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Islamic Finance Briefing - Archive | November, 2012

Fitch affirms HSBC Amanah Takaful at IFS ‘A-’; outlook stable

Posted on 22 November 2012 by Laxman  |  Email|Print

Fitch Ratings has affirmed HSBC Amanah Takaful (Malaysia) Sdn Bhd’s (HSBCAT) Insurer Financial Strength (IFS) rating at ‘A-’ with Stable Outlook.
The rating reflects the important role HSBCAT plays in the insurance franchise of HSBC group. The rating also reflects HSBC group’s franchise value, distribution channel and management support. HSBCAT benefits from its parent’s widely recognised brand name, product and distribution capabilities, as well as other management resources………………………………………..Full Article: Source

SABB Takaful recognized for Takaful protection and savings products

Posted on 22 November 2012 by Laxman  |  Email|Print

SABB Takaful Company has received an award for their Takaful protection and savings at the INSUREX conference held in Dubai. SABB Takaful was competing with prestigious names in global insurance like Friends Provident International and Zurich as well as regional firms from 11 Middle Eastern countries.
Nonetheless, SABB Takaful was named the winner for this year’s award. It is worth mentioning that the INSUREX conference this year is the 7th of its kind to be held with the organization of of Policy Magazine - one of the most important publishers specializing in the insurance field in the Middle East; in an aim to highlight the excellence of leading insurance companies in the region………………………………………..Full Article: Source

ICIEC and GARANT sign cooperation agreement

Posted on 22 November 2012 by Laxman  |  Email|Print

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC and the European insurer Garant Versicherungs-AG signed a cooperation agreement to insure and reinsure trade and investments flows to and from Arab and Islamic countries members of ICIEC.
The agreement was signed on the side lines of the 3rd Annual Meeting of Aman Union, a group of Arab and Islamic Export Credit Agencies which is being held in Kuala Lumpur 21st and 22nd October 2012. The Agreement was signed by Dr. Abdel Rahman El-Tayeb Taha, the Chief Executive Officer of ICIEC and Mr. Louis Habib-Deloncle, Chairman of the Managing Board of Garant………………………………………..Full Article: Source

MAS secures RM5bln financing for aircraft

Posted on 22 November 2012 by Laxman  |  Email|Print

Malaysian Airline System Bhd (MAS) has entered into an Islamic financing scheme of up to RM5.3 billion to fund the purchase of eight aircraft. The national carrier had executed a master facility for a Bai’ Bithaman Ajil Islamic financing arrangement with Turus Pesawat Sdn Bhd, a special purpose company owned by the Ministry of Finance (MoF), to provide financing facilities.
The current facility will be used to finance the purchase of six Airbus A380-800, one Airbus A330- 200F and one Airbus A330-300 and other related expenses, MAS said in a filing to the exchange………………………………………..Full Article: Source

Qatar Telecom agrees $500 mln debut Islamic finance deal

Posted on 21 November 2012 by Laxman  |  Email|Print

Qatar Telecom (Qtel), one of the Gulf Arab region’s largest telecoms firms, has signed its debut Islamic financing facility, the operator said on Tuesday.
The $500 million deal, which runs for 18 months and is structured as a revolving Murabaha facility, was provided by Qatar Islamic Bank in a capacity as sole mandated lead arranger, the former monopoly said in an emailed statement. A murabaha is a sharia-compliant cost-plus-profit arrangement……………………………………….Full Article: Source

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Australia – A new Islamic finance hub?

Posted on 21 November 2012 by Laxman  |  Email|Print

Australia’s political stability, sizeable domestic economy, supportive infrastructure and developed financial system adds to its chance of becoming a hub for Islamic finance in the region. Islamic finance has a long history. However, it has only developed on a global scale over the last 30 years. In that relatively short space of time the industry has grown rapidly and the global market now exceeds US$1 trillion.
Many will find it surprising that Australia was one of the first developed countries to establish Islamic finance. Shariah compliant cooperatives have been offering personal and small business financial services such as mortgages from the 1990s……………………………………….Full Article: Source

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Malaysian Air lines up $1.73 bln bond to buy new Airbus aircraft

Posted on 21 November 2012 by Laxman  |  Email|Print

Loss-making Malaysian Airline System Bhd (MAS) has secured a state-backed Islamic bond facility to raise up to 5.3 billion ringgit ($1.73 billion) for the purchase of eight new widebody aircraft made by EADS’s Airbus.
The state-guaranteed bond was established through Turus Pesawat Sdn Bhd, a special-purpose vehicle owned by the ministry of finance, MAS said in a statement on Tuesday……………………………………….Full Article: Source

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Bank Rakyat launches RM1 bln Sukuk

Posted on 21 November 2012 by Laxman  |  Email|Print

Bank Rakyat Tuesday signed an agreement with Maybank Investment Bank and CIMB Investment Bank to issue an Islamic medium-term notes (IMTN) programme worth RM1 billion.
Its managing director, Datuk Yusof Abdul Rahman, said the inaugural sukuk musyarakah, expected to be issued on Friday, aimed to generate long-term yields and to meet the Basel III rules on banking capital which will be implemented by Bank Negara Malaysia………………………………………Full Article: Source

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Bank Rakyat’s RM1bln Islamic medium term notes well received

Posted on 21 November 2012 by Laxman  |  Email|Print

In preparation for Basel III, Bank Rakyat has launched its first sukuk issuance to raise RM1bil under an Islamic medium term notes programme. The issuance would raise RM300mil under its three-year term notes and RM700mil under its five-year term notes.
Bank Rakyat managing director Datuk Yusof Abdul Rahman said the sukuk issuance was part of the bank’s effort to restructure the bank’s fund and to raise funds for the long and medium term……………………………………….Full Article: Source

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Golden agri-resources raises $490 mln from Sukuk

Posted on 21 November 2012 by Laxman  |  Email|Print

Golden Agri-Resources, one of the world’s largest palm oil companies, announced on Monday that it raised 1.5 billion ringgit ($490 million) from selling five-year Islamic medium-term notes, called sukuk.
The sale is part of a larger plan to sell up to 5 billion ringgit in notes, the company said in a statement published on its website on Monday. The notes will mature in November 2017, it said. The company considers Malaysia the ideal location for the sale of its sukuk given the country’s well-established and advanced sukuk market with abundant liquidity, coupled with its familiarity with the palm oil industry in general, Golden Agri-Resources said……………………………………….Full Article: Source

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Bahrain c.bank to foster capital markets

Posted on 21 November 2012 by Laxman  |  Email|Print

Bahrain’s central bank (CBB) plans steps to encourage securities issuance and lure foreign investors who have been deterred by the global financial crisis and political unrest in the Gulf island kingdom.
The CBB will soon issue a directive on the offering of securities covering both Islamic and conventional paper, governor Rasheed al-Maraj said. Bahrain, a regional financial hub and a major centre for Islamic finance, has been hit by unrest that followed Arab Spring uprisings elsewhere in the Middle East……………………………………….Full Article: Source

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Emirates Islamic Bank partners with RTA

Posted on 21 November 2012 by Laxman  |  Email|Print

Emirates Islamic Bank, the Islamic banking arm of Emirates NBD Group, and Roads and Transports Authority (RTA) announced on Tuesday the launch of a new Sharia-compliant visa credit card that is packed with special city transport features, and targeted at car drivers as well as metro commuters.
The new Emirates Islamic Bank RTA credit card is fully Sharia-compliant and combines the features and benefits of a regular credit card and the proprietary Nol transit application, used for making payments on the RTA transit network and at parking meters……………………………………….Full Article: Source

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Malaysia to remain global leader in Islamic banking

Posted on 21 November 2012 by Laxman  |  Email|Print

Malaysia will continue to be the global leader in developing and promoting Islamic banking systems, according to Roland Berger Strategy Consultants. Its senior partner in Southeast Asia, Markus Bohme said Malaysia will face competition from member countries of the Gulf Cooperation Council (GCC). He said there will be an automatic connection with the GCC countries and at the same time competition, but Malaysia is probably set for that in Asia.
“Many people are thinking about Malaysia as a product of Islamic investment banking, automatically the activity will be related to the Gulf region. It probably goes beyond the Islamic…Malaysia has relatively strong banks and very international banks which are Maybank and CIMB,” he said……………………………………….Full Article: Source

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Takaful Malaysia’s profit grows by 55pct

Posted on 21 November 2012 by Laxman  |  Email|Print

Takaful Malaysia reported a 55 percent growth in its profit after taxation and zakat (PATZ) of RM67.4 million for the 3rd quarter financial period ended September 2012 compared with RM43.6 million for the same period last year.
Profit before taxation and zakat (PBTZ) meanwhile increased by 44 per cent to RM86.6 million compared with RM60 million previously, the company said in a statement. The group’s cummulative 3rd quarter operating revenue increased by 24 per cent to RM1.29 billion from RM1.04 billion in the same period last year. ………………………………………Full Article: Source

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UAE’s first-ever Islamic Margin Trading rolled out by Al Ramz Securities

Posted on 21 November 2012 by Laxman  |  Email|Print

Al Ramz Securities, one of the UAE’s leading brokerage houses, has once again reaffirmed its pioneering role in local industry by introducing the country’s first-ever Islamic Margin Trading service.
The service is patterned after the ‘Murabaha’ type of Shariah-compliant ‘cost-plus’ financing, where a fund purchases goods and resells them to a third party at an agreed-upon price. The price includes the cost of the goods plus a profit margin, with the cost and margin predetermined by the parties involved in advance……………………………………….Full Article: Source

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Firm boosts Irish Islamic finance sector

Posted on 20 November 2012 by Laxman  |  Email|Print

Amanie Advisors, the global Islamic capital markets advisory firm, has set up an Irish operation. The move is seen as a further boost to Ireland’s growing Islamic finance sector, and will facilitate both Irish and European companies access funding through the Islamic capital markets.
Dr Daud Bakar, group chairman of Amanie, said it chose Ireland due to its “growing reputation as a hub for Islamic finance operations”. Amanie has a base in Luxembourg but, according to Noel Lourdes, who will head up its new operation, Dublin will act as the hub for originating and structuring Islamic bond deals………………………………………..Full Article: Source

BoG to consider Islamic banking in Ghana

Posted on 20 November 2012 by Laxman  |  Email|Print

The Bank of Ghana (BoG) has hinted it may later consider introducing Islamic Banking in Ghana if the prospects are positive. Industry players have argued that Islamic Banking has the potential of solving the high interest rates challenges for the private sector.
The Acting Governor of the BoG, Dr. Henry Wampah at last week’s Monetary Policy Committee press conference stated that it may consider that banking concept soon………………………………………..Full Article: Source

Basel III and Islamic finance: friend or foe?

Posted on 20 November 2012 by Laxman  |  Email|Print

High capital levels and a prohibition on more exotic forms of funding should leave Islamic banks well placed under Basel III. But a lack of high quality sharia-compliant instruments leaves the sector facing issues over liquidity requirements
Basel III has prompted a large amount of discussion among the Islamic financial sector. At first glance, the new regime should be positive: Islamic banks should easily already clear most of the new requirements for capital and adequacy ratios without needing to raise substantial amounts of new capital - unlike their conventional banking peers. This should effectively level the playing field between the two schools of finance………………………………………..Full Article: Source

Need for strategy for sustainable growth of Islamic finance in Asia

Posted on 20 November 2012 by Laxman  |  Email|Print

There is a need for a strategy to ensure a sustainable and stable growth of the Islamic Finance Industry across Asia.Executive Director and Chief Executive Officer of CIMB Islamic Bank, Badlisyah Abdul Ghani said the basic requirements for an effective integration of Islamic Finance across the region are certainty in Islamic Finance activity, regulatory and legal certainty; Shariah credibility and regional Shariah harmony.
“In Asia in general, people are not sure whether Islamic Finance in Asia has stability and integrity,” he said………………………………………..Full Article: Source

Islamic Finance House opens its new main branch in Abu Dhabi

Posted on 20 November 2012 by Laxman  |  Email|Print

Islamic Finance House Pvt. JSC, (IFH) has announced the grand opening of its new main branch, which is located at the heart of the Capital city, Abu Dhabi. Committing to grow across the UAE and serve customers’ seeking Shari’a compliant financial services through its wide and diversified portfolio of Shari’a compliant products including, personal and business finance in addition to investments, IFH aims to enrich its customers’ financial experience through adopting a customer-centric approach.
Eisa Alqubaisi, Chairman of Islamic Finance House said: “We at Islamic Finance House offer innovative Shari’a compliant personal and business Islamic finance products, with a clear objective to become the preferred financial institution in the UAE”(Press Release)

Dubai Islamic Bank builds on Emiratisation partnership

Posted on 20 November 2012 by Laxman  |  Email|Print

Dubai Islamic Bank (DIB) has welcomed the second batch of its 2012 Emarati Programme in cooperation with Majid bin Mohammed UAE Nationals Training Initiative. The 20 male UAE Nationals will now commence a six-month long customised training course to enhance their skills and knowledge of the banking industry.
The first batch of graduates, a group of 20 female UAE Nationals followed the same course at the bank earlier this year. The programme was developed following the the signing of a Memorandum of Understanding (MoU) between DIB and the Private Office of His Highness Sheikh Majid Bin Mohamed Bin Rashid Al Maktoum………………………………………..Full Article: Source

Malaysia continues to lead in Islamic banking development

Posted on 20 November 2012 by Laxman  |  Email|Print

Malaysia will continue to be the global leader in developing and promoting Islamic banking systems, according to Roland Berger Strategy Consultants. Its senior partner for Southeast Asia, Markus Bohme said Malaysia will face competition from member countries of the Gulf Cooperation Council (GCC).
He said there will be an automatic connection with the GCC countries and at the same time competition, but Malaysia is probably set for that in Asia………………………………………..Full Article: Source

S-E Asia a likely hotspot for global investment bank growth

Posted on 20 November 2012 by Laxman  |  Email|Print

South-East Asia is expected to be a hotspot for growth for global investment banks while more consolidation is expected to reduce the number of major players to around 10 or less within the next three to five years, from the current 14.
In terms of Islamic finance, he said that the country would continue to lead in developing and promoting Islamic banking systems. However, Malaysia will continue to face competition from the Middle East. While there is competition, there will also be an automatic connection with Middle Eastern countries, according to Roland Berger Strategy Consultants senior partner Markus Boehme………………………………………..Full Article: Source

SBP issues instructions to improve transparency in IBIs

Posted on 20 November 2012 by Laxman  |  Email|Print

The State Bank of Pakistan (SBP) has issued detailed instructions for Profit and Loss Distribution and Pool Management in Islamic Banking Institutions (IBIs) in order to improve transparency and disclosures and bring standardisation in IBIs’ profit and loss distribution policies and practices.
Instructions are applicable with immediate effect and Para IV of annexure-II of IBD circular 2 of 2008 stands withdrawn. Provisions of BPRD circular 7 of 2008 regarding minimum rate of return on savings deposits as amended from time to time shall no more be applicable on IBIs………………………………………..Full Article: Source

SBP seeks transparency in Islamic banking

Posted on 20 November 2012 by Laxman  |  Email|Print

All the Islamic Banks are advised to maintain transparency in Profit & Loss Distribution and Pool Management in order to improve standardization in Islamic Banking Institution’s (IBIs’) profit and loss distribution policies and practices.
The State Bank of Pakistan has issued these instructions to the IBI, which are applicable with immediate effect. Failure to comply with SBP instructions shall invoke penal action under the provisions of Banking Companies Ordinance, conveyed to the Presidents/Chief Executives of all Islamic banks and all conventional banks having Islamic banking branches ………………………………………..Full Article: Source

BoK Raast Islamic Banking branch opened at Topi

Posted on 20 November 2012 by Laxman  |  Email|Print

“Bank of Khyber (BoK) was committed to cater the banking requirements of all segments of society. BOK is providing Islamic Banking & Financial requirements as well as conventional in a befitting manner to encourage the economic developmental activities in the region.”
BoK Managing Director Bilal Mustafa said this while speaking at the formal inauguration of BoK Raast Islamic Banking Branch at Main Bazaar Topi, District Swabi on Monday in a ceremony. The inaugural ceremony was also attended by notables of the area and business community………………………………………..Full Article: Source

Ithmaar continues core business growth, takes prudent provisions and reports a net loss of $15.6 mln

Posted on 20 November 2012 by Laxman  |  Email|Print

Ithmaar Bank, a Bahrain-based Islamic retail bank, reported today (ed note: 13/11/12) overall growth in core business for the year but reported a net loss after recognizing prudent impairment provisions. The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Mohamed Al Faisal, followed the review and approval, by the Board of Directors, of the Bank’s consolidated financial results for the nine month period ended 30 September 2012.
The results show a net loss of $15.6 million for the nine month period as compared to a net profit of $6.7 million for the same period last year. This is despite operating income increasing 14.21 per cent to $161.9 million for the period.(Press Release)

Highway sukuk on MARCWatch

Posted on 20 November 2012 by Laxman  |  Email|Print

Malaysian Rating Corp Bhd (MARC) has put Senai-Desaru Expressway Bhd’s (SDEB) RM1.89bil nominal value senior sukuk ijarah medium term notes programme and its RM3.69bil nominal value junior sukuk ijarah medium term notes programme on MARCWatch negative.
SDEB is the concession holder for the Senai-Pasir Gudang-Desaru Expressway, with the highway codename E22. MARC said in a press release that the MARCWatch Negative placement is due to the E22’s weak traffic performance since commencing full operations after the opening of Package 3 in July 2011………………………………………..Full Article: Source

Indonesia to issue 1 bln USD of global Islamic bond

Posted on 20 November 2012 by Laxman  |  Email|Print

A senior Indonesian official said on Monday that government is scheduled to issue Islamic global bond on Wednesday, aimed at seeking some 1 billion U.S. dollars of funds to finance state budget this year.
Debt Management Director General at the Financial Ministry Robert Pakpahan said that the would-be issued bond offers 3.3 percent returns rate with service period of 10 years. The ministry also planned to issue sovereign for Japanese investors, called Samurai Bond, on Thursday, worth 60 billion Yen. The bond offers 1.13 percent returns rate, has 10 years of service period, the largest news portal detik.com reported………………………………………..Full Article: Source

KPMG ready to help Islamic banking in Azerbaijan

Posted on 19 November 2012 by Laxman  |  Email|Print

Due to the opening of the largest-in-the-region “Islamic window” by the International Bank of Azerbaijan, an interest in the expert support of Islamic banking in the country has increased.Neil Miller, head of KPMG International Group on Islamic finance, has said that the best experience for Azerbaijan is the experience of Kazakhstan.
“The use of Islamic banking creates the conditions for an alternative and interest-free financing. From my own experience I can say that most Muslim countries are interested in the application and use of such banking. It should also be noted that in recent years the amount of funding on the methods of Islamic banking will reach $1.3 trillion,” Miller said………………………………………..Full Article: Source

Azerbaijani bank increases Islamic finance borrowings

Posted on 19 November 2012 by Laxman  |  Email|Print

In the two months since the establishment of the Islamic Banking Department, the International Bank of Azerbaijan (IBA) has raised $60 million, Chairman of the Board Jahangir Hajiyev said.
“The money is attracted from the Islamic Development Bank, the Fund in the UAE and other financial institutions. Currently, negotiations are underway to attract new funds,” Hajiyev said. According to him, Islamic banking is a large reservoir in the world finance and banking, to which Azerbaijan has virtually had no access before………………………………………..Full Article: Source

Indonesia issues 10-year $1 bln Sukuk

Posted on 19 November 2012 by Laxman  |  Email|Print

The Government of Indonesia has issued its third sovereign Sukuk. The $1 billion, 10-year bond, is part of a $3 billion trust certificate issuance program. It was rated BB+ by Standard and Poor’s, BBB- by Fitch and Baa3 by Moody’s.
Indonesia was able to price the Sukuk at 3.3 per cent, at the tight end of final guidance of 3.3-3.4 per cent and 20 basis points tighter than the initial price guidance of 3.5 percent provided before the sale. ……………………………………….Full Article: Source

Singapore: Mega sukuk issue creates ripples here

Posted on 19 November 2012 by Laxman  |  Email|Print

Singapore investors dipped heartily into the world’s first syariahcompliant Tier 1 perpetual sukuk (Islamic bonds) despite the financial centre not being known for its appetite for Islamic finance.
So keen were Singapore investors on the offering that they accounted for 23 per cent or US$3.5 billion of the US$15.5 billion order book for Abu Dhabi Islamic Bank’s (ADIB) US$1 billion Tier 1 perpetual sukuk. In the end, however, allocations were scaled back and they ended up with 18 per cent of the issue. ADIB, majority owned by the Abu Dhabi royal family, last week sold the world’s first perpetual sukuk issued by a bank in the international market………………………………………..Full Article: Source

A word of caution on Sukuk financing

Posted on 19 November 2012 by Laxman  |  Email|Print

The use of Sukuk is now in vogue. The term itself is a plural for sakk, which in Arabic refers to a note, and is believed to be the origin of the English word cheque. The financial instrument is used in contemporary capital market practices as an investment certificate, note or simply a bond-like instrument, which replicates the economic characteristics of an interest-bearing bond.
A number of governments in the block of countries represented in the Organisation of Islamic Conference are using innovative Sukuk structures to raise money for a variety of purposes, including financing budget deficits………………………………………..Full Article: Source

Sukuk fund outlook from Rasmala

Posted on 19 November 2012 by Laxman  |  Email|Print

The predominant tone in October was one of “risk on” with fluctuations in $ interest rates having little bearing on Sukuk pricing in the region. Nervousness in the international market merely resulted in the local market pausing for breath before soldiering on once positive sentiment returned.
Against this backdrop, the hunt for yield continued apace and this was reflected in the strong performance of some previously unloved but higher yielding names in the conventional space i.e. Dubai Holdings 14s and 17s which increased by more than two per cent and three per cent respectively on the month. In the Sukuk high grade space, DP World 17s and Dubai Government 22s were two standout performers increasing 2.4 per cent and 2.3 per cent respectively on the month………………………………………..Full Article: Source

Golden Agri-Resources sells MYR1.5 bln Sukuk at 4.35pct profit rate

Posted on 19 November 2012 by Laxman  |  Email|Print

Golden Agri-Resources Ltd. (E5H.SG) Monday said it has sold 1.5 billion Malaysian ringgit (US$489 million) of five-year Islamic medium term notes at a profit rate of 4.35% per annum, according to a company announcement.
The net proceeds raised from the issuance, the company’s first Sukuk, or Islamic notes, will be utilized for the company’s general corporate purposes which are in compliance with Shariah principles, Golden Agri said in a statement to Singapore Exchange………………………………………..Full Article: Source

Tilal Development Company announces first Sukuk in Oman towards expansion of Muscat Grand Mall

Posted on 19 November 2012 by Laxman  |  Email|Print

Tilal Development Company, the Sultanate’s leading real estate firm that has been credited with the inception of the ground breaking Muscat Grand Mall project, announces its intention to raise OR53m by way of Islamic debt instrument or sukuk, which will be the first such issue in Oman in order to put into motion plans for expansion of the complex that houses Muscat Grand Mall.
Commenting on this historic announcement, Hassan Jaboub, General Manager of Tilal Development Company said, “These are very exciting times for us. The Muscat Grand Mall, our finest venture has seen unparalleled success and it is only natural for us to move forward the expansion way.” Discussing the instrument, Jaboub commented, “67,000 square metres of shopping area at Muscat Grand Mall are fully leased and already operational. Additionally, owing to demand and market interest in our project, the expansion was an effortless decision. Towards the same, we are also glad to be pioneering the sukuk market in Oman and hope that it will grow exponentially here from.” (Press Release)

Dana Gas board meets to discuss sukuk terms

Posted on 19 November 2012 by Laxman  |  Email|Print

The board of Dana Gas is meeting on Sunday morning to discuss progress in restructuring the company’s $920 million Islamic bond which matured last month, the company said in a stock exchange statement.
Natural gas producer Dana, headquartered in the emirate of Sharjah, said on November 7 it had reached an agreement in principle with creditors on restructuring the sukuk, and would pay holders a mix of cash and two new bonds. The new bonds would be a sukuk and a convertible sukuk………………………………………..Full Article: Source

MARC downgrades Tanjung Langsat Port’s sukuk, notes programme

Posted on 19 November 2012 by Laxman  |  Email|Print

Malaysian Rating Corp Bhd (MARC) has downgraded its ratings on Tanjung Langsat Port Sdn Bhd’s (TLP’s) RM250mil sukuk musyarakah bonds and RM135mil musyarakah commercial papers/musyarakah medium-term notes programme (MCP/MMTN) to BBB+IS and MARC-3ID/BBB+ID from A-IS and MARC-2ID/A-ID respectively.
The downgrade reflects TLP’s continued losses and weak cashflow which arose from a delay in the commencement of its port operations. This has resulted in erosion of its shareholders’ funds and heavy reliance on sale of land to meet its principal repayments which commenced in July 2012………………………………………..Full Article: Source

KSA funds continue to rule the roost in size and performance

Posted on 19 November 2012 by Laxman  |  Email|Print

At the end of the third quarter of 2012, total assets under management amounted to USD 59.5 billion, according to the first issue of Zawya’s MENA mutual funds quarterly bulletin for Q3-2012.
More than half of these assets are invested in money market and Saudi trade finance funds, while 25% is invested in equities. The rest is allocated among fixed income securities, IPOs, protected or guaranteed funds, and many other types………………………………………..Full Article: Source

Islamic finance: Does it include you?

Posted on 19 November 2012 by Laxman  |  Email|Print

There were three recent major Islamic finance conferences in Malaysia: Global Islamic Finance Forum (GIFF), Islamic Finance News (IFN), and Kuala Lumpur Islamic finance forum (KLIFF), and headline question was neither asked nor answered or raised?
Who represents the financial interests of the super-majority of 1.8 billion Muslims comprised of have nots, students and the youth? Are they ‘bankable in the wait’ for Islamic finance for sizing and seizing………………………………………..Full Article: Source

QInvest arranges $106.7 mln Islamic syndicated facility

Posted on 19 November 2012 by Laxman  |  Email|Print

Mazaya Qatar Real Estate Development Company QSC has signed a dual-currency, $106.7m 8-year syndicated facility to finance the development of the Sidra Village Residential Project. QInvest acted as Financial Advisor to Mazaya Qatar Real Estate Development Company and Sole Bookrunner for the facility.
Qatar Islamic Bank took the Investment Agent and Mandated Lead Arranger roles and was joined in the facility at MLA level by a group of regional financial institutions comprising ABC (through Arab Banking Corporation and ABC Islamic Bank), National Bank of Abu Dhabi, and First Gulf Bank, with Ahli United Bank taking a Lead Arranger role………………………………………..Full Article: Source

Fitch affirms Abu Dhabi Islamic Bank’s ratings

Posted on 19 November 2012 by Laxman  |  Email|Print

Fitch Ratings has affirmed Abu Dhabi Islamic Bank’s (ADIB) Long-term Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook and Viability Rating (VR) at ‘bb’. ADIB’s IDRs are driven by potential state support from the UAE authorities. A change in Fitch’s view of the willingness or ability of the UAE authorities to support ADIB would be negative for its IDRs and its Support Rating Floor.
However, Fitch notes recent supportive actions for the domestic banking sector including pre-emptive capital injections. In addition, Fitch believes that support would be forthcoming from the Abu Dhabi government (’AA’/Stable/’F1+’), which has injected hybrid capital into the leading Abu Dhabi banks………………………………………..Full Article: Source

Islamic finance industry reaches critical mass

Posted on 16 November 2012 by Laxman  |  Email|Print

The Islamic finance industry’s growth has continued to defy global economic malaise in 2012. And, with more government interest, increasingly complex products and a large untapped customer base, future forecasts are no longer concerned with the industry’s ability to continue growing but instead are focusing on the more complex issue of how it will evolve.
An old Egyptian proverb comes to mind when reviewing the 2012 figures for the Islamic finance industry: “At the time of a test, a person rises or falls.” This may well be said to reflect a current dilemma – that a bank’s real worth is known only through the trials and tribulations of the global financial crisis………………………………………..Full Article: Source

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Lack of experts poses a challenge to Islamic finance

Posted on 16 November 2012 by Laxman  |  Email|Print

Rapidly expanding Islamic finance suffers from a dearth of skilled human resource with syariah-compliance knowledge. The Institute of International Finance (IIF) described it as a challenge for the industry, which has grown at a time when conventional banking and finance have undergone crises, offering a more resilient alternative.
“Further improvements in oversight, the development of secondary markets, regulatory issues and risk management remain,” says Lauren Clark an analyst from IFF’s Africa/Middle East Department and George T. Abed, senior counselor and director of the department, in a report………………………………………..Full Article: Source

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Islamic banking influencing North American institutions

Posted on 16 November 2012 by Laxman  |  Email|Print

While Shariah-compliant banking is not widespread in the United States, Islamic financial institutions are making headway in gaining a foothold in North American banks to bring services to customers. “I have no doubt that investment in a purely Islamic-compliant banking is growing in the US, where there is a lot of openness, I guess, through a Shariah-compliant investment,” said Benjamin Newland, partner with King & Spalding.
The firm has offices in Riyadh and specializes in Islamic Financing. “I can see even before coming over here (to Saudi Arabia) that there was a shift by the time I left in 2006,” he added. “There was a lot of recognition in the market for Islamic structure and investment due to the presence of the Muslim community in the US.”……………………………………….Full Article: Source

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Great potential for Islamic finance in Egypt

Posted on 16 November 2012 by Laxman  |  Email|Print

While it was suggested that the Egyptian government stands to gain from developing Islamic finance and meeting it ambitious target, it does face significant challenges. New regulatory structures would be needed and the proposed incentives would require significant capital that the government currently does not have.
Added to that, the traditional banking sector is doing well, so it may be tough to get the religiously motivated reforms implemented………………………………………..Full Article: Source

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What are the benefits of Islamic finance? (Video)

Posted on 16 November 2012 by Laxman  |  Email|Print

Nigel Denison, executive director of Bank of London & Middle East, says Islamic Finance is increasingly attracting non Muslims in the UK as it is perceived as a safer and more ethical alternative. He spoke as part of Bloomberg Television’s “Faith in Finance.”.………………………………………Full Article: Source

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Hong Kong’s sukuk bill on track but local interest dim

Posted on 16 November 2012 by Laxman  |  Email|Print

Hong Kong’s bill to facilitate the issuance of sukuk, or Islamic bonds, is expected to be ready early next year but initially at least, it may attract little interest among issuers. In March, the government asked for industry feedback on the subject and this month, it said it aimed to introduce a bill in early 2013.
A draft bill could take three months to prepare and then be passed quickly into law provided there is no controversy, said Marcellus Wong, co-chairman of the taxation policy committee at the Taxation Institute of Hong Kong, an association of tax professionals………………………………………..Full Article: Source

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Indonesia sells US$1bn 10-year Global sukuk at 3.30%

Posted on 16 November 2012 by Laxman  |  Email|Print

The Republic of Indonesia last night priced its latest Global offering of Islamic bonds at 3.30%, the tight end of final guidance of 3.35% area (plus/minus 5bp), selling US$1bn of 10-year paper on a strong order book of over US$5bn.
The final pricing was also 20bp inside initial guidance of 3.5% area………………………………………..Full Article: Source

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