CIMB Group Bhd, Malaysia’s second largest lender, hopes to use its expertise in Islamic finance to distinguish itself from the competition when it formally opens its Australian operations this week, company executives said.
That may include bringing Australian companies to the Malaysian sukuk market as issuers for the first time. “We are very keen to do an Islamic finance transaction as soon as possible, but we also have to be realistic, working on a 12-month time frame,” Michael Forde, head of capital markets at CIMB Australia, said………………………………………..Full Article: Source

After a multi-year, crisis-induced lull, the sukuk market is back on the rise. But is it a realistic alternative to traditional bonds? This year has seen a dramatic increase in sukuk issuance as a proportion of debt issuance.
Such structures are appealing for their simplicity and capture a public and regulatory mood that has swung decisively away from the complexity that characterised pre-crisis structures, even setting aside their ethical and religious dimension………………………………………..Full Article: Source

Global Islamic bonds (sukuk) is seeing a steady growth path as institutions and governments worldwide issue new bonds while new incentives for regulatory and advisory bodies are said to be inspiring confidence in the market.
RHB Research Institute Sdn Bhd (RHB Research) in a research note yesterday stated that Malaysia’s corporate sukuk issuance for the third quarter of 2012 (3Q12) gained momentum with a total of RM26.8 billion issued, compared with RM13.05 billion recorded in 2Q12. The research house highlighted that ‘chunky issuances’, amongst others, came from Celcom and Tanjung Bin with RM5 billion and RM4.2 billion issued respectively………………………………………..Full Article: Source

Oman’s market regulators should develop a vibrant sukuk market for helping the proposed Islamic banks to invest their funds and the government to raise debt funds for infrastructure projects.
When the Islamic banks start operations, the deposit growth (or growth on the liability side) will be much higher than the anticipated growth in asset side and the Sharia-compliant banks will find it extremely difficult to invest their deposits, if there is a lack of Islamic debt instruments like sukuks in the financial system………………………………………..Full Article: Source

The numbers look good for the Islamic bond market. Issuance hit a record high in 2011 and figures for the first half of 2012 show that volumes are already up another third. It is widely expected that issuance of sharia-compliant bonds, or sukuk, will top the $100bn mark before the year is out.
Despite this rise, however, questions remain as to whether the increase in issuance is enough to match investor demand. According to consultancy Ernst & Young, the answer is no………………………………………..Full Article: Source

As Abu Dhabi Islamic Bank undertakes a roadshow for its innovative Sharia-compliant hybrid Tier 1 non-call six perpetual notes issue, the great unknown is the extent to which conservative, traditional sukuk investors will buy the securities.
In a market in which extending tenor on a vanilla sukuk issue to beyond the typical five years is seen as a big development, this is a bank capital offering designed to comply with the Basel committee’s criteria for additional Tier 1 capital in anticipation of possible Basel III implementation in the UAE. Terms such as “hybrid” and “perpetual” will be unfamiliar and foreign to many accounts………………………………………..Full Article: Source

An Omanese real estate firm is expected to announce its plans to raise funds by way of an Islamic debt instrument or sukuk. It was reliably learnt that Tilal Development Company, which developed the Muscat Grand Mall, will announce their sukuk plan.
But it is not clear whether the company is raising money from within Oman or from some other GCC countries since the regulations are not in place. The Capital Market Authority is yet to announce the regulation for takaful firms and sukuks. Further, those attending the forum will be privy to strategic alliances and MoU signings which will be of direct impact to the Islamic finance community in Oman………………………………………..Full Article: Source

“A first in Tunisia, the draft state budget of 2013, will be financed by Islamic bonds (Sukuk), with an amount of about 1,000 million Tunisian dinars (MTD),” announced Slim Besbes, Acting Minister of Finance, stating that this is part of the development of a legal framework for Islamic finance.
Besbes stressed the need to disseminate a new culture that includes all sources of funding and establish a complementarity between indirect and direct funding………………………………………..Full Article: Source

Dana Gas, a natural gas extraction and production corporation based in the emirate of Sharjah in the UAE, failed to repay a $1 billion Islamic Shari’a-compliant Sukuk bond when the bond’s maturity date came and passed on 31 October. $920 million was due after Dana Gas repurchased $80 million of the bond issue in 2008.
Additionally, the gas producer failed to pay $18.75 million of accrued profit from the Sukuk-holders ownership stake due on 30 October………………………………………..Full Article: Source

Amana Bank, Sri Lanka’s only full-fledged Islamic lender, plans to double its branches by expanding in rural areas, forecasting a six-fold growth in demand. The company, which started in August 2011, will add five outlets this year to its existing 14 and nine in 2013, Colombo-based chief executive officer Faizal Salieh said.
Sri Lankan Islamic banking assets could reach $1.5bn from $250mn now, he added, without specifying a timeframe. Amana posted a net profit of 178mn Sri Lankan rupees ($1.4mn) in the nine months through September and had assets of SLR18bn, according to Salieh………………………………………..Full Article: Source

As Oman prepares to introduce Islamic finance, a restriction on the money market instruments which banks can use may curb their ability to manage funds in the market, hurting profitability.
Authorities are expected to release Islamic banking rules by year-end, making Oman the last country in the six-nation Gulf Cooperation Council to accommodate Shariah-compliant banks………………………………………..Full Article: Source

The economic stagnation of the past year and a half has taken a toll on many businesses, but a fleet of Islamic investment banks in Egypt sees opportunity in the emerging new order.
Ridge Islamic Capital, one such investment bank, has found a niche in the finance sector and made plans to capitalize on it. It offers Sharia-compliant investment banking, asset management and wealth management services to a market that experts say is primed for Islamic finance. Launched in late September, the firm is among a slew of banks offering, or planning to offer, Islamic investment products………………………………………..Full Article: Source

Dubai Islamic Bank said total assets rose by 3.5 per cent in the first nine months to stand at AED 93.7 billion. Operating profit was up by 4.9 per cent to AED 1.67 billion while customer deposits reached AED 66.9 billion, up 3.3 per cent. At end-September, DIB’s capital adequacy ratio was 18.4 per cent with Tier 1 CAR of 14.3 per cent.
For the first nine months of 2012, DIB reported a net profit of AED 854 million, compared to AED 850 million for the corresponding period of 2011. For Q3 2012, the bank reported a net profit of AED 298.5 million, thereby maintaining its profitability over the same period last year. DIB’s operating profit (net profit before impairment losses) increased by 9.6 per cent in Q3 2012 compared with the corresponding period in 2011………………………………………..Full Article: Source

Oman’s Al Izz Islamic Bank, the sultanate’s second Islamic bank, attracted bids worth 46 million rials ($119.5 million) for its initial public share offer, 1.15 times the sum which it was raising, a source close to the offering said .
The bank, which counts Abu Dhabi state-fund Aabar Investments as a founding shareholder, will be listed on the Muscat Securities Market on December 3, the source said. Al Izz looked to raise 40 million rials ($104 million) by selling 40 percent of its capital through a month-long initial public offering, which ended on October 21 and was managed by Bank Muscat………………………………………..Full Article: Source

Al Baraka Islamic Bank is the latest bank to announce its intention to rapidly expand its branch network throughout Pakistan, and appears to have a focus on the market in Punjab.
The announcement was made by Al Baraka President and CEO Adnan Ahmad Yousaf during a visit to the Lahore Chamber of Commerce. Yousaf made it a point to extol the virtues of Islamic finance and point out why he felt it was a superior product to the more conventional forms of banking………………………………………..Full Article: Source

The forty-year old, $1.2 trillion Islamic finance industry needs to take stock and look in the mirror and examine the reflection holistically. Have we arrived at the ‘reset’ moment that every relationship, in this case, faith and finance, must surely undergo?
The range of topics are from a high level, jet engine, (making Islamic finance conventionally efficient for information intermediation), from a medium level, helicopter, (internationalisation of Islamic finance), from a ground level, (level playing field), and from a grass-roots level, (non-bankable financial inclusion, including the $640 billion halal industry)………………………………………..Full Article: Source

The rise and continued growth of the Islamic finance industry has been well documented. The reports of 10, 12 and even 15 percent annual growth have captured the attention of those in conventional banking and finance. A number of Islamic banks are based in London, but the industry is mostly Malaysia and GCC-centric.
Critics of Islamic finance have stated that the label of “shariah” is not conducive to widespread development of the industry in Europe. They are known as “participation banks” in Turkey for this reason. Everybody in the industry is aware of the growth rates, the increasing issuance of Islamic bonds, called sukuk, and the continuing scandals that emerge out of the world’s financial centres such as London and New York that allow Islamic finance to market itself as a legitimate alternative system………………………………………..Full Article: Source

IT spending across the Islamic banking sector in select GCC countries (Bahrain, Qatar, UAE, Kuwait, and KSA) totaled $400m in 2011 and is set to grow considerably over the coming years, according to a report from IDC Financial Insights titled “The Impact of Technology on Islamic Banking in the Middle East and Africa”.
Islamic banking services have gained in popularity and are now distributed across both Muslim and non-Muslim countries, with many conventional banks actively offering Islamic banking products to their customers………………………………………..Full Article: Source

The government and the Insurance Regulatory Authority have been urged to come up with incentives to encourage investments in sharia-based insurance to enhance protection of low income earners among the muslims.
Takaful Insurance Africa Kenya CEO Hassan Bashir said lack of distribution networks due to stringent licensing requirements for insurance agencies by IRA and high cost of running micro-Takaful operations have locked out a large population of the community from insurance services………………………………………..Full Article: Source

Morocco is moving closer towards the creation of a national zakat fund. The idea was put forward by the late King Hassan II when he called for an entity responsible for collecting alms, but the proposal was never implemented.
Najib Boulif, the Minister Delegate of General Affairs and Governance, recently said that preparations for such a fund were now being made by the Islamic Affairs Ministry, which is working on a management model. The government will then examine implementation mechanisms, the minister told Magharebia on October 24th………………………………………..Full Article: Source