Many were surprised at the response of the American people to 9/11. I wasn’t. After living among them for five years, I realized how much Americans love their country. True they originally came from different parts of the world, with diverse and colorful backgrounds, but the governance system managed to build a strong allegiance to the novel idea of the United States of America.
The European Union is a newer idea. It should have a good chance of success because the people there are mostly European in origin. Unlike the immigrants to the New World, they are rooted in their older continent. However, Europeans may not have reached the US level of integration, and countries like Britain and Greece may leave the EU. But Europe has make great strides in economic unification………………………………………..Full Article: Source

As financial services adhering to Islamic principles continue to gain popularity in Asia, Japanese financial institutions have started offering such products in Muslim countries in the region. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking have organized a syndicated loan of $184 million dollars for a maritme shipping company affiliated with the Brunei government.
The funds will be used to expand the company’s liquefied-natural-gas carrier fleet. But to comply with Sharia law, which prohibits the charging of interest, the loan will be made to a special-purpose company that will purchase LNG carriers and lease them to the shipping company. Instead of interest, the lenders will receive leasing fees………………………………………..Full Article: Source

While lenders in the United States and Europe have downsized their exposure in banking in compliance with Islamic law, Islamic financial institutions in Southeast Asia and the Middle East and Africa (MEA) region are taking over the initiative.
According to global consultancy Ernst and Young, worldwide investments done in line with Islamic law, known as Shari’ah, will reach 1.8 trillion U.S. dollars globally in 2013. There was a time when major Western banks like Citigroup, HSBC, UBS and Deutsche Bank set the pace for the developments in Islamic finance, while their much smaller counterparts in the Muslim world just followed. In recent years, this order has been almost completely shifted in favor of the East………………………………………..Full Article: Source

Barwa Bank has been chosen to co-lead manage Dubai’s $750m sukuk issuance, which is the first sovereign sukuk of 2013 in the region. Barwa Bank has opened the year in the debt capital markets in the same manner as in 2012, being chosen for the second time as co-lead manager by Government of Dubai, for what is “one of the most sought after credits” in the Middle East and North Africa (Mena) region.
Barwa Bank CEO Steve Troop said: “We are extremely proud to have been selected again as co-lead manager by the Government of Dubai. Having the opportunity to be associated for the second time with a transaction of such significance indicates our credibility, strong regional relationships and delivery, as well as access to liquidity………………………………………..Full Article: Source

The recent announcement of Sime Darby Bhd’s (Sime Darby) successful pricing of its first US$800 million sukuk issue will bode well for the group with positive spillover effects into the group’s order book. “We gather that the sukuk will be issued in two tranches of US$400 million with a five-year tenure and the balance US$400 million with a 10-year tenure respectively,” noted analysts at Kenanga Investment Bank Bhd (Kenanga Research).
“This is part of its Multi-Currency Sukuk Programme with a limit of up to US$1.5 billion. “Pricing for the five-year tenure, the sukuk was at 130 basis points (bps) above US Treasuries rate or 2.053 per cent while the 10-year tenure sukuk was at 145bps above US Treasuries rate or 3.290 per cent,” it added………………………………………..Full Article: Source

The Islamic banking seg­ment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances. Having moved early to estab­lish shariah-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic bank­ing centre.
However, the industry will need to address a number of chal­lenges, led by a shortage of skilled workers, if it is to fully support the segment’s development. In mid-October, Standard Chartered Bank Brunei (SCB) said it was mulling plans to intro­duce Islamic banking products this year to meet increased de­mand for sharia-compliant bank­ing services in the Sultanate………………………………………..Full Article: Source

J. P Morgan Chase has hired Hussein Hassan as its global head of Islamic finance, the US-based investment bank said in a statement on January 22. Hassan was previously at UBS, where he was global head of Islamic structuring and head of structuring for the Middle East and North Africa (MENA), the statement said.
“Hussein is widely acknowledged as one of the most experienced and prominent Islamic banking experts and I am confident his knowledge will help us to serve clients better across the globe,” Sjoerd Leenart, senior country officer for MENA at J. P Morgan, said………………………………………..Full Article: Source

UAE-based National Bank of Ras Al-Khaimah (Rakbank) said it has registered a 16.6 per cent growth in its net profit for 2012 which rose to Dh1.4 billion ($381 million) when compared to the same period the year before.
The leading retail and small business bank in the UAE continues to report double digit growth year on year by consistently pursuing its successful strategy towards the business and personal finance segments………………………………………..Full Article: Source

The private sector in the Kingdom has been spurred into action, giving a major boost particularly to real estate, construction, health care, education, financial services and a host of other activities, thus offsetting some of the global economic gloom, according to Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB) Group
“However, financing for small and medium enterprises (SMEs) is not yet developed in most of the member-countries,” Al-Aboodi told Khalil Hanware of Arab News in an exclusive interview. “Even in GCC countries, there is lack of access to financing for SMEs,” Al-Aboodi pointed out………………………………………..Full Article: Source

The beating heart of an Islamic bank is actually the treasury and its uniquely qualified people. Treasury, at one time, was about liquidity management, and now has become a profit centre for banks.
The challenge for Islamic finance treasury is there are not many options, vis-a-vis, conventional treasury on liquidity management, hence, their important contribution adds to not only the bottom line, but also the bonus!……………………………………….Full Article: Source

Qatar is ready to go to the top of the Big League of Islamic finance as her economy shifts up a notch in readiness to fulfil the promise of Qatar National Vision 2030. How far Qatar can continue to stay ahead of the curve in a global economy that is still struggling to come to grips with the worst ravages of the global financial crisis?
Several of the Gulf Cooperation Council’s member continue to enjoy economies that are buoyed by revenues from plentiful natural resources, Qatar included, but the International Monetary Fund in recent weeks has urged economies across the Middle East to introduce fiscal restraint and deeper reforms in order to be able to safeguard their future in the midst of a still precarious world economy………………………………………..Full Article: Source

Dubai, recovering from a 2008-10 corporate debt crisis and property market collapse, is eager to lure more foreign capital. In one initiative announced early this month, the emirate said it would revise regulations to become a regional center for Islamic finance and other Islamic businesses.
The UAE has for years been working on legislation that would in some cases let the cabinet approve 100 percent foreign ownership in firms outside free zones………………………………………..Full Article: Source

Amãna Takaful, one of Sri Lanka’s fastest growing composite insurers recently presented its annual plan cascade to its staff. Under the theme ‘We Are Winning’, all staff members were presented with the 2012 performance of the company highlighting the year and the milestones achieved above expectations on many fronts.
“We are winning. Our growth trajectory is promising and we have expanded to new markets in 2012. This year we are even more bullish to reach the homes and offices of more Sri Lankans to introduce them to the concept of Takaful through products of mutual value”, said Fazal Ghaffoor, Chief Executive Officer, Amana Takaful PLC, making a presentation to the audience that had converged from all branches………………………………………..Full Article: Source

The Qur’an’s teachings around business chime with the objectives of the worldwide social enterprise movement. Though wealth creation is the primary goal taught by top businessmen, social impact is considered to be a more fulfilling outcome for others.
Money is not timeless, but what you do with that money can be. The light you instil in the uneducated, the medicine you provide to the ill, or the food and water you provide to the malnourished is far more enduring than the car you drive or the house you buy. Most advocates of social entrepreneurship believe that creating a business with a social impact leaves much more than just a humble footprint behind………………………………………..Full Article: Source

The compatibility of contemporary insolvency legislation in the context of Islamic financial institutions and Islamic capital markets instruments is an important subject which regulators, courts and other stakeholders must address sooner rather than later to ensure the sustainable and continuous growth of the industry.
This issue deserves more serious consideration from the legislatures and regulators as lack of an appropriate and legal and regulatory regime on insolvency in respect of Islamic financial institutions would certainly affect insolvency proceedings and the remedies sought or granted pursuant to such proceedings………………………………………..Full Article: Source

The Islamic banking segment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances. Having moved early to establish sharia-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic banking centre.
However, the industry will need to address a number of challenges, led by a shortage of skilled workers, if it is to fully support the segment’s development………………………………………..Full Article: Source

EFG-Hermes Holding SAE (HRHO), Egypt’s biggest investment bank, said its sale to Qatar’s QInvest LLC has been delayed as regulators in the Middle East scrutinize the takeover. QInvest, a unit of Qatar Islamic Bank (QIBK), and EFG-Hermes plan to create an investment bank with operations in the Middle East, Africa and Turkey, as well as southern and southeastern Asia.
“It is mainly because of regulatory approvals that the conclusion of the deal is taking longer than expected,” Hanzada Nessim, investor-relations manager at Cairo-based EFG-Hermes, said. The deal, announced in March, was expected to be concluded in November………………………………………..Full Article: Source

The Government of Dubai, acting through the Department of Finance, opened the first issue of the year in the Mena capital markets with a dual-tranche landmark transaction, which has successfully raised $1.25 billion across a 10-year sukuk and a first ever 30 year conventional issue.
The aggregate order book was over twelve times oversubscribed demonstrating tremendous investor appetite. The well-planned and swift intra-day execution took advantage of the positive market environment which led to a quick build of a large and high-quality order book for a 10 year Sukuk………………………………………..Full Article: Source

Dubai says two bond offerings have raised $1.25 billion in what appeared to signal investor interest returning to the city-state after a stunning downturn. Wednesday’s statement by Dubai’s government said the second bond was added because of high demand for the original offering for a $750 million, 10-year Islamic bond known as sukuk. The additional 30-year conventional bond raised $500 million.
The sales suggest Dubai is winning back financial confidence after a deep slump that hit in 2009, driving down property prices and requiring a $10 billion bailout from neighboring Abu Dhabi………………………………………..Full Article: Source

Malaysian conglomerate Sime Darby made a successful debut in the US dollar bond market, pricing on January 22 a dual-tranche sukuk issue totaling US$800 million. It is the first Malaysian issuer and the first sukuk issuer globally to launch in the international US dollar debt capital markets in 2013.
The transaction did not disappoint as it generated a robust investor demand as it offered a welcome diversification from the slew of conventional bond deals that are flooding the market since the start of the year………………………………………..Full Article: Source

Further bank mergers in Bahrain could be on the way this year with Gulf Finance House (GFH) confirming it is studying options to merge its affiliate, Khaleeji Commercial Bank (KHCB), with other Bahraini banks. GFH, which has undergone a number of debt restructurings since 2009, currently owns 47 per cent of KHCB, which would be worth around $61.8 million at current market value.
“GFH is currently studying a number of options to merge Khaleeji Commercial Bank with other banks in Bahrain to create a bigger and stronger bank,” GFH said in a statement on the Bahrain Bourse website………………………………………..Full Article: Source

A fundamental difference between conventional and Islamic finance is that, as the Islamic system does not permit risk-free capital, those operating under the Shariah framework cannot profit from the lending of money. Accordingly, the charging of interest known as riba is prohibited by the Shariah and instead, a system of risk sharing is promoted.
Riba can be defined as any increase over and above the principal amount payable under a contract, which is not covered by a corresponding increase in labour, commodity, risk or expertise………………………………………..Full Article: Source

Taliworks Corp Bhd , a Malaysian water and waste management company, said on Tuesday its 55 percent subsidiary Cerah Sama Sdn Bhd received regulatory approval to sell 750 million ringgit ($247.16 million) worth of Islamic bonds.
The country’s securities commission approved the bond issue by Cerah Sama, which owns and operates the concession for a 11-kilometer highway in the country’s capital. “Proceeds will be utilised to refinance existing medium-term notes, finance investments, working capital requirements and general corporate purposes,” Taliworks said………………………………………..Full Article: Source

Nakheel PJSC, the Dubai developer that was rescued by the government in 2009 after a property crash, said it may refinance its Islamic bonds this year after reporting a 57 percent increase in annual profit.
The company, which built palm-shaped islands off Dubai’s coast, has received offers from local and foreign banks to refinance its sukuk, on which it pays annual interest of 10 percent, Chairman Ali Rashid Lootah said at a press conference in Dubai today. “Refinancing will not be an issue,” he said………………………………………..Full Article: Source

Multinational banks such as Citibank, Credit Agricole and the Islamic Development Bank expressed willingness to provide support to Egypt in the early stages of issuing Islamic bonds, an adviser to the finance minister said. Ahmed al-Naggar, the adviser responsible for the Islamic bonds, or sukuk, said the banks were willing to provide technical and administrative support and to train staff.
“They are willing to do so because they project good growth rates,” Naggar told state news agency MENA, referring to the bonds, and adding that they would be offered on the stock exchange and global financial markets………………………………………..Full Article: Source

Egypt’s government is using an ingenious stratagem to try to push a bill authorising issues of sovereign sukuk past Islamic scholars, but even if it passes, the bill may not shield authorities from controversy that could slow issuance.
The cabinet last week approved a draft law that would allow the government to issue Islamic bonds; the bill will now be presented for review to the upper house of parliament and religious scholars at Cairo’s prestigious Al-Azhar university. The government is keen to issue sukuk internationally to help finance the country’s budget and external deficits, and finance minister Al-Mursi Al-Sayed Hegazy said this week that sukuk could eventually raise $10 billion for the state………………………………………..Full Article: Source

Malaysia’s Sime Darby Bhd , the world’s largest palm oil company by planted area, today priced the first issuance of an US$800 million (RM2.43 billion) Islamic bond under a US$1.5 billion facility established earlier this month.
The first Islamic bond, or sukuk, will be issued in two tranches - a five-year US$400 million sukuk priced at 2.05 per cent per annum, and a 10-year US$400 million sukuk at 3.3 per cent………………………………………..Full Article: Source

Sime Darby Bhd’s maiden US dollar-sukuk issuance for a total of US$800mil (RM2.4bil) has been oversubscribed by 10 times, reflecting the conglomerate’s strong order book of more than US$8bil held via 376 orders from high-quality investors.
“This issuance is considered highly successful, notwithstanding the heavy supply in the primary US dollar bond market,” said the company. To be issued in two tranches, the company has priced the US$400mil (RM1.2bil) five-year sukuk issue at a fixed coupon rate of 2.053% and the US$400mil 10-year sukuk issue at a fixed coupon rate of 3.29%………………………………………..Full Article: Source

The Government of Dubai, acting through the Department of Finance, on Wednesday, opened the first issue of the year in the Mena capital markets with a dual-tranche landmark transaction, which has successfully raised $1.25 billion across a 10-year sukuk and a first ever 30-year conventional issue.
The aggregate order book was over twelve times oversubscribed demonstrating tremendous investor appetite. The well-planned and swift intra-day execution took advantage of the positive market environment which led to a quick build of a large and high-quality order book for a 10-year sukuk………………………………………..Full Article: Source

Indonesia, Southeast Asia’s largest economy, plans to raise $1 billion through a global Islamic bond in the second half of 2013 to help plug its budget gap, a top official told Reuters.
This would bring the contribution to its annual budget from domestic and global Islamic bonds to as much as 57 trillion rupiah ($5.9 billion), the same amount as 2012………………………………………..Full Article: Source

The Central Bank of Bahrain (CBB) announced last Monday that the monthly issue of the Sukuk Al-Salam Islamic securities for the BD18 million issue, which carries a maturity of 91 days, has been oversubscribed by 193%.
The expected return on the issue, which begins on 23 January 2013 and matures on 24 April 2013, is 1.00%. The securities are issued by the CBB on behalf of the Government of the Kingdom of Bahrain………………………………………..Full Article: Source

RAM Ratings has reaffirmed the AA3 long-term rating of Kesas’ MYR 800 million Al-Bai’ Bithaman Ajil Islamic Debt Securities while revising its rating outlook to stable from negative. Kesas is the toll concessionaire for the 35-km Shah Alam Expressway (the Highway) under a concession agreement dated 19 November 1993.
RAM’s rating action follows the Government’s recent announcement that Kesas will receive an MYR 86 million cash compensation for non-revision of its toll rates in 2012. At the same time, toll rates for the Highway would be reduced effective 15 January 2013 while tariffs would not be raised until 2016 (the toll rate for Class 1 vehicles has already been lowered from MYR 2.20 to MYR 2.00)………………………………………..Full Article: Source

Sukuk markets had a record year in the primary markets with issuance totalling USD 139B in 2012, a 64.1% YoY increase. We expect demand for sukuk to continue exceeding supply. The upgrade and development of infrastructure in both the GCC and Asia will continue to provide appealing sukuk investment opportunities, particularly in Saudi Arabia.
Sukuk volatility is relatively low compared with emerging markets debt, due to the thin nature of its secondary markets and the typically higher credit quality of issuers………………………………………..Full Article: Source

FIMBank President Margrith Lütschg-Emmenegger told Times of Malta, that it would be the first to bring Islamic banking to Malta if Middle Eastern institutional investors take a controlling interest in the next few months.
She said FIMBank was heading for a major strategic turning point the joint offer by Kuwait’s Burgan Bank and Bahrain-licensed United Gulf Bank is given the go-ahead at FIMBank’s EGM on 31 January………………………………………..Full Article: Source

Reuters reports that Bahrain-based Islamic investment bank Gulf Finance House is ‘studying options’ with regard to merging Khaleeji Commercial Bank with ‘other Bahraini banks’.
In a filing to the Bahrain Bourse and the Dubai Financial Market, Gulf Finance House said, “GFH is currently studying a number of options to merge Khaleeji Commercial Bank with other banks in Bahrain to create a bigger and stronger bank.”……………………………………….Full Article: Source

The Islamic Development Bank (IDB) is likely to provide credits up to US$ 11 billion to the Bangladesh Petroleum Corporation (BPC) in four years up to 2016 for purchase of petroleum oil, officials said Wednesday.
Economic Relations Division (ERD) officials said the Jeddah-based lender had given assurances about giving $8.0 billion to $11 billion in the form of short-term credit to the state-owned corporation under its proposed Member Country Partnership Strategy (MCPS)………………………………………..Full Article: Source

Players in the investment banking industry are expected to face tougher competition against a backdrop of economic moderation, said Affin Investment Bank. In a recent note to investors, the bank said the investment banking industry was facing stiffer competition due to weaker investor appetite amidst volatile markets.
However, opportunities would arise from new funding activities from Economic Transformation Programme-related projects in the domestic private sector, it added………………………………………..Full Article: Source

Tamweel , the UAE Islamic home finance provider, net profit dropped 29 per cent to Dh72 million in 2012 as compared to Dh102 million in the previous year due to exceptional provisions relating to certain ongoing litigations for which the company made full provision while continuing to fight its rights.
Tamweel reported operating income at Dh603 million in 2012 compared with Dh601 million in 2011……………………………………….Full Article: Source

With the move to risk-based capital (RBC) and market liberalisation well underway, the Malaysian insurance sector is poised for a flurry of activities and consolidation, an entry into one of the world’s most potentially lucrative markets.
A second wave of mergers and acquisitions in the insurance and takaful markets is about to get underway, linked to a new regulatory requirement and new strategies, Oxford Business Group (OBS) highlighted in its Malaysia Report. This followed a first wave that came after the insurance authorities moved to implement RBC requirements for conventional insurers………………………………………..Full Article: Source

Marking the first sovereign Islamic bond sale in the GCC this year, Dubai on Tuesday launched a $1.25 billion two-part conventional and Islamic bond sale to take the advantage of low borrowing costs and speedy economic rebound.
The $750 million 10-year Islamic bond, or sukuk, launched at 3.875 per cent, well inside guidance of four per cent range, while the $500 million 30-year bond sold at 5.375 per cent………………………………………..Full Article: Source

Indonesia, Southeast Asia’s largest economy, plans to raise $1 billion through a global Islamic bond in the second half of 2013 to help plug its budget gap, a top official told Reuters.
This would bring the contribution to its annual budget from domestic and global Islamic bonds to as much as 57 trillion rupiah ($5.9 billion), the same amount as 2012. The country, whose economy grew faster than its regional peers at 6.3 percent last year, will also seek funds to kick-start $54.4 billion worth of infrastructure projects this year………………………………………..Full Article: Source

Taliworks Corp Bhd , a Malaysian water and waste management company, said on Tuesday its 55 perc ent subsidiary Cerah Sama Sdn Bhd received regulatory approval to sell 750 million ringgit worth of Islamic bonds.
The country’s securities commission approved the bond issue by Cerah Sama, which owns and operates the concession for a 11-kilometre highway in the country’s capital………………………………………..Full Article: Source

Nakheel PJSC’s Islamic bonds, which rallied 37 percent last year, were cut to sell by Exotix Ltd., which said the Dubai-based developer’s debt no longer accurately priced in the risk of a default.
It’s “highly unlikely” that Nakheel will manage to pay the principal on the notes, which mature in 2016, from its own capital, Exotix said in an e-mailed note today. The developer, which drove Dubai to the brink of default just over three years ago, may fall 70 percent short of funds required to settle $3 billion of sukuk and bank debt maturing that year, it said………………………………………..Full Article: Source

Gatehouse Bank has issued its first real estate-backed Sukuk, paying a distribution of three per cent per annum over a five year term. Investors will earn a return by virtue of having pro-rata ownership of the Sukuk assets, which comprise shares in a company which owns a 62,000 sq ft property in Basingstoke, in the south east of England.
The property is leased to IT services giant Fujitsu Services Limited for an unexpired term of 68 years. “The strong tenant profile offers further guarantee of the security of investment, and is likely to appeal to investors looking for security of income,” said the bank in a statement………………………………………..Full Article: Source

Standard & Poor’s Ratings Services (S&P) has assigned an A rating to Sime Darby Bhd’s proposed issue of US dollar-denominated sukuk.
Sime Darby will issue the sukuk via Sime Darby Global Bhd, a Malaysia-domiciled special purpose vehicle that the company had set up and owns. “The rating on the sukuk is subject to our review of the final issuance documentation,” said the rating house in a statement………………………………………..Full Article: Source

This 10-year issue has come to market very quickly, and appears to utilise the existing Sukuk programme that investors are already familiar with. The suggested 4% price of the issuance appears to be fair, given the recent $650m issue maturing in May 2022 currently trades with a yield just inside 4%.
Long-dated dollar swap rates have started to climb in the last two months, while Dubai’s 10-year credit spread has fallen, so it looks like this issue seeks to lock-in a low long-term cost of financing before the window of opportunity may close………………………………………..Full Article: Source

J P Morgan, a leading international financial services firm, has announced the appointment of Hussein Hassan as global head of its Islamic Finance practice.
Hassan will lead the firm’s effort to further build out its Islamic offering across different lines of business and regions. He will work closely with J P Morgan’s existing Islamic finance professionals, broaden the team as required and ensure J P Morgan’s product offering is best-in-class across the Corporate & Investment Banking and Wealth Management………………………………………..Full Article: Source

The Islamic banking segment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances.
Having moved early to establish Syariah-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic banking centre. However, the industry will need to address a number of challenges, led by a shortage of skilled workers, if it is to fully support the segment’s development………………………………………..Full Article: Source

Rakbank is starting 2013 with the launch of its new Islamic banking window. The bank’s Islamic banking services will be offered through a separate brand, Rakbank Amal, to include a wide range of products from accounts, loans and cards to takaful policies.
“As the fastest growing bank in the region, introducing Islamic Banking is the natural direction for Rakbank as it strives to better serve existing and potential customers in the country through added choice,” said Graham Honeybill, Rakbank chief executive officer………………………………………..Full Article: Source

The State Bank of Pakistan (SBP) has decided to introduce changes in the “Statement of Financial Position” and the relevant notes to streamline and standardise disclosures of Islamic banks and Islamic banking branches.
According to these changes, the head “financing” used by Islamic banks in their balance sheet and the related note should be renamed as “Islamic financing and related assets”. All financings, advances (against Murabaha etc.), inventories and any other related item(s) pertaining to Islamic modes of financing, presently being reported under “Other Assets” or any other head, shall become part of the “Islamic Financing and Related Assets”………………………………………..Full Article: Source