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Islamic Finance Briefing - Archive | September, 2009

France not ready for Islamic bank licences-Noyer

Posted on 30 September 2009 by Laxman  |  Email|Print

From Reuters: More work needs to be done to ensure that Islamic banks can operate safely in a conventional banking environment before France hands out its first such licences, the head of the French central bank said on Tuesday.

France has spearheaded a drive to create a new European hub for Islamic finance over the past two years and industry hopes that the banking authorities may soon give the green light to an Islamic bank have been growing………………..Full Article: Source

BoF’s Noyer sees opportunities for Islamic finance in France

Posted on 30 September 2009 by Laxman  |  Email|Print

From Bloomberg: Bank of France Governor Christian Noyer said the euro region’s second-largest economy offers opportunities to investors in Islamic finance as it adapts its fiscal and banking rules to welcome this type of product.

“Islamic finance has a role to play that could be beneficial both to Islamic investors and to the French economy,” Noyer, who is also a European Central Bank board member, said today at a conference on Islamic finance in Paris………………..Full Article: Source

Islamic finance must interact smoothly with system

Posted on 30 September 2009 by Laxman  |  Email|Print

From Dow Jones: Western banking authorities need to tackle a number of issues before licensing Islamic banks, in order to ensure a smooth interaction with the rest of the banking system and preserve financial stability, European Central Bank Governing Council member Christian Noyer said.

“Banking authorities need to ensure that islamic banks will interact with their conventional environment in France as soundly as possible,” Noyer said………………..Full Article: Source

Finer regulatory model vital in Islamic finance

Posted on 30 September 2009 by Laxman  |  Email|Print

From Islamic finance needs to have a comprehensive, legislatively-based, unified, and dynamic regulatory and supervisory framework.

Former International Monetary Fund executive director and acclaimed economist Professor Dr Abbas Mirakhor said this was the important lesson from the current financial crisis………………..Full Article: Source

Islamic finance can also face systemic failure & reputation risks, says economist

Posted on 30 September 2009 by Laxman  |  Email|Print

From Bernama: Islamic finance could also face a systemic failure and reputation risk unless there is a unified and dynamic regulatory framework applied not only domestically but also globally, warned an economist and former International Monetary Fund (IMF) executive director Dr Abbas Mirakhor.

He brushed aside claims that Islamic Finance was the most regulated financial sector as compared to the others………………..Full Article: Source

Errant Shariah advisers ‘are open to legal suits’

Posted on 30 September 2009 by Laxman  |  Email|Print

From Shariah advisers can be held accountable in court for lapses in their duty but it would be hard to make a case against them as their role involves views which differ across the industry, a top scholar has said.

Shariah advisers are gatekeepers of the $1tn Islamic finance industry, applying Islamic and banking law to decide which financial practices and products comply with Shariah………………..Full Article: Source

Korea: Islamic bonds to be issued next year

Posted on 30 September 2009 by Laxman  |  Email|Print

From Islamic bonds will likely debut here next year, as the government plans to revise regulations to attract Islamic funds. They will get the same tax benefit as other foreign currency-denominated bonds.

The Ministry of Strategy and Finance announced Tuesday that it submitted a tax revision to the National Assembly. When approved, local businesses will start issuing Sukuk, or Islamic bonds………………..Full Article: Source

Legal change to encourage Islamic bonds

Posted on 30 September 2009 by Laxman  |  Email|Print

From Joongang Daily: Korea said yesterday that it seeks to grant tax benefits to profits earned from Islamic bonds that conform to Shariah law and are designed for sale in the Middle East, in a bid to encourage local firms to attract oil dollars.

The Ministry of Strategy and Finance said it will push to revise the law to allow Islamic bond holders to see the same tax exemptions on profits allowed with traditional bonds………………..Full Article: Source

Tax benefits to lure Islamic capital in Korea

Posted on 30 September 2009 by Laxman  |  Email|Print

From The government said yesterday it will give tax benefits to local companies who earn profits from investments in Islamic bonds, a move designed to facilitate attraction of oil money from the Middle East.

The Ministry of Strategy and Finance said the government will draft a revision bill of relevant laws to exempt corporate tax on incomes earned from investments in Ijara sukuk and Murabaha sukuk, which is the same tax exemption rule on profits from other traditional bonds………………..Full Article: Source

First Islamic charity fund plans Q1 launch

Posted on 30 September 2009 by Laxman  |  Email|Print

From Reuters: The first fund managing Islamic charitable donations plans to launch in the first quarter next year as it bids to raise $750 million from high net worth Muslims in its first 12 months, the fund’s Islamic advisor said.

The World Zakat Fund has $50 million in soft commitments so far, said Humayon Dar, chief executive of BMB Islamic, the fund’s sharia adviser. He predicts the fund could grow to as much as $10 billion over 10 years………………..Full Article: Source

CAAM launches its first Shariah Sicav

Posted on 30 September 2009 by Laxman  |  Email|Print

From Crédit Agricole Asset Management (CAAM) has launched CAAM Islamic, its first Sicav to invest in accordance with Shariah Law.
This Luxembourg-domiciled Ucits III fund will be available to both private and institutional investors and will initially offer three sub-funds registered for sale in France:……………….Full Article: Source

Sime Darby to issue Islamic notes

Posted on 30 September 2009 by Laxman  |  Email|Print

From SIME Darby Bhd plans to undertake an Islamic Medium Term Note Programme of RM4.5 billion and an Islamic Commercial Paper/Islamic Medium Term Note Programme of RM500 million, with a combined master limit of RM4.5 billion.

The proceeds raised from the two programmes will be used for the group’s working capital and general corporate purposes and to finance future investments, capital expenditure and debt………………..Full Article: Source

AMB Dana Fitrah 1 fund reaches maturity date

Posted on 30 September 2009 by Laxman  |  Email|Print

From Bernama: Amanah Mutual Bhd (AMB) announced Tuesday that its AMB Dana Fitrah 1-Capital Protected fund has reached its maturity date on Sept 29, 2009.

AMB said it would be delivering the full amount based on the last net asset value (NAV) on the maturity date subject to the minimum of RM0.5000 per unit………………..Full Article: Source

Chancellor introduces ground breaking guide to Islamic finance

Posted on 30 September 2009 by Laxman  |  Email|Print

From For most of the Western institutions interested in Islamic finance authentic information on structuring of Shari’a compliant financial products remains scarce, the Chancellor Guide to the Legal and Shari’a Aspects of Islamic Finance, to be published this month, is the first publication of its kind to explain many of the most important legal dimensions of Islamic finance.
Bringing together 19 legal practitioners and advisors the 355 page Guide offers practical insights on Islamic finance and will be of value to experts and laypersons alike………………..Full Article: Source

Al Omar receives the Best Banking CEO Award in the region for the year 2009

Posted on 30 September 2009 by Laxman  |  Email|Print

From The CEO Middle East magazine awarded Kuwait Finance House, Chief Executive Officer, Mohammad Sulaiman Al Omar the best CEO award in the banking sector for the year 2009 in appreciation of his efforts and outstanding contributions to Islamic finance industry.
Al-Omar, who joined KFH 20 years ago, is considered as one of the second generation leaders of this remarkable Islamic financial institution………………..Full Article: Source

Boost for Gulf banking sector

Posted on 30 September 2009 by Laxman  |  Email|Print

From Gulf Cooperation Council (GCC) central bankers have agreed to ease restrictions on the opening of Gulf banks in the bloc, Oman’s Central Bank Governor Hamoud Al Zadjali said on Tuesday.

Al Zadjali, who headed the 33rd annual meeting of the bankers in Abu Dhabi, did not provide details of the regulatory reforms to be discussed………………..Full Article: Source

Bail plea rejected in Dubai Islamic Bank fraud case

Posted on 30 September 2009 by Laxman  |  Email|Print

From Seven defendants accused of swindling Dubai Islamic Bank (DIB) out of Dh1.8 billion remained behind bars last night after a request for bail was rejected by Dubai Criminal Court.

The accused are US citizen ZO, British nationals CM, RL and AV, Pakistanis RAO and OM and Turkish national AE. Only five of the seven – the Britons and the Pakistanis – attended yesterday’s hearing with their lawyers. The DIB’s lawyer was also present………………..Full Article: Source

13 UAE banks exposed to troubled Saudi groups

Posted on 30 September 2009 by Laxman  |  Email|Print

From UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi confirmed yesterday that 13 local banks are exposed to the Saad and Algosaibi groups, but declined to specify the total amount owed by the Saudi family businesses.

Speaking on the sidelines of the annual meeting of Arab central bankers, Al Suwaidi said the Central Bank will soon set the minimum amount to be set aside by each bank to cover the potential losses………………..Full Article: Source

Dubai Bank launches electronic Salik payment system

Posted on 30 September 2009 by Laxman  |  Email|Print

From Dubai Bank, in partnership with the Roads and Transport Authority (RTA), announced today the launch of an electronic recharge facility that allows Dubai Bank customers to recharge their Salik tags via the bank’s electronic channels, including Internet, phone banking, ATMs and cash deposit machines.

This new service is available to all customers of Dubai Bank. In addition, RTA customers who currently do not have accounts with Dubai Bank also have the convenience to recharge their Salik tags using any one of Dubai Bank’s Cash Deposit Machines (CDM)………………..Full Article: Source

UAE banks set the pace

Posted on 30 September 2009 by Laxman  |  Email|Print

From The combined assets of 420 Arab banks last year reached $1.9 trillion (Dh6.9 trillion), with the top 100 lenders accounting for $1.5 trillion, according to a top official of the Union of Arab Banks (UAB).

Total shareholders’ equity for all the banks rose $164 billion while net profits stood at $24 billion in 2008………………..Full Article: Source

Thomson Reuters launches Middle East Investment Banking League Tables

Posted on 30 September 2009 by Laxman  |  Email|Print

From With money managers and investors shunning volatile stocks in the financial crisis, debt issues and restructuring have taken the lead in the Middle East financial markets, according to the Thomson Reuters investment banking league tables for the region launched today.
“Thomson Reuters has a long history of pioneering in the region since opening its office in Alexandria in 1865,” said Basil Moftah, Managing Director of Thomson Reuters, Middle East and Africa………………..Full Article: Source

Gulf banks must take responsibility for bad loans, says Oman official

Posted on 30 September 2009 by Laxman  |  Email|Print

From Gulf banks should bear responsibility for their lending practices and governments must not create a precedent with bailouts, Oman’s central bank governor said.

“Nobody should expect that governments are going to bail out the borrowers,” Hamud bin Sangur al-Zadjali told reporters at a news conference in Abu Dhabi yesterday following a meeting of Gulf central bank governors that he chaired………………..Full Article: Source

Arab banks need own accounting standard - Yousuf

Posted on 30 September 2009 by Laxman  |  Email|Print

From Arab banks should have their own accounting standard to meet challenges, Adnan Ahmad Yousuf, chairman of the Union of Arab Banks (UAB), said.

“The GCC [Gulf Cooperation Council] and other Arab countries should have an accounting standard which should assess the application of the accounting practices prescribed by the global accounting setting bodies in our countries,” he said………………..Full Article: Source

Moody’s downgrades Bahrain-Based Investcorp for negative outlook

Posted on 30 September 2009 by Laxman  |  Email|Print

From Moody’s Investors Service has today downgraded the long-term deposit ratings of Investcorp Bank B.S.C. (”Investcorp”) to Ba2 from Ba1 and its bank financial strength rating (BFSR) to D from D+.
The ratings of its subsidiary, Investcorp S.A., were downgraded to the same level. Moody’s also assigned a negative outlook to the bank’s ratings………………..Full Article: Source

Union of Arab Banks chairman suggests proposals for reform

Posted on 30 September 2009 by Laxman  |  Email|Print

From Gulf lenders should develop a unified credit bureau to share data as this will help to reduce the number of bad debts, a top banker has said.

It has been projected that bad debts could reach $4 billion (Dh14.7 billion) to $5 billion………………..Full Article: Source

SABB Takaful appoints new CEO

Posted on 30 September 2009 by Laxman  |  Email|Print

From SABB Takaful has announced the appointment of Philip Head as the Company’s new Chief Executive Officer (CEO) with effect from 1 July 2009.
In his new role, Philip will oversee all SABB Takaful operations throughout the Kingdom as well as driving the development of Takaful products across all businesses………………..Full Article: Source

Al Alamiya appoints advisors for IPO

Posted on 30 September 2009 by Laxman  |  Email|Print

From Al Alamiya Cooperative Insurance Company, a Saudi joint stock company under formation, has appointed advisors for its forthcoming initial public offering.

The company has named Riyad Capital as its lead manager and sole underwriter and Morgan Stanley Saudi Arabia as financial advisor for the issue………………..Full Article: Source

Bahrain T’azur to operate Takaful business in Qatar

Posted on 30 September 2009 by Laxman  |  Email|Print

From Bahrain-based T’azur Co. said it has been authorized by the Qatar Financial Centre Regulatory Authority to operate a general takaful in the Qatar Financial Centre.

“T’azur will be offering its full range of general takaful products including property, engineering, marine, medical and motor,” the company said in a statement Monday, adding it is “the first Islamic general insurance company to receive approval to operate at the QFC”……………….Full Article: Source

Arab states upbeat on economic revival

Posted on 30 September 2009 by Laxman  |  Email|Print

From Gulf powerhouse Saudi Arabia and some other Arab countries voiced cautious optimism that economies were on the mend, with the UAE seeing an improvement in lending conditions and liquidity.

Oil producers in the Gulf region have boosted spending with Saudi Arabia, the biggest Arab economy, alone committing more than $400 billion to underpin growth, according to a report in our sister newspaper Gulf Daily News………………..Full Article: Source

HKMA, BNM to advance Islamic Finance: official

Posted on 29 September 2009 by Laxman  |  Email|Print

From Xinhua: Bank Negara Malaysia (BNM), the central bank of Malaysia, announced the signing of a memorandum of understanding (MoU) with the Hong Kong Monetary Authority (HKMA) on cooperation in development of the financial services industry here on Monday.

BNM said in a statement that the field of cooperation of the long-term strategic partnership laid particularly in Islamic Finance………………….Full Article: Source

Islamic Bank of Britain 6-month loss widens

Posted on 29 September 2009 by Laxman  |  Email|Print

From Islamic Bank of Britain Plc reported a wider half-year loss attributable to the owners of the company of £4.62 million compared with £3.06 million in the prior year period.

Half-yearly loss per ordinary share widened to 0.87 pence from 0.73 pence in the comparable period………………….Full Article: Source

Legal services to be more significant in Islamic finance

Posted on 29 September 2009 by Laxman  |  Email|Print

From Bernama: The legal service in Islamic finance will become more significant with the continued advancement and efficiency of the industry, Bank Negara Malaysia Governor, Tan Sri Dr Zeti Akhtar Aziz said here on Monday.

This is because the inherent strengths of Islamic finance, amid the global financial crisis, has managed to heightened interest with the level of innovation, scale and complexity of transactions on the increase………………….Full Article: Source

Heads of Islamic banking industry to discuss about future

Posted on 29 September 2009 by Laxman  |  Email|Print

From of retail banking of the world’s Islamic banks and several conventional banking counterparts are going to meet on October 12th to debate over the future of ethical retail banking in 2010 – reported AME Info.

The most talked about session of the event is expected to be the ‘International Open Fatwa Session in Islamic Retail Banking’ which will feature Shariah Scholars from around the world on one stage debating on interpretations for major products. …………………Full Article: Source

Expertise key to Islamic finance growth

Posted on 29 September 2009 by Laxman  |  Email|Print

From Having a sufficient pool of talent and expertise in Islamic Finance will be key to the development of Brunei as an Islamic financial services hub in Asia.

This was said by the Minister of Energy at the Prime Minister’s Office, Pehin Orang Kaya Seri Dewa Major General (Rtd) Dato Seri Pahlawan Hj Mohammad Hj Daud during the Public Seminar on Islamic Finance organised by Bank Islam Brunei Darussalam (BIBD) yesterday………………….Full Article: Source

BIBD hopeful of more Islamic finance deals

Posted on 29 September 2009 by Laxman  |  Email|Print

From Bank Islam Brunei Darussalam (BIBD) is anticipating to strike more global Islamic finance deals, following the success of an US$850 million ($1.2 billion) international sukuk issue which it helped arrange, a top bank official yesterday said.

The success of the International Development Bank’s (IDB) global sukuk issuance has increased consumer confidence on Brunei’s status as an Islamic finance hub, BIRD Managing Director Javed Ahmad said at the sidelines of a public seminar on Islamic finance at a hotel in Jerudong………………….Full Article: Source

Sharia exchange-traded funds poised for growth

Posted on 29 September 2009 by Laxman  |  Email|Print

From Pent up demand for sharia-compliant exchange-traded funds has yet to translate into inflows.
The Javelin ETF Dow Jones Islamic Market International Index fund launched in June hoping to capitalise on the growing interest in sharia-compliant investment products from some of the seven million Muslims living in the US. It was the first such fund in the world………………….Full Article: Source

HSBC and Deutsche Bank turn to Dentons for IDB sukuk issuance

Posted on 29 September 2009 by Laxman  |  Email|Print

From Denton Wilde Sapte has advised HSBC and Deutsche Bank as underwriters on an $850m (£524.7m) sukuk issuance by the Islamic Development Bank (IDB).
The issuance is part of the IDB’s trust certificate programme and was updated to include an increase of the aggregate issue limit to $1.5bn and transfer of the listing of the programme from Luxembourg to ­London………………….Full Article: Source

CBB Sukuk Al-Salam securities over subscribed

Posted on 29 September 2009 by Laxman  |  Email|Print

From The Central Bank of Bahrain (CBB) announces that the monthly issue of the Sukuk Al-Salam Islamic securities has been over subscribed.
Subscriptions worth BD12m were received for the BD6m issue, which carries a maturity of 91 days………………….Full Article: Source

Bond listings stir excitement

Posted on 29 September 2009 by Laxman  |  Email|Print

From The listing of bonds by Petroliam Nasional Bhd (Petronas) and Cagamas MBS Bhd has stirred some excitement on the local bourse although the papers are not allowed to be traded by the public at large.

While trading remains on an over-the-counter basis, their listing marks an initial step towards generating retail awareness on bonds. The companies that choose to list their bonds can also benefit from greater visibility and an improved corporate profile………………….Full Article: Source

Rasmala launches Egypt equity fund

Posted on 29 September 2009 by Laxman  |  Email|Print

From Rasmala, a leading regional investment bank headquartered in Dubai, has launched an equity fund for investing in securities of publicly-listed companies traded on the exchanges of Egypt.

The Rasmala Egypt Equity Fund may also invest in the securities of corporations domiciled in, or with the majority of their operations in Egypt, but are listed on exchanges outside Egypt, said a company official………………….Full Article: Source

Muslim co-operative launches another fund

Posted on 29 September 2009 by Laxman  |  Email|Print

From The Muslim Community Co-operative Australia (MCCA) has announced the launch of the MCCA Income Fund following its recent release of Australia’s first Shariah-compliant Mortgage Income Fund.

The MCCA Income Fund was developed due to a growing demand from within the Australian Muslim community for a Shariah-compliant investment………………….Full Article: Source

IDB funds $100 mln to Azerbaijan for Canub station project

Posted on 29 September 2009 by Laxman  |  Email|Print

From Governmental sources inform that within the framework of co-operation with Azerbaijan for period until 2012 inclusively the Islamic Development Bank (IDB) agreed to extend a loan for station’s construction.

“The IDB gave its consent to extend a loan of up to $130 million,” a source said………………….Full Article: Source

Banque Al Baraka D’Algerie posts a 39 pct growth in profits

Posted on 29 September 2009 by Laxman  |  Email|Print

From Banque Al Baraka D’Algerie, a subsidiary banking unit of Al Baraka Banking Group BSC, announced that it posted a substantial increase of 39% in net profits during the first half of 2009 compared to the same period last year.
Assets also increased by 8%, finance by 17%, deposits by 7% and shareholders equity by 7% as at the end of June 2009 compared to the end of December 2008………………….Full Article: Source

Al Baraka unit is planning to boost capital

Posted on 29 September 2009 by Laxman  |  Email|Print

From Banque Al Baraka D’Algerie plans to increase its capital from $105m to $140m. The subsidiary banking unit of Bahrain-based Al Baraka Banking Group has already received approval for the move from shareholders and the Central Bank of Algeria.

The bank yesterday said total operating income increased by 16pc from $36.34m in the first half of last year to $42.05m in the first half of this year………………….Full Article: Source

Bank group calls for unified credit bureau in region

Posted on 29 September 2009 by Laxman  |  Email|Print

From The Union of Arab Banks (UAB) has proposed the creation of a unified credit bureau and risk management unit for the banks across the region.

“A unified credit bureau will strengthen the GCC financial sector and lead to greater transparency in the regional economies. Such a move will reduce the possibility of systemic risks to financial sector emerging from corporate frauds,” Adnan Ahmad Yousuf, Chairman of UAB, said………………….Full Article: Source

Arab cbankers want early warning system

Posted on 29 September 2009 by Laxman  |  Email|Print

From Arab central bankers, grappling with the impact of the global financial crisis and a corporate debt scandal in the Gulf region, want a global “early warning system” for financial institutions, the head of the UAE central bank said.

But as the Arab Monetary Fund holds its annual meeting in Dubai on Monday, Governor Sultan Nasser Al-Suweidi said it was unlikely there would be major progress made, citing Western reluctance………………….Full Article: Source

Fitch: UAE banks face increased impairments in tough environment

Posted on 29 September 2009 by Laxman  |  Email|Print

From Fitch Ratings says today in a special report that the eight largest UAE national banks continue to face rising impairments and other challenges, but can absorb higher impairments as capitalisation has improved and they have a high level of sustainable revenues.

“The first half of 2009 has been challenging, with a rapidly slowing economy, liquidity pressures and rising impairments restricting new lending and profitability,” says Robert Thursfield, Director in Fitch’s Financial Institutions team………………….Full Article: Source

Gulf Bank says Saad exposure could be contained

Posted on 29 September 2009 by Laxman  |  Email|Print

From Kuwait’s Gulf Bank said its exposure to Saudi Arabian conglomerates Saad and Algosaibi could be contained and dealt with, state news agency KUNA cited the bank’s chief executive as saying on Monday.

“We are in continuous dialogue with the officials in both groups and the concerned supervisory parties in both countries to discuss how to deal with this issue,” Michel Accad told KUNA………………….Full Article: Source

Kuwait- Gulf Bank to restore the pre-crisis position in 2010

Posted on 29 September 2009 by Laxman  |  Email|Print

From Gulf Bank’s CEO Michel Accad stressed Monday that next year will represent a starting point for the Bank to restore its pre-crisis position as one of the largest local banks.

Interviewed by Kuwait News Agency (KUNA), Accad stated, “As everyone knows, last October the Bank went through a serious crisis that cost the bank substantial losses………………….Full Article: Source

Saad in talks with Kuwait banks to settle debt

Posted on 29 September 2009 by Laxman  |  Email|Print

From Saudi Arabian conglomerate Saad Group has started talks with Kuwaiti lenders to settle its debts in order to avoid further lawsuits, a Kuwaiti newspaper said on Monday citing banking sources.

The move comes as Saad Group tries to avoid any further legal action that could be taken by Kuwaiti lenders, after Al Ahli Bank of Kuwait (ABK) sued the group, Kuwaiti daiy newspaper Al-Qabas reported………………….Full Article: Source

September 2009
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