HSBC Holdings Plc is to significantly scale back the scope of its global Islamic banking operations, as the business becomes the latest area to be affected by a wider restructuring at the UK-based bank.
HSBC is cutting thousands of jobs and exiting non-core businesses as part of Chief Executive Stuart Gulliver’s plans to cut costs and improve profitability. The bank has already divested assets in more than 26 countries, including the United States, South Korea and Pakistan………………………………………..Full Article: Source

Sukuk have played a crucial role in the infrastructure sector over the past decade, with proceeds raised from issuances being utilised for both low and high profile projects. The very nature of sukuk combined with their flexibility allows them to be structured in various different ways which has attracted corporate and sovereign entities to choose Islamic bonds as a viable alternative financing instrument.
The infrastructure sector has seen a large portion of the raised sukuk funds directed to development projects around the globe………………………………………..Full Article: Source

Offshore aviation services provider Weststar Aviation Services Sdn Bhd has proposed to raise RM900mil under a Sukuk Mudharabah programme. Malaysian Rating Corporation Bhd (MARC) said on Thursday the proceeds from the notes would be used mainly to refinance up to RM870mil of existing debt at Weststar.
MARC assigned a preliminary rating of AA-IS with a stable outlook to the notes which would be issued by Weststar’s special purpose entity Weststar Capital Sdn Bhd………………………………………..Full Article: Source

To fund the Sungai Buloh-Kajang mass rapid transit (MRT) project, Danainfra Nasional Bhd is finalising plans to issue a RM1.5 billion sukuk tranche by mid-November, with one portion to be marketed as retail bond as mooted in Budget 2013.
The issuance, part of the RM8 billion Islamic commercial papers/Islamic medium-term notes (ICP/IMTN) programme signed in early July, will see one fifth of it — or RM300 million — being floated as retail bonds, said officials involved in the issuance. “This is an opportunity to widen the investor base for the MRT project………………………………………..Full Article: Source

Trans-Caledon Tunnel Authority, a builder of dams and water tunnels, is considering an Islamic bond sale, one of at least three South African companies seeking to tap a market on track for record sales this year.
Trans-Caledon might issue the sharia-compliant debt to help raise R26 billion once the government had established a benchmark with its own sale, Zodwa Mbele, the parastatal’s executive manager for project finance and treasury, said this week. Sukuk yields are within 5 basis points of a record low and 19 basis points below South African dollar bonds, according to HSBC, Nasdaq and JPMorgan Chase indices………………………………………..Full Article: Source

In order to develop the sukuk (Islamic bond) market on a stronger footing, the Securities and Exchange Commission of Pakistan (SECP) has drafted the Issuance of Sukuk Regulations, 2012 to elicit public comments. The public can submit their comments by October 15.
A SECP statement said that the regulations are aimed at facilitating the issuers and to provide comfort to the sukuk investors. The regulations broadly cover eligibility and conditions for issuance of sukuk, disclosure and reporting requirements, and appointment of trustee and Sharia advisor………………………………………..Full Article: Source

After many years of opposing the idea, the Reserve Bank of India (RBI) has written to the Indian government requesting that it amend laws forbidding Islamic banking in India. Central bank governor Duvvuri Subbarao told reporters at a local event on October 3 that the RBI is in talks with the government about whether or not to allow shari’ah, or Islamic law-compliant finance.
In June, the National Commission for Minorities (NCM) spoke up in favour of introducing such financing by submitting a proposal to permit interest-free banking. Following this, the finance ministry asked the RBI to reconsider the matter. Until this point, India’s central bank had insisted that Islamic banking was not viable in the country………………………………………..Full Article: Source

In preparation for the launch of a dollar-denominated sukuk, International Islamic (QIIB) has mandated QNB Capital and two international banks - HSBC and Standard Chartered Bank - to arrange investor meetings from October 10.
The investor meetings will be held in the Middle East, Asia and Europe, QIIB said. The bank said the sukuk offering may follow the investor meetings subject to market conditions. However, it did not give the size of the sukuk or other offer details………………………………………..Full Article: Source

The International Islamic Liquidity Management Corporation which has its headquarters in Kuala Lumpur but supported massively by banks in Asia and the Middle East will be issuing its first sukuk within a few months with an Islamic principle called al-Ijarah attached to it.
The bank is hoping to issue short term sukuks in order to come to the aid of sharia-compliant banks to manage liquidity and create a liquid cross-border market for Islamic instruments. The sukuk will range from $300 million to $500 million………………………………………..Full Article: Source

Bahrain has been chosen as the Islamic finance knowledge hub by international business intelligence firm Thomson Reuters. The hub will initially employ 21 Bahrainis, and this is expected to grow over time.
A two-year training period will also be provided to equip the individuals with the knowledge and skills required to become Islamic finance specialists, through a combination of in-class training and intensive mentoring and on-the-job training………………………………………..Full Article: Source

The Islamic financial market has has grown exponentially over the last decade and at the World Islamic Economic Forum (WIEF) roundtable event in London on Wednesday, it was clear that many institutions are planning to increase their Shariah-compliant product offering.
In Malaysia, where the WIEF is based, the Deputy Finance Minister Datuk Dr Awang Adek Hussin announced this week that “at a time when world economy is slowing down, Islamic finance is, more than ever, central to our agenda for sustainable growth and development.”……………………………………….Full Article: Source

The Reserve Bank of India (RBI) is in correspondence with the government to look into ways to bring in new rules to accommodate the concept of Islamic banking, said Governor D Subbarao. Speaking at the Jawaharlal Institute of Postgraduate Medical Education & Research, he said: “The current Banking Regulation Act does not allow the model of Islamic banking.
Under the current Act, banks are required to borrow and deposit (and paying interest) with RBI, and to give interest to depositors.”……………………………………….Full Article: Source

In early October 2012, the western South American nation of Peru signed a historic framework agreement with the GCC states aimed at strengthening bilateral trade and boosting investment flows. While the agreement was lauded as an opportunity to create a “strategic partnership” between both signatories, it is also a timely reminder of the potential next generation markets for Islamic financial institutions.
While Europe, the GCC, and Asia have all witnessed a proliferation of Islamic banks, little mention is made of Latin America. An examination of the continent’s underlying fundamentals combined with an assessment of the winds of change currently underway in global trade flows reveal that Latin America could be the next growth story for the phenomenal growth we’ve witnessed in Islamic finance………………………………………..Full Article: Source

Deals from two major banks this week have reopened the Gulf debt market after an extended summer lull, and highlighted the lower yields that investors in the region are settling for as liquidity continues to far outstrip supply.
Qatar Islamic Bank returned to the market on Wednesday after two years away with a $750 million, five-year sukuk at a profit rate of 2.5 percent. Order books for the sukuk were $6 billion………………………………………..Full Article: Source

Arcapita Bank BSC, an Islamic- compliant fund manager, shouldn’t be allowed to extend control of its bankruptcy because it already has a plan that may lead to the sale of investments with a liquidation value of $1.4 billion, lenders said.
A group of lenders owning $1.1 billion of Arcapita’s unsecured debt objected in court papers to the company’s bid to extend by 120 days its exclusive right to file a bankruptcy exit plan. The company has a “toggle” plan under which it will either reorganize or “conduct an orderly monetization” of assets, depending on whether Arcapita raises more money by the time it seeks to confirm a plan in 2013, the lenders said………………………………………..Full Article: Source

HSBC Holdings Plc said it would stop selling Shariah-compliant products in the U.K., the UAE, Bahrain, Bangladesh, Singapore and Mauritius. The bank will continue offering wholesale Islamic financing in those countries, and the change is part of the company’s review into its businesses, it said.
HSBC was facing local competition in the businesses it chose to exit, which represented 17 percent of the bank’s Islamic business revenue, Patrick Humphris, HSBC spokesman, told Bloomberg in a phone interview from London………………………………………..Full Article: Source