Islamic assets have been on the rise, driven by greater issuance of sukuk, or Islamic bonds. Last year saw a new record for Islamic debt issuance globally, 77% of which emanated from Malaysia. But while the global bond market stands at $100 trillion, the sukuk market is still tiny by comparison, at just $100 billion. It is this room for growth that industry participants are eager to capitalise on.
According to AsianInvestor findings, the top 50 by AUM have combined assets of $72.9 billion, split fairly evenly between equities and fixed income/money market/sukuk, with the remaining 10% or less in Islamic private equity and other alternatives………………………………………..Full Article: Source

India’s General Insurance Corp (GIC Re), the 15th largest re-insurer in the world, is planning to convert its Dubai office into a subsidiary as part of strengthening the Middle East and North Africa (Mena) business from which it generated premium worth $385mn.
The public sector re-insurance giant is also focusing more on life and Islamic ‘takaful’ in a big way to make its presence felt in the Mena region, P K Bhagat, general manager of GIC Re, said. “We might consider converting Dubai office into a subsidiary in the next few years as part of strengthening the operations in the Mena region,” he said………………………………………..Full Article: Source

Alliance Financial Group Bhd’s (AFG) disposal of its 30 per cent equity interest in AIA AFG Takaful Bhd (AIA AIG Takaful) for a total cash consideration of RM45 million was anticipated by analysts and would probably not leave much impact for the group.
According to an analyst from RHB Research Institute Sdn Bhd (RHB Research) in a research note yesterday, the disposal announcement was not too surprising as management had previously said that it was searching for a new partner to replace AIA following AIA’s acquisition of ING’s Malaysian operations (ING has a tie up with Public Bank)………………………………………..Full Article: Source

Dubai Islamic Bank is issuing a perpetual bond to address its Basel II Tier 1 (13.9 per cent) and the amortisation schedule of existing Tier 2 bonds (five per cent, 20 per cent amortisation p/a until maturity.
The bank may buy back existing Tier 2 bonds from the Ministry of Finance – several UAE banks including NBAD, Emirates NBD, ADCB, RAKBANK and Union National Bank have been buying back Tier 2 debt. The perpetual bond should boost DIB’s Tier 1 ratio to 18.8 per cent, according to analysts at Arqaam Capital………………………………………..Full Article: Source

Dubai Islamic Bank (DIB), the United Arab Emirates biggest Sharia-compliant lender, may pay a profit rate of about 7 per cent on a perpetual Islamic bond it plans to sell, said two bankers familiar with the matter.
The profit rate per year is payable semi-annually in arrear until the first call date in 2019, said the bankers, asking not to be identified because the matter is private. The rate will be reset on the first call date and every six years thereafter to a new fixed rate, they said………………………………………..Full Article: Source

AirAsia X, Malaysia’s long-haul budget carrier, plans to sell its first Islamic bonds this year, joining Emirates Airlines in favouring sukuk over more costly loans. The company, which was started by millionaire Tony Fernandes who owns the UK’s Queens Park Rangers soccer club, may issue $160 million of the debt as soon as the second quarter, Chief Executive Officer Azran Osman Rani said in a March 6 interview.
Malaysian Airline System completed a sale of 5.3 billion ringgit ($1.7 billion) of the securities guaranteed by the finance ministry last month. Sharia-compliant bonds are well suited to the airline business given the long-term investments and income streams from passenger traffic, according to CIMB Group Holdings Bhd………………………………………..Full Article: Source

A combination of factors is making the ringgit the preferred currency for sukuk issuance as the East Asian and Gulf Cooperation Council (GCC) countries become more interdependent due to the pick-up in cross-border transactions.
Standard & Poor’s Rating Services analyst Paul-Henri Pruvost noted in a report that both regions had relatively strong economies seeking huge amounts of capital to fund new infrastructure, support economic development and entice more private-sector investment………………………………………..Full Article: Source

Nakheel issued a sukuk (Islamic bond) worth Dh120 million on Tuesday, the fourth tranche that forms part of the developer’s billion-dollar restructuring plan. The new sukuk issuance takes the total amount issued to Dh4.27 billion, the company said.
“We continue to successfully implement our revised business plan and to honour our commitment to the settlement of trade creditor claims,” a company spokesman said. In January, the developer issued an Islamic bond worth Dh121 million. The first tranche was issued in August 2011, part of the company’s $16 billion restructuring plan………………………………………..Full Article: Source

Saudi Binladin Group (SBG), one of the largest construction firms in the Kingdom, is currently meeting fixed income investors as it plans to issue a new local currency Islamic bond (sukuk), sources aware of the matter told Reuters.
Roadshows are due to take place this week and next, at which point the size and pricing of the deal would be determined, a banking source said, speaking on condition of anonymity as he was not authorized to speak to media. All-in pricing is likely to be around 2.5 percent, a second banking source said, giving a spread over the three-month Saudi interbank offered rate (Saibor) of around 150 basis points………………………………………..Full Article: Source

The new issuance of sukuk worldwide could top well above $100 billion again this year, Standard & Poor’s said its recent report “Investor Appetite Is Pushing Sukuk Into The Mainstream”, amid current investment spending and economic growth, along with its forecast of continued high oil prices and low bond yields.
In addition, jumbo issuance may pick up further, mainly on the back of huge infrastructure projects from sovereigns. Turkey, Qatar, and Malaysia issued more than $1 billion over the past two years. Sustained investment spending and ample domestic liquidity are likely to support sukuk issuance, especially in Malaysia, Saudi Arabia, Qatar, and the UAE………………………………………..Full Article: Source

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of Dubai International Financial Centre (DIFC), on Monday rang the bell for listing Dubai Electricity and Water Authority’s (Dewa’s) sukuk worth $1 billion on Nasdaq Dubai.
The successful issue followed an initiative launched recently by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, for transforming Dubai into a world hub for sukuk within his vision to establish the city as a capital of Islamic economy. ……………………………………….Full Article: Source

A strong performance from Turkey’s banks last year produced a significant rise in total assets and an increase in equity capital, generating impressive growth across the industry. Turkish banks also continued to strengthen their position on the international stage by further diversifying their services, with a number of financial institutions extending their reach into the growing Islamic financial services segment.
The Banking Regulation and Supervision Agency (Bankacılık Düzenleme ve Denetleme Kurumu, BDDK) announced on February 13 that the sector grew 12.6% in 2012. Total assets reached TL1.3bn ($0.72bn), driven largely by growth in the second half of the year, according to Mükim Öztekin, president of the BDDK………………………………………..Full Article: Source

With liquidity still an issue, small and mid-size upstream oil and gas companies continue to feel a disproportionate impact of the ongoing financing squeeze from the debt crisis and the uncertainty in the capital markets.
While lenders and debt investors continue to show a willingness to provide capital to larger oil and gas companies, the same cannot be said for small and mid-sized upstream companies, those with leaner operating cash flows and a smaller asset base. Compounding the effect of the crisis, Basel III regulations are forcing lenders to deleverage and recapitalize, which will continue to leave, for the foreseeable future, many small and mid-sized companies in need capital-starved………………………………………..Full Article: Source

The European Central Bank and the Malaysia-based Islamic Financial Services Board (IFSB) are conducting a joint study on policies affecting Islamic finance in Europe, the IFSB’s top official told Reuters.
“We are doing a joint study with Europe’s central bank which brings together European scholars and regulators to examine a broad set of policy and regulatory issues in relation to Islamic finance in Europe,” said IFSB secretary-general Jaseem Ahmed. The IFSB is one of the main bodies setting standards globally for Islamic finance………………………………………..Full Article: Source

The United Kingdom has established a task force on Islamic finance in an effort to “cement London’s status as the western hub” for the industry, as competition grows among financial centres to attract Sharia-compliant business.
The move is intended to showcase “the UK as the preferred choice for the Muslim world to invest in and do business with”, the British government said in a statement. The measure comes within two months of an announcement by Dubai’s Government that the emirate would seek to refashion itself as a global “capital” of the Islamic economy, with a focus on halal food, pharmaceuticals and cosmetics, alongside charitable giving and dispute resolution………………………………………..Full Article: Source

Professor Dr Mahmood Ahmed Bodla, Director, COMSATS Institute of Information Technology, Lahore Campus said that COMSATS is planning to establish Center for excellence in Islamic Finance. The purpose behind the establishment of this Center is to train skilled manpower for Islamic banking industry.
Bodla was talking to media on the second day of the “global forum on Islamic Finance: new realities and new challenges” organised by COMSATS Institute of Information Technology (CIIT) in collaboration with First Global Forum on Islamic Finance (GFIF) and Lancaster University UK. Former Governor State Bank of Pakistan Dr Ishrat Hussain chaired the session on Islamic finance and socio-economic development………………………………………..Full Article: Source

The Islamic Development Bank and the Ecobank have allocated €377 million to Iran’s water and wastewater projects, IRNA quoted Iranian water and wastewater company official Hossein Bonakdari as saying.
The IDB and the Ecobank allocated €342 million and €35 million, respectively, he noted. He added that 8.75 trillion rials (about $714 million) worth of bonds were issued and a major portion of which were sold to finance water supply projects………………………………………..Full Article: Source