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Islamic Finance Briefing - Archive | March, 2013

Nigeria to South Africa race for first sukuk issue

Posted on 28 March 2013 by Laxman  |  Email|Print

Nigeria, South Africa and Senegal are vying to become the first African country to tap yield-chasing Middle East Islamic bond investors after borrowing costs in the Gulf tumbled. Nigeria and South Africa, the continent’s largest economies, already have rules in place to sell the debt in a market where global demand outstrips supply.
The average yield of African sovereigns is about a third higher than that of Islamic debt in the Gulf Cooperation Council after yields of the six-member group declined almost one percentage point over the past year to three per cent, according to indexes by JPMorgan Chase & Co and HSBC/Nasdaq Dubai………………………………………..Full Article: Source

Barwa Bank eyes full-fledged sukuk platform by end-2013

Posted on 28 March 2013 by Laxman  |  Email|Print

Barwa Bank expects its sukuk trading platform to become full-fledged by the year-end and sees the market as “very competitive and lucrative with a great potential”, chief investment officer Bashar Jallad said. Jallad said Barwa Bank was active in both the primary and secondary sukuk markets and started to act as a custodian for some of the clients.
“The sukuk market is limited but in the last couple of years we have seen quite a decent pipeline of issuances. There is a lot of appetite for Shariah-compliant products here,” Jallad said………………………………………..Full Article: Source

Cautious approval for Dubai sukuk ambition

Posted on 28 March 2013 by Laxman  |  Email|Print

After the initial burst of enthusiasm that greeted the initiative to make Dubai the capital of the global Islamic economy, a gentle note of caution has crept in. Some analysts see the ambition, and especially the goal of overtaking London as the world capital of the sukuk business, as a challenge perhaps too tough even for the emirate’s “can-do” mentality.
Mohieddine Kronfol is in a good position to judge. He is the chief investment officer for global sukuk and fixed income business for Franklin Templeton, one of the world’s biggest asset managers with some US$800 billion (Dh2.93 trillion) of funds under management around the globe………………………………………..Full Article: Source

Gulf issuers try out new bond formats

Posted on 28 March 2013 by Laxman  |  Email|Print

Gulf bond issuers are tapping new bond structures and investors as the energy-rich region embarks on big infrastructure projects, bolsters ties with Asia, and capitalizes on investor appetite for its highly rated paper. Depending on what investors are being catered to, the bonds often have exotic nicknames like Dim Sum for China or Uridashi for Japan.
With global interest rates low, bond buyers around the world are hunting for higher yields and are buying Gulf bonds. They are attracted by the region’s mostly high-rated sovereign credits and yields that are often higher than other similar-rated issues in other jurisdictions. They are being paid a premium for perceived geopolitical risk in the Gulf………………………………………..Full Article: Source

Dana Gas launches consent solicitation for $1 bln refinancing process

Posted on 28 March 2013 by Laxman  |  Email|Print

Dana Gas has announced that it has today (27 March) launched the process of seeking consents from the holders of the $1 billion Sukuk-al-Mudarabah issued by Dana Gas Sukuk to restructure the Sukuk on previously announced terms.
As a normal part of this process, Dana Gas today (27 March) issued an announcement on the UK Regulatory News Service confirming the launch of the consent solicitation process, a period in which the company seeks approval from holders of the Sukuk………………………………………..Full Article: Source

S&P: Malaysia tops global sukuk sales in 2013

Posted on 28 March 2013 by Laxman  |  Email|Print

Malaysia is dominating global sales of sukuk in 2013 and Standard & Poor’s forecasts the trend will continue this year even as national elections loom. Issuance in the Southeast Asian currency may account for more than 74 per cent of worldwide offerings, compared with 49 per cent in 2008, Rajiv Vishwanathan, associate director for corporate and infrastructure ratings at S&P in Singapore, said in a interview.
Global sales of syariah-compliant notes, including government securities, may exceed US$100 billion (RM309 billion) in 2013 after rising 64 per cent to US$138 billion last year, according to a report from the company……………………………………….Full Article: Source

Islamic banking assets in GCC jump 14pct, paced by Qatar

Posted on 28 March 2013 by Laxman  |  Email|Print

Islamic banking assets with commercial banks in the Gulf Cooperation Council region leapt 14% in 2012, paced by Qatar, according to Ernst & Young’s Global Islamic Banking Center.
During the same period, conventional assets held in these banks grew by just 8.1%, the data, contained in a report on the E&YGIBC website, shows, although the pace of the growth of the Islamic banking assets was below that of the five-year average rate for the region, of 19%………………………………………..Full Article: Source

BankDhofar appoints new Chief Islamic Banking Officer

Posted on 28 March 2013 by Laxman  |  Email|Print

BankDhofar annoucned the appointment of Sohail Niazi as Chief Islamic Banking Officer of its Islamic window “Maisarah” reporting to Tony Mahoney, Chief Executive Officer of BankDhofar.
Niazi brings a wealth of experience from his eighteen years in the banking industry. Most recently Niazi was Acting CEO with Elaf Bank, an Islamic wholesale bank in Bahrain, and previously worked at many globally recognised and respected institutions such as Bank of America, Morgan Stanley and KPMG Consulting………………………………………..Full Article: Source

Meethaq seminar highlights Islamic banking features

Posted on 28 March 2013 by Laxman  |  Email|Print

Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, hosted a seminar on Islamic banking in Nizwa. Dr Abdullah bin Mubarak Al Abri from the Ministry of Awqaf and Religious Affairs addressed the seminar aimed at raising awareness and familiarising people with the main characteristics of Islamic finance.
Sulaiman Al Harthy, group general manager (Islamic Banking), said: “Meethaq is proud to take the lead in launching a suite of banking products which combine traditional values with modernity. Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which will protect customers and complement the Islamic banking industry. The Meethaq strategy is to attract customers through innovative Sharia-based products and services. The operations are managed by an experienced team, separate from conventional banking.”……………………………………….Full Article: Source

NCB secures ‘best Islamic project finance deal’ award

Posted on 28 March 2013 by Laxman  |  Email|Print

The National Commercial Bank (NCB) was recently declared winner of the “Best Islamic Project Finance Deal 2013 Award” by Euromoney for being one of the main organizers and for its participation with major portion of the total finance amounting to $1.2 billion for the expansion project of Prince Mohammed bin Abdulaziz International Airport in Madinah.
This is the first financing transaction in the world for an airport project structured in accordance to the Islamic law with the partnership of the public and private sectors. NCB is considered as the largest contributor to the finance deal for this megaproject, the funding of this Shariah-compliant transaction is primarily based on the assets………………………………………..Full Article: Source

Malaysia reviews operations of Islamic endowments

Posted on 28 March 2013 by Laxman  |  Email|Print

The Malaysian government is reviewing the operations of Islamic endowments as it seeks ways to have them run by private corporations instead of religious bodies. Facilitating corporate management of Islamic endowments, known as awqaf or wakaf in Malaysia, is one of several initiatives announced by the government in September to boost the country’s Islamic finance industry.
Awqaf operate social projects such as hospitals, mosques and schools with donations received from Muslims in the form of land, cash or other valuables. Malaysian awqaf hold 11,091 hectares of land valued at 1.2 billion ringgit ($384 million), according to the government’s Department of Awqaf, Zakat and Hajj (JAWHAR)………………………………………..Full Article: Source

Linklaters brings ex-Norton Rose Islamic finance star on board

Posted on 28 March 2013 by Laxman  |  Email|Print

Linklaters has hired KPMG global Islamic finance head Neil Miller as its new global Islamic finance head, based in Dubai. Miller joins the magic circle firm from accountancy firm KPMG. He joined KPMG two years ago from Norton Rose (25 January 2011), having developed a leading Islamic finance practice at the firm over around 20 years.
Norton Rose moved Miller out to Dubai from London in 2009 (16 February 2009) in a bid to strengthen its Middle East practice. He previously headed Norton Rose’s Bahrain office from 1997 to 2000………………………………………..Full Article: Source

Halal Easter eggs and cat food: where big money meets religion

Posted on 28 March 2013 by Laxman  |  Email|Print

Cadbury will sell a mountain of chocolates this Easter, as it does every Easter. It has been careful to make sure that its products are certified as halal, even though it is not necessary. Hundreds of companies in Australia do the same. Halal certification has become a big business.
The essence of halal is that any food is forbidden to Muslims if it includes blood, pork, alcohol, the flesh of carnivores or carrion, or comes from an animal which has not been slaughtered in the correct manner, which includes having its throat slit. Food labelled as halal invariably involves the payment of a fee. It does not extend to chocolate but Cadbury lists 71 products which are halal, ranging from Dairy Milk to Freddo frogs to Red Tulip chocolates. The website also states: ”We do not have any kosher-certified products.”……………………………………….Full Article: Source

Islamic bonds find favour in Australia

Posted on 27 March 2013 by Laxman  |  Email|Print

Insurance Australia Group became Malaysia’s biggest general insurer when its joint venture business AmG Insurance bought Kurnia Insurans in September 2012. Chief executive Mike Wilkins is keen to tap into the rapid rise in takaful, or Islamic insurance, which adheres to principles of co-operation as prescribed by Islamic law.
Wilkins’s interest in takaful extends beyond viewing Asia as an important growth market for IAG: he assisted with the preparation of Australia as a Financial Centre, a report released in late 2009, which recommended Australia pull down tax barriers in order to encourage Islamic finance. The federal government is yet to respond to a subsequent Board of Taxation review………………………………………..Full Article: Source

S&P sees Malaysia leading sukuk

Posted on 27 March 2013 by Laxman  |  Email|Print

Malaysia is dominating global sales of sukuk in 2013 and Standard & Poor’s forecasts the trend will continue this year even as national elections loom. Issuance in the Southeast Asian currency may account for more than 74 per cent of worldwide offerings, compared with 49 per cent in 2008, Rajiv Vishwanathan, associate director for corporate and infrastructure ratings at S&P in Singapore, said.
Global sales of Shariah-compliant notes, including government securities, may exceed US$100 billion in 2013 after rising 64 per cent to US$138 billion last year, according to a March 11 report from the company………………………………………..Full Article: Source

Saudi Electric launches $2bn sukuk

Posted on 27 March 2013 by Laxman  |  Email|Print

Saudi Electricity Co (SEC), the Gulf’s largest utility, has launched an offer of a $2 billion dual-tranche Islamic bond, or sukuk, with pricing due later on Tuesday, a document from lead managers said.
The offer is split between a $1 billion 10-year tranche and a $1 billion 30-year portion, with price guidance set at 155 basis points and 190 bps over benchmark US Treasuries. Orders worth $13 billion have been pledged by investors for the deal, which should price in the morning New York time, the document added………………………………………..Full Article: Source

CBB Sukuk Al-Salam securities oversubscribed

Posted on 27 March 2013 by Laxman  |  Email|Print

The Central Bank of Bahrain (CBB) announces 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 246%.
The expected return on the issue, which begins on 27 March 2013 and matures on 26 June 2013, is 0.81% compared with 0.90% for the previous issue. The securities are issued by the CBB on behalf of the Government of the Kingdom of Bahrain. (Press Release)

Morocco: Opening the door to Islamic finance

Posted on 27 March 2013 by Laxman  |  Email|Print

Although GDP growth slowed in 2012 on the back of reduced demand from Europe and lower-than-average agricultural output, Moroccan banks continued their solid growth trend, paving the way for further expansion in 2013. The introduction of the country’s first Islamic bank, slated for this year, should also provide opportunities for foreign banks.
Combined banking profit grew from Dh9.72bn (€871.19m) in 2010 to Dh10.1bn (€905.26m) at the end of 2011, a record high. According to the most recent figures from Bank Al Maghrib, the central bank, total profits had reached Dh6bn (€537.78m) as of June 2012. This represents a 3.8% increase from Dh5.7bn (€510.89m) over the same period in 2011, indicating the sector would see a strong finish to the year………………………………………..Full Article: Source

Trade to support Dubai’s Islamic economy plan

Posted on 27 March 2013 by Laxman  |  Email|Print

A surge in exports boosted Dubai’s total non-oil trade by nearly 13 per cent to an all-time high in 2012 and such steady growth would support the emirate’s plan to become the world’s Islamic economy hub, officials were reported on Tuesday as saying.
From around Dh1,089 billion in 2011, Dubai’s total non-oil trade, including free zone commercial activity, swelled to a record high of Dh1,235 billion in 2012, maintaining its position as the main commercial and business centre in the oil-rich Gulf………………………………………..Full Article: Source

Insights into Islamic Investment Management from a CFA Charterholder in Pakistan

Posted on 27 March 2013 by Laxman  |  Email|Print

To gather insights into Islamic investment management from experienced CFA charterholders from different countries, we will be conducting a series of interviews. In the first interview of this series, we discuss Islamic investment management with Mohammad Shoaib, CFA.
Shoaib is the chief executive officer of Al Meezan Investment Management Limited based in Karachi, Pakistan. He earned his CFA Charter in 1999. In addition, he holds an MBA from the Institute of Business Administration, Karachi, which is now a program partner of CFA Institute. He has 23 years of work experience, including 10 years in Islamic investment management………………………………………..Full Article: Source

Filling a niche for Islamic banking

Posted on 27 March 2013 by Laxman  |  Email|Print

Islamic finance differs from conventional banking systems in that usury and speculation are prohibited. Transactions have to comply with Shariah, the legal code of Islam based on the Koran, and are based on principles of risk and profit sharing.
Islamic finance is booming. According to figures from Hong Leong Islamic Bank, a financial institution in Kuala Lumpur, Islamic finance activity has been growing 14 percent per year, with Islamic finance assets exceeding $1.1 trillion in cumulative value in 2011………………………………………..Full Article: Source

Pakistan: IBI share in banking industry surges to 10 pct

Posted on 27 March 2013 by Laxman  |  Email|Print

The Islamic Banking Industry (IBI) continued to post a healthy growth, touching for the first time a share of 10 percent in the banking industry at the end of the Calendar Year 2012 (CY12). With a substantial growth of 35.5 percent or Rs 185 billion, IBI deposits surged to Rs 706 billion by the end of CY12 against Rs 521 billion at the end of CY11.
According to the State Bank of Pakistan, IBI posted a healthy growth as far as deposit base was concerned during the period under review. IBI’s share in the entire banking industry increased from 8.4 percent in CY11 to 9.7 percent by the end of CY12. IBI’s asset base also continued to expend, touching Rs 837 billion by the end of CY12, up from Rs 641 billion in CY11, depicting an increase of 30 percent or Rs 196 billion in a single year………………………………………..Full Article: Source

Emirates Islamic Bank offers special discounts and deals to customers on Fridays

Posted on 27 March 2013 by Laxman  |  Email|Print

Emirates Islamic Bank announced the launch of a special Friday campaign on various financial services and products at its Dubai Festival City branch. The limited period offer, valid until April 8, 2013, provides special discounts and deals on credit cards and personal finance.
Customers of Emirates Islamic Bank can take advantage of zero per cent processing fee on personal finance and a waiver of annual fee for the first year on credit cards every Friday until April 8, 2013. The special offer also enables customers to earn 20,000 joining points on the Emirates Islamic Bank Rewards Credit Card and 100 points for SALIK and NOL on Emirates Islamic Bank RTA credit cards………………………………………..Full Article: Source

Meezan Bank signs MoU with JIBF

Posted on 27 March 2013 by Laxman  |  Email|Print

Meezan Bank, Pakistan’s first and largest Islamic Bank, has signed MoU with the Journal of Islamic Banking and Finance (JIBF), one of the oldest Islamic finance research publications of Pakistan (1984), under which Meezan Bank will contribute its research and articles on Islamic Banking & Finance to JIBF for publication.
With the objective to bridge the gap between academia and industry, Meezan Bank with its largest research team across all banks in Pakistan, will share case studies, research papers and articles with JIBF………………………………………..Full Article: Source

Al Hilal Islamic Banking Board meets

Posted on 27 March 2013 by Laxman  |  Email|Print

An expanded meeting for al Hilal Islamic Banking Sharia Supervisory Board was held recently at ahlibank’s head office in Wattiyah. The meeting was chaired by Dr. Ali Mohyeddin al Qurah Daghi, and included Dr. Farid Mohammed Hadi, Dr. AbdulAziz al Qasar and Sheikh Aflah bin Ahmed bin Hamad al Khalili and Azhar Hamid.
During the meeting of Al Hilal’s Sharia Supervisory Board a number of approvals were attained which included approvals on products and their features, as well as the approval of the prospectus of the upcoming Sharia complaint Al Hilal Mena Fund which will be launched in the near future and approval of this year’s Shaira Audit and training plan………………………………………..Full Article: Source

Qatar proposes $1bln fund for Palestinians in Jerusalem

Posted on 27 March 2013 by Laxman  |  Email|Print

The emir of Qatar has called for the establishment of a $1bn (£660m) fund to help Palestinians in East Jerusalem, and offered to contribute $250m. Addressing an Arab League summit in Doha, Sheikh Hamad Al Thani said its member states should be serious about defending the city’s “Arab character”.
The emir did not give details of how the fund might work. Israel occupied East Jerusalem in 1967. An estimated 200,000 settlers now live there, alongside 280,000 Palestinians………………………………………..Full Article: Source

Sharia compliance: To be or not to be

Posted on 26 March 2013 by Laxman  |  Email|Print

Islamic banking is sitting on the horns of a double dilemma. Islamic financial institutions have to compete with conventional banks if they have to stay in contention and yet be compliant with Sharia principles while carrying on business.
On the other hand, due to their relatively smaller size and operations, Islamic banking products tend to become more costly, further limiting the scope. In fact, according to the latest numbers out in the market, the average return on equity of Sharia compliant financial institutions has fallen in comparison to the situation one year ago………………………………………..Full Article: Source

Egypt: Sukuk market will increase as soon as the legal framework is established

Posted on 26 March 2013 by Laxman  |  Email|Print

Sukuk will be sued to finance the upcoming Public Private Partnership (PPP) projects according to the financial advisor to the Ministry of Finance, Ahmed Al-Naggar. He made these confirmations during the 2nd Annual PPP Investment Summit held in the capital.
The confirmation has been welcomed by stakeholders in the partnership. Waleed Hegazi, partner at Hegazy & Associates said it’s sukuks allow “high rates of return on investments” but calls for the implementation of the sukuk law which will be “a positive step and a quantum leap in establishing Islamic finance.” ……………………………………….Full Article: Source

Saudi Electricity two-part dollar sukuk to price Tuesday

Posted on 26 March 2013 by Laxman  |  Email|Print

Saudi Electricity Co (SEC), the Gulf’s largest utility, is expected to price a two-part Islamic bond, or sukuk, on Tuesday, lead managers said, with investor demand for the transaction already proving strong.
Order books for the planned ten-year and 30-year tranches are each in excess of $2.5 billion, a document from the managers said, ahead of the final day of investor meetings in London on Monday. Roadshows took place in the United States last week………………………………………..Full Article: Source

Bank Asya raises $250mln through 10-yr subordinated sukuk

Posted on 26 March 2013 by Laxman  |  Email|Print

Turkish Islamic lender Bank Asya has raised $250 million in international markets through a subordinated sukuk issue with a ten-year maturity, the bank’s chief executive Ahmet Beyaz said on Monday.
Strong investor demand and a need to improve capital adequacy ratios (CAR) are causing Turkey’s Islamic banks to consider issuing subordinated sukuk, bankers and analysts told Reuters last month. Beyaz said in a statement this issue would raise its CAR to around 16 percent from 13 percent. The notes priced at par to yield 7.5 percent………………………………………..Full Article: Source

Marafiq plans debut riyal bond

Posted on 26 March 2013 by Laxman  |  Email|Print

Marafiq, a utility services provider to two industrial cities in Saudi Arabia, may conduct a debut local currency bond issue after picking HSBC’s Saudi Arabian arm to advise it on raising new corporate debt.
“It is likely to be a debt capital markets transaction,” a company spokesman told Reuters by email in response to questions. He said HSBC had been appointed to advise on the fund-raising but that a target amount had not yet been decided. The company, which counts SABIC and Saudi Aramco as shareholders, will use the money for general business activities, three banking sources said………………………………………..Full Article: Source

CBB Sukuk Al-Salam Securities oversubscribed by 246pct

Posted on 26 March 2013 by Laxman  |  Email|Print

The Central Bank of Bahrain (CBB) announced 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 246%.
The expected return on the issue, which begins on 27 March 2013 and matures on 26 June 2013, is 0.81% compared with 0.90% for the previous issue. The securities are issued by the CBB on behalf of the Government of the Kingdom of Bahrain………………………………………..Full Article: Source

Dubai SME and Noor Islamic Bank to implement MBR Fund

Posted on 26 March 2013 by Laxman  |  Email|Print

Dubai SME, the agency of the Department of Economic Development (DED) mandated to develop the small and medium enterprise (SME) sector, and Noor Islamic Bank has formed a partnership to implement the Credit Guarantee Scheme of the Mohammed Bin Rashid Fund, announced by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, to support Emirati entrepreneurs.
Dubai SME is tasked with developing the Credit Guarantee Scheme (CGS) under the Mohammed Bin Rashid Fund (MBRF) to support and finance projects of young entrepreneurs………………………………………..Full Article: Source

Yet another step to strengthen Islamic banking in Oman

Posted on 26 March 2013 by Laxman  |  Email|Print

Since the beginning of the launch Islamic banking in the Sultanate, numerous conferences and workshops have been conducted to delve deep into the structure of Islamic finance and explore the themes of its emergence in Oman. But the recent Oman Second Islamic Banking and Finance Conference witnessed vital issues relating to Islamic banking and industry being deliberated upon and decisions being taken by the authorities concerned.
Although the conference delved deep into improving the regulatory infrastructure and supporting harmonisation and linkages among different jurisdictions, the most important announcement was restriction on the entry of foreign Islamic banks into Oman………………………………………..Full Article: Source

CIMB starts brokerage and corporate advisory business in Korea

Posted on 26 March 2013 by Laxman  |  Email|Print

CIMB has opened a brokerage and corporate advisory businesses in Seoul, South Korea, after obtaining an equities brokerage licence from the country’s Financial Services Commission.
John Choi, the branch manager and the head of equities, and Sean Cho, the head of investment banking will lead a staff of 39 people, providing stock brokerage, research and corporate advisory services to both domestic and international clients………………………………………..Full Article: Source

DMCC hosts first Islamic commodity trade

Posted on 26 March 2013 by Laxman  |  Email|Print

The Dubai Multi Commodities Centre (DMCC) has hosted the first transaction on its new sharia-compliant commodity trading platform, a deal done between two local banks, company officials told Reuters on Monday.
The Dh50 million ($13.6 million) facility signed by Noor Islamic Bank, the lending agent, and Commercial Bank of Dubai will be priced on Tuesday………………………………………..Full Article: Source

Shura Council debates IDB contribution to South Helwan power station

Posted on 26 March 2013 by Laxman  |  Email|Print

The Shura Council on Monday discussed plans to include the Islamic Development Bank (IDB) as a potential partner with the Egyptian government to contribute funds towards the second payment installment of an electrical station set to be built in southern Helwan.
The installment would cost an estimated $250m. Minister of Electricity and Energy Ahmed Imam stated that the station would operate at 1,950 MW, and would require a total of EGP 13bn in investments over the whole course of the construction project. He added it was part of Egypt’s 2012-2017 ‘five-year project plan’………………………………………..Full Article: Source

A.M. Best assigns ratings to Takaful International Company BSC

Posted on 26 March 2013 by Laxman  |  Email|Print

A.M. Best Europe - Rating Services Limited has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb” to Takaful International Company BSC (TIC) (Bahrain). The outlook assigned to both ratings is stable.
The ratings of TIC reflect its sound domestic profile, satisfactory risk-adjusted capitalisation and sound track record of technical profitability. However, the ratings are tempered by the weaker overall earnings of the company, its higher risk investment portfolio, unsophisticated enterprise risk management (ERM) and the country risk associated with Bahrain………………………………………..Full Article: Source

Sukuk: Depth of the financial market need to improve

Posted on 25 March 2013 by Laxman  |  Email|Print

While the sukuk or the Islamic bond market has been growing rapidly with increasing number of large and liquid issues, the depth of the financial market, especially in the GCC, is not at the level of the developed countries or at a level some global fund managers would ideally like it to be. For that to happen, global asset manager Franklin Templeton Investments believes that the policy makers should concentrate their efforts at developing non-banking financial services.
While acknowledging that liquidity has been on an improving trend, Mohieddine Kronfol, chief investment officer, Global Sukuk and Mena Fixed Income at Franklin Templeton Investments, clearly would like to see policy makers in the Gulf and Malaysia do more to promote money, debt and sukuk markets to have more liquidity going forward………………………………………..Full Article: Source

Egypt: Seventeen PPP projects to be financed using sukuk: Panel

Posted on 25 March 2013 by Laxman  |  Email|Print

Seventeen upcoming Public Private Partnership (PPP) projects will be financed using sukuk, confirmed Ahmed Al-Naggar, financial advisor to the Ministry of Finance, during the 2nd Annual PPP Investment Summit in Cairo on Sunday.
“Egypt has acquired 1.2% of the total sukuk market in the world,” he said. “This is a very low percentage compared with Malaysia, which has 24%, and Bahrain, which has 2.4%.”……………………………………….Full Article: Source

CBJ plans to issue sovereign Islamic sukuk

Posted on 25 March 2013 by Laxman  |  Email|Print

The Central Bank of Jordan (CBJ) is examining mechanisms to issue sovereign Islamic sukuk in the primary market in order to widen the base of investment tools that can be traded in the secondary market on the one hand and, on the other, to come up with a new method for financing the treasury besides the traditional financing means.
CBJ Governor Ziad Fariz underlined the importance of coming up with new financing tools in accordance with Sharia (Islamic law) to accelerate the economic growth, the state news agency, Petra, reported………………………………………..Full Article: Source

UAE’s Dana Sukuk restructuring vote postponed to April 23

Posted on 25 March 2013 by Laxman  |  Email|Print

Dana Gas, the Abu Dhabi-listed energy firm, postponed the shareholder vote for restructuring of the $920 million sukuk to April 23 after a meeting on Sunday failed to meet the required quorum. This is the second time the meeting has been rescheduled after a majority was not reached at a shareholder meet on March 21. Dana announced the new date in a filing on the Abu Dhabi bourse.
Dana became the first company in the United Arab Emirates to miss repayment of a maturing bond on October 31 but agreed new terms with a creditor committee representing bondholders, which included investment firms Ashmore Group and BlackRock, a week later………………………………………..Full Article: Source

Gulf bonds’ order books ‘not as solid as they seem’

Posted on 25 March 2013 by Laxman  |  Email|Print

Bond and sukuk issues from the Gulf Arab region in the past few weeks have drawn huge investor order books but then performed poorly in the secondary market - a sign that some of the orders are not as solid as they appear.
In order to ensure they obtain part of a new issue, institutional investors are bidding for larger amounts than they actually want, because they assume their bids will be cut when the issuer decides on allocations, traders and analysts say………………………………………..Full Article: Source

SBP issues instructions for issuance of Ijara Sukuk

Posted on 25 March 2013 by Laxman  |  Email|Print

The State Bank of Pakistan (SBP) on Friday announced that the proceeds of the government of Pakistan Ijara Sukuk will be used by Pakistan Domestic Sukuk Company Limited (PDSCL) to purchase the assets as an agent for and on behalf of the investors.
The State Bank will conduct an auction through which Sukuk investors will be identified. A circular issued by the State Bank said that the investors will execute the Sukuk subscription undertaking in favour of Pakistan Domestic Sukuk Company Limited and the National Highway Authority (NHA), which will record the commitments of the investors to subscribe the Sukuk to be issued by PDSCL………………………………………..Full Article: Source

Need to develop ‘effective Islamic funds system’

Posted on 25 March 2013 by Laxman  |  Email|Print

In the Islamic funds market there is a need to build a system that can facilitate effective and efficient capital and trading flows, said an expert ahead of the upcoming ‘World Islamic Funds and Financial Markets Conference’ (WIFFMC) in Bahrain.
The annual conference will be held under the theme ‘Broadening the Base of Investors and Issuers: New Strategic Insights on Boosting the International Growth of Islamic Capital Markets and Investments,’ at the Gulf Hotel on May 27 and 28 in an event supported by the Central Bank of Bahrain, reported the Gulf Daily News, our sister publication………………………………………..Full Article: Source

Pakistan as a global leader in Islamic banking and finance

Posted on 25 March 2013 by Laxman  |  Email|Print

In recent years, Islamic banking and finance in Pakistan has experienced phenomenal growth. Islamic deposits – held by fully-fledged Islamic banks and Islamic windows of conventional banks – at present stand at 9.7% of total bank deposits in the country: meaning that every 10th rupee is now being deposited in an Islamic bank account.
Similarly, assets managed by banks offering Islamic financial services are 8.6% of total banking assets in the country. Net Islamic savings and investments are 8.19% of the total savings and investment in the banking sector in Pakistan………………………………………..Full Article: Source

Islamic finance to fuel Turkey’s energy and infrastructure development

Posted on 25 March 2013 by Laxman  |  Email|Print

The Islamic finance industry, rapidly growing over the last 40 years, has demonstrated its potential with robust, steady 15-20 percent growth throughout the recent economic crisis, and Standard & Poor’s predicts global Islamic financial assets will rise to as much as $3 trillion by 2015 and $6 trillion by 2020.
Structured properly, infrastructure projects can avail of the vast amount of wealth that nations in the Islamic world have at their disposal. Islamic finance offers a wide variety of products, including project financing products and the ability to issue sukuk (Islamic bonds) for large infrastructure projects, and is flexible enough to be utilized on a stand-alone basis or as a complement to conventional project financing for the funding of large-scale infrastructure development………………………………………..Full Article: Source

Senior finance lawyer brings diverse expertise to Islamic finance practice

Posted on 25 March 2013 by Laxman  |  Email|Print

Amar Meher has joined the Law Office of Salman M. Al-Sudairi in association with Latham & Watkins in Riyadh as counsel in the Finance Department. Meher’s practice focuses on conventional and Islamic finance, debt restructurings, debt capital markets, and Shari’ah-compliant structured products, most notably Shari’ah-compliant investment funds.
Meher has worked extensively throughout the Middle East and his experience spans the financial services, power, infrastructure, shipping, telecoms and real estate sectors, among others. He has advised on numerous high profile debt financings and restructurings across various product areas, from the bank market to the capital markets. His experience spans a number of jurisdictions, including the UAE, the United Kingdom, Asia and Australia………………………………………..Full Article: Source

Meethaq Sharia Board inducts 2 more members

Posted on 25 March 2013 by Laxman  |  Email|Print

The Sharia Supervisory Board of Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, conducted its first meeting of 2013 under the chairmanship of Shaikh Dr Ali Qaradaghi, in the presence of Shaikh Essam Muhammad Ishaq and Shaikh Majid al Kindi. The board inducted two new members — Abdulqader Thomas and Dr Saeed al Muharrami.
The two experts in the field of Islamic banking will serve as non-Shari’a members and assist the Shari’a voting members, providing insights on various Islamic banking issues. The board reviewed Meethaq activities during 2012 and discussed the strategy for the coming period………………………………………..Full Article: Source

Yet another step to strengthen Islamic banking in Oman

Posted on 25 March 2013 by Laxman  |  Email|Print

Since the beginning of the launch Islamic banking in the Sultanate, numerous conferences and workshops have been conducted to delve deep into the structure of Islamic finance and explore the themes of its emergence in Oman. But the recent Oman Second Islamic Banking and Finance Conference witnessed vital issues relating to Islamic banking and industry being deliberated upon and decisions being taken by the authorities concerned.
Although the conference delved deep into improving the regulatory infrastructure and supporting harmonisation and linkages among different jurisdictions, the most important announcement was restriction on the entry of foreign Islamic banks into Oman………………………………………..Full Article: Source

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