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Islamic Finance Briefing - Archive | August, 2009

Islamic finance emerging as blue ocean

Posted on 31 August 2009 by Laxman  |  Email|Print

From While major economies were rattled by the global financial crisis following the U.S. subprime mortgage trouble, some were relatively safe. Islamic finance is one of them.
It survived the crisis thanks to stable management of assets based on Islamic law, and the world is paying attention to it as an alternative to Western-style finance…………..Full Article: Source

Islamic Development Bank set to start $1.5 bln bond roadshow on Sept 2

Posted on 31 August 2009 by Laxman  |  Email|Print

From The Islamic Development Bank (IDB) will be meeting investors during the week to Sept 8 for the first tranche of a $1.5 billion Islamic bond program which will be worth at least $500 million, its treasurer said on Saturday.
The roadshow will start on Wednesday with the Saudi capital Riyadh, and then Kuala Lumpur, Singapore, Brunei, the United Arab Emirates, Switzerland, and finally London on Sept 8, Mohammad Tariq told Reuters…………..Full Article: Source

IDB approves EUR20mln loan for Iran Railway Co.

Posted on 31 August 2009 by Laxman  |  Email|Print

From The Islamic Development Bank (IDB) approved a 20- million-euro loan to the Islamic Republic of Iran Railway.

The Mehr News Agency quoted the Islamic Republic of Iran Railways Procurement Department General Director Nourollah Beiranvand as saying that the money will be used for expanding rail transportation fleet, developing the related infrastructures, and accelerating the implementation of current projects…………..Full Article: Source

IDB plans $90mln loan for Iran’s mining project

Posted on 31 August 2009 by Laxman  |  Email|Print

From The Islamic Development Bank (IDB) plans to offer a $90 million loan to Iran for the development of Khomroud coal mine in Kerman province, the Islamic Republic of Iran News Network reported on Sunday.

According to the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), IDB officials will travel to the country in December to finalize the plan…………..Full Article: Source

Malaysia sets new guidelines on Murabahah

Posted on 31 August 2009 by Laxman  |  Email|Print

From Bank Negara has announced rules for a standard application of the Murabahah financing structure, seeking a common reading of Islamic law to help the industry grow.

Bank Negara’s Murabahah guidelines follow other recent efforts at harmonization by Islamic banks and Bahrain-based industry body AAOIFI, which would make it cheaper to conduct Shariah financial transactions and encourage cross-border deals…………..Full Article: Source

Amlak tumbles into red as writedowns weigh

Posted on 31 August 2009 by Laxman  |  Email|Print

From Amlak Finance, the home finance company in merger talks with its rival Tamweel, lost Dh67 million (US$18.2m) in the second quarter as it took provisions on mortgages made on incomplete properties.

The sharia-compliant finance firm based in Dubai had reported a net profit of Dh145m for the same period a year earlier, it said…………..Full Article: Source

Pakistan to offer Islamic bonds

Posted on 31 August 2009 by Laxman  |  Email|Print

From Dow Jones: State Bank of Pakistan said Saturday it plans to sell PKR10 billion ($120 million) of sukuk, or Islamic bonds, at the fourth such domestic auction.

The country’s central bank will sell the bonds Sept. 5, it said in a statement…………..Full Article: Source

Al Yusr Islamic banking service launches new Car Murabaha

Posted on 31 August 2009 by Laxman  |  Email|Print

From Al Yusr Islamic banking service of IBQ announced the launch of its latest Sharia compliant financing product.
The new Car Murabaha product aims at providing customers enhanced flexibility and favourable repayment tenure while upholding the highest standards of Sharia compliance…………..Full Article: Source

Firm launches pioneering Sharia insurance product

Posted on 31 August 2009 by Laxman  |  Email|Print

From Bahrain’s leading Islamic insurance company t’azur yesterday launched what it believes is the world’s first Sharia-compliant charitable insurance product.

The Sadaqah product helps people willing to give to charities through regular donations which the company invests in Sharia-compliant funds over a set number of years, after which the accumulated capital is then passed to the charity of the donor’s choice…………..Full Article: Source

SABB Takaful $80 mln rights issue oversubscribed

Posted on 31 August 2009 by Laxman  |  Email|Print

From Zawya Dow Jones: Saudi’s Islamic insurer SABB TakafulSABB TakafulLoading… (8080.SA) said Sunday its 300 million Saudi riyals ($80 million) rights issue was oversubscribed.

The insurer, an affiliate of HSBC Holdings PLC, said 96.5% of its investors subscribed to the offer and would receive 12 shares for every 5 they already own, according to a statement on the Saudi bourse Web site…………..Full Article: Source

Major projects in Bahrain hit by cash crunch

Posted on 31 August 2009 by Laxman  |  Email|Print

From The global economic crisis has set back major infrastructure projects in Bahrain - but the government is determined to press ahead, according to reports.

Bahrain is looking for private money to pump into massive infrastructure projects costing up to BD400 million, delayed by a cash crunch under the global economic crisis…………..Full Article: Source

Abu Dhabi Finance launches mortgages for non residents

Posted on 31 August 2009 by Laxman  |  Email|Print

From Abu Dhabi Finance, the Emirate’s fastest growing home finance provider, announced the launch of a new mortgage product, ‘Compass’, for clients residing outside the UAE.
‘Compass’ offers salaried non residents wishing to invest in residential property in the capital up to 75% mortgage finance. Self employed investors are eligible for a maximum of 70% finance…………..Full Article: Source

BFX to launch operations at Bahrain Financial Harbour

Posted on 31 August 2009 by Laxman  |  Email|Print

From The Bahrain Financial Harbour Holding Company (BFHHC) has announced that Bahrain Financial Exchange (BFX), the first multi-asset exchange in Mena that will be internationally accessible, will establish its operations at Bahrain Financial Harbour (BFH).

Senior BFH officials said a tenancy agreement has been signed with the BFX, under which the company will occupy the 12th floor of the East Tower…………..Full Article: Source

Arab Bank lowers interest rates on housing loans

Posted on 31 August 2009 by Laxman  |  Email|Print

As part of Arab Bank’s continued efforts to provide housing loans to its customers at reduced cost that meets their needs during the current economic climate, the Bank decided to lower the lending interest rate by 0.5% to 8.25% for customers who take out a housing loan starting September 1, 2009.

Arab Bank’s Chairman and CEO, Abdel Hamid Shoman, said “This step is part of the Bank’s constant efforts to ease lending terms and to lower the cost of obtaining housing loans in order to meet the current economic conditions in general and the Jordanian real estate market situation in specific.”………….Full Press Release: Source

UAE economy remains robust: Al Mansouri

Posted on 31 August 2009 by Laxman  |  Email|Print

From His Excellency Sultan Al Mansouri, UAE Minister of Economy, said the federal government’s continuous efforts to develop the national economic infrastructure and help the emirates’ local economies adapt to global economic changes are yielding tremendous results, even over the traditionally slower summer months.
The minister praised the initiatives undertaken by UAE President His Highness Sheikh Khalifa Bin Zayed Al Nahyan to cultivate a more investment-friendly environment, including the scrapping of capital requirements and creation of a national statistics centre…………..Full Article: Source

Saudi Arabia - Cooperative insurance regulations

Posted on 31 August 2009 by Laxman  |  Email|Print

From The insurance sector in Saudi Arabia was unregulated prior to the passing Control of Cooperative Insurance Companies Law, which came into force on 20 November 2003 along with its implementing regulations published on 23 April 2004.
Prior to the implementation of the Cooperative Insurance Regulations and the subsequent establishment of licensed insurance companies in Saudi Arabia, the only options for individuals or businesses operating in Saudi Arabia………….Full Article: Source

Sri lanka: Sukuk certificates to attract Muslim millions for post-war development

Posted on 31 August 2009 by Laxman  |  Email|Print

From Sri Lanka has been urged to use Sukuk, (Islamic financial certificates), to channel millions of dollars of Muslim community funds into post-war development projects.
According to market estimates, funds worth US$ 150 million are in circulation, in the form of informal arrangements, among the Muslim community inside Sri Lanka alone…………..Full Article: Source

Opportunities in Libya - Banking and finance

Posted on 31 August 2009 by Laxman  |  Email|Print

From Ongoing investment in Libya is driving expansion of banking assets: 36% year-on-year in April 2009. The banking sector is dominated by the Libyan Foreign Bank (LFB) and four state owned or controlled commercial banks (85% of assets).

Banking Law of 2005 established the Central Bank of Libya’s independence and role as regulator. At present, the CBL is cautiously reforming the banking sector…………..Full Article: Source

Abu Dhabi Islamic Bank appoints Nawal Al Bayari Business Head for Ladies Banking

Posted on 31 August 2009 by Laxman  |  Email|Print

From Abu Dhabi Islamic Bank (ADIB), the region’s leading Islamic bank, has appointed Mrs. Nawal Al Bayari who is a UAE national as Vice President, Business Head for Ladies Banking.
Her role will be to ensure development of new products and services for women customers of the bank and continuous upgrade in delivery of women banking services…………..Full Article: Source

DIB donates AED5 mln to Zakat Fund

Posted on 31 August 2009 by Laxman  |  Email|Print

From Dubai Islamic Bank (DIB) has donated AED5 million to the Zakat Fund (ZF), it was revealed when Dr. Hadif bin Jowan Al-Dhahiri, Justice Minister and ZF Board Chairman, received at the ZF premises here today Abdul Razak Al-Abdullah, DIB Chief Executive, in the presence of Abdullah bin Aqeed Al-Muhairy, ZF Secretary General.
Dr. Al-Dhahiri commended the DIB for the generous donation which, he said, reflects the DIB’s social and charity philosophy, adding that the donation will serve a large segment of the needy in the society…………..Full Article: Source

Mergers remain difficult option for Kuwaiti finance firms

Posted on 31 August 2009 by Laxman  |  Email|Print

From Mergers between Kuwaiti financial institutions, suffering from the global economic crisis, remain a difficult option that is being avoided due to the ownership structures of these firms and the nature of their managerial board.

With the harsh impact of the global crisis on the local financial sector, calls are being made to offer mergers as a primary solution to bring financial firms out of this predicament, but none of the companies have taken steps in this direction…………..Full Article: Source

Saudi central bank gets deputy chief

Posted on 31 August 2009 by Laxman  |  Email|Print

From Saudi Arabia’s King Abdullah has appointed Abdulrahman Al-Humaidi as deputy governor of the kingdom’s central bank, the official news agency SPA reported on Sunday.

The appointment should not lead to any policy changes at the central bank, known as the Saudi Arabian Monetary Agency (Sama), analysts say…………..Full Article: Source

Dubai International Capital gets new chief

Posted on 31 August 2009 by Laxman  |  Email|Print

From Dubai Holding has appointed Anand Krishnan as chief executive officer of Dubai International Capital (DIC) with immediate effect from his existing role as chief operating officer.

Anand joined DIC in January 2006 as CFO and was appointed COO one year later. Previously he was a managing director at JP Morgan Chase New York/Asia in various senior roles for a total of 19 years…………..Full Article: Source

Shuaa appoints new chief executive

Posted on 31 August 2009 by Laxman  |  Email|Print

From Shuaa Capital has appointed Sameer Al Ansari as the new chief executive officer with effect from September 1. Al Ansari replaces Iyad Duwaji who resigned as CEO this month.

“Sameer Al Ansari has a strong professional track record and decades of expertise in the international investment arena,” said Majid Saif Al Ghurair, chairman of Shuaa Capital…………..Full Article: Source

Islamic finance institutions add $580bln in assets

Posted on 28 August 2009 by Laxman  |  Email|Print

From Total assets at the world’s 100 largest Islamic banks climbed by 66 per cent to more than US$580 billion (Dh2.13 trillion) last year, according to a report by Asian Banker.

The dramatic jump reflects the rapid growth of the Islamic finance industry as a whole, analysts say. While little reliable data exists on Islamic assets globally, the overall industry is by some estimates worth about $1 trillion and growing…………..Full Article: Source

The Asian Banker ranks the world’s largest Islamic banks

Posted on 28 August 2009 by Laxman  |  Email|Print

From Despite the financial turmoil in late 2008 that crippled so many large Western institutions, Islamic banks have continued to grow in prominence and size.
The top ten banks remained largely the same as the ones that dominated our previous ranking in 2008, with Bank Melli Iran (BMI) still topping the list and Saudi Arabia’s Al Rajhi Bank in second place…………..Full Article: Source

Islamic or not? Top sharia scholars and their rulings

Posted on 28 August 2009 by Laxman  |  Email|Print

From Reuters: Deciding which financial products are permissible under varying interpretations of Islamic law is the main task of the more than 200 top religious scholars who sit on the sharia boards of Islamic banks.

Differences of opinion among scholars have seen some financial products deemed un-Islamic in certain centres but permissible in others, creating uncertainty in the $1 trillion industry as it looks for new ways to grow…………..Full Article: Source

Market-friendly rulings promote Islamic finance

Posted on 28 August 2009 by Laxman  |  Email|Print

From In a plain electronics store in Manama’s old business district, one of Islamic finance’s most powerful figures explains how religion defines the $1 trillion industry while still allowing for innovation.

“Everything is permissible unless you prove that it is not permissible,” Shariah adviser Sheikh Nizam Yaquby told Reuters in his tiny office crammed with religious manuscripts and old texts…………..Full Article: Source

IDB to roll out $1.5bln bond

Posted on 28 August 2009 by Laxman  |  Email|Print

From The Islamic Development Bank (IDB) has set up a $1.5 billion Islamic bond medium term note (MTN) programme, ratings agency Moody’s said late on Wednesday.Moody’s rated IDB’s bond programme at Aaa.

“The net proceeds of the issue of such certificates will be used to purchase a portfolio of sukuk assets which may comprise ijara assets, murabaha contracts, istisna’a contracts and Islamic Development Bank’s investments in equity and sukuk certificates,” Moody’s said in a statement…………..Full Article: Source

Bahrain’s Al Baraka sees Syrian affiliate IPO in Oct

Posted on 28 August 2009 by Laxman  |  Email|Print

From Reuters: Bahrain’s Al Baraka Banking Group BARKA.BH will open the initial public offering of its Syrian affiliate in October and expects full-year profit to be similar to 2008, bank executives said.

Speaking to Reuters late on Wednesday at its annual general meeting in Jeddah, chief executive Adnan Ahmed Yousif said Bahrain’s largest Islamic bank by market value said net profit would be close to “what we have already disclosed in 2008″…………..Full Article: Source

More Islamic products from HSBC in pipeline

Posted on 28 August 2009 by Laxman  |  Email|Print

From HSBC Bank Malaysia Bhd plans to roll out more Islamic banking offerings based on the good response to its recently launched Islamic credit cards and mortgage product.

Executive director and deputy chief executive officer Jonathan Addis said the number of Islamic credit cards had grown to about 50,000…………..Full Article: Source

Dubai unlikely to restructure Nakheel bond

Posted on 28 August 2009 by Laxman  |  Email|Print

From Dubai will choose to repay a government-guaranteed $3.52 billion bond sold by state-owned real-estate developer Nakheel PJSC rather than change its terms, according to Ashmore Investment Management Ltd.

Blackrock Global Funds and Ashmore are the two largest holders of the Nakheel issue, according to data compiled by Bloomberg. Ashmore Investment Management owns 1.09 per cent of the bond, the data show. Ashmore, which started its first fund in 1992, invests in currencies, debt and special situations…………..Full Article: Source

Further strengthening of Islamic banking called for

Posted on 28 August 2009 by Laxman  |  Email|Print

From Saleh Kamel, chairman of the Al Baraka Banking Group, has urged in his speech all Islamic banks to strengthen their Islamic banking services.
“The Islamic banking is a real message and method in the economy,” he said, addig “I hope we don’t change the terms without applying the Islamic principles.” He also said that Islamic banking should be purified from all the impurities it suffered from during the past years…………..Full Article: Source

Islamic insurance gains toehold in U.S.

Posted on 28 August 2009 by Laxman  |  Email|Print

From American International Group Inc., the U.S.-based insurer that nearly imploded in 2008 because of its exposure to risky financial instruments, is taking a different tack these days.

Earlier this year, the insurance giant became the first company to offer Islamic homeowners insurance, known as Takaful, in the U.S. with plans to expand into auto and other insurance products in the next six months…………..Full Article: Source

Kuwait’s IFC gets cbank nod for mergers

Posted on 28 August 2009 by Laxman  |  Email|Print

From Kuwait’s International Finance Co, which provides consumer credit facilities, said Thursday it got central bank approval to merge with investment firm Kuwait Invest Co. and real estate company Jeezan Holding Co.

International Finance Co will set up a joint committee with the two companies to study the merger, the company said in a statement on the Kuwait bourse website…………..Full Article: Source

UAE: Foreign investors purchase Dhs973.96mln worth of shares on DFM

Posted on 28 August 2009 by Laxman  |  Email|Print

From Dubai Financial Market announced that the value of shares bought by foreign investors, or non UAE nationals, during last week (August 23 - August 27) reached Dhs973.96m comprising 46.36% of the total value of stocks traded during the period.
The value of stocks sold by foreign investors during the same period reached Dhs824.61m comprising 39.25% of the total value of stocks traded during the period. Net foreign investment on the market reached Dhs149.35m during the same period, as aggregate buy…………..Full Article: Source

Malta seeks Qatar SWF investments

Posted on 28 August 2009 by Laxman  |  Email|Print

From Pitching for rapid conclusion to a free trade agreement between the GCC and the European Union, Malta yesterday said it was in talks with Qatar’s sovereign wealth fund on seeking investments.

The Southern European nation, which has signed seven bilateral agreements (including double taxation avoidance and air services) with Qatar, also saw its Chamber of Small and Medium Enterprises inking pact with the Qatar Chamber of Commerce and Industry (QCCI)…………..Full Article: Source

Malta upbeat on economic ties with Qatar

Posted on 28 August 2009 by Laxman  |  Email|Print

From Malta is keen to collaborate with Qatar in Islamic Banking and Finance as the country is aiming to become a Centre of Islamic Finance in the Mediterranean.
Qatari Islamic financial institutions wanting to spearhead the growth of Shariah-compliant finance in the Mediterranean can benefit from the cost-efficient opportunities that Malta presents by using Malta as the gateway to European and North African markets…………..Full Article: Source

Top Islamic banks post strong asset growth

Posted on 27 August 2009 by Laxman  |  Email|Print

From The world’s top 100 Islamic banks managed to grow their assets by two-thirds last year, at a time when their conventional rivals were struggling to deal with the global financial crisis.

They had US$580 billion (RM2 trillion) of assets in 2008 as against US$350 billion (RM1.2 trillion) in 2007, according to The Asian Banker, a research company……………Full Article: Source

Islamic funds turn focus on India

Posted on 27 August 2009 by Laxman  |  Email|Print

From India is fast emerging as the preferred destination for Islamic funds. In the last six months, the country has seen major Islamic finance players in the Gulf announcing investments of over $10 billion, said Shariq Nisar, chief executive officer of Bangalore-based Bearys Amanah Investment.

According to him, India is a more strategic option over countries like Malaysia and Pakistan because of the thriving stock markets . “It is estimated that Islamic finance business is worth $1 trillion and India can attract a sizable portion of it,” said Nisar, who screened and launched the first list of Shariah-compliant stocks in India……………Full Article: Source

Sukuk attracts cash-rich banks

Posted on 27 August 2009 by Laxman  |  Email|Print

From With debt markets gingerly reopening, Gulf companies eager to raise cash through issuing bonds have to make a decision: should they issue conventional or Islamic bonds, known as sukuk?

The SR7bn ($1.9bn) sukuk issued by Saudi Electricity Company, the kingdom’s state power utility, this summer could be a useful indicator……………Full Article: Source

Islamic venture capital

Posted on 27 August 2009 by Laxman  |  Email|Print

From If the Islamic private equity industry has failed to live up to its expectations then Islamic venture capital has followed the same path with even less spectacular results. Indeed discussion of Islamic venture capital is largely theoretical because real life examples are few and far between.
The government of Malaysia has done more than any other body to promote and define the industry and indeed has launched a fund, albeit a small $10m fund, to help show the way……………Full Article: Source

Malaysia’s Sime eyes $1.14 bln sukuk program

Posted on 27 August 2009 by Laxman  |  Email|Print

From Reuters: Malaysia’s Sime Darby, the world’s top planter by landbank, plans to set up an Islamic funding programme for up to 4 billion ringgit ($1.14 billion), a senior company official said on Wednesday.

The fund-raising could could signal a revival in demand for top rated sukuk, or Islamic bonds, after issuance slumped more than 56 percent in 2008 due to the credit crunch……………Full Article: Source

Islamic mortgage originator launches retail investment fund

Posted on 27 August 2009 by Laxman  |  Email|Print

From MCCA Asset Management, a subsidiary of Islamic mortgage originator MCCA, has launched a shariah-compliant retail managed investment mortgage fund, designed to attract Muslim, as well as generally ethical investors.

The fund, to be known as the MCCA Income Fund, has been registered with the Australian Securities and Investments Commission (ASIC), with a Product Disclosure Statement and official launches scheduled for September……………Full Article: Source

Recession sparks interest in Islamic finance

Posted on 27 August 2009 by Laxman  |  Email|Print

From CNN: With irresponsible banking practices taking the blame for bringing about the global economic crisis, there has been a surge of interest in Islamic finance.
Now, a slew of academic courses are springing up to meet the demand of those wanting to break into an expanding market……………Full Article: Source

UAE rejigs interbank rate panel to stimulate lending

Posted on 27 August 2009 by Laxman  |  Email|Print

From The United Arab Emirates central bank will set up a new panel for the interbank offered rate, an official said yesterday, in the hope that the change will lower the rates and spur lending.
The central bank expressed dismay earlier this month at persistently high interbank rates, saying they did not reflect the market……………Full Article: Source

Bonuses under pressure in Abu Dhabi banks

Posted on 27 August 2009 by Laxman  |  Email|Print

From Even though bonuses are under pressure in the banks of the capital, none of them are planning any salary cuts.

“No bankers in the UAE that I know of are getting bonuses. Most companies are making losses so I don’t expect any bonuses this year,” said Ian Giulianotti, Associate Director at Nadia Recruitment and Management Consultancy……………Full Article: Source

Moody’s downgrades three Kuwait banks for weak credit

Posted on 27 August 2009 by Laxman  |  Email|Print

From Moody’s Investors Service yesterday downgraded three Kuwaiti banks, citing weakening credit conditions, as the Gulf state’s banking sector grapples with the fallout from the financial crisis.

The three lenders are Gulf Bank of Kuwait, National Bank of Kuwait (NBK) and Burgan Bank……………Full Article: Source

Saudi banks step up investment abroad as slowdown hits lending

Posted on 27 August 2009 by Laxman  |  Email|Print

From Saudi banks have intensified a drive to build up their investment abroad as an alternative to a slowdown in their lending to the domestic market because of waning confidence and debt default problems, official figures showed yesterday.

The drive constitutes a turnaround in a policy by most of the kingdom’s 12 commercial banks to cut their overseas assets and head back home just after the eruption of the global financial distress in September 2008……………Full Article: Source

CI affirms United Gulf Bank ratings

Posted on 27 August 2009 by Laxman  |  Email|Print

From Capital Intelligence, the international credit ratings agency, has affirmed the long and short-term ratings for United Gulf Bank (UGB) at BBB+ and A2 respectively. The outlook for the ratings remains ‘stable’.

UGB is nearing the final stages of its balance sheet restructuring, having sold the bulk of its portfolio of commercial bank investments (namely Jordan Kuwait Bank, Algeria Gulf Bank and Bank of Baghdad) to Kuwait-based Burgan Bank, another Kuwait Projects Company Holding (Kipco) group company……………Full Article: Source

August 2009
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