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Turkey: Treasury to issue non-interest bonds

The Treasury of Turkey announced it will sell bonds linked to income at four state enterprises. The Treasury will issue the bonds in Turkish Liras and dollars Jan. 28 after collecting bids Jan. 26 and 27. The total issuance will be YTL 1.89 bn, or USD 1.15 bn. The papers will be linked to income at four state enterprises, namely oil company TPAO, the state stationary office DMO, the government-run airports authority DHMI and the coast safety authority, or KIYEM. The Treasury statement did not clarify whether the new revenue-index bonds were compliant with Islamic investment principles. Last month, Selim Ye?ilba?, the head of the international finance markets department at the Turkish Undersecretariat of Treasury, said to Hürriyet Daily News & Economic Review the new borrowing method would be "based on rent certificates."

GCC Islamic insurance sector set to grow 25%

Ghazanfar Ali Khan reported in Arab News on 22 January that the Islamic insurance (Takaful) market will grow five fold over the next 10 years while the market for Shariah-compliant insurance will be worth USD 14 bn by 2015 being said at an Islamic insurance conference. Since 2000, Islamic insurance has been growing at more than 15 percent per annum, yet the market is still at its tip, especially in the Middle East and Southeast Asia, said a report released on the occasion.

According to the report, insurance premiums paid in Muslim nations are equal to between 0.5 percent and 5 percent of gross domestic product. That compares with between 10 percent and 15 percent in developed markets. The event has been organized by the Islamic International Foundation for Economics and Finance, an affiliate of the Muslim World League, in cooperation with the Islamic Research and Training Institute.

Sukuk market struggles

Shanthy Nambiar and Aloysius Unditu reported on Bloomberg on 21 January about the outlook of the Sukuk market. A long line of sovereign and corporate issuers in GCC and Asia are delaying their issuance due to market constraints.

The average extra yield on corporate and government sukuk above the London interbank offered rate, or Libor, is now 11.1 %, up from 1.9 % a year ago, according to HSBC-DIFX indices. That spread widened to a record 11.9 % in December, compared with 6.97 % for non-Islamic bonds in the Middle East.

HSBC launches Amanah India Sharia Portfolio

The portfolio management services division of HSBC Asset Management has launched the actively managed, open-ended HSBC Amanah India Shariah Portfolio. The portfolio will be benchmarked against the Dow Jones Islamic Market India Index and the BSE 500.

CEO of HSBC Asset Management is Mr Vikramaaditya.

Two Gulf banks possibly to be licensed in France

Stanley Carvalho reported on 21 January in Arabianbusiness that two financial institutions in the Gulf may be licensed to introduce Islamic banking in france later this year according to a member of the French banking delegation, one of them being Qatar Islamic Bank, the second possibly located in Bahrain.

Islamic finance media house set up

Shariah consultancy Yasaar has announced the launch of a dedicated Islamic finance media entity called Yasaar Media. Yasaar Media recognises that there is a serious need for an information provider in the Islamic finance industry that produces in-depth reports and studies on specific market niches, asset classes and countries.

The people behind Yasaar Media are Paul McNamara and Majid Dawood.

Europlance wants to promote Islamic finance and banks in Paris

Nasser Al Harthy reported in The Peninsula on 21 January about Paris-based Europlace that it welcomes sukuk issuers on NYSE Euronext and the setting up of Islamic banks in Paris. Arnaud de Bresson, Managing Director of Paris Europlace, said the new reforms that were adopted concerned authorisation of Shariah-indexed mutual funds, listing of sukuk in France, tax neutrality on Murabaha (transactions on real estate property, shares, machinery and commodities) as well as tax deduction on renumeration of sukuk.

Emaar Properties in USD 4 bn borrowing plan

John Irish and Jason Benham reported on Reuters on 20 January about the financing needs of Emaar Properties, Dubai both conventional euro medium term note and Islamic. The notes would be listed on the London Stock Exchange, with HSBC and Royal Bank of Scotland acting as lead arrangers..

Sukuk Manfa’a with a value exceeding SAR 857 mn

According to CPIFinancial on 21 January, Al Salam Bank-Bahrain works with Tadhamon Islamic International Bank in agreement with Rawacheen Al Hijaz to issue Sukuk Manfa’a with a value exceeding SAR 857 mn on Burj Al Jewar, a commercial/residential tower overlooking the Holy Mosque in Mecca. Rawacheen Al Hijaz will act as the lead manager of the Sukuk Manfa’a.

The Sukuk program will give each Sukuk holder the right to benefit from the unit for a period of 19 Hijri years either to use it or sell, lease to others, grant or bequeath. The holders can also exchange their unit with another.

Islamic Bank of Asia in Singapore Sukuk job

CPIFinancial reported on 20 January that the Islamic Bank of Asia is one of the two Lead arranger for SGD 200 mn Sukuk Al-Ijarah Trust Certificate Issuance Programme from Monetary Authority of Singapore. The bank itself will be the first investor in the programme.

Vince Cook is the CEO of The Islamic Bank of Asia.

Singapore plans S$ 200 mn Sukuk programme

Saeed Azhar, Reuters reported on 19 January that Singapore's central bank aims a S$200 million Sukuk Al Ijara programme, to promote the growth of Islamic finance in the state. The underlying asset for this Sukuk programme is the office units of Monetary Authority of Singapore's head office. According to Heng Swee Keat, managing director of the Monetary Authority of Singapore the Sukuk will be the Sharia compliant equivalent of Singapore government securities with the same credit standing.

Mashreq Capital To Launch USD 50 mn Regional Sukuk Fund

Mirna Sleiman, Dow Jones Newswires reported on 19 January that Mashreq Capital will launch a USD 50 mn Sukuk fund in Q.
Abdul Kadir Hussain, CEO, sees a target return of between 12% and 20% over the next 12 months.

Syria approves Al Baraka banking partnership

Gulf News published based on Bloomberg 15 January an article regarding the governmental approval for Emirates Islamic Bank, Kuwait Syrian Holding, and two Saudi investors from the Al Rajhi family to partner with Bahrain-based Albaraka Banking Group, setting up Al Baraka Bank-Syria. The bank plans an IPO at the end of Q1 to sell 35 % according to Amir Assassa, a founding member of Albaraka Bank-Syria. Assassa said that Albaraka Banking Group will own 23 % in the Syrian bank, Syrian investors 16 %, Emirates Islamic 10 % and Kuwait Syrian Holding, which is partly owned by the Al Kharafi Group, 5 %, he said.

Challenges for Islamic finance in Nigeria

Chris Agabi reported on 16 January on allAfrica about the discussions held at the Lotus Capital Seminar series. Professor Mohamed L. Bashar, an Islamic finance and economics lecturer and a board member, Lotus Capital Limited has advocated for a defined regulatory framework to support the growth of Islamic finance in Nigeria, while the guest speaker Professor Monzer Kahf, and Chairman of the Sharia Advisory Board of Lotus Capital, noted that legislation may not necessarily be the biggest impediment but political will - legislation for the conventional financial system does not generally affect Islamic finance.

Global Investment House begins operations in Saudi Arabia

Global-Saudi is an investment bank with a capital of 50 million Saudi riyals. It carries out conventional and Islamic financial services such as the establishment and management of investment funds, portfolio management, international brokerage, private and public placement, underwriting, advisory, dealings as a principal and as an agent as well as custody. Additionally, Global-Saudi obtained approval from the Authority to launch 3 Investment Funds, which are the Global GCC Market Fund, Global GCC Equity Fund and Global Saudi Equity Fund (Noor Fund).

Iran - Insurance Bank planned

Iran Daily reported on 15 January that an insurance bank in Iran is proposed by Iran Insurance Company. Mohammad Javad Sahamian Moqaddam told Fars News Agency that the proposed bank will be set up after implementation the insurance laws.

S&P lowered rating on East Cameron Gas Co (Sukuk) 2006

Reuters published the release of Standard & Poor's Ratings Services on 14 January regarding the downgrading of East Cameron Gas Co.'s USD 165.67 mn Sukuk series 2006 to 'CC' from 'CCC+' and placed it on CreditWatch with negative implications. The downgrade reflects the negative impact caused by shortfall enforcement event on the overriding royalty interest in oil and gas reserves (ORRI), which is the primary collateral for the Sukuk.

South Korea interested in Islamic finance

The Financial Supervisory Service (FSS) Governor Kim Jong-chang sees Islamic finance as a potential new alternative in overcoming the global financial crisis pointing out that reckless distribution of complicated derivative products throughout the global market, detached from the real economy, put the global financial market into crisis.

The annual seminar, held in Japan and Hong Kong in the last two years, is now under way in Seoul, jointly hosted by the Islamic Financial Services Board (IFSB), the Financial Services Commission (FSC) and the FSS.

Kim said the regulator would focus on setting up infrastructure for Islamic finance in the country.

Malaysia Bina Puri unit gets Islamic financing

A unit of Malaysian builder Bina Puri Holdings Bhd has secured RM 1.04 bn of Islamic financing to build a highway, Reuters citing Bernana, the official news agency.

Singapore's Agni Inc plans sukuk deals

Singapore renewable energy firm Agni Inc will sell more than RM 900 mn Sukuk Al Ijara according to a Malaysian newspaper.

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