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Islamic Finance Briefing - Category | Emerging Trends more

Cross-border tax on Islamic finance prohibitively high

Posted on 21 February 2013 by Laxman  |  Email|Print

A new study into the cross border tax burden on Islamic finance transactions in the Middle East and North Africa region, relative to the tax burden placed on conventional finance, underscores the importance of regional tax legislative changes to equalize the tax treatment of shariah-compliant financial options.
The study reviewed the tax treatment of four common Islamic finance structures, commodity murabaha, sukuk, salaam and istisna in eight MENA region countries: Egypt, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Turkey and also in the Qatar Financial Centre………………………………….Full Article: Source

Tapping the Islamic finance industry’s growth potential in Bangladesh

Posted on 21 February 2013 by Laxman  |  Email|Print

The growth potential for Bangladesh’s Islamic finance industry is enormous, and coupled with a steadily growing economy and financial reforms. With support from the Bangladesh government, financial regulators and the central bank, Bangladesh can be poised to become the next hub for Islamic finance in Asia and on a global scale, the world Islamic scholars opined in the International Islamic Finance Roadshow held recently in Bangladesh.
In the roadshow, the panelists discussed on various issues on Islamic Finance such as Challenges & Opportunities in Bangladesh’s Islamic Finance Sector, Possibilities and Opportunities for Diversification of Islamic Products, Facilitating Shariah Compliant Investment Flows in Bangladesh and South Asia through innovative products, structures and channels, crucial steps to take Bangladesh’s Islamic Finance to the Next Level etc………………………………….Full Article: Source

Grubbing the Islamic banking industry of Pakistan

Posted on 21 February 2013 by Laxman  |  Email|Print

The long history of Islamic banking has gotten remarkable embellishments in the recent years. With the industry touting a global size of $1.35 trillion in 2012; the growth engines are yet to gun, with experts predicting the industry to attain a size of $4 trillion by 2015.
Islamic banking assets have grown by 33 percent since 2010 - twice as fast as the conventional banking assets and in the wake of widespread developments ongoing in the Islamic banking industry (IBI), the gap between the conventional banking and its ethical spin - Islamic banking is narrowing substantially, with every passing moment………………………………….Full Article: Source

Oman: Preferred destination for Sukuk

Posted on 21 February 2013 by Laxman  |  Email|Print

As per a study recently conducted by Thompson Reuters, which included all issuers and investors of Islamic Sukuk, the Sultanate of Oman came No. 1 as a preferred destination for attracting investments and issuance of Sukuk, ahead of countries, such as Egypt, Kazakhstan, Tunisia and Libya.
The Capital Market Authority (CMA) will host next Sunday “Oman Position in Islamic Banking Forum’ organized by Thompson Reuters. The organization of this forum comes within the Sultanate’s interest in the sector after the recent introduction of Islamic banking and allowing the establishment of Islamic banks………………………………….Full Article: Source

Malaysia: Repositioning the sukuk

Posted on 20 February 2013 by Laxman  |  Email|Print

The new source of power is not money in the hands of a few, but information in the hands of many, says John Naisbitt, best-selling author and futurist. But, what do we know about sukuk? It’s often described as a bond, but it’s not a conventional bond. It is often described with pride and a sense of accomplishment for its issuance (in the case of Malaysia) and the London Stock Exchange for its listing.
The sukuk is the foundation of investment vehicles like today’s sukuk funds, and, hopefully, tomorrow’s sukuk exchange-traded funds. It has encountered defaults, bankruptcies, and restructurings. It has become the alter ego of debt capital market bias, Islamic finance…………………………………….Full Article: Source

Hong Kong: Islamic finance getting there little by little

Posted on 20 February 2013 by Laxman  |  Email|Print

With the platform for an Islamic finance offering in Hong Kong almost complete, what are the prospects for the growth of the Islamic finance sector in Hong Kong? Bryant Edwards, Craig Nethercott and Nomaan Raja ask whether the region has the capacity to foster an Islamic finance sector.
The Arabic exclamation ‘shwaya – shwaya’ (or ‘little by little’) comes to mind when one reviews the progress of Hong Kong towards establishing itself as an Islamic finance hub in Asia. Since 2007 Hong Kong has been focused on the need to develop a fiscal environment to encourage and sustain an Islamic finance offering. Meanwhile, the global sukuk market has continued its rapid growth with the value of sukuk issues in 2012 said to have reached over US$121 billion…………………………………….Full Article: Source

Islamic finance is a supply-driven market

Posted on 20 February 2013 by Laxman  |  Email|Print

Despite the claims by proponents of Islamic finance that there is a “pent-up demand” for Islamic financial products, in reality there seems to be a growing disinterest in such products. Regardless, the proponents continue to argue for adjusting the conventional secular financial system to sharia, regardless the market’s dwindling interest.
The decision by HSBC late in 2012 to significantly downsize its worldwide Islamic banking operations serves to illustrate the point. According to Reuters , HSBC made the decision despite being one of the pioneers in developing Islamic finance within the international banking sector. In 2012, HSBC was the first Western bank to issue an Islamic bond, when Its Middle East unit sold a US $500 million sukuk…………………………………….Full Article: Source

Islamic banks ‘should focus more on quality growth’

Posted on 19 February 2013 by Laxman  |  Email|Print

Mergers and acquisitions, quality of talents and embracing technology are key areas for Islamic banks to move forward, in addition to focusing more on quality rather than percentage of growth.
“There are 13 banks that are big with more than US$1 billion [RM3.09 billion] each in equity whereas the rest of the industry is small, lacking scale,” Ernst & Young (E&Y) partner, Islamic banking excellence centre, Ashar Nazim told The Malaysian Reserve last week…………………………………….Full Article: Source

Why did the Vatican suggest Islamic finance?

Posted on 18 February 2013 by Laxman  |  Email|Print

Just after the 2008 global financial crisis hit, the Vatican suggested using the Islamic finance and banking system as a solution. So then what does Islamic finance offer? To answer this question we had better first lend an ear to the saying of the Prophet Muhammad: “You should sell gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, like for like, equal for equal, and hand-to-hand; if the classes differ, then you may sell as you wish, provided that the exchange is hand-to-hand.”
With this concise saying, the Prophet Muhammad expresses exactly 80 kinds of exchanges, which are the exchange of a commodity for another commodity or a currency for another currency on credit or on the spot and for matching or different quantities of goods. According to that Prophetic saying, out of these 80 kinds of exchanges, 46 sales bear a religiously forbidden “interest.”……………………………………….Full Article: Source

Australia eyes Islamic funding

Posted on 15 February 2013 by Laxman  |  Email|Print

Australian businesses and fund managers will find accessing capital from countries within the Gulf Cooperation Council (GCC) easier with the establishment of global Islamic finance experts Amanie Advisors in Australia.
With enormous multi-billion dollar pools of capital forming from within the GCC’s combined economies of Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE, there is expected activity of approximately $1.5 trillion in 2013, this representing a huge opportunity for Australian businesses and fund managers to grow………………………………………..Full Article: Source

Do we need better Islamic finance oversight?

Posted on 14 February 2013 by Laxman  |  Email|Print

The statement by the Capital Market Authority (CMA) appeared to be in response to concern about uneven self-regulation by the institutions.
Islamic financial institutions in Kuwait should hire enough personnel to ensure they comply with sharia standards, and work with the personnel in a transparent way, the country’s market watchdog said on Tuesday. The statement by the Capital Market Authority (CMA) appeared to be in response to concern about uneven self-regulation by the institutions………………………………………..Full Article: Source

Sukuk bond market: Mixed signals

Posted on 14 February 2013 by Laxman  |  Email|Print

Last year was supposed to represent the pivotal moment in which sukuk debt – Islamic versions of bonds – came into their own as a deep, mature and liquid source of funding. Issuance data from January suggest the jury is still out. First, the case for.
Last year saw a record $144bn of sukuk issuance, according to Islamic Finance Information Service (Ifis). More than that, the market featured renewed reach, strength and innovation: sovereign issues came from ever further afield, notably Turkey; headline deals were bigger than ever before, particularly Qatar’s record $4bn issuance;……………………………………….Full Article: Source

‘Past negligence’ saddles Islamic Bank

Posted on 13 February 2013 by Laxman  |  Email|Print

The explosion of bad debt at the state-owned Islamic Bank of Thailand was largely caused by grossly negligent lending by former executives, according to its new president. Meanwhile, former finance minister Chalongphob Sussangkarn has suggested that the Finance Ministry overhaul the oversight of state banks to improve governance and prudent lending practices.
Non-performing loans (NPLs) at IBank currently amount to Bt39 billion, or about 30 per cent of outstanding loans, its president Thanin Angsurarangsit said………………………………………..Full Article: Source

HSBC says Gulf surge to drive 2013 Sukuk record: Islamic Finance

Posted on 12 February 2013 by Laxman  |  Email|Print

Global Islamic bond sales are set to surpass the 2012 record as Persian Gulf issuers take the lead to tap borrowing costs that tumbled in the past year, according to HSBC Holdings Plc, last year’s top sukuk underwriter.
Sales in the six-nation Gulf Cooperation Council will surge to between $30 billion and $35 billion in 2013, Mohammed Dawood, Dubai-based managing director of debt capital markets at HSBC Amanah, said in an interview. That’s up as much as 64 percent from last year. The government of Dubai kicked off sovereign sukuk sales last month with $750 million of 10-year Islamic notes after its borrowing costs dropped 40 percent………………………………………..Full Article: Source

Oman: Islamic banking to witness robust growth this year

Posted on 12 February 2013 by Laxman  |  Email|Print

Islamic banking services in the Sultanate will witness robust growth during 2013, says Ahmed al Musalmi, Deputy CEO, National Bank of Oman. The introduction of Islamic banking has certainly increased market dynamics. NBO has unveiled “Muzn” brand of its Islamic banking window with the plan to allocate RO10m capital to this.
NBO also plans to raise RO 25m through a sub-debt of which RO15m has already been taken. The two Islamic banks (Bank Nizwa and Alizz Islamic) have raised a total of RO150m through an IPO with the aggregate paid up capital of RO 250m………………………………………..Full Article: Source

Pakistan: Campaign for promotion of Islamic finance

Posted on 12 February 2013 by Laxman  |  Email|Print

The Deputy Governor, State Bank of Pakistan (SBP), Kazi Abdul Muktadir has said that a comprehensive media campaign for promoting inherent strengths of Islamic finance and clearing common apprehensions, confusions and misconceptions about Islamic banking and finance is being launched shortly. ‘This campaign is to be led by the Islamic banking industry with the support of SBP’, he added.
In his opening remarks while chairing a meeting for initiating the media awareness campaign to promote Islamic banking in Pakistan at SBP, Karachi today, he said that preliminary findings of SBP comprehensive country-wide survey on “Knowledge, Attitude & Practices of Islamic Banking in Pakistan” suggest the dire need for initiating mass awareness campaign to increase public trust and confidence in Islamic banking………………………………………..Full Article: Source

Inconsistent regulation hurting Gulf’s Takaful industry

Posted on 11 February 2013 by Laxman  |  Email|Print

Inconsistent regulation across the Gulf’s takaful (Islamic insurance) industry is hurting profit margins and credit ratings, while leaving the door open to regulatory arbitrage, according to global insurance rating agency A.M. Best.
New rules in Oman and updated ones in Bahrain are expected this year, but lack of coordination among regulators is making life difficult for takaful operators, said Vasilis Katsipis, Dubai-based general manager for market development at the firm………………………………………..Full Article: Source

UAE ‘has what it takes’ to be Islamic finance hub

Posted on 11 February 2013 by Laxman  |  Email|Print

The UAE has what it takes to become a hub for Islamic finance, according to Sheikh Mohammed bin Rashid Al Maktoum, the country’s vice president and prime minister. Sheikh Mohammed, also ruler of Dubai, made his comments at a workshop organised by the higher committee for development of Islamic economy sector to follow up progress on action plans and proposed initiatives.
He said in comments published by news agency WAM: “We have a clear vision for this vital sector and we want it to contribute significantly to our national economy and ton help bolster our position as the world’s capital for Islamic economy.”……………………………………….Full Article: Source

Arab world: Underfunded renaissance

Posted on 11 February 2013 by Laxman  |  Email|Print

Inexperienced Islamist leaders in Egypt and Tunisia are struggling to manage economic grievances. For all the pledges of change, however, the Islamists in the two countries where they are now in power – Egypt and Tunisia – have yet to prove they can deliver. They are discovering that governing is much trickier than fighting authoritarianism, not least when it comes to the economy.
Theories of what Islam can offer in the economic field are also transpiring to be rather limited in practice……………………………………….Full Article: Source

Over 70 pct of Belgium Muslims interested in Islamic finance

Posted on 07 February 2013 by Laxman  |  Email|Print

Over 70 per cent of Belgian Muslims express strong interest in Islamic finance, revealed Belgium’s first independent market study. Key findings published this week from Belgium’s first independent market study, Islamic finance in Belgium – sizing the retail market points to a very strong interest from local Muslim consumers in Islamic finance products and services.
Over 70 per cent of survey respondents interviewed for the study have indicated their likelihood to take up such services if local banks were to begin offering them………………………………………..Full Article: Source

Location, rules may aid Dubai’s Islamic finance push

Posted on 07 February 2013 by Laxman  |  Email|Print

Dubai’s strengths as a vibrant trading economy could help its push into Islamic finance, which has been plagued by doctrinal disputes and uncertainty over regulation.
If Dubai has its way, the world’s biggest Islamic bond issues will be designed under its rules and traded in its market. Muslims around the world will use Dubai’s standards to prepare food, and take disputes to Dubai for Islamic arbitration………………………………………..Full Article: Source

Bank Muscat set to consolidate leading position, says its CE

Posted on 07 February 2013 by Laxman  |  Email|Print

Chief Executive of Bank Muscat AbdulRazak Ali Issa said that “2013 will be experimental year for Islamic finance in Oman”. He was addressing a gathering of shareholders, investors, the media and analysts from brokerage and investment companies at the bank’s investor meet at Muscat Securities Market (MSM) to discuss the bank’s 2012 results and business prospectus for the year 2013.
AbdulRazak Ali Issa said: “Amid the slow global economic recovery, the key business lines of the bank recorded healthy performance on expected lines in 2012. Following 31 years of successful growth, the bank is poised to further consolidate its position”………………………………………..Full Article: Source

Islamic finance model global demand

Posted on 06 February 2013 by Laxman  |  Email|Print

It had been reported that The Islamic financial system has grown tremendously over the last 40 years, says Dr Hatim El Tahir, Director, Islamic Finance Group, for Deloitte and Touche.
“The total size of the Islamic insurance industry is US$1.3 trillion which is still small compared to the international financial market. In 1973 it was only US1$ billion,” he said on Thursday night during his contribution to a seminar on Islamic Banking hosted by the Agricultural Development Bank (ADB) at the National Academy Performing Arts (NAPA) in Port-of-Spain………………………………………..Full Article: Source

Australian firms eye Islamic funding from GCC

Posted on 06 February 2013 by Laxman  |  Email|Print

Australian businesses and fund managers will find accessing capital from countries within the Gulf Cooperation Council (GCC) easier with the establishment of global Islamic finance experts Amanie Advisors in Australia.
With enormous multi-billion dollar pools of capital forming from within the GCC’s combined economies of Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE, there is expected activity of approximately $1.5 trillion in 2013, this representing a huge opportunity for Australian businesses and fund managers to grow………………………………………..Full Article: Source

Sukuks integrated into pension system

Posted on 05 February 2013 by Laxman  |  Email|Print

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

Malaysia: Repositioning the sukuk

Posted on 04 February 2013 by Laxman  |  Email|Print

The new source of power is not money in the hands of a few, but information in the hands of many, says John Naisbitt, best-selling author and futurist. But, what do we know about sukuk? It’s often described as a bond, but it’s not a conventional bond. It is often described with pride and a sense of accomplishment for its issuance (in the case of Malaysia) and the London Stock Exchange for its listing.
The sukuk is the foundation of investment vehicles like today’s sukuk funds, and, hopefully, tomorrow’s sukuk exchange-traded funds. It has encountered defaults, bankruptcies, and restructurings. It has become the alter ego of debt capital market bias, Islamic finance…………………………………..Full Article: Source

Islamic financing holds promises in Yemen

Posted on 04 February 2013 by Laxman  |  Email|Print

Economists in Yemen have for several years now encouraged the state to move away from its dependency on oil and gas revenues to explore other avenues which would generate national growth and sustain economic development.
Many foresee that the financial sector and more particularly, the Islamic finance sector would prove a fructuous venture for a country such as Yemen where tradition and Islamic values are more prominent. Nathan Giliano, a professor of Economics in Vancouver, Canada explained that over the past few years - since the world economy so famously land-slided on Wall Street slope - Islamic financial products had grown in popularity across the Arab world and its emerging economies…………………………………..Full Article: Source

Islamic finance model growing globally

Posted on 04 February 2013 by Laxman  |  Email|Print

The Islamic financial system has grown tremendously over the last 40 years, says Dr Hatim El Tahir, Director, Islamic Finance Group, for Deloitte and Touche. “The total size of the Islamic insurance industry is US$1.3 trillion which is still small compared to the international financial market. In 1973 it was only US1$ billion,” he said on Thursday night during his contribution to a seminar on Islamic Banking hosted by the Agricultural Development Bank (ADB) at the National Academy Performing Arts (NAPA) in Port-of-Spain.
The seminar was attended by members of the local Muslim community as well as other stakeholders including PSA president Watson Duke…………………………………..Full Article: Source

Still springtime in North Africa? Interest in Islamic finance is rising

Posted on 04 February 2013 by Laxman  |  Email|Print

It may still be ‘too early’ to gauge the full impact of the events that led to regime change across much of the Arab world and are still being played out in Syria and elsewhere. It is, however, clear that one beneficiary is the Islamic finance sector. Unmet economic need was one of the key triggers for the protests. New governments in Tunisia, Libya and Egypt are now moving to embed Shari’ah-compliant finance into their economic systems.
For example, on 29 September 2012, plans were revealed in Tunisia to issue Sukuk early this year. Reuters reported Chadli Avari, Governor of the Banque Centrale de Tunisie, as saying “Tunisia will begin issuing Islamic bonds early next year … This is part of the draft budget for 2013.”………………………………….Full Article: Source

India: Give Islamic finance a chance

Posted on 01 February 2013 by Laxman  |  Email|Print

While India’s current legal framework on lending is interest-based, Islamic finance is founded on participatory finance that entails sharing of profit or loss. If the profit earned is less than expected cash flows, then a smaller profit pool is shared — a mechanism that can lower the cost of capital. The RBI governor recently said that laws have to be amended before one goes about allowing such products.
Advocates of Islamic finance think it’s no big deal and one need not go through the rigmarole of standing committees and parliamentary proceedings — if the central bank can use its powers to let commercial banks open a new window. Other countries, even a few not particularly sensitive to Islamic sensibilities, have gone ahead with it. That’s because they sensed that any leading financial centre should be open to various investment possibilities………………………………………..Full Article: Source

Oman rules may spur Islamic finance reforms

Posted on 01 February 2013 by Laxman  |  Email|Print

Oman’s new Islamic banking rules could encourage the development of a larger pool of Shariah scholars and ultimately help to raise operating standards for them around the world, according to bankers and scholars.
Last month, the sultanate’s central bank released an extensive Islamic banking rulebook which included provisions for Shariah scholars, such as fit-and-proper criteria and term limits on scholars’ appointment to Shariah boards, which decide whether products and activities obey Islamic principles………………………………………..Full Article: Source

Saudi industrial push to be fuelled by sukuk

Posted on 31 January 2013 by Laxman  |  Email|Print

Saudi Arabia’s massive industrialisation drive will increasingly rely on Islamic financing, said the treasurer of the country’s national oil company, as international banks are constrained from investing in projects in the region.
Saudi Aramco - the world’s largest oil company - has taken on many of the petrochemical and refining projects intended to diversify the national economy away from oil and provide jobs for Saudis. Satorp, a Saudi Aramco petrochemical joint venture with France’s Total, in 2011 launched a Sharia-compliant bond to fund the construction of a refinery………………………………………..Full Article: Source

Kingdom Holding in Islamic financing push

Posted on 31 January 2013 by Laxman  |  Email|Print

Kingdom Holding, the international investment firm of Saudi billionaire Prince Alwaleed bin Talal, has formed a sharia board of prominent scholars in order to raise more of its funding through Islamic finance.
The decision by one of the most prominent investment firms from the Gulf is likely to be seen as a boost to the Islamic finance industry, which obeys religious principles such as bans on interest payments and pure monetary speculation………………………………………..Full Article: Source

Oman: Higher demand to boost Islamic banking growth

Posted on 30 January 2013 by Laxman  |  Email|Print

The Islamic banking in Oman is demand-led and is expected to grow fast on the back of higher demand and positive sentiments, according to Richard Thomas, chief executive officer of Gatehouse Bank, a Sharia-compliant investment bank based in London.
“Oman’s foray into Islamic banking is based on strong fundamentals and sound regulations. The government is extremely proactive and keen to utilise unproductive money into fruitful enterprises. They have a very mature outlook on Islamic banking, and that is music to the ears,” he said. ……………………………………….Full Article: Source

Egypt: A reform package for the Islamic banking and finance sector proposed for the new year

Posted on 30 January 2013 by Laxman  |  Email|Print

A number of Islamic banks and financial institutions are awaiting the passage of a new legislative reform package to regulate the sector in the coming year. The goal of the package is to create an environment conducive for Islamic banks to operate by making available the necessary tools for growth without contradicting the values and practices of Islamic banking.
One such reform would include amendments to Egypt’s current law, which does not distinguish between Islamist and non-Islamist banking institutions. This would force non-Islamist banks to comply by the same standards of Islamist ones………………………………………..Full Article: Source

Japanese get into Islamic financing

Posted on 29 January 2013 by Laxman  |  Email|Print

The rise of Asian ship finance gets ever more sophisticated in its offerings. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking have organized a syndicated loan of $184m for Brunei Gas Carriers (BGC). The loan complies with Sharia law, which prohibits the charging of interest. The loan is being paid to a special-purpose company that will buy LNG ships and lease them to BGC. Instead of interest, the Japanese banks will receive charter fees.
This is the second loan the two banks have made to BGC following a $170m syndicated loan from a year ago. The Nikkei newspaper reports that Bank of Tokyo-Mitsubishi UFJ has set up a section specializing in Islamic financing at a local unit in Malaysia………………………………………..Full Article: Source

Islamic financial institutions boosting Shariah investments

Posted on 29 January 2013 by Laxman  |  Email|Print

Ernst and Young (E&Y) said that Islamic financial institutions in Southeast Asia and the Middle East and Africa (MEA) region are boosting their investments that are carried out in line with Shari’ah, as these economies have surpassed the global economic expansion since the start of the new millennium, and developed their regulatory system to stimulate Islamic banking.
However, financial institutions and banks in the US and Europe have trimmed their exposure in banking in line with Islamic law, due to the financial crisis that forced them to return to their roots by lowering their exposure in foreign fields, including Islamic finance, and by limiting their investments in emerging markets………………………………………..Full Article: Source

Islamic finance success offsetting global gloom

Posted on 29 January 2013 by Laxman  |  Email|Print

The private sector in the Kingdom has been spurred into action, giving a major boost particularly to real estate, construction, health care, education, financial services and a host of other activities, thus offsetting some of the global economic gloom, according to Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB) Group.
“However, financing for small and medium enterprises (SMEs) is not yet developed in most of the member-countries,” Al-Aboodi said………………………………………..Full Article: Source

Shariah-compliant schemes to provide further aid to Malaysia’s SME growth

Posted on 29 January 2013 by Laxman  |  Email|Print

Shariah-compliant small and medium-sized enterprises (SMEs) Financing Scheme (SSFS) and Commercialisation Innovation Fund (CIF) are set to provide further aid to the growing SME sector in Malaysia.
To note, in an effort to provide further support to SMEs, the Malaysian government in its 2012 budget, allocated RM2 billion for the establishment of SSFS and RM500 million for CIF. According to Oxford Business Group (OBG) in its Malaysia Report 2012, SMEs represent a significant part of the economy, a fact acknowledged early on by the government………………………………………..Full Article: Source

Brunei: Islamic banking earmarked for further growth

Posted on 28 January 2013 by Laxman  |  Email|Print

The Islamic banking seg­ment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances. Having moved early to estab­lish shariah-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic bank­ing centre.
However, the industry will need to address a number of chal­lenges, led by a shortage of skilled workers, if it is to fully support the segment’s development. In mid-October, Standard Chartered Bank Brunei (SCB) said it was mulling plans to intro­duce Islamic banking products this year to meet increased de­mand for sharia-compliant bank­ing services in the Sultanate………………………………………..Full Article: Source

Islamic finance success offsetting global gloom

Posted on 28 January 2013 by Laxman  |  Email|Print

The private sector in the Kingdom has been spurred into action, giving a major boost particularly to real estate, construction, health care, education, financial services and a host of other activities, thus offsetting some of the global economic gloom, according to Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB) Group
“However, financing for small and medium enterprises (SMEs) is not yet developed in most of the member-countries,” Al-Aboodi told Khalil Hanware of Arab News in an exclusive interview. “Even in GCC countries, there is lack of access to financing for SMEs,” Al-Aboodi pointed out………………………………………..Full Article: Source

How Islamic finance and a more ethical capitalism go hand-in-hand

Posted on 25 January 2013 by Laxman  |  Email|Print

The Qur’an’s teachings around business chime with the objectives of the worldwide social enterprise movement. Though wealth creation is the primary goal taught by top businessmen, social impact is considered to be a more fulfilling outcome for others.
Money is not timeless, but what you do with that money can be. The light you instil in the uneducated, the medicine you provide to the ill, or the food and water you provide to the malnourished is far more enduring than the car you drive or the house you buy. Most advocates of social entrepreneurship believe that creating a business with a social impact leaves much more than just a humble footprint behind………………………………………..Full Article: Source

Brunei Darussalam: Islamic banking earmarked for further growth

Posted on 25 January 2013 by Laxman  |  Email|Print

The Islamic banking segment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances. Having moved early to establish sharia-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic banking centre.
However, the industry will need to address a number of challenges, led by a shortage of skilled workers, if it is to fully support the segment’s development………………………………………..Full Article: Source

Brunei: Islamic banking set for further growth

Posted on 23 January 2013 by Laxman  |  Email|Print

The Islamic banking segment strengthened its position within Brunei Darussalam’s financial services industry last year on the back of rising demand that led to the launch of a new bank and major bond issuances.
Having moved early to establish Syariah-compliant services, the Sultanate is now well placed to carve out a niche for itself as an international Islamic banking centre. However, the industry will need to address a number of challenges, led by a shortage of skilled workers, if it is to fully support the segment’s development………………………………………..Full Article: Source

More Islamic windows on anvil

Posted on 23 January 2013 by Laxman  |  Email|Print

Capitalising on the modern business mantra of Islamic Banking, more and more banks are coming up with their Islamic windows, according to the Central Bank of Oman (CBO). However, the number of full-fledged Islamic banking bodies will be confined to just two key players, as is said by Hamood Sangour al Zadjali, Executive President of the CBO.
“We have given permission to two full-fledged banks to operate in the country, which are Bank Nizwa and Alizz Islamic Bank. The earlier one has already begun operations while the latter is in the process of opening their offices in the country.”……………………………………….Full Article: Source

Robust growth for Islamic banking

Posted on 23 January 2013 by Laxman  |  Email|Print

Ernst & Young’s World Islamic Banking Competitiveness Report 2013 notes that global Islamic banking assets held by commercial banks are set to cross US$1.8 trillion this year, up from the US$1.55 trillion in 2012.This is significantly higher than some of the earlier industry estimates.
Globally, the Islamic banking industry continues to record robust growth, with the leading top 20 Islamic banks registering a growth of 16% in the last three years and Saudi Arabia emerging as the largest international market for Islamic assets (excluding Iran’s banking industry, which has major limitations on international participants)………………………………………..Full Article: Source

Islamic banking on uptrend despite challenges

Posted on 22 January 2013 by Laxman  |  Email|Print

Challenges or not, Islamic banking is set to continue its growth momentum this year. Underpinning this is the planned conversion of development financial institutions (DFIs) into full-fledged Islamic banks, a growing demand for Islamic finance, a strong sukuk (Islamic bond) market and anticipated mergers among Islamic banks.
Industry observers and players reckoned that these factors would spur the growth of the industry and hot up competition among the players, both existing and new………………………………………..Full Article: Source

Gulf bonds to weather jump in US treasury yields

Posted on 21 January 2013 by Laxman  |  Email|Print

A jump in US Treasury yields in the last few weeks has raised a grim possibility for emerging market bond investors: a sustained back-up in US yields that could sink the value of bond holdings. But compared to many other places in the world, the Gulf looks well-placed to weather such a storm.
Because it has a big local investor base of cash-rich financial institutions, the region may quickly absorb any mass exit by foreign investors from its bonds. And relatively high yield levels, especially for lower-rated bonds, give countries in the six-member Gulf Co-operation Council some protection………………………………………..Full Article: Source

Malaysia: Islamic banking on uptrend and continues to grow despite challenges

Posted on 21 January 2013 by Laxman  |  Email|Print

Challenges or not, Islamic banking is set to continue its growth momentum this year. Underpinning this is the planned conversion of development financial institutions (DFIs) into full-fledged Islamic banks, a growing demand for Islamic finance, a strong sukuk market and anticipated mergers among Islamic banks.
Industry observers and players reckoned that these factors would spur the growth of the industry and hot up competition among the players, both existing and new. Statistics concur with this. According to the Ministry of Finance (MOF) 2012/2013 Economic Report, Islamic banking continued to expand in the first seven months of 2012, with total assets increasing 20.6% to RM469.5bil, representing 24.2% of the country’s banking system assets………………………………………..Full Article: Source

Islamic banking in Oman poised for mega growth

Posted on 21 January 2013 by Laxman  |  Email|Print

Oman’s Islamic banks and window operations of conventional banks, some of which have already started operations, are expected to achieve an asset base of OMR1.5 billion by the end of this year and OMR3-4 billion in the next three to four years, said a prominent expert on Islamic finance.
The Sharia-compliant institutions are expected to mobilise OMR1 billion by way of deposits by the end 2013 while the equity capital of two Islamic banks and window operations put together is estimated in the region of OMR550 million. Of this, the combined paid up capital of two Islamic banks alone is at OMR250 million………………………………………..Full Article: Source

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