IslamicFinance.de

Malaysia's central bank said Wednesday it has approved four licenses for Islamic life insurance to mostly foreign-led operators as part of an ongoing liberalization to make Malaysia a regional Islamic finance hub. Bank Negara Malaysia said in a statement it had planned to award only two insurance -- or family takaful -- licenses but raised this to four due to growth potential in the sector, the country's economic recovery and the strength of the applicants.

Thailand's Securities and Exchange Commission planned to implement its first regulations governing the issuance of sukuk, or Islamic bonds, in October, the head of the watchdog agency said on Wednesday. SEC Secretary-General Thirachai Phuvanatnaranubala told a debt market seminar that the long-awaited launch would be part of Thailand's moves to liberalise and expand its relatively small debt market. State-owned Islamic Bank of Thailand said in June it would be the first issuer of Thai sukuk with a planned offer of 5 billion baht of five- to seven-year Islamic bonds once regulations were in place. SEC chief Thirachai said his agency was in the process of drafting licensing rules for municipal authorities to issue and offer bonds to Thai investors. Thirachai said Thailand and other members of the Association of Southeast Asian Nations had made progress in working out details for licensing cross-border bond issues within ASEAN.

Ashurst acted as counsel to the Islamic banks. The team was lead by managing partner of Ashurst's Abu Dhabi office, David Wadham, assisted by associate Faris Hadi. Denton Wilde Sapte (Neil Cuthbert) acted as counsel to Emirates Steel and Allen & Over (Bimal Desai) acted as common lenders' counsel to the banks.

Qatar First Investment Bank isn’t discussing the purchase of Ihlas Finans, the financial arm of Turkey’s Ihlas Holding AS. This statement was given by Emad Mansour.

Leading Islamic finance scholars are preparing the first global certification for Shariah experts, seeking to bolster the industry’s reputation and make it easier for banks to find qualified advisers. The International Shariah Research Academy for Islamic Finance in Kuala Lumpur will pick a board of regulators by year- end to issue permits for scholars qualified to sit on Shariah boards. The scholars decide whether financial products meet the religion’s precepts, including a ban on interest payments. Scholars are now required to have recognized university degrees before they can act as advisers to banks and companies. The council of scholars at the academy includes Sheikh Nizam Yaquby of Bahrain, Mohammad Daud Bakar of Malaysia and Abdul Sattar Abu Ghuddah of Syria. A centralized regulator for scholars will help increase investment because banks would save time in choosing experts to ensure products meet religious principles. The institution doesn’t plan to restrict scholars on the number of advisory panels they can join.

The Jeddah-based Islamic Development Bank (IDB) is gearing up for its latest sukuk offering under its Medium Term Note (MTN) or Trust Certificate Issuance Program. The IDB, according to Mohamed Tariq, senior adviser to the President Ahmad Mohamed Ali, was poised to go to the international financial markets in September this year. In Kuala Lumpur last week, Abdul Aziz Al-Hinai, vice president, finance, IDB, confirmed that the IDB plans to go to the market in the last quarter of 2010. Another international rating agency, Moody's Investors Service, last month had already reaffirmed for a fifth consecutive year the Islamic Development Bank's Aaa long term and P-1 short term foreign currency issuer rating with a stable outlook. Moody's stated that the IDB's rating is strongly supported by the commitment of its member countries, and highlighted that the capital base of the bank is strong, its operational assets continue to perform well, it has a high level of liquidity and very low level of debt. Moody's concluded that the bank's risk profile is likely to remain healthy over the medium term.

Kuveyt Turk Katilim Bankasi AS is planning a second sale of Shariah-compliant debt for 2012. Kuveyt Turk, the Istanbul-based bank owned by Kuwait Finance House KSC, may sell more than $100 million of five-year sukuk. Islamic bond offerings may accelerate in the next 18 months, led by countries new to the market, Mohamed Damak, a Paris-based credit analyst at Standard & Poor’s. Policies to promote assets that follow Islamic law are spreading to Europe from Asia. Kazakhstan, the former Soviet republic that last sold debt overseas in 2000, is planning a debut Islamic bond sale this year to broaden its investor base, Aibek Bekzhanov, head of Islamic instruments at the Regional Financial Center of Almaty. Dubai-based Millennium Private Equity Ltd, owned by Dubai Islamic Bank PJSC and United Gulf Bank BSC, today said the company bought sukuk sold by the U.K.’s International Innovative Technologies Ltd. Albaraka Turk Katilim Bankasi AS, the Istanbul-based unit of Albaraka Banking, will sign a $250 million one-year Islamic syndicated loan with about 25 banks, including Standard Chartered Plc.

The recent launching of the first corporate Sukuk out of the UK by Gateshead-based International Innovative Technologies (IIT) may have taken the Islamic capital markets by surprise, but the signs are that a spate of other UK originations may follow over the next few months. A major GCC-based sukuk arranger confirmed that it has been working on a corporate sukuk issuance for a UK healthcare company for the last year. The company hopes to launch the issuance next month. A London-based Islamic bank is also working on a sukuk issuance for a UK client which is near to being finalized. Tom Wilkinson, chairman of IIT, is confident that there is potential for other UK companies to access Islamic finance including sukuk as an alternative source of funding. The proceeds of the IIT sukuk, according to Wilkinson, will be used as growth capital for the company. The sukuk issue was placed privately with Millennium Private Equity Ltd., leading private equity firm based in the Dubai International Financial Centre (DIFC) and regulated by Dubai Financial Services Authority (DFSA). Millennium Private Equity Ltd. is co-owned by United Gulf Bank (UGB) and Dubai Islamic Bank (DIB).

Islamic finance is a trillion dollar industry and has become part of the global financial system. The rating agency Moody's says that institutional and private investors look to tap into a market that may reach a staggering $5tn. Recently, Paris Europlace signed an agreement with AAOIFI paving the way for greater cooperation to drive the development of Islamic finance in France. In 2010 Qatar Islamic Bank signed a Memorandum of Understanding with Banque Populaire Caisse d'Epargne, France's second largest banking group, in order to gain access to the French retail banking and small medium-size business markets. This would promote a cooperation between the two banks in France and try to build a lasting partnership. An independent report projected that France could potentially attract 10% of the trillion dollar industry. the historical and political links of France with the Middle East give France the opportunity to hold a unique position in the Islamic finance industry.

Patrick Imam and Kangni Kpodar note that the 9/11 attack on the US ‘had a positive impact on assets of Islamic banks, perhaps because Muslim investors, who traditionally invested in the West, were compelled to keep more money at home for fear of expropriation. The study said that while oil prices have a positive and statistically significant impact on the diffusion of Islamic banking, the effect is likely to be asymmetric. They found that the probability for Islamic banking to develop in a given country rises with the share of the Muslim population, income per capita, and whether the country is a net exporter of oil. Trading with the Middle East and economic stability also are conducive to diffusion of Islamic banking… proximity to Malaysia and Bahrain, the two Islamic financial centers, also matters.

The Solidarity Group Holding board has appointed of Ashraf Bseisu as group chief executive officer. Mr Bseisu is a long-standing Solidarity executive and a prominent member of the region's insurance industry. Solidarity Group Holding, one of the largest takaful companies in the world, includes the Solidarity Family Takaful Company and Solidarity General Takaful Company in Bahrain as well as subsidiaries and associates in Saudi Arabia, Jordan, Egypt, Malaysia and Luxembourg. Mr Bseisu is currently Bahrain Insurance Association chairman and the General Arab Insurance Federation vice-president. He has been with Solidarity since his appointment as general manager - finance and corporate management in July 2006 and has held several senior posts within the organisation. He has more than 20 years of experience in the insurance and financial services sector, where he held several executive positions.

The Kuwait investment Authority, or KIA, has turned down a parliamentary proposal to set up a shariah-compliant specialized entity to support small projects by Kuwaiti nationals. The sovereign wealth fund said that it is engaged in undertakings that have been in place for a long time that make creating such entity unnecessary.

Kuveyt Turk Katilim Bankasi, a subsidiary of Kuwait Finance House, will pay a coupon of 5.25 per cent on Turkey’s first Islamic bond offering that was oversubscribed, said people close to the transaction. Kuveyt Turk launched the three-year $100 million sukuk on August 17. This is the first ever sukuk from Turkey and the first bank sukuk originating from Europe, according to law firm Norton Rose, which advised on the offering. “This is another significant step towards growing Islamic finance in Europe. “The sukuk by Kuveyt Turk further demonstrates continuing interest and appetite for Islamic finance within key emerging economies,” Neil D. Miller Global Head of Islamic finance at Norton Rose (Middle East), said in the statement. The joint lead managers on the transaction were Citigroup Global Markets and Liquidity Management House.

A £20m capital injection into Islamic Bank of Britain will help develop more home loans in line with Sharia law, an expert from Defaqto has said. David Black, banking expert from Defaqto, said: “The £20m capital investment will enable the IBB to grow its Islamic mortgages. With some other banks recently reducing their involvement in Sharia loans in the UK, the IBB’s capital injection will provide fresh impetus for what will be a growth area.” Its products are structured in a different way to those provided by conventional banks. Instead of a traditional mortgage, customers pay monthly rent and purchase instalments over the agreed period to the bank on the basis of which the bank gradually sells its share of the property to the customer. The recent cash injection has meant IBB has launched two new home loans. “With a fresh injection of capital we are well placed to grow the business through our Home Purchase Plan products. The products will offer peace of mind for customers, both financially and spiritually, which is especially important in the holy month of Ramadan” , said Sultan Choudhury.

Indonesia's finance ministry, Agus Martowardojo, sold 336 billion rupiah of sukuk to the religious affairs ministry through a private placement, said the debt office. The bonds will help fund a budget deficit seen at 1.5 percent of gross domestic product this year.

Sovereign Islamic bonds from Asia to the Persian Gulf are beating returns on corporate sukuk for the first time in three months as accelerating economic growth and rising oil revenue shore up state finances. Malaysia’s Lembaga Tabung Haji fund, France’s BNP Paribas Investment Partners and Duet Mena Ltd. in Dubai forecast government debt will outperform until property prices in the Persian Gulf recover from a slump that prompted credit-ratings companies to downgrade corporate bonds. “Investors prefer to hold sovereign debt because they are more comfortable with the ratings and market liquidity,” says Hishamuddin Sohaimi. Shariah-compliant government bonds from the Gulf Cooperation Council members and Asia, particularly Malaysia and Indonesia, are likely to benefit the most as growth quickens, said Rafael Martinez Dalmau, director of Islamic investment at BNP Paribas Investment. Oil exporters should be able to “maintain a degree of fiscal stimulus,” said Tristan Cooper, a sovereign ratings analyst at Moody’s.

Bahrain (665km²) is smaller than King Fahd airport (780km²) and has achieved being the biggest centre of Islamic finance in the world, democracy, its very own airline. Moody's, a ratings agency, says it doesn't think Bahrain has sufficient cash to be able to underwrite its banking sector anymore, and has consequently downgraded the investment rating it bestows upon the country from A2 to A3. "Reduced fiscal flexibility makes it more challenging potentially to meet contingent liabilities arising from Bahrain's financial sector, which is relatively large compared with the government's resources," Moody's said.

JEDDAH - Standard & Poor's assigned 'AAA' rating to Islamic Development Bank (IDB) $3.5 billion trust certificate issuance program, IDB said in a statement on Wednesday. Standard & Poor's said the IDB's ratings are underpinned by strong shareholders' support, very high level of capital and liquidity and a good asset portfolio with historically very low losses and preferred-creditor treatment. Dr. Ahmed Mohamed Ali, president of the IDB, said that IDB continued its efforts to reform the bank with a view to strengthening performance through improved governance and organizational efficiencies.