Hoping to attract Arab capital, Russia will take its first step into the world of Islamic finance in June by issuing sukuk, Islamic bonds which comply with Muslim religious rules. The bonds are to be issued by the majority Muslim Russian republic of Tatarstan in the Volga region, which has embarked on an ambitious drive to attract foreign investment.
“Russia will show that it can be interesting for Muslim countries,” one of the project’s backers, Linar Yakupov said……………………………………….Full Article: Source

Ireland has launched a bid to become the home of Islamic finance in Europe as it seeks to rebuild its once dominant financial services sector.
Taoiseach (prime minister) Enda Kenny, who was swept to power on a wave of public anger at the taxpayers’ €70 billion ($A95 billion) bailout of failed banks, told the Irish Funds Industry Association (IFIA) that he was doing everything he could to ensure Dublin became ”a centre of excellence for Islamic finances”……………………………………….Full Article: Source

The Government is to clear the way for Ireland to become a centre for Islamic Finance (IF), the Taoiseach said yesterday. Enda Kenny told the Irish Funds Industry Association annual conference that the Government is reforming the tax code to allow IF to flourish.
“Ireland has recognised its importance in the global financial system through adapting our tax system and financial regulatory system to ensure a level playing field between Islamic Finance and conventional measures……………………………………….Full Article: Source

London and Luxembourg are engaged in a friendly “battle of the listings domicile” especially for sukuk and Islamic investment funds, and its seems that the London Stock Exchange (LSE) currently has the upper hand on its counterpart in the Duchy, Luxembourg Stock Exchange.
In a short and simple announcement on June 1, the London Stock Exchange welcomed “the listing of another two sukuk bringing the total number of sukuk which have listed on the exchange to 33 and the total money raised to $19.4 billion.”………………………………………Full Article: Source

Companies in the Middle East are heading to market in great numbers with bonds and sukuk, as they rush to take advantage of the end of stimulus measures in the US and the region’s political turmoil changes course.
A combination of government bond purchases and historically low interest rates have flooded the world economy with cheap liquidity, creating an attractive environment to raise funds on bond markets……………………………………….Full Article: Source

The Palestine Monetary Authority hopes to issue to banks its first ever Islamic bond worth $50 million by the end of June, its governor Jihad Al Wazir said. The authority originally aimed to issue the bonds, or sukuk, in the first quarter, but obtaining the approval of the issue being in line with Sharia, or Islamic law, delayed the plan.
“We are issuing a $50 million sukuk so it is relatively small, but it is testing the market and it will be a useful instrument. Expected maturity is probably five years,” Al Wazir said……………………………………….Full Article: Source

Al Tamimi & Company’s Jordan and Kuwait offices served as lead counsel in the closing of a JOD 85 million ($119.9 million) Sukuk Al Ijara Mountahia Bittamlik.
The transaction, led by Khaled Saqqaf, partner and head of the Jordan and Iraq offices, and Alex Saleh, partner and head of the Kuwait office, marks the first ever issuance of an Islamic Sukuk in Jordan. Closing on 1 March 2011, the transaction took place after the Jordanian Cabinet of Ministers approved a number of tax exemptions for the issuance of Islamic bonds for Al Rajhi Cement / Jordan PSC, a Shari’ah-compliant company, in October 2010……………………………………….Full Article: Source

Sharjah Islamic Bank (SIB) last week closed its second sukuk (Islamic bonds) worth $400 million. The sukuk due in 2016 was closed at a pricing of five-year US dollar mid-swap + 2.70 per cent translating into an annual profit rate of 4.715 per cent.
The issue was in massive demand with orders of $3.62 billion or 9.03x. With roadshows taking place in Abu Dhabi, Dubai, Singapore, Kuala Lumpur, Hong Kong and London, we saw enormous interest from institutional investors……………………………………….Full Article: Source

Law firm SNR Denton’s Islamic Finance practice has been simultaneously advising on a number of Sukuk (Islamic bond) issuances from the Middle East region.
The deals include the $400 million Trust Certificates due 2016 issued by SIB Sukuk Company II Limited on behalf of Sharjah Islamic Bank (SNR Denton acted for HSBC, Standard Chartered and Liquidity House as Joint Lead Managers); the $750 million Trust Certificates due 2016 issued by IDB Trust Services Limited on behalf of Islamic Development Bank (SNR Denton acted for HSBC, Standard Chartered, Deutsche Bank and BNP Paribas as Joint Lead Managers);………………………………………Full Article: Source

Islamic financing modes are not limited to risk sharing products only. Instead, the Islamic contracts could be equity based, asset based or leasing transactions. A product like car financing may be offered through Sharia-compliant contracts, for example, Murabaha, Musharaka or Ijara. Individual banks would chose the relevant contracts based on the local legal and regulatory requirements, the bank’s risk appetite, and the needs of its target market.
Thanks to extensive research studies over the past several decades, there are now a number of institutes, Sharia scholars and bankers engaged in product development that are in compliance with Islamic financial laws and serve the contemporary needs of businesses and individuals……………………………………….Full Article: Source

Mohammad Faiz Azmi, Global Leader of PwC’s Global Islamic Finance Team reports that Shariah law, which prevents complex credit trading, was the life jacket for the Islamic banking sector during the global financial crisis. Despite weathering the storm, those institutions face their own challenges, ranging from real estate risk to operational, liquidity, fiduciary and reputational risk.
However he says that: “By seizing the opportunity, Islamic Banks can also reap the rewards of further growth while times are good.”………………………………………Full Article: Source

A proposed merger between Qatari lender Al Khaliji Commercial Bank and International Bank of Qatar (IBQ) will not proceed after the two parties failed on agree on final terms, Al Khaliji said.
“The parties have together decided to end negotiations for the proposed combination of businesses after final terms could not be agreed,” the company said in a statement on its website……………………………………….Full Article: Source

Al Khaliji Commercial Bank has called off its merger with International Bank of Qatar, putting an end to a deal that was expected to create a formidable rival for Qatar’s largest banks. The deal has been shelved in the absence of an agreement on final terms, the banks said in a joint statement to the Qatar Exchange.
“The parties have together decided to end negotiations for the proposed combination of businesses after final terms could not be agreed,” the banks said……………………………………….Full Article: Source

As the $3.5 billion Islamic Trust Certificates Program of the Islamic Development Bank (IDB) nears completion, the multilateral development bank (MDB) of the Muslim world, is faced with the dilemma of introducing a new program or increasing the ceiling of the existing one or deciding on other ways to raise funds for its future resource mobilization purposes.
The IDB has thus far issued a $400 million debut sukuk; followed by a $500 million sukuk and an $850 million sukuk in 2009; an $500 million sukuk in 2010 and the recent $750 million in May 2011, thus bringing the total volume of IDB sukuk offerings to date to $3 billion — the largest volume of sukuk issuances by any supranational……………………………………….Full Article: Source

Total assets and liabilities of Islamic banks in the UAE reached $73.1bn at the end of 2010 but short-term liquidity remained a challenge, according to UAE Central Bank governor Sultan Bin Nasser Al Suwaidi.
He said the number of Islamic banks in the UAE now stood at eight with 260 branches……………………………………….Full Article: Source

Few lenders can claim to have had as much good fortune as Qatar Islamic Bank this year.
In the past month, not one but two putative challenges to its position have evaporated, leaving the country’s largest Sharia-compliant lender in an enviable position. The bank’s stockwas flat yesterday at 77 Qatari rials, as the QE Index fell 1.02 per cent to 8,156.60……………………………………….Full Article: Source

Islamic finance refers to a system of banking and other financial activities that are in conformity with the principles of Sharia. In the context of financial activities, Sharia prohibits dealing in interest, speculative transactions, excessive risk taking, and gambling. Money is seen only as a medium of exchange, and not as a commodity that generates incremental returns.
Islamic financial institutions can profit by risk sharing or by participating in the creation of a productive asset……………………………………….Full Article: Source

Bahrain Islamic Bank had its credit ratings cut to junk at Moody’s Investors Service because of losses and after political unrest in the Arabian Gulf nation.
The Sharia-compliant lender’s long- and short-term ratings were lowered two levels to Ba1/Non-Prime, the highest non- investment grade, from Baa2/Prime-3, the rating agency said in an e-mailed statement today. The ratings will remain on review for further possible cut……………………………………….Full Article: Source

Private sector credit has continued to track higher, albeit gradually, as the Kingdom’s well-capitalized and liquid banks respond to increasing demand from an expanding private sector. Despite regional political upheaval, Saudi firms have boosted purchases, built up stocks and taken on new staff.
However, they have also reported rising input costs, which are likely to feed through into higher inflation as we move through the year, the Riyadh-based Samba Financial Group said in its Economic Monitor for June released on Saturday……………………………………….Full Article: Source

Emirates Islamic Bank announced a unique personal finance promotion never witnessed before in the market. Customers will now enjoy 0.4% rate on 10% of their personal finance through Investment Murabaha. The promotion offers other leading benefits such as payment holidays, discount on Credit Card annual fee, free life takaful Etc.
Commenting on the launch, Mr. Faisal Aqil GM Retail at EIB said: “Emirates Islamic Bank is delighted to again bring a new offering to our customers that provides them true value for their money and enhances their lifestyle and convenience. We take great pride in being leading innovator in the industry and the market can look forward to more and more exciting product launches from us”. (press Release)

Contrary to common perceptions, insurance as a concept is acceptable under Sharia financial principles. However, similar to the banking system, Islamic financial laws do have reservations on the way the conventional insurance business is practiced and the way the rights and obligations of different parties are defined under conventional insurance.
Conventional form of insurance is prohibited under Islamic law since it contains elements of riba (interest), gharar (uncertainty) and maysir (gambling)……………………………………….Full Article: Source

Islam is a ‘deen’ or a way of life. It provides detailed guidelines on every aspect of human life - be it personal or professional. It is therefore no surprise that Islam demands its followers to conduct their economic and business dealings according to the broad principles set out in the ‘Holy Quran’ and Sunnah.
Islamic banks and other financial institutions are part of an Islamic financial system, which is itself a part of Islamic economic system. This Islamic economic system demands a society which is living Islamic values……………………………………….Full Article: Source