The full potential of Islamic finance could be realised if several challenges are to be addressed, according to World Bank managing director Dr Mahmoud Mohieldin.
The challenges that needed to be addressed include improving regulatory oversight, rebalancing tax treatment, strengthening insolvency framework, promoting standardisation, ensuring adequate liquidity and establishing sound risk-management practices………………………………………..Full Article: Source

Lack of standardisation and cohesion in Islamic finance, especially in sukuk products, hinders the growth potential of the industry and deprives the market of an organised structure to facilitate secondary trading and liquidity.
World Bank managing director Dr Mahmoud Mohieldin said promoting standardisation is among the challenges in the Islamic finance landscape and the industry would benefit from more widely accepted benchmarks and indices………………………………………..Full Article: Source

As the Muslim population is expected to rise twice as fast as the non-Muslim population, financial products to service this market could be in line for dramatic growth. With western financial markets still suffering the after-shock of the collapse of Lehman Brothers and the resulting credit crunch and Eurozone sovereign debt crisis, attention is now turning to the Middle East.
While Dubai may have been caught up in the global asset bubble, the region has emerged largely unscathed from the recent crises, paving the way for dramatic growth in Islamic finance. But what is Islamic finance and what does it mean for Irish investors?……………………………………….Full Article: Source

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has introduced new guidelines for applying religious law to finance, as it prepares to launch a sweeping review of the industry.
The seven new standards, which help scholars decide whether financial activities and products conform with sharia law, address issues including financial rights, bankruptcy, capital protection, entrusting money to an agent for investment, and contract termination………………………………………..Full Article: Source

If the recent global economic crisis taught a lesson about debt, it might be to think twice about investing in it. Wary of buying bonds that may never be repaid, some investors in these precarious times are looking for opportunities that don’t involve such high risk.
Some are turning to Islamic banking, a rapidly growing industry that is rippling through global financial systems due to its conservative and low-risk approach………………………………………..Full Article: Source

Islamic finance in Tunisia is only a recent trend, and one that is still working through the hurdles to meet the competition in the domestic banking sector.
In 2009, the Islamic Bank of Zitouna was established by Mohamed Sakher El Materi – a Tunisian business magnate at the time, and the thirty-year-old son-in-law of former President Zine el-Abidine Ben Ali. Mention El Materi’s name, and most Tunisians will wince with distaste at the memory of the Ben Ali-era corruption and the excesses of which he was so intimately a part of………………………………………..Full Article: Source

The Securities Commission Malaysia (SC) received a total of 19 corporate proposals in first quarter of this year, compared with 41 proposals in the preceeding quarter.
In line with the trend of increasing preference for fund-raising through issuance of corporate bonds and sukuk, the majority (79%) of the proposals were for issuance of private debt securities (PDS)………………………………………..Full Article: Source

Dubai’s Jebel Ali Free Zone (JAFZA) is in advanced talks with financial institutions over a financing package to meet its $2 billion-equivalent Islamic bond, or sukuk, maturity in November, the company said in a statement on Monday.
The state-linked industrial free zone, located on the outskirts of Dubai, will use the funding package solely for the redemption of its 7.5 billion dirhams ($2.04 billion) sukuk, the statement, which accompanied its 2011 results, said. “The board of directors is confident about JAFZA’s ability to refinance the sukuk,” Hisham Abdullah al-Shirawi, chairman of Economic Zones World (EZW), JAFZA’s parent and a unit of state conglomerate Dubai World, said. ……………………………………….Full Article: Source

DIFC Investments, the investment arm of the company running Dubai’s financial free zone, is confident of successfully refinancing an upcoming Islamic bond maturity, and said it swung to profit in 2011.
DIFC Investments’ (DIFCI) sukuk obligation has been highlighted by analysts as one of the most challenging refinancings in the Gulf Arab region this year, given the size of the maturity and the firm’s limited cash position………………………………………..Full Article: Source

Dubai will employ $1.25 billion raised through an Islamic bond last week to fund the expansion of its airport and sees no risk to repaying creditors at its flagship conglomerate Dubai World on time, a top Dubai official told Reuters on Tuesday.
“We will use proceeds from the $1.25 billion sukuk to fund Dubai International Airport expansion,” Sheikh Ahmed bin Saeed al Maktoum, a close advisor and uncle to Dubai’s ruler and a key figure in the emirate’s recovery from its 2009 debt debacle, said in an interview on the sidelines of a Dubai travel show………………………………………..Full Article: Source

Saudi Arabia’s National Industrialization Company (Tasnee) will begin meeting investors next week ahead of a potential debut Islamic bond, or sukuk, the petrochemicals firm said in a regulatory filing.
HSBC’s Saudi Arabian unit has been selected to organize the roadshows, which could lead to a privately-placed transaction, according to a statement published late on Monday………………………………………..Full Article: Source

Islamic bonds (sukuk) are set to become the big hit of the Middle East’s financial markets this year as low costs, a contracting European banking industry and a rising tide of religion across the region spur interest from borrowers and investors alike.
Dubai gave the segment a lift last week when investors climbed over themselves for two issues of sovereign sukuk worth $1.25 billion. The strong demand was reflected in pricing of 4.9% for the five-year bond, a record low for dollar-denominated bond issued by the emirate, and 6.45% for the 10-year issue………………………………………..Full Article: Source

Sukuk market will be spurred by the global economic turmoil, as global deleveraging leads to a reduction in global bank credit available for Saudi companies and projects; funds are needed and the government is correctly reluctant to provide it directly.
“Sukuk can foster economic development In Saudi Arabia. Companies start to turn to the Sukuk market to fill the funding gap. Although important progress has been made in Sukuk issuance, the active names have tended to be large companies - led by GACA, SABIC and Saudi Electricity Company - as cost considerations and illiquid secondary markets have deterred others,” said Richard Banks, Director of Euromoney Saudi Arabia Conference. ……………………………………….Full Article: Source

Barclays expects 2012 to be a “decent” year for bond and sukuk issuance in the Middle East, likely on par with 2011, but is more upbeat long term as regional companies shun under pressure European banks in favour of other sources of debt, the UK lender’s regional chief executive said.
“It’s not going to be a ‘wow’ year but a decent year,” said John Vitalo, Barclays Middle East and North Africa chief executive, in reference to the performance of the region’s debt markets this year………………………………………..Full Article: Source

Baker and McKenzie has advised Banque Saudi Fransi (BSF) in relation to the establishment and listing of its debut $2,000,000,000 sukuk programme. This is the first sukuk programme to be established by a Saudi bank which was listed on the London Stock Exchange.
Karim Nassar, Partner based in the Gulf offices, said, “Having assisted BSF previously on the establishment of its EMTN programme, we are very pleased to have once again worked with BSF on the establishment of its first Sukuk programme.”……………………………………….Full Article: Source

Indonesian two-year sukuk, or the Islamic equivalent of bonds fell last month, pushing up yields by the most since September, as Standard & Poor’s, kept the nation’s credit rating at junk after the government maintained fuel subsidies.
Yields on sovereign 8.8 percent Shariah-compliant dollar-denominated bonds due April 2014 climbed 39 basis points to 2.92 percent on April 30, according to data compiled by Bloomberg………………………………………..Full Article: Source

GCC sukuk market continued to flourish with Saudi Arabia leading issuances for the first time and overtaking the UAE in Q1, 2012. The $4bn sukuk issuance by the General Authority of Civil Aviation was the first sovereign issuance in Saudi Arabia followed by a number of corporate sukuk issuances in the country.
Despite falling behind in the league tables, the UAE witnessed a number of sukuk issuances with Majid Al Futtaim raising $400mn, Emirates Islamic Bank and First Gulf Bank, both raising $500mn amongst the notable issuances in Q1 2012………………………………………..Full Article: Source

The six-nation Gulf Cooperation Council, which includes Saudi Arabia and the United Arab Emirates, needs to refinance $60 billion of debt between now and the end of the year, Royal Bank of Scotland Group Plc said.
“We don’t foresee any issues for refinancing” as these loans have “either been dealt with” or are being restructured or amortized, Jacco Keijzer, head of debt capital markets for the Middle East and Africa at RBS, said………………………………………..Full Article: Source

Senator Rand Paul is blocking an amendment to a U.S.-Swiss tax treaty, slowing Switzerland’s handover of data on thousands of Americans with bank accounts hidden from the U.S. Internal Revenue Service.
The protocol, negotiated in September 2009, would amend a 1996 treaty and make it more difficult for Switzerland to refuse requests from the IRS for tax information about U.S. customers of Swiss banks. The U.S. is cracking down on secret accounts held by its citizens at UBS AG (UBSN), Credit Suisse AG (CSGN), Wegelin & Co. and other financial institutions………………………………………..Full Article: Source

Mutual Fund houses launching specific schemes catering to philosophies propagated by a particular community is an interesting concept that is slowly gaining momentum in the Indian mutual fund industry. Here, I am referring to the Shariah compliant funds that have been introduced in the recent years.
Before getting into more details, let me first give you an idea of what exactly is Shariah compliance………………………………………..Full Article: Source

Emirates Islamic Bank, one of the leading Islamic financial institutions in the region, announced on Tuesday that its operating profits rose to AED 138 million at the close of the first quarter of 2012.
This is a 56 per cent and 68 per cent growth over Q1 and Q4 2011, respectively. The results see Emirates Islamic Bank deliver its highest operating profit for the past two years………………………………………..Full Article: Source

Islamic banks have outperformed their conventional peers in most markets, but a closer look suggests the market dynamics are changing, demonstrating a new trend, said a report.
Two key indicators are cause for reflection: slowing growth rates and eroding profitability, according to A T Kearney, a global management consultancy………………………………………..Full Article: Source

Changing market dynamics are demonstrating a new trend, with two key indicators giving cause for reflection: slowing growth rates and eroding profitability, according to A.T. Kearney.
Declining growth rates are occurring in key geographies including KSA, Bahrain and the UAE, where growth rates have dropped to between three and eight per cent from double-digit figures. In parallel cost income ratios are increasing in most markets, putting pressure on profitability………………………………………..Full Article: Source

Syarikat Takaful Malaysia Bhd is eyeing to emerge as the top market leader in the takaful market over the next three to five years through an aggressive rebranding campaign.
Presently, it ranks second out of 11 takaful operators in the country. Group managing cirector Datuk Hassan Kamil said the campaign would include opening of new service centres and recruiting additional agents………………………………………..Full Article: Source

Net profit reached $ 652,224 USD, compared with a net profit of $84,164 from the first three months of 2011, a net increase of 674.9 per cent. Total assets of the company reached $18,641,195 as of 31 March 2012, compared to total assets of $17,634,237 as of 31 December 2011, a net increase of 5.7 per cent.
Total liabilities of the company reached $9,718,703 as of 31 March 2012, compared to total liabilities of $9,176,092 as of 31 December 2011, a net increase of 5.9 per cent………………………………………..Full Article: Source