Asia

Hong Kong and Dubai sign Islamic finance pact

Rita Raagas De Ramos reported in Asian Investor on 7 April about the Memorandum of Understanding (MOU) between the Hong Kong’s Securities & Futures Commission the Dubai Financial Services Authority (DFSA) calling for mutual cooperation on capacity building and human capital development in Islamic finance, as well as the promotion and development of their respective Islamic capital market segments; both parties will examine the possibility of establishing a framework for the mutual recognition of their regulatory regimes on Islamic funds to facilitate cross-border marketing and distribution of such funds.

The MOU for cooperation on Islamic finance and capacity building was signed by Hong Kong SFC CEO Martin Wheatley and the DFSA CEO David Knott.

Source: http://www.asianinvestor.net/article.aspx?CIaNID=73222

New IFSB documents on Capital Adequacy and Liquidity Management

The Islamic Financial Services Board (IFSB) released on 1 April that the IFSB Council adopted two documents to further facilitate efforts towards enhancing the soundness and stability of the Islamic financial services industry.

In its 12th meeting held at the Islamic Development Bank's (IDB) headquarters in Jeddah on March 26th 2008, the Council of the Islamic Financial Services Board (IFSB) resolved to approve two documents that aim to further facilitate efforts towards enhancing the soundness and stability of the Islamic financial services industry. The two documents are:

Guidance Note in Connection with the Capital Adequacy Standard: Recognition of Ratings by External Credit Assessment Institutions (ECAI) on Shari'ah-Compliant Financial Instruments (Guidance Note)

Technical Note on Issues in Strengthening Liquidity Management of Institutions Offering Islamic Financial Services: The Development of Islamic Money Markets (Technical Notes)

Guidance Note in Connection with the Capital Adequacy Standard: Recognition of Ratings by External Credit Assessment Institutions (ECAI) on Shari'ah-Compliant Financial Instruments (Guidance Note)

International Shariah Research Academy for Islamic Finance (ISRA) established

Bernama reported on 26 March that Bank Negara Malaysia announced the establishment of the International Shariah Research Academy for Islamic Finance (ISRA) to promote applied research in the area of Sharia and Islamic finance. It will also act as a repository of knowledge for Sharia views or fatwas and undertake studies on contemporary issues in Islamic financial industry. ISRA will be part of the International Centre for Education in Islamic Finance (INCEIF).

A Council of Scholars, comprising local and international Syariah scholars will be set up. Dr Mohamad Akram Laldin will be appointed as the executive director of ISRA.

Source: http://www.bernama.com.my/bernama/v3/news_lite.php?id=322895

State Bank of Pakistan issues updated guidelines

The new standards of the State Bank of Pakistan (SBP) cover appointment of Shariah advisers, conflict resolution in Shariah rulings, use of charity fund and introduction of new products, reported The News Pakistan on 26 March.

Currently, total assets of Islamic banking industry in Pakistan had exceeded Rs 200 bn and the branch network of 18 Islamic banking institutions (i.e. six full-fledged Islamic banks and 12 conventional banks having Islamic banking branches) has expanded to 47 cities.

Full text: http://www.thenews.com.pk/daily_detail.asp?id=102998

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Sukuk market challenged by subprime crisis

Arthur Macdonald reported in Gulf Daily News that the Sukuk market has suffered from the global financial crisis, but it is likely to recover. It impacted pricing and access to investors. Further the discussion on the Dollar peg of Gulf currencies created addtional uncertainties. Nevertheless the market has grown in ten years from millions to billions, participants of a Sukuk conference in Bahrain said.

Source: http://www.gulf-daily-news.com/Story.asp?Article=211884&Sn=BUSI&IssueID=...

CIMB to latch on Islamic banking expertise in China expansion

Joyce Goh reported in The Edge Daily, Malaysia about plans of Bumiputra-Commerce Holdings Bhd (BCHB), parent company of CIMB Group, will use its 20% stake in Bank of Yingkou (BOYC) of China as a springboard to expand its business there, particularly latching on its Islamic finance expertise to carve a niche for itself in one of the world’s fastest-growing economies. China has a larger Muslim community than China. BOYC is looking to expand to Shenyang — the city in Liaoning province earmarked to be an Islamic finance hub of China. Just three months ago, BOYC received the approval from the Chinese government to transform itself from a local commercial bank into a regional bank, thereby giving it the green light to expand its services in the Liaoning province.

Litrak, Malaysia, may return RM 1 per share with debt refinancing plan

Yong Yen Nie reported in The Edge on 18th March about Lingkaran Trans Kota Holdings Bhd (Litrak), which may return RM 1 per share after debt refinancing. The firm proposed last Friday the issuance of up to RM1.55 billion in Islamic debt papers under a sukuk programme. The new debt issue is meant to refinance the highway concessionaire’s existing borrowings and redeemable unsecured loan stocks of RM1.2 billion and to fund working capital and other operational purposes.

Analysts said the proceeds from the sukuk bond issue would fully retire Litrak’s existing debts that were taken to fund the construction of the Damansara-Puchong Expressway (LDP).

Source: http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Artic...

Stanchart applies for Malaysia Islamic bank

Saeed Azhar reported on Reuters on 18th March, that Asia-focused Standard Chartered Bank has applied for a license to set up a separate Islamic banking unit in Malaysia, aiming to capture growth in a business that has escaped global credit turmoil.

Standard Chartered had $1.4 billion (699 million pounds) of Islamic banking assets in Malaysia at the end of 2007, more than double the year ago period, he said.

HSBC and Singapore's third-biggest lender, Oversea-Chinese Banking Corp , have already received regulatory approval to set up Islamic banking units in Malaysia.

Source: http://uk.news.yahoo.com/rtrs/20080318/tbs-uk-standard-chartered-malaysi...

Takaful help Prudential to make as much profit in Asia as in UK

The Guardian reported on 17th March about the takaful business of Prudential. Prudential is looking to expand into Egypt as the executive who runs the insurer's fast-growing Asian business seeks other markets with scope for rapid growth, like before Indonesia, where 25% of all sales in the fourth quarter of 2007 were sharia-compliant products.

Figures on Friday showed that profits of the Pru's Asian operations broke through £1bn for the first time in 2007 and now match the profits achieved by the insurer's traditional UK operations.

Stowe is already responsible for 13 countries. In India, he believes Pru can soon overtake the state-owned insurer that occupies the number-one slot in the country.

Source: http://www.guardian.co.uk/money/2008/mar/17/islamicfinance.insurance?gus...

Islamic Development Bank fosters climate research in Pakistan

The Islamic Development Bank (IDB) will help Pakistan Institute of Development Economics (PIDE) to conduct research on climatic changes and devise strategies to face the impending environmental challenges.

Pakistan would be adversely affected by climatic change in the years to come and there was dire need that a comprehensive strategy was devised to overcome this, he maintained.

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