Malaysian and Indonesian pension funds, which have a combined $192 billion of assets, say plans to increase holdings of Islamic bonds are being hampered by a shortage of investment-grade sukuk.
Kuala Lumpur-based Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan), Malaysia’s two biggest pension managers, and PT Jaminan Sosial Tenaga Kerja (JAMSOS), Indonesia’s largest retirement fund, say they want more Shariah-compliant debt in order to diversify portfolios that must hold investment- grade securities………………………………………..Full Article: Source

Emirates Islamic Bank (EIB) and Dubai Bank, two Islamic banking subsidiaries of Emirates NBD, announced yesterday that they have finalised the appointment of the unified top management team and the establishment of a unified executive committee that will manage both banks.
While sources have indicated that both banks are moving towards a full merger of its operations, unconfirmed reports said yesterday that these banks have received endorsement from the UAE Central Bank for merger………………………………………..Full Article: Source

Rapid growth of Islamic finance is increasing pressure for the industry to enter the accounting mainstream, by seeking guidance from the International Accounting Standards Board (IASB), the global body which sets the tone for book-keeping in conventional finance.
It would be a controversial move - by basing itself on religious principles, Islamic finance seeks to set itself apart from conventional finance. But some experts think the industry is becoming so big that it can no longer sit comfortably outside a trend towards harmonizing accounting rules across the world………………………………………..Full Article: Source

With Egyptian newspaper headlines signalling Islamists’ increasing hold on politics, the economy pages are regularly filled with information on all kinds of investment products that adhere to Islamic principles. Sharia law bans both interest and speculative trading.
The Egyptian media echoes the social transformation that is currently underway. Ikram El-Sayed, a 62-year-old housewife, said she is transferring all her savings to Islamic banks, after spending the past 15 years unwillingly investing her money in interest-bearing investment certificates………………………………………..Full Article: Source

Almost exactly one year ago, Noel Bonoan and Aaron Lim published an article entitled “Why not Islamic finance?” in this KPMG CORNER. The article summarizes the potential opportunities of Islamic finance while at the same time mindful of the hurdles currently in the Philippine fiscal and regulatory regime.
In trying to understand and flesh out some of these hurdles, Manabat Sanagustin and Co., CPAs (MS&Co.), the Philippine member firm of KPMG International, partnering with the British Embassy in Manila organized a forum on Islamic finance entitled “Enabling Islamic Finance in the Philippines” on March 8, 2012………………………………………..Full Article: Source

The Islamic Financial Services Board (IFSB) has published new guidelines on liquidity and stress-testing, seeking to reduce the balance sheet risk of Islamic financial institutions in line with a tightening of standards in conventional banking.
The guidelines are the first published by the Malaysia-based body, which sets global standards for Islamic finance, since December 2010. The guidelines are not mandatory — it is up to national regulators to decide whether to adopt them — but the IFSB said it expected regulators to begin using them in 2013………………………………………..Full Article: Source

Two Dubai-based banks have approved a plan to merge into one unit following negotiations over the past two years and endorsement of the plan by the Central Bank, a newspaper reported on Monday.
Dubai Bank (DUB) and Emirates Islamic Bank (EIB) agreed on the landmark merger after talks in Dubai on Sunday by a committee created from the two banks and Dubai-based Emirates NBD (ENBD), one of the largest banks in the Middle East, the Sharjah-based Arabic language daily Alkhaleej said………………………………………..Full Article: Source

Emirates NBD, Dubai’s largest lender, is seeking approval from three government bodies to merge its two Islamic banking units.
The bank is aiming to combine its Emirates Islamic Bank arm with Dubai Bank, the debt-laden lender acquired in October at the behest of the Dubai government. The rationalisation has been expected by the market since the takeover was announced………………………………………..Full Article: Source

The Malaysia-based Islamic Financial Services Board (IFSB) has approved Oman’s application for a full-time membership in the body, which formulates standards and guidelines for Sharia-compliant financial institutions across the world.
The decision was taken by IFSB board, which met in Kuala Lumpur on March 29. Oman’s stock market and insurance watchdog Capital Market Authority (CMA) represents the country in the body, said a CMA press release………………………………………..Full Article: Source

Islamic finance has achieved a substantial growth in the last few years, annualising a growth rate of about 18-percent. The Islamic finance industry that was currently estimated to be worth about US$1 trillion had made further headway in the Islamic traditional markets such as Malaysia, the Gulf Cooperation Council countries, Pakistan, Indonesia, apart from penetrating new markets such as in Europe and Africa.
While Islamic banking assets account for a large part of this value, the segment that has enjoyed especially strong growth in the more recent years is Sukuk………………………………………..Full Article: Source

Al Hilal Banking Services, the Islamic finance arm of ahlibank, proposes to launch five branches. “We will reassess the potential for opening more branches for Islamic banking operations and if necessary plan more,” Hamdan Ali Nasser al Hinai, chairman of ahlibank, said.
“In terms of infrastructure, we have implemented a Core Banking IT System (iMal) to support our Islamic banking activities, and identified premises and refurbished the same to create dedicated branches for providing Islamic banking services at five different locations across the regions and plan to propose more………………………………………..Full Article: Source

Nabil Alhoshan, CEO of Bank Aljazira, has reiterated the bank’s commitment to continue to offer innovative Shariah-compliant solutions that meet the increasing needs of customers and in tandem with the challenges of the Saudi community.
Alhoshan was recently honored by the CEO — Middle East Magazine as the Best CEO of the Year in the Islamic banking sector of Saudi Arabia for his significant contribution in maintaining the leading position of Bank Aljazira in Islamic banking………………………………………..Full Article: Source

Nigeria, last week, joined the rest of the member-nations of the Islamic Development Bank (IDB) in Khartoum, Sudan, to review the bank’s activities and chart a new course for it for the future. Vice-President Namadi Sambo was there to canvass the country’s position.
President Omar Hassan al Bashir of the Republic of Sudan presided over the ceremony of the highly anticipated two-day event that was also attended by ministers of Finance, Economy and Planning and hundreds of delegates from the 56 IDB member-countries………………………………………..Full Article: Source

HSBC Saudi Arabia Limited has successfully closed the first private placement of sukuk issue for The Saudi British Bank (SABB). This is the first subordinated Tier II sukuk transaction, which comes in line with the Basel III transitional arrangement requirements in the region.
The size of the issue was SR1.5 billion with 5-year tenure. As part of the issue, SABB has offered investors in its senior 2008 SR1,705 million notes the options to buy all or parts of their notes if they wished to take part in the new sukuk issue………………………………………..Full Article: Source

Global banking giant HSBC said its Saudi unit has successfully closed the first private placement of SR1.5 billion ($400 million) sukuk (Islamic bond) issue for its affiliate The Saudi British Bank (SABB).
The 5-year bond is the first subordinated Tier II sukuk transaction which comes in line with the Basel III transitional arrangement requirements in the region, said a HSBC statement………………………………………..Full Article: Source

Saudi Arabia raised approximately $6.4 billion through sukuk (Islamic bonds) in the first quarter of 2012, making it the largest sukuk issuer in the said period as the Kingdom surpassed the United Arab Emirates which chalked up only $1.9 billion in the same period, Zawya said in a quarterly bulletin.
In total, sukuk issuances in the first quarter doubled to reach a record $43 billion worldwide — nearly half of the whole of 2011, Adnan Halawi, Team Leader Fixed Income at Zawya, said………………………………………..Full Article: Source

Kingdom raised $6.4bn compared to $1.9bn by the UAE in Q1 2012. Saudi Arabia overtook UAE to become the largest issuer of sukuk in the first quarter of 2012 in the GCC, Zawya said in a bulletin.
The UAE, which was the fourth largest issuer of Islamic bonds in the first quarter of 2012, raised approximately $1.9 billion (Dh7 billion) through sukuk compared to $6.4bn by Saudi Arabia………………………………………..Full Article: Source

Law firm Latham & Watkins advised the managers in relation to an Ijara Sukuk issuance by Saudi Electricity Global SUKUK Company (a wholly-owned SPV of Saudi Electricity Company). The Sukuk was issued in two tranches, $500 million due 2017 and $1.25 billion due 2022.
HSBC Bank and Deutsche Bank, London Branch, were Lead Managers for the Sukuk, with Co-Manager Mitsubishi UFJ Securities International………………………………………..Full Article: Source

Indonesia’s first Islamic bank, PT Bank Muamalat, is planning to issue 1.5 trillion indonesian rupiah ($164 million) of corporate sukuk to expand business and credit financing, the firm’s director said on Thursday.
Bank Muamalat director Adrian Gunadi said 800 billion rupiah will be issued as the first tranche in mid 2012, with a 10-year tenure and buyback option on the fifth year………………………………………..Full Article: Source

Bank Muamalat Indonesia said its planned sale of Shariah-compliant bonds would probably be denominated in rupiah.
The nation’s oldest Islamic lender may issue Rp 800 billion ($87 billion) of securities, or as much as Rp 1.5 trillion if the issue is oversubscribed, Hendiarto, the bank’s Jakarta-based finance director, said………………………………………..Full Article: Source

Publicly listed food-producer PT Mayora Indah and Bank Muamalat Indonesia plan to issue sukuk, or Islamic debt-papers, this year hoping to raise Rp 250 billion (US$27 million) and Rp 800 billion respectively, the National Sharia Council says.
Mayora Indah would launch its sukuk on Monday while Bank Muamalat, which runs on sharia banking principles, would follow in July, Kanny Hidaya, council deputy secretary, said on Thursday during a discussion on sukuk development in Indonesia………………………………………..Full Article: Source

Indonesia is very likely to see a record sukuk issuance in 2012, including the offering of the country’s first US dollar corporate sukuk.
Herwin Bustaman, head of HSBC Amanah in Indonesia, notes that the Indonesian government has already sold USD1.5 billion of local sukuk in March this year and that another USD1 billion to USD1.5 billion of global government sukuk is likely to be sold in the second half of the year………………………………………..Full Article: Source

Emirates, the biggest airline by international traffic, may refinance US$550m of bonds maturing in June, as borrowing costs decline, a company executive said.
“The market is awash with funds,” Gary Chapman, president of the airline’s travel service unit dnata, said in a phone interview today. “At the moment the market is looking pretty attractive for good credit and there are funds available at relatively attractive pricing,” said Chapman, who also is responsible for finance at the company………………………………………..Full Article: Source

The cost of insuring Dubai’s debt against default has dropped by almost half since the peak of a crisis in 2009 as recent restructuring progress and a more positive global outlook cheer investors.
It reflects a growing faith in the emirate’s ability to repay debts falling due this year. “It’s a positive sign in terms of global investor faith in Dubai,” said Nick Stadtmiller, the head of fixed income research at Emirates NBD………………………………………..Full Article: Source

Life and health insurance provider Takaful Emerat has launched Sehat Plan, a corporate health plan intended for low income workers. The new plan covers risks of injury, illness and unexpected circumstances for manual labourers.
The insurer said that lower income employees between age of 18 to 65, living in the UAE including Abu Dhabi and the Northern Emirates are eligible for the new plan………………………………………..Full Article: Source

Slow paper-dependent processes often hinder an insurer’s ability to provide better customer service and compete in today’s market. For insurers, the speed at which they quote a new policy, answer a policyholder’s inquiry or process a claim can make or break their success. Although speed is a necessary component in business processes, insurance companies shouldn’t sacrifice it for accuracy.
Syarikat Takaful Malaysia Berhad (Takaful Malaysia, the first takaful operator in Malaysia), has successfully deployed Hyland Software’s enterprise content management solution (ECM), OnBase, streamlining underwriting and claims processes across its 40 sales and servicing outlets. New business is written sooner and claims are resolved faster without sacrificing data integrity. (Press Release)

Airport retailer Dubai Duty Free has mandated banks for a $1.1 billion (Dh4 billion) multi-tranche loan facility to help fund the expansion of Dubai’s international airport, the company said. Facility includes both conventional and Islamic tranches.
Citibank along with Dubai Islamic, HSBC and Emirates NBD have been hired to arrange and coordinate the debut international transaction, the company said………………………………………..Full Article: Source

Bangladesh signed an $855 million loan agreement with the International Islamic Trade Finance Corporation (ITFC) to finance imports of crude oil and refined petroleum products.
A deal was signed among ITFC (a member of the Islamic Development Bank Group), the Energy and Mineral Resources Division and Bangladesh Petroleum Corporation at Ruposhi Bangla Hotel in Dhaka………………………………………..Full Article: Source

Hong Kong is attracting more Muslim money and businessmen amid increasing economic ties between China and the Muslim business community.
The online version of Time magazine Wednesday said halal food, or food made in accordance with the Quran, is popular among Muslim businessmen in Hong Kong. The city and China have raised trade with Islamic countries like Indonesia and the United Arab Emirates, so more restaurants in Hong Kong are selling halal food or dumplings without pork for Muslim businessmen. Pork is widely used in Chinese food but banned by Islamic law………………………………………..Full Article: Source