A new type of sukuk, introduced by a British unit of a Kuwaiti firm, could make inroads in the market by offering greater security to investors through a structure similar to conventional covered bonds. Providing recourse to a pool of assets if the originator becomes insolvent, covered bonds found a new lease of life in Europe and the United States during the global financial crisis as investors sought liquid and safe investments.
The structure could now play a role in Islamic finance, if tax and pricing issues can be resolved to the satisfaction of investors. It was used for the first time by London-based Gatehouse Bank, a subsidiary of Kuwaiti firm Securities House, through a private placement in December………………………………….Full Article: Source

Indonesia failed to reach its sukuk auction target for the first time since October as buyers sought higher yields to compensate for accelerating inflation. The finance ministry sold Rp 1.05 trillion ($108 million) of five- and 24-year Islamic bonds on Feb. 19, short of its Rp 1.5 trillion goal, it said in a statement.
Investors asked for rates as high as 6 percent on the five-year notes that are yielding 5.16 percent in the secondary market. Borrowing costs on Indonesia’s 10.25 percent sukuk due 2030 have risen 14 basis points to 6.38 percent in 2013………………………………….Full Article: Source

The Cabinet, under Prime Minister Hisham Qandil, stressed that the now-debated Sukuk (Sharia-compliant bonds) is not an alternative to the other financing tools.
The final blueprint of the Sukuk bill will be presented to the Cabinet next Wednesday 27/2/2013 after taking into consideration all remarks made by al-Azhar, the Central Bank of Egypt and investment associations. If approved, it will be referred to the Shura Council for endorsement on the same day………………………………….Full Article: Source

Egypt legislative is preparing a new law for issuance of Islamic Bonds hailed as an important financial instrument that should attract investment funds to take Egypt well out of its long-standing economic crisis.
Hussein Ibrahim, Freedom and Justice Party (FJP) Secretary-General, said “The Islamic Bonds law – being prepared in cooperation with the Nour Party, Watan Party and many other political parties and economic authorities – is the real beginning of serious attempts to attract huge investments that should contribute to the establishment of a genuine renaissance, as a good alternative to loans………………………………….Full Article: Source

Barwa Bank, the Qatari lender that became one of the top 10 underwriters of Gulf Islamic bonds within three years of opening, plans to seek a credit rating in the second half before a possible sukuk sale.
Qatar’s smallest Islamic bank helped issuers including the Qatar, Dubai and Turkish governments sell sukuk last year, as sales in the region tripled, according to the lender’s data. Barwa Bank arranged $863mn of notes in 2012, just behind QInvest, a unit of Qatar Islamic Bank, the nation’s biggest Shariah-compliant lender by assets, data compiled by Bloomberg show. That made it the eighth-biggest underwriter out of 25 for Gulf Co-operation Council sukuk………………………………….Full Article: Source

UMW Holdings Bhd is looking at oil and gas (O&G) acquisitions following the finalisation of its RM2bil sukuk musharakah facility. Sources told Starbiz that the money to be raised from the sukuk issuance could be used to target potential “bolt-on acquisitions” that would complement its core O&G operations.
The sources added that the previously delayed initial public offering of UMW’s O&G unit would definitely take place this year, as the division has been readied for it and is showing the right kind of earnings………………………………….Full Article: Source

Regulatory reforms are underway to help Malaysia’s Islamic banking industry expand further, but for government plans to succeed, they will need to be matched by action from some reluctant banks. The government originally aimed for 20 per cent market share for Islamic banks by 2010, but despite double-digit growth in both lending and assets, the sector has fallen shy of this mark.
Islamic banks have added RM111.6 billion in assets over the past two years, bringing their share of total banking assets in Malaysia to 19.6 per cent in December 2012, central bank data shows. Their share of loan business crossed the 20 per cent mark in January 2012, reaching 21.3 per cent last December………………………………….Full Article: Source

Scotland has the opportunity to become a global “ethical finance hub”, says the expert panel convened in Edinburgh by law firm Tods Murray and the Islamic Finance Council UK. The IFC Ethical Finance Round Table, which has attracted senior representatives from government, financial services, academia and the voluntary sector, aims to “bring together Islamic and ethical banking as the bedrock to a systemically stable and prudent banking sector”.
Islamic finance seeks to avoid the payment of interest on loans, preferring partnership, profit and risk sharing, and it also shuns certain types of investment………………………………….Full Article: Source

Malayan Banking Bhd (Maybank) reported a 15.9% increase in its earnings to RM1.459bil in the fourth quarter ended Dec 31, 2012 from RM1.259bil a year ago. It said on Thursday the board of directors proposed a final dividend of 18 sen per share and 15 sen single-tier dividend for the 8.44 billion shares, amounting to a net dividend payable of RM2.405bil.
For Q4, 2012, Maybank’s revenue increased by 4.3% to RM7.027bil from RM6.737bil while earnings per share were 17.19 sen compared with 16.72 sen………………………………….Full Article: Source

When Ahli United Bank, Bahrain’s largest lender by market value, announced this week a rise in profits for 2012, it was more than good news for the bank alone. It was a sign that the island kingdom is surviving as a regional financial center.
Two years after pro-democracy protesters inspired by the Arab Spring uprisings blockaded Bahrain’s financial district, political tensions still weigh on its banking industry. This is deterring some investment and inflows of money, and making it harder for Bahrain to compete with other centers such as Dubai………………………………….Full Article: Source

Bank Muscat board has cleared an equity investment worth OMR75.1 million from the International Finance Corporation (IFC) and IFC Capitalisation Fund on private placement basis. The move will enhance the capital base of the biggest Omani bank.
The bank also raised OMR96.7 million rials of fresh capital from existing shareholders in July last year to fund its Islamic finance business through a rights issue. Bank Muscat is anticipating a credit growth in the region of 14-15 per cent this year, thanks to high government spending, a substantial growth in number of Omanis entering the workforce and an increase in minimum salary of Omani workers………………………………….Full Article: Source

Al Baraka Banking Group (ABG) achieved a net income of $235 million last year, a noticeable increase of 11 per cent on what it achieved in 2011. Total assets also increased by 11pc, total financing and investments by 21pc, deposits including equity of investment account-holders by 12pc and total equity by 9pc.
“This was not possible without the strong financial means, human resources and technical capabilities possessed by the group, as well as its commitment to the Islamic banking model that impose the hard work for the reconstruction of the societies and serve the communities in which it operates,” said chairman Shaikh Saleh Abdullah Kamel………………………………….Full Article: Source

A major insurance company based in the Middle East intends to expand its reinsurance operations into Bermuda. Qatar Insurance Company has embarked on a five-year plan, which includes setting up operations for its reinsurance arm in Bermuda and Zurich.
The company intends to open these new Q-Re operations before the end of the year. Eonomic Development Minister Grant Gibbons said yesterday: “We are pleased to see a leading Gulf-Region insurer increasing its presence in Bermuda and bringing top quality capital to our island.”…………………………………Full Article: Source

Takaful Ikhlas Sdn Bhd’s new health product introduced in September 2012, ChoicePlus, has registered a contribution of RM12.16 million involving 57 companies and has covered 21,000 lives. ChoicePlus is a medical aid card targeting all employers in Malaysia for the purpose of looking after their employees’ health and welfare.
Is President and Chief Executive Officer, Ab Latiff Abu Bakar, said the company targets an annual contribution of RM66.5 million from ChoicePlus with the participation of more than 70,000 members and 200 companies………………………………….Full Article: Source