than simply mimicking conventional products………………………………………..Full Article: Source

Saudi Sukuk analysis

Posted on 19 December 2011 by Laxman  |  Email|Print

Saudi Arabia is the somewhat reclusive economic superpower of the MENA region. It has the largest population, GDP and oil reserves in the GCC region and is strategically and militarily important on both a regional and global scale.
However, unlike its neighbors the UAE or Bahrain, Saudi Arabia is not a culturally or economically-welcoming place for international business and as such much of Saudi Arabia’s non-oil related business is an internal market………………………………………..Full Article: Source

South Africa’s Sukuk: Pot of gold for the Rainbow Nation?

Posted on 14 December 2011 by Laxman  |  Email|Print

Sukuk may not be able to offer any sort of quick fix for Europe’s funding crisis, but South Africa’s decision last week to push ahead with a sovereign deal offers a much more encouraging vision for how the Islamic market could develop.
South Africa’s plans for a sovereign sukuk issue could make it the first country with a miniority Islamic population to tap the asset class. And it could be the start of a healthy trend, paving the way for countries with modest debt funding requirements and open-minded regulation to benefit from diversifying into a ready and willing alternative investor base………………………………………..Full Article: Source

Malaysia to continue global Sukuk market domination

Posted on 14 December 2011 by Laxman  |  Email|Print

Malaysia is expected to continue its strong 60% contribution to global sukuk issuance next year, bolstered by projects under the Economic Transformation Programme (ETP). HSBC Amanah said that this year had seen significant growth in sukuk, principally driven by issuance out of the country.
“This is by far the best year since 2002. Over 60% of total global sukuk issuance come from Malaysia,” HSBC Amanah chief executive Rafe Haneef said. He believes that the ETP and other projects would continue to drive the sukuk market………………………………………..Full Article: Source

HSBC Amanah upbeat on Sukuk market

Posted on 14 December 2011 by Laxman  |  Email|Print

HSBC Amanah Malaysia Bhd is upbeat on the local banking sector next year, expecting over 60% of global sukuk issuance to continue to come from Malaysia. Its CEO Rafe Haneef said the sukuk sector saw significant growth this year, with over 60% of sukuk issued worldwide denominated in ringgit.
He said the bank expects the sukuk sector to maintain the same performance next year, especially with the Economic Transformation Programme projects that are funded by sukuk coming on line and projected a 4.5% to 5% gross domestic product growth for th country………………………………………..Full Article: Source

Sukuk market is the fastest growing segment of international finance

Posted on 12 December 2011 by Laxman  |  Email|Print

The sukuk market is the fastest growing part of Islamic finance. Indeed it is one of the fastest growing segments in the global financial market. Having attracted interest from the business community worldwide, it has helped place Islamic finance as a viable industry and as an asset class that is not confined to Muslim countries but as part and parcel of the international financial market.
This is revealed in the introduction of a book titled “Global Sukuk and Islamic Securitisation Market - Financial Engineering and Product Innovation” written by Muhammad Al-Bashir Muhammad al-Amine, who is currently group head of Shariah compliance at Bank Al-Khair (formerly Unicorn Investment Bank) in Bahrain………………………………………..Full Article: Source

Global Islamic funds assets grow to $58 bln in 2010

Posted on 12 December 2011 by Laxman  |  Email|Print

According to the 5th annual Ernst & Young Islamic Funds & Investments Report (IFIR 2011) released at the World Islamic Funds and Capital Markets Conference, global Islamic fund assets under management (AuM) grew by 7.6% to $58 billion in 2010, up from $53.9 billion in 2009. The growth was largely due to market performance and partially on account of new money inflows.
Concentration in equities remains, as they account for 39% of the $58billion AuM, but bringing new money into equities is challenging. Fixed income, commodities and alternatives did well in 2010, which was a record year for Sukuk with issuance of $50 billion………………………………………..Full Article: Source

Shariah compliant funds of funds sector analysis

Posted on 12 December 2011 by Laxman  |  Email|Print

Marketed as an investment one-stop shop, multi-manager funds first came to light in the 1980s but became more prominent as an investment model in the 1990s. They are a very popular optionamongst both retail and institutional investors in the US and UK. The funds aredesigned to make an investor’s life easier by bringing together a range of specialist managers into a single fund.
There are two types of multi-manager funds: those that invest in a range of other funds controlled by different asset managers, which are called funds of funds, and those that appointexternal managers with specific expertise to invest separate tranches of theprovider’s portfolio; these are called manager of managers funds………………………………………..Full Article: Source

Global Sukuk cheaper and more plentiful in 2011

Posted on 08 December 2011 by Laxman  |  Email|Print

November 2011 witnessed a record number of sukuk issues totaling USD 8.86 billion globally, according to data compiled by Zawya Sukuk Monitor. Major issues include a global seven-year USD 1 billion sukuk sold by Indonesia in the international markets followed by a similar seven-year USD 750 billion international sukuk by the Central Bank of Bahrain.
Bank Negara Malaysia successfully issued MYR 3 billion (USD 950 million) Government Investment Issue (GII) in the domestic market………………………………………..Full Article: Source

Dow Jones Islamic Market Indexes November 2011 performance report

Posted on 07 December 2011 by Laxman  |  Email|Print

The global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, had a down month in November with a loss of 0.57%, closing at 2213.85. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of 2.31%, closing at 171.24.
The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased 5.22% in November, closing at 1916.32. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of 6.63%, closing at 118.14. (Press Release)

Islamic finance: Is it just for Muslims?

Posted on 02 December 2011 by Laxman  |  Email|Print

The main reasons today for Muslims leaving the western-style interest banking system is not just the fact that Muslim’s believe that paying or collecting interest is wrong. It’s likely the fact that European and American style of interest banking is nearly a complete failure today. As one woman put it, “I definitely feel safer.”
Islamic finance permits religious practices to influence business decisions. Thus, bans on interest and pure monetary speculation are put into business practice in an Islamic bank………………………………………..Full Article: Source

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Why Islam failed economically?

Posted on 29 November 2011 by Laxman  |  Email|Print

Compared to the enormous literature on the religion of Islam, very few books have been published about the economic performance of different Islamic nations. The book, The Long Divergence: How Islamic Law Held Back the Middle East, by Timur Kuran, an American Muslim and a leading expert on Islamic economic institutions, is a thought-provoking attempt to analyse the factors responsible for the persistent underdevelopment of Islamic countries in West Asia that include the Arabs, Iran, Turkey and the Balkans.
In the author’s words, the region, “at the start of the third millennium, is widely considered an economic laggard, and plethora of statistics support this consensus”………………………………………..Full Article: Source

Islamic banking comes out of its niche

Posted on 29 November 2011 by Laxman  |  Email|Print

Modern Islamic banking follows Islamic law according to the boards of Shariah scholars which differ between the conservative Middle East and more accepting South East Asian regions but the fundamentals remain the same: interest is banned and banks operate on a system of profit loss sharing (PLS).
Loans involve the bank purchasing a commodity at market value and then selling it to the customer at a higher price with the bank keeping the difference. Similarly, interest is not paid on deposit accounts but investors share in the profit of the bank at a level set to compete on the conventional market………………………………………..Full Article: Source

Islamic finance assets to hit $1.1 trillion in 2012 -study

Posted on 23 November 2011 by Laxman  |  Email|Print

Ashar NazimIslamic finance assets around the world are expected to climb 33 percent from their 2010 levels to $1.1 trillion by the end of 2012, boosted by the aftermath of the Arab Spring uprisings and dissatisfaction with conventional finance in the wake of the global debt crisis, consultants Ernst & Young said in a report on Tuesday.
Growth in the Middle East and North Africa will be particularly strong, with assets rising to a projected $990 billion by 2015 from $416 billion in 2010, as new countries open up to Islamic finance, the report predicted………………………………………..Full Article: Source

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