From Timesonline.co.uk: A default by Dubai will put the world of Islamic finance to the test at a time when hard questions are being asked by bankers and lawyers about the protection afforded by financial instruments that are Shariah compliant.

The bond that lies at the heart of the threat of default and financial ignominy for Dubai is a sukuk, an instrument invented by bankers and Islamic scholars to comply with a Shariah (Islamic law) prohibition against the payment of interest on money……………………………Full Article: Source

From AFP: The shock from Dubai’s move to suspend payments due on a slice of government-backed debt spilled over on Thursday into world markets and caused a sharp weakening in global Islamic bonds.

The move to restructure the state-owned Dubai World and the proposal to request a minimum six-month moratorium on its maturing debt has also triggered fears of a domino effect across the emirate’s indebted state-run corporates, pushing debt rating agencies to slash the grading of Dubai companies……………………………Full Article: Source

From WSJ: The shock from Dubai World’s restructuring and call for a standstill on its group debts sent yields on Islamic bonds issued from Asian borrowers sharply higher Thursday.

The sukuk of the Indonesian government and Malaysia’s national oil company Petronas were particularly hard hit. But many were convinced it was a knee-jerk reaction……………………………Full Article: Source

From Theage.com.au: Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.

The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $US59 billion ($64 billion) of liabilities, sought a “standstill” agreement from creditors……………………………Full Article: Source

From Reuters: Dubai’s shock move to restructure billions of dollars in debt fuelled a heavy selloff in Gulf bonds on Thursday while debt insurance costs soared, endangering planned issues from the region in the near future.

At least one issuer was forced to pull a bond sale after Dubai said on Wednesday it was seeking a standstill on debt held by flagship firms Dubai World and property developer Nakheel, until at least May 2010……………………………Full Article: Source

From Reuters: Islamic bond defaults and the standstill requested for Dubai’s Nakheel will transform the market as investors demand more transparency and subject new issues to forensic due diligence.

Investors in real estate developer Nakheel were stunned following the announcement on Wednesday that the company and its owner state-run Dubai World would delay by at least six months repayment on billions of dollars in debt……………………………Full Article: Source

From Thenational.ae: Bradley Hope, our intrepid property reporter, managed to dig up more detail yesterday on the terms of Nakheel’s bond than we had space to publish. But for those trying to dig deeper into what outcomes might be possible, his findings may be useful.

For those who don’t recall, Nakheel sold $3.5bn in Islamic bonds, or sukuk, back in 2006. They come due Dec. 14 and will pay $4.05bn in principal, profits and compensation for not having issued shares into which bondholders could conver……………………………Full Article: Source

From Globalarabnetwork.com: Standard & Poor’s Ratings Services said it had taken rating actions on a number of Dubai-based government related entities (GREs) and transactions.
Standard & Poor’s has downgraded DIFC Investments LLC, DP World Ltd., Jebel Ali Free Zone (FZE), Dubai Holding Commercial Operations Group LLC (DHCOG), and Emaar Properties PJSC. All of these entities have been placed on CreditWatch with negative implications……………………………Full Article: Source

From Globalarabnetwork.com: Standard & Poor’s Ratings Services said today that it has placed on CreditWatch with negative implications its ‘A-’ long-term counterparty credit ratings on Emirates Bank International (EBI), National Bank of Dubai (NBD), and Mashreqbank (Mashreq) and its ‘BBB+/A-2′ ratings on Dubai Islamic Bank (DIB).
At the same time, Standard & Poor’s has affirmed its ‘A-2′ short-term counterparty credit ratings on EBI, NBD, and Mashreq……………………………Full Article: Source

From Risk.net: The rapid growth of the Islamic financial market in the Gulf Cooperation Council (GCC) region and South East Asia over the last five years has created a thriving market for the suppliers of support technology to develop and enhance their offerings to meet the increasing demands of their customers who operate within this specialized segment.
However, the current economic meltdown in the US and European markets (which is likely to spread to other regions) will force Islamic finance players to review and redefine their focus on how to survive in a highly turbulent market place……………………………Full Article: Source

From Gulf-daily-news.com: Islamic finance has a potential role in contributing not only to global financial stability but also towards more balanced global growth.

While Islamic finance by its very nature and its direct link to economic activity contributes to this process, the recognition of the new financial challenges ahead require further steps to be taken to strengthen its resilience and robustness, Central Bank of Malaysia governor Dr Zeiti Akhtar Aziz told a high-level conference on financial stability in Kuala Lumpur……………………………Full Article: Source

From Btimes.com.my: The Islamic Financial Services Board (IFSB) Council has resolved to discuss pertinent issues related to financial stability in future meetings, particularly those concerning the Islamic financial services industry.

In a statement yesterday, the IFSB said that its inaugural forum on financial stability issues will be held in April next year in Khartoum, Sudan. The forum will follow the 16th Meeting of the IFSB Council there……………………………Full Article: Source

From Bernama: Safeena (L) Ltd, the first Malaysian Islamic shipping fund established more than a year ago, has completed its first investment with Jimbaran AS, a Norwegian entity that owns and manages chemical tankers.

A statement by its equity shareholders, Asian Finance Bank and Amanah Investment Bank (L) Ltd, said the investment was made through Istisna (construction contract) and Ijarah Mawsufah fi Dzimmah (forward lease)……………………………Full Article: Source

From Tradearabia.com: Insurance major Allianz Takaful and Standard Chartered Bank have announced a five-year sales agreement to promote insurance products from Allianz Takaful in Bahrain.

As part of the deal, the bank will promote and sell Allianz Takaful’s life insurance portfolio comprising features like protection, savings, investment and child education……………………………Full Article: Source

From Globalarabnetwork.com: Standard & Poor’s Ratings Services today said it has lowered its long- and short-term counterparty credit ratings on Bahrain-based Gulf Finance House G.S.C. (GFH) to ‘BB+/B’ from ‘BBB-/A-3′. The outlook is negative.

“The rating action reflects our opinion that GFH’s stand-alone credit profile is no longer consistent with an investment-grade rating owing to uncertainties on the bank’s implementation of its revised business model and delivery of sustainable profitability,” said Standard & Poor’s credit analyst Goeksenin Karagoez……………………………Full Article: Source

From Dawn.com: State Bank of Pakistan Governor Salim Raza has said that the performance of Islamic banks has been impressive compared to their conventional counterparts during the last two years.

Speaking at a opening ceremony of 10 more branches of Dubai Islamic Bank here on Wednesday, the SBP governor said due to active support of the central bank the total assets of Islamic banking industry had grown to Rs323 billion up to September 2009 while their deposits reached to Rs245 billion……………………………Full Article: Source