Innovation is the key to the future success of the Islamic finance industry and to meet the challenges of contributing to economic growth and to facilitate internationalization of the industry.
According to Nor Mohamed Yakcop, minister in the prime minister’s department in Malaysia, “the Islamic financial system has to continually innovate and adapt in order to be competitive. At the same time, innovation is also the driving force behind developing greater diversity of products and services. Therefore there is a need to focus on product innovation and development efforts that will provide a comprehensive array of Shariah-based products for the industry.”………………………………………Full Article: Source

The Islamic finance industry is gaining growth with each passing day due to its rising demand, and the Middle East has been playing a key role in developing the sukuk market, a top banker said.
“The Islamic finance industry has a long way ahead and it needs to address the concepts such as financial planning and estate and succession planning rather than just products and services,” Fares Mourad, managing director and head of Islamic finance of Switzerland’s Bank Sarasin & Co Ltd, said……………………………………….Full Article: Source

Barring a sharp global downturn, Islamic financial asset growth will likely maintain its current growth clip over the next 5-10 years as new markets emerge, an industry body said.
The $1 trillion sector has bright growth prospects in Asia, the Middle East and Africa driven by increasing populations, natural resources and policies that encourage expansion, the Islamic Financial Services Board (IFSB) said……………………………………….Full Article: Source

Asia’s solid economic growth and surging population will need significant developments and upgrades of its infrastructure, Standard & Poor’s Ratings Services said in a recently published commentary, titled “Will Islamic Finance Play A Key Role In Funding Asia’s Huge Infrastructure Task?”.
Indeed, the Asian Development Bank (ADB) recently predicted that Asian economies require US$8 trillion over the next decade to fully address the region’s basic infrastructure needs, including developments in areas such as water, transportation, and energy. “With the outlook in global lending markets still uncertain, conventional financing such as bank funding might not be able to completely shoulder this huge financing task. We believe alternatives, such as Islamic finance, could play a key role,” said Standard & Poor’s credit analyst Allan Redimerio. (Press Release)

Malaysia, via the International Centre for Education in Islamic Finance (INCEIF), is supplying world class talent for the fast-growing Islamic finance, says chairman and chancellor, Tan Sri Dr Zeti Akhtar Aziz.
“INCEIF was set up to supply talent to the financial industry not just for Malaysia but for global development of Islamic finance,” said Zeti, who is also governor of Bank Negara Malaysia (BNM)……………………………………….Full Article: Source

Following its announcement earlier this month that the Abu Dhabi National Energy Company (TAQA) “is setting up a RM3.5 billion sukuk program to diversify funding sources” the issuance process is likely to take much longer given the prevailing volatile market conditions as a result of the fallout of the euro zone sovereign debt crisis and the downgrading of the US credit rating by Moody’s Investors Service.
Mohammed Mubaideen, investor relations manager, TAQA, confirmed that the (issuance) process is in early stages and the above announcement was made “to meet regulatory requirements……………………………………….Full Article: Source

Indonesia, the most populous Muslim country and potentially the largest market for Islamic finance, has received a major boost to press ahead with the issuance of its proposed benchmark global Islamic trust certificates (sukuk) which will be issued by Perusahaan Penerbit SBSN Indonesia II (PPSI II), a special purpose vehicle (SPV) on behalf of the Ministry of Finance of Indonesia.
The issuance, which has been assigned a “BB+” long-term foreign currency issue rating by Standard and Poor’s and a provisional rating of Ba1 by Moody’s Investors Service, was subject to the right market conditions, especially pricing……………………………………….Full Article: Source

Saudi Arabia’s Almarai Co is to seek shareholder approval of its plan to issue Islamic bonds, or sukuk, at a general assembly meeting on Nov. 19, the company said in a bourse statement on Sunday.
Shareholders will be asked to approve the company’s bond issue programme, and to authorise its board of directors to issue the sukuk, once all regualtory approvals are in place……………………………………….Full Article: Source

The investment holding arm of the government of Malaysia, Khazanah Nasional, on October 13 successfully priced a 500 million renminbi (USD79 million) sukuk, representing the first global offshore renminbi-denominated sukuk.
The three-year deal, issued through a special purpose vehicle, Danga Capital, was priced through a book building process at the tightest end of the price guidance at 2.90 percent amid a difficult market environment……………………………………….Full Article: Source

Majid Al Futtaim Holding, a Dubai-based conglomerate, which holds the franchise for French supermarket chain Carrefour in the GCC, as well as having interests in real estate development, facilities management, leasing and leisure & entertainment, is to launch a Sukuk program.
The move, according to Daniele Vecchi, senior VP for MAF who was talking to local news sources at an event in Abu Dhabi, has been prompted as the firm finds it difficult to raise finance through the conventional route as market volatility and uncertainty abounds……………………………………….Full Article: Source

Dubai’s Mashreq Bank is the process of structuring a number of UAE-dirham denominated benchmark Sukuk, according to reports from Abu Dhabi.
Masreq al Islami, the bank’s Islamic window’s CEO, Moinuddin Malim, told reporters that the bank was working with three clients, from both the government and private sector who were looking to raise finance in the UAE market……………………………………….Full Article: Source

National Bank of Kuwait (NBK) SAK said it didn’t have exposure to First Investment Co., a Kuwaiti Islamic finance company known as Al-Ola, and denied a report that it was part of a debt restructuring accord.
“NBK denies signing any restructuring debt agreement with Al-Ola Investment,” the bank said in an e-mailed statement today. ‘‘We did not take part in this agreement and we do not have any relationship with or exposure to Al-Ola Investment.’’………………………………………Full Article: Source

First Investment Co., the Kuwaiti Islamic finance company known as Al-Ola, signed an agreement with its creditors to restructure 92 million dinars ($333 million) of debt.
“We signed the accord last February with our six local lenders” including Al-Ahli United Bank, Kuwait Finance House, Burgan Bank SAK, Chief Executive Officer Khalid al-Sanaousi said in a phone interview. Kuwait International Bank, Commercial Bank of Kuwait SAK and Boubyan Bank were also part of the agreement, he said……………………………………….Full Article: Source

Mapping out growth strategies for the booming industry, Islamic finance officials will meet in Malaysia next week to debate the industry’s future path.
“To a certain extent, global investors’ appetite towards emerging markets may be impacted by the global uncertainty,” Alhami Mohd Abdan, head of international finance and capital market at Islamic bank OCBC Al-Amin, a subsidiary of OCBC’s Malaysian unit, told Reuters……………………………………….Full Article: Source

Islamic finance officials will gather in Kuala Lumpur next week to debate the industry’s future path and craft crisis measures, as banks’ limited capital base and liquidity management ability render them vulnerable to a global slowdown.
Bankers, lawyers, asset managers and policy makers from Qatar to Indonesia will meet Monday through Wednesday to look for new markets while mapping out growth strategies for the $1 trillion industry……………………………………….Full Article: Source

Foreign and local banks are intensifying their struggle for the for the region’s high net worth clients by expanding their Islamic Wealth Management services.
In wealth management there is no such thing as an “invisible hand”, which economist Adam Smith described as the growth-driving result of a free market economy in his “Inquiry into the Nature and Causes of the Wealth of Nations”, published in 1776. In fact, private bankers must work hard to lure High net worth individuals (HNWI) and Ultra-HNWI (clients with over $1m and over $30m at their disposal)……………………………………….Full Article: Source

Al Hilal Bank intends to press on with branch openings and a bond issuance, in spite of trouble on world markets and diminishing opportunities for the banking sector at home.
The Islamic lender is opening a branch in Kazakhstan this week, with three to follow in the UAE by the end of next year, as it makes inroads into markets held by more established banks……………………………………….Full Article: Source

Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic finance institution, was named UAE’s ‘Overall Top Bank in Customer Service’ at the 7th Annual Bank Benchmarking Index for service excellence by Ethos Consultancy. Over the years, ADIB has made a consistent and continuous journey towards the top rank. From being ranked 23rd in 2008 to 18th in 2009 and 3rd in 2010 when it was judged to be the most improved bank in customer service.
ADIB also won top rank as ‘Best Islamic Bank in Service Excellence’ in the UAE and was voted ‘Best Branch. ADIB was chosen from among many conventional and local banks researched all over the UAE. (Press Release)

Oman’s ahlibank has organised a certification course for its existing staff to bring awareness on Sharia-compliant products and services among them. The course, which was conducted by the International Centre for Financial Training, affiliated with the General Council for Islamic Banks and Financial Institutions of Bahrain, lasted for six days from September 17 to September 22 with the participation of its 23 employees.
Employees from both front office and back office participated in the course. At the end of the training, all the employees undertook a test and were declared successful and certified by the institute……………………………………….Full Article: Source

Canada’s Al Huda Islamic Finance Consultancy Canada, which has just set up shop, is not letting the grass grow beneath its feet as the consultancy has already roped in two partners, Dar Al Sharia and Pakistan-based Burj Bank (formerly Dawood Islamic Bank).
The partnerships will enhance Al Huda’s Shari’ah advisory service, allowing the Canadian company to co-opt Dar Al Sharia and Burj Bank’s scholars onto their own Shari’ah boards to help them create products for the local Canadian market……………………………………….Full Article: Source

TheDh 3.68 trillion ($1 trillion) global Islamic finance industry is in the process of developing a road-map to convergeonDh 2.4 trillion ($651 billion)halal market, says Saleh Abdullah Lootah, Managing Director of Al Islami Foods, the leading producer of halal food in the Middle East.
Saleh Abdullah Lootah said: “Islamic stock exchange for both Islamic financial services and halal FMCG companies is a logical outcome and a natural relationship of the two fast growing industries. The time has come to sustain and channelize this growth.”………………………………………Full Article: Source

Today, Islamic venture capital is a feel good theory presented at conferences about the lofty goals of this niche market with the focus on the formalism of structuring and screening. Its impact investing, yet we see it as a cost (at best) and a write-off (at worst).
The chairman of Malaysia’s Securities Commission, Zarinah Anwar, stated in a keynote speech in 2007, “… how can Malaysia distinguish itself in the emerging market VC (venture capital) pool? Our belief is that Islamic VC provides that distinguishing factor.” Obviously, the industry needs to catch-up to the vision of the chairman, according to a report in Business Times……………………………………….Full Article: Source

Tata Ethical, which adheres to the Shariah principles of investment, has managed to outperform the benchmarked indices consistently. The scheme has overcome the odds of narrow investment possibility by picking up companies with good cash generation visibility.
Targeting a specific set of investors, Tata Ethical is one of the very few schemes in the country today to strictly adhere to the Shariah principles of investment. The scheme thus, does not invest in companies engaged in banking, financial lending, liquor, tobacco, hospitality or gambling businesses……………………………………….Full Article: Source

A conference on the future and expansion of takaful, called Takaful Rendezvous 2011, took place in Malaysia under the banner of Kuala Lumpur Islamic Finance Forum (KLIFF) from October 4 to 6. Although the industry has come far in a short period of time, more needs to be done.
Much like the $640-billion (Dh2.35 trillion) halal industry, takaful needs to rise and address some of the challenges on size, representative industry body, and perception……………………………………….Full Article: Source

With over 70m Muslims, the Commonwealth of Independent States might yet be the next frontier for Islamic finance. At present, six Muslim republics of the former Soviet Union, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kirgizstan and Tajikistan are members of the CIS.
There are also 20m indigenous Muslims in Russia, mostly concentrated in the semi-autonomous Caucasus provinces of Chechnya, Ingushetia, Dagestan, Tatarstan and Bashkortostan. ………………………………………Full Article: Source

Malaysia is determined to become a global hub for Islamic Finance, and already accounts for two thirds of outstanding Islamic bond issuances (reftel). However, at a recent conference in KL, financial experts discussed a number of obstacles holding back development of this niche market. Chief among them was the inadequacy of the secondary market and the lack of Islamic derivative products.
Higher legal fees and complications arising out of the need for Sharia compliance were a burden as well. Nevertheless, the Malaysian government remains optimistic and content to have a pragmatic approach to development rather than get hung up on the need for a “purist” approach to Sharia compliance……………………………………….Full Article: Source