IslamicFinance.de

Seeking to diversify its financial industry after a banking crisis, oil-rich Kazakhstan is drawing on Arab and Malaysian investment in an effort to build an Islamic finance industry among its 13mn Muslims. Its success may depend on the fate of pioneer investors and the commitment of its secular government to clear the way for a long-awaited sovereign issue of sukuk, or Islamic bonds, which could prompt other issuers to follow. Al Hilal, owned by the government of Abu Dhabi, was the first bank to respond when Kazakhstan passed new laws last year to allow an Islamic finance industry. The bank opened its Kazakh offices in March 2010. Though modern Islamic finance began three decades ago, its major principles, such as a prohibition on paying interest, would have been familiar to Muslim traders on the medieval Silk Road through Kazakhstan and Central Asia. Investors, though, are cautious. The financial crisis humbled the once-proud Kazakh banking sector; international creditors were forced to write off billions of dollars of debt in a restructuring process that followed local bank defaults.

Pakistan’s government plans to sell Islamic bonds in the domestic market by the end of this month, according to the central bank’s spokesman. State Bank of Pakistan is seeking to sell Islamic bonds maturing in a year or less

MAYBANK, Malaysia's biggest lender, has set up a dedicated Islamic banking hub here as part of a concerted push to expand the business beyond its home market, as it strives to gain an edge over rivals vying to stamp their name on South-east Asia. About one-third of the bank's Islamic financing portfolio comprises corporate and business loans, while the rest includes home loans, receivables from car and equipment hire-purchase financing schemes, credit cards and personal loans, he said. In Indonesia, Maybank is converting its subsidiary Bank Maybank Indocorp into a full Islamic bank that will be re-branded Maybank Syariah Indonesia. It will then use the distribution network of Maybank's other subsidiary there, Bank Internasional Indonesia, which has 290 branches, to sell Islamic banking products and services.

Malaysia, the world’s largest market for sukuk, plans to improve its legal system to become an alternative location to the U.K. for resolving international Islamic finance disputes. The goal is to position Malaysian laws as the law of choice for Islamic finance transactions globally. Disputes about Shariah principles are a risk to the market for sukuk, bonds complying with Islam’s ban on payment of interest. Persian Gulf companies have traditionally based cross-border contracts on U.K. law to take advantage of the country’s developed legal system and neutrality, according to Unicorn Investment Bank BSC. The challenge will be to gain acceptance in the Middle East because of different religious interpretations in various jurisdictions. A group of scholars in Kuala Lumpur is helping to set up a committee to prepare the first global certification for Shariah experts said Aznan Hasan, the president of the oversight committee

According to the research report Saudi Arabia Insurance Market to 2012 from market research and analytical consultancy RNCOS , Takaful is the fastest growing segments of the Saudi Arabian insurance industry. RNCOS says that protection and savings and health insurance are the fastest growing insurance lines in Saudi Arabia, with health insurance accounted for around 50 per cent of the overall insurance market at the end of 2009. The most recent introduction of compulsory health insurance for private employees, irrespective of the size of the company they are working with, will further boost the health insurance market in the country. The general insurance category has shown substantial growth despite being heavily hit by the financial crisis.

Malaysia's largest lender Maybank on Friday announced plans to expand its Islamic finance business in Singapore and Indonesia to tap the markets' demand for such services. In Indonesia, home to the world's largest Muslim population, the bank will open at least one new branch a week to increase its network. Maybank chief executive Abdul Wahid Omar is also planning to expand its Islamic services in Singapore, whose population is 13 percent Muslim. Maybank is determined to become the number one Islamic bank in ASEAN. Maybank is aiming to break into the world's top 10 Islamic finance centres, Abdul Wahid said. Bank Melli Iran is the global leader in Islamic finance.

The Malaysian unit of Kuwait Finance House (KFH), the Gulf Arab state's biggest Islamic lender, is having "strategic alliance" negotiations in Japan, a newspaper reported on Sunday. Kuwait Finance Malaysia was the first foreign Islamic bank to win a licence under the Southeast Asian country's Islamic Banking Act. It is the Kuwaiti bank's Asia-Pacific hub and aims to promote business between the region and the Middle East.