International law firm Freshfields Bruckhaus Deringer advised International Islamic Liquidity Management Corporation (IILM) on establishing its inaugural $2 billion short-term Sukuk Programme.
The global programme was set up to create a global cross-border market for Islamic financial instruments and to strengthen the liquidity management of institutions that offer Islamic financial services. The programme will be backed by sovereign, sovereign-linked and supranational Sukuk assets and issue short-term Shari’ah-compliant certificates. The programme is rated by Standard & Poor’s Rating Services (S&P)………………………………………..Full Article: Source

Prudential BSN Takaful Berhad (PruBSN) has appointed as a panel takaful provider of Bahagian Pinjaman Perumahan (BPP). PruBSN was appointed as the panel takaful operator on 29 July 2010. The launch ceremony was graced by the Deputy Finance Minister, YB Datuk Dr. Awang Adek Hussein; Deputy Secretary of BPP Perbendaharaan Malaysia, Dr. Chen Chaw Min; Chairman of PruBSN, YBhg Datuk Adinan Maning and Chief Executive Officer of PruBSN, Encik Azim Mithani.

Representatives from BPP Perbendaharaan Malaysia and PruBSN were also present to witness the official appointment. Encik Azim Mithani, in his speech said, “We are delighted to be given this opportunity to serve the government sector. The Takaful Panelship with BPP represents a new and exciting prospect for PruBSN. We are exceptionally pleased that this is happening in the year when we are celebrating our five years of success in the takaful market.”
(Press Release)

From Gulf-daily-news.com: The Central Bank of Bahrain (CBB) has authorised formation and marketing of the Hyperion Australian Equity Islamic Fund, the first Sharia-compliant offshore fund comprised of the country’s stocks.
Investment manager for the fund is Hyperion Asset Management, a Brisbane-based, growth-style manager whose award-winning core investment team has worked together since 1997……………………………………….Full Article: Source

Amiri Capital LLP, the London-based Shariah-compliant alternative investment management group, is finally launching the Amiri Equity Alternative Strategies (AEAS) fund. It was put on hold when the fund’s initial broker, Lehman Brothers, filed for bankruptcy in September last year. It is now reportedly been launched in cooperation with Newedge.

AEAS is Amiri’s first fund. Coronation, the London-based multi-manager, will oversee the AEAS fund, which plan to employ around ten underlying managers.

Bindesh Shah, one of Amiri’s founders, told Opalesque last year that the fund had the following unique aspects: (1) it is Shariah compliant, (2) it is operated within a single funds structure that has managed accounts (Amiri asks investment managers to run portfolios on a Shariah basis,) (3) it uses a screening methodology.

The AEAS fund has been certified as Shariah-compliant by a five-member Shariah Supervisory Committee chaired by Sheikh Hussain Hassan. Islamic law prohibits conventional shorting, hence the fund will use a promissory note-based contract system that will replicate the economic effects of shorting without compromising Islamic principles. This methodology works at the individual stock level and will be implemented by Newedge.

“The shorting system is such that prime brokers promise (to each other) to deliver the stock on a future date but at a price governed by a formula which we set today,” Bindesh Shah told Opalesque. “In doing that we achieve the exact economics of conventional shorting.”

The trick is to devise a new structure that retains the economics of shorting but takes away these issues, while maintaining the commercial viability of the fund, wrote Mr. Shah in a previous article. Not only must the managers be able to work within the structure, but the prime brokers must be able to implement it. Most of the legal documentation in the conventional hedge fund sector has been developed over the past 20 years, and much of it is unacceptable under Islamic law. This means a great deal of work with the prime brokers, a reengineering of their systems and the rewriting of legal documentation.

“We work very close with Coronation by which is a long standing FoFs house. There aren’t many conventional Shariah funds to choose from. Se we identify managers we like and we work with them to develop a Shariah compliant managed account. To find conventional managers who don’t have any experience of Shariah funds, Coronation does the usual due diligence work and we talk to them. Then we take care of the structures and the rating. We in effect put these managers onto a Shariah platform.”

In addition, Amiri has developed a proprietary system to screen equities for inclusion in the funds. The system, S3, scrutinises over 36,000 stocks worldwide to determine their suitability for inclusion in an Islamic fund.

The AEAS fund is targeting around $1bn in assets from Middle Eastern and Asian institutional investors.

As of Q3-08, the AEAS fund’s pro forma track record resulted in returns averaging circa 13-16% p.a. over a period of 5 years with downside protection and low levels of volatility.

Amiri Capital LLP was founded in early 2006 by Bindesh Shah and Richard Ellis and is backed by Olivant.
Article Source: http://www.amiricapital.com/

From Komfie Manalo, Opalesque Asia: A report by Celent, a Boston-based financial research and consulting firm, sees fast growth in the Islamic banking industry in the Asia-Pacific region, second only with the phase in the Middle East.

The report adds assets of Islamic banks in the Asia-Pacific region is now estimated to reach $450bln, representing 60% of the total Islamic bank assets across the globe.

Key points of the report
The economic crunch facing Western markets has resulted in emerging countries in the Asia-Pacific region that investors find more attractive. The growing Muslim population that expands at a rate of 2 percent annually, are mostly potential clients for these Islamic banks. Muslims now number around 1.7bln or 28.4% of the global population. At least 1 billion of them are in the Asia-Pacific region making it the next big market for Islamic banks.

Global assets of Islamic banks is estimated between $700 billion and $750 billion. Notably, Islamic banks are enjoying a faster growth rate and profit margins compared with their conventional counterparts. However, since the Islamic banking sector is a relatively new concept, the industry is facing challenges, particularly in areas of technology adoption, lack of Islamic banking experts, differences in tax treatment of various Islamic banking products and integration with global financial standards.

At least 35% of the top 100 Islamic banks are based in the Asia-Pacific region. In 2007, the top Islamic banks posted a growth rate of 26.7% with its assets totaling $350 billion, outrunning the 19.7% growth rate achieved by the top conventional banks in the same period.

Iran owns 52% of the global Islamic banking assets making it the biggest market of Islamic bank. The region also has the world’s most developed and mature market, complying with the Shari’ah principles. Iran’s banking sector has grown at a CAGR of 30% and in 2007, posted assets reaching $376 billion. It is 3.1 times bigger than the next big market, Saudi Arabia, with Islamic banking assets of $120.7% Islamic banking assets.

Analysts see Malaysia as the next big market for Islamic banks, with Islamic banking assets estimated at $43 billion at the end of 2007, and with 12.8% penetration, although many sees this level as limited. The Islamic banking industry in Malaysia is seen to be in a growth-to-mature phase. Bank Negara Malaysia is credited for developing the market in the region.

Several global financial banks, including HSBC and Deutsche Bank has signified intend to enter the local Islamic banking system, although currently, Malaysia only as 12 pure play Islamic banks, with foreign banks offering Islamic banking products.

Indonesia, the largest Muslim-populated country in the world, Pakistan and Bangladesh, are also seen as a potential market to push Islamic banking growth. Although Islamic banking in Pakistan only comprises less than 4% of the entire banking system, the State Bank of Pakistan is trying to encourage growth of the industry through more participation. Only six Islamic banks are open in Pakistan.

The industry also sees a lot of growth potential in Bangladesh, a heavily-Muslim populated country with very low Islamic banking penetration. The central bank is currently drafting Islamic banking policies and guidelines in the absence of existing ones in an effort to improve the sector. These set of policies are seen to be key in the development of Islamic banking in the region.

There are 27 Islamic banks in Indonesia making it host to the largest number of Islamic banks in the region. Although the industry’s assets is only $3.5 billion or 1.6% of the total banking system. The reason given is the lack of proper regulatory framework and the limited geographic coverage of the country. There is also lack of awareness among the population so the growth of the Islamic banking sector is stagnated. Islamic banking in Indonesia has grown at a CAGR of 42% between 2003 and 2007.

With an estimated 153 million Muslim population, India holds a very promising growth for Islamic banking. The Islamic banking industry in India is currently operating as non-banking financial corporations. A decision by the Reserve Bank of India to allow Islamic banking in the country, is seen to boost the industry.

The tiny but rich country of Brunei is also showing great growth promise for Islamic banks. Brunei has attracted global financial institutions that offer Islamic banking products and services.

Although small in size in terms of assets, there is also potential for Islamic banks in the Philippines, Singapore and Thailand where the Muslim population comprise less than 20 percent of the populace. Source

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Article Source: http://www.opalesque.com/index.php?act=registration

From Zawya.com: The Macquarie Group (Macquarie) and Abu Dhabi Commercial Bank (ADCB) announced today the launch of a fund that is expected to raise up to US$1 billion to invest in infrastructure opportunities in the Gulf Cooperation Council (GCC) as well as the broader Middle East and North Africa (MENA) region.

An initial cornerstone investment of US$500m has been made by Al Hail Holding, a prominent UAE-based investor and developer, and the fund - ADCB Macquarie Infrastructure Fund (AMIF) - is now welcoming other regional investors. …. Full Article: Source

Islamic finance has become a major global industry, with over 300 institutions currently involved in both Muslim countries and international markets. Globally, Islamic banking assets are estimated between US$600 billion and $650 billion and have registered a growth rate of 10-15% per year over the last decade, according to a new report, Islamic Banking in the Middle East and North Africa from Celent, a Boston-based financial research and consulting firm.

The Middle East is currently one of the most developed Islamic banking markets, with more than US$255.8 billion in Islamic banking assets. Over the last decade with the expansion of economies, this region has seen exceptional growth, both in terms of financial institutions providing Islamic products and services and assets under management. Furthermore, Islamic banking assets have grown more rapidly than conventional assets in the Middle East region. However, Islamic banking is not equally developed across all countries…… Full Press Release: Source

Earlier in 2008, Matthias Knab was chairing a three day conference in Dubai which was attended by bank CEO, CIO, treasurers, institutional investors and Arab billionaires. Over 50% of the delegates were looking for Islam-compliant investments.

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