Gulf Islamic Bonds or sukuk issues are set to rise in 2013 as Shariah-compliant firms look for quality investments and governments seek financing for big projects. Gulf governments, government- related entities and banks will also take advantage of foreign investor interest in the region to refinance existing debt and raise funding to expand their businesses.
Dubai Electricity and Water Authority has already announced plans for up to $1 billion of sukuk. Gulf governments have also shown a keen interest in developing their Islamic finance industry, with Oman introducing Islamic finance for the first time in 2012 and Dubai announcing in January this year initiatives to boost Islamic finance products……………………………………Full Article: Source

The Paramount Corporation Bhd (PCB), a wholly-owned subsidiary of KDU University College Sdn Bhd (KDUUC), plans to issue Islamic medium-term notes (sukuk ijarah) of up to RM350 million in nominal value.
Hong Leong Investment Bank Bhd, OCBC Al-Amin Bank Bhd and RHB Investment Bank Bhd are the joint principal advisers, arrangers and lead managers for the sukuk programme. The Securities Commission Malaysia had approved the issuance of the proposed sukuk programme via a letter on January 31. …………………………………..Full Article: Source

With the government seeking to increase citizens’ involvement in the personal pension system by contributing 25 percent themselves, communities that prefer non-interest systems have been taken into consideration.
Some 75 percent of the pension fund provided by the state can be invested in debt instruments issued by the Treasury, revenue sharing certificates, or sukuks. The remaining 25 percent can be managed in investment instruments such as government bonds, treasury bonds, as well as sukuks, according to the new pension system that has been in effect since Jan. 1……………………………………Full Article: Source

Sak (singular), sukuk (plural): as stipulated in the project law endorsed by the Freedom and Justice Party (FJP) and Al-Nour Party, a financial instrument representing a common share in the property of assets, facilities or services pertaining to a certain project, specified in the offering bulletin and in compliance with Islamic Shari’a.
What is the different between sukuk and bonds? Bonds offer an interest rate while sukuk don’t. Fixed interest rates are prohibited under Islamic Shari’a. Sukuk are offered under various Shari’a-compliant contracts that differ according to the nature of the project……………………………………Full Article: Source

The Central Bank of Oman (CBO), in collaboration with the Islamic Institute for Research and Training of the Islamic Development Bank in Jeddah, Kingdom of Saudi Arabia (KSA), is organizing a training course under the patronage of Hamoud bin Sanjour al-Zedjali, CBO Executive President.
The course, being held during the period from February 2nd to 6th, comes within the CBO’s endeavors to develop the capabilities of the human resources working in Islamic banks. A number of Islamic Sukuk specialists give lectures on Sukuk, the main Islamic finance tool. The course is the second one organized by the CBO about Islamic banking since the beginning of this year…………………………………..Full Article: Source

Bank Sarasin & Co has selected Avaloq’s Islamic Banking Solution, in an effort to upgrade its range of Sharia-compliant offerings to private clients.
The new system covers a range of Islamic products, such as murabaha finance and placement, diminishing musharaka, and others. Murabaha refers to a form of fixed-income commodities trading, where parties agree on an upfront price pre-sale, and the seller takes physical receipt of the commodity before passing it on……………………………………Full Article: Source

Dubai Islamic Bank (DIB) group reported a net profit of AED 1.19 billion, compared to AED 1.05 billion in 2011, an increase of 13 per cent. DIB’s Board of Directors also recommended the distribution of a cash dividend of 15 per cent, subject to regulatory and general assembly approvals.
DIB’s total assets as of December 31, 2012, stood at AED 95.4 billion, compared to AED 90.6billion at the end of the same period in 2011, an increase of 5.3 per cent……………………………………Full Article: Source

The Islamic banking market is growing in Indonesia, where 11 banks offer Shariah-compliant financial services. The market reached a combined total of Rp 199.7 trillion by the end of 2012, according to central bank data.
But Indonesia’s Shariah banking market still lags behind Malaysia, where Islamic lenders hold 23.1 percent of the assets deposited in Malaysian banks. In Indonesia, Shariah banking only totals 4.7 percent of the Rp 4,000 trillion market……………………………………Full Article: Source

Bank Mandiri will channel an additional Rp 800 billion ($83 million) in funds to its Shariah banking arm as the unit prepares to expand its services after next year’s initial public offering, a bank official said on Monday.
The bank, Indonesia’s largest lender by assets, will inject a total of Rp 1.1 trillion in capital to Bank Syariah Mandiri ahead of the Islamic finance unit’s listing on the Indonesia Stock Exchange (IDX)……………………………………Full Article: Source

ASM Investment Services Bhd, which aims to be a full-pledged syariah-compliant fund management company by the end of this year, will convert the remaining three unit trust funds into shariah-compliant assets, said its CEO Ameer Ali Mohamed.
ASM Investment, a subsidiary of Pelaburan MARA Bhd, manages 14 unit trust funds, of which 11 are already syariah-compliant. “We are changing all conventional funds into syariah-compliant funds in line with the our inspiration to make ASM Investment a syariah-compliant fund management company by year-end,” Ameer told reporters after the launch of four converted syariah-compliant funds……………………………………Full Article: Source

Islamic finance is a system of financial services that complies with the principles of Shari’a (Islamic law). Islamic finance is free from the elements of Riba (interest), Gharar (extreme uncertainty and lack of transparency), Qimar (gambling) and some other market malpractices which are prohibited by Shari’a.
Islamic finance transactions are typically asset backed as charging of returns on lending money is prohibited. Islamic finance is based on the principle of assuming risk / liability in order to obtain rewards……………………………………Full Article: Source

Al Hilal Bank has announced the first dividend payout by its flagship fund, Al Hilal Global Sukuk Fund. The fund, which was launched in March 2012, will distribute a 4.36 per cent dividend, and all registered unit holders of the fund, as of Dec. 31, 2012, will be eligible to receive this dividend, according to a press release.
Al Hilal Global Sukuk Fund’s objective is to generate regular income and to achieve capital appreciation by investing in globally diversified Shariah-compliant fixed-income securities (Sukuk) issued by sovereign, quasi-sovereign, and corporate organisations……………………………………Full Article: Source

The Central Bank of Bahrain (CBB) will introduce new rules this year to enhance the operational model of Takaful. The Central Bank of Bahrain is in the final stages of developing a new model for Bahrain’s Takaful industry, Abdul Rahman Mohammad Al Baker, Executive Director of the Financial Institutions Division at the Central Bank of Bahrain, said.
“We are in the process of finalising a new model for Takaful, which will open the doors for quite a few players in the market, specifically international players, whereby we calculate the solvency differently than the existing standard. It has already received the approval of more than 20 Shari’ah clerics,” Al Baker said……………………………………Full Article: Source

Because Takaful companies are competing for the same market as conventional insurers, with much the same product offering, local markets could come under strain, according to Vasilis Katsipis, General Market of Market Development for A.M. Best.
Takaful is growing faster than traditional insurance, which increases the competition to conventional insurers, according to Katsipis. “Very few Takaful companies have actually focussed in developing new offerings, they are competing with a Shari’ah-compliant product for the same type of business,” he explained……………………………………Full Article: Source