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Pak-Qatar Family Takaful inks deal with Dawood bank

A key joint venture of Qatar Islamic Insurance Company in Pakistan has in collaboration with a local bank and FWU AG launched lucrative Shariah-compliant long-term savings schemes.
Pak-Qatar Family Takaful Limited has inked a deal in Karachi with Dawood Islamic Bank Limited and FWU AG to provide bank customers long-term savings plans enabling them to secure their future financially.
According to the strategic agreement, Dawood Islamic Bank would distribute Shariah compliant Bancassurance (BancaTakaful) products across its branch network.
The agreement was signed by CEO Pak-Qatar Family Takaful P Ahmed, and Pervez.
These products will provide DIB’s customers with Long term Savings plans specifically catered to fulfil their future financial needs.

Gulf asset managers looking for regional partners

Asset managers in the Gulf Arab region are looking to partner with regional players and third-party providers to break the bottleneck of distributing their offerings solely through banks.
The industry, still at its nascent stage, is heavily dependent on banks, but as the funds grow in size and get international focus, better distribution methods are in demand.
The challenge is even bigger for small regional players who do not have the ability to market their products effectively to international players or comply with global regulations like Ucits III, a European Union (EU) framework for funds that can be sold across borders.
For smaller players, the operational cost of complying with global regulations like Ucits III are too high, forcing them to set up partnerships with others in the region. Local fund managers are also looking to set up funds domiciled in off-shore locations to attract global clients.

HarbourVest to invest $300m in Arcapita arms

Kingdom-based Arcapita Bank said global private equity firm, HarbourVest Partners would invest approximately $300 million in five companies controlled by it.
The bank said United States based HarbourVest acquired minority interests in five of its portfolio companies and has committed follow-on capital in support of their growth strategies.
Both the entities created a new fund to effect the transaction while Arcapita will continue to manage the portfolio.


Indonesia's 5-yr sukuk yield falls in auction

Indonesia's finance ministry said the average weighted yield for its five-year sukuk was 7.18862 percent in an auction on Tuesday, down 68 basis points from a previous auction in July.

Barwa Bank takes humorous approach to brand communication

For many, banking is perceived as a very serious and regulated domain that easily dismisses emotional concepts such as humor as a sign of carelessness and irresponsibility. For some, Islamic banking is perceived as an even more serious and dry subject. As Qatar's newest Islamic banking group, Barwa Bank decided to change this perception by running a major campaign in Doha - a campaign designed to make you think again and smile.

Malaysian Sukuk May Rebound in 2011 on $444 Billion Plan: Islamic Finance

The 26 percent slowdown in Malaysia’s local-currency Islamic bond sales this year may get a boost in 2011 from the country’s 10-year development plan.
Pengurusan Aset Air Bhd., a government-owned agency that oversees the water services industry, may sell bonds next year to finance acquisitions, while the eastern state of Sarawak will need to fund the takeover of hydroelectric plants, according to RAM Rating Services Bhd. in Kuala Lumpur.
Prime Minister Najib Razak is seeking to increase spending in the next decade to bolster growth in Southeast Asia’s third- largest economy.

India should open interest-free banking windows in conventional banks

India should open interest free banking windows in conventional banks as a pilot project, Muddassir Siddqui, a leading authority on interest-free banking, said.
On issues relating to recovery in cases of loan defaults, he said it is done the same way as convetnional banking. The adoption of interest free banking system in the country offers a great opportunity to attract substantial investments from countries in the West Asian region to India.
A two day conference on Islamic Finance in India is being held from tomorrow to create awareness about the banking system.
The Kerala High court had in April this year directed the state government and its institutions not to participate financially or otherwise in the financial company modelled on the lines of Islamic bank.

Controlling fatwa would harm Islamic finance

Recent developments in the Islamic finance market prompted the industry to rethink the role of Shariah scholars.
Most Islamic financial institutions appoint a supervisory board or committee of religious scholars who are tasked with reviewing their transactions in order to ensure that they comply with the principles of Islamic Shariah in their business and financial dealings.
A Shariah supervisory board or committee approves or rejects a transaction through the issuance of a fatwa.
The question of the day in the Islamic finance industry is whether Shariah scholars should be subject to some sort of supervision themselves.
In our opinion, the answer to this question depends on what is meant by ‘supervision’.
Industry practitioners should oppose supervision if it means that Shariah scholars would have to adhere to strict criteria or methodology before issuing a fatwa.

Arabic Business News Stories From October 5

Global demand for oil is expected to grow to 106 million barrels a day by 2030 compared with the current 86 million barrels a day, said Abdalla El Badri, secretary general of the Organization of the Petroleum Exporting Countries.
The Kuwaiti government has allocated 8 billion Kuwaiti dinars ($28.2 billion) in its development plan to provide about 82,000 housing units, said Sheikh Ahmad Fahad Al Sabah, deputy prime minister for economic affairs and minister of state for development affairs and for housing affairs.
Kuwait's Noor Financial Investment's Nasser Al Marri said he has stepped down from his executive position as the company's managing director.

Al Rajhi Capital launches Luxembourg Fund for investment in Saudi Arabia equity market

Al Rajhi Capital, the investment-banking subsidiary of Al Rajhi Bank and a leading asset manager in the Kingdom of Saudi Arabia, announced the launch of the Al Rajhi Saudi Equity Fund, a Specialized Investment Fund (SIF) established under Luxembourg law.
Al Rajhi Capital Company is the independent, wholly owned investment subsidiary of Al Rajhi Bank, the world's largest Islamic bank and the largest commercial bank in the GCC region in terms of market capitalization.

DIB's realty exposure jumps to half of its loan book

Dubai Islamic Bank's real estate exposure has crossed half of its total loan book following the acquisition of mortgage lender Tamweel , putting pressure on the bank's balance sheet due to rising mortgage delinquencies.
The bank has been attempting to restrain its property exposure over recent quarters, and this transaction reverses this trend, a study said.
According to Madha, Istithmar, Dubai Capital Group, Dubai Investment Group and others - which are short of cash - sold Tamweel stake to DIB.

Merger with Amlak unlikely, says Tamweel chairman

Sheikh Khaled bin Zayed al-Nehayan, chairman of Tamweel, has said that the merger with Islamic lender Amlak has likely been scrapped. The biggest shareholder in Tamweel is Dubai Islamic Bank and there are no longer any thoughts on a merger, at least not at the present moment.

Zawya identifies more than 300 Shari’ah scholars to address ‘shortage’ issue

Zawya, in partnership with Funds@Work, has enabled Islamic finance institutions to identify and connect to more than 300 Shari’ah scholars, who will also convene their own Shari’ah board.
The platform aims to facilitate Shari’ah governance through transparency and connectivity to the Shari’ah scholar landscape.
Amongst its functions, Zawya Shari’ah Scholars enables an institution to view scholars’ affiliations with one another, as well as to identify those that have already worked closely with the current members of its Shari’ah board.
Zawya Shari’ah Scholars feeds from the extensive data provided by Funds@Work to enable institutions to search over 300 scholars globally, to understand their affiliations and expertise, and connect to them. It also places further efficiency in the Shari’ah system by enabling institutions to identify partnerships with others that share similar Shari’ah boards. Sukuk structurers and investors are able to view and assess Sukuk approved by scholars; they specify and further understand their caveats and acceptances on structures.

IDB board approves over $772m for new projects

Nine member countries have been approved to receive financing. They are Indonesia, Uzbekistan, Bangladesh, Pakistan, Sudan, Turkmenistan, Gambia, Mauritania and Albania.
The financing includes technical assistance in the form of grants for development projects in Benin, Chad, Togo, the GCC and grants and concessional loans for Sudan.
The approved financing also includes health and educational projects directed towards communities in non-member countries including Congo, Fiji, India and South Africa.


Fitch raises Tamweel rating to positive

Fitch Ratings has revised the Rating Watch on UAE-based Tamweel's Long-term Issuer Default Ratings (IDR), Short-term IDR, Support Rating and Support Rating Floor to 'Positive' (RWP) from 'Evolving' (RWE). The move follows the acquisition by Dubai Islamic Bank of a majority stake in the Shari'ah-compliant mortgage lender. The rating agency also affirmed Tamweel's 'E' Individual Rating, reflecting its weak standalone risk profile.

Qatar QIB $750M Sukuk Final Price At Midswaps +237.5

Qatar Islamic Bank said last week following a report from Zawya Dow Jones that it would kick off a global investor roadshow on Sept. 24 in Asia ahead of a planned sukuk. The roadshow began in Asia and then moved to the Middle East and Europe this week.
HSBC Bank Middle East, QInvest and Credit Suisse are advising QIB on the deal.
The chunky order book signals strong demand among investors, who are scrambling to get exposure to the oil-rich Gulf. Qatar, the wealthy gas-rich Arab state, has seen a string of bond issuances this year, including a $3.5 billion offering from the property arm of its sovereign wealth fund earlier in the summer, as the country tries to deepen its capital markets and create a yield curve.

Women and Islamic Financing

Fozia Amanulla has grown accustomed to the pressures of negotiating multi-million-ringgit deals during her career in Islamic finance.
At a meeting with a client in Saudi Arabia, where men and women are commonly segregated in public life, she was the only woman in the building -- a fact reinforced by the absence of any toilets for women.
Fozia, one of the first women to lead an Islamic bank in Malaysia, has had no shortage of reminders that her industry -- in which investments are made according to Islamic principles -- is a male-dominated one.
But the number of female faces is multiplying.
Jamelah was appointed managing director of RHB Islamic Bank in Malaysia in 2007 and is believed to have been the first woman in the world to head an Islamic bank.
Linda Eagle, president of the Edcomm Group Banker's Academy, a consulting firm based in New York, said that while branches for women only had existed in Saudi Arabia for decades, such branches had opened in Dubai and Iraq in recent years.

Saudi Arabia: JODC receives SR1.35b funding

Jabal Omar Development Company the leading planner and developer of the Jabal Omar mountain area, has received agreements for bridge funding collectively worth SR1.35 billion from five national banks, namely Al Rajhi Bank, National Commercial Bank, Bank Al Jazira, Saudi British Bank (SABB) and Saudi Hollandi Bank.
The bridge loan provides immediate cash flow that would serve as a working capital until the round of funding goes through and acts to bridge the gap between times when financing is needed.
The Jabal Omar development in Makkah project calls for construction of residential and commercial center in area close to the Grand Mosque in Makkah. The master plan of development covers 230,000 square meters.
The development consists of 39 commercial and residential towers, notable of which is the 50-storey Twin Tower.
The project has led other developers to follow our lead in improving and urbanizing the central area surrounding the Mosque.

Muddy waters

Islamic finance is struggling to streamline regulations as it moves into the mainstream, but seems overwhelmed by scholar reforms.
Islamic finance is toughening supervision of its powerful religious advisers as shareholders worldwide demand increasing accountability from directors, but key reforms may do little to boost independence and transparency.
Islamic banking is overhauling rules that govern the conduct of its influential sharia advisers, with competition for investor dollars and a growing market putting pressure on the once-arcane industry to adopt clearer, more uniform guidelines.
Key to these challenges is the small number of scholars advising a growing number of banks on increasingly complex financing structures, raising issues such as transparency of rulings, independence of advisers and how to groom new scholars.
The International Sharia Research Academy for Islamic Finance, which is backed by Malaysia's central bank, is planning a global regulatory body for sharia advisers.
Others point out that uniformity is hardly attainable, as markets range from Saudi Arabia's established sector to South Korea's infant industry.

IDB raises sukuk size issue plans, to aid Pakistan

The Islamic Development Bank (IDB) will more than double the size of bonds, or sukuk, issued under an ongoing programme to $3.5 billion to help meet financing needs mainly from flood-ravaged Pakistan.
In 2009, the Saudi-based triple-A lender issued an $850 million sukuk which was the first tranche of a $1.5 billion bond. The issue was part of the $6 billion programme it established to soften the impact of the financial crisis on its member countries.

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