Europe

UK working to offer sukuk in sterling

Rachna Uppal reported on 16 February that the UK Sterling Sukuk will be offered in the foreseeable future. There is work ongoing on the issue how t o treat the coupon of the Sukuk and put it on par with bonds.

Britain's First Islamic Motor Insurance

Salaam Halal Insurance, Britain's first Shari`ah-compliant insurer, was launched last July and price-comparison websites show a great demand and competitiveness.

Islamic Securitization - The Right Way Forward?

Heiko Hesse, Andreas Jobst and Juan A. Sole published on RGEmonitor on 13 February an analysis regarding Islamic Securitization and the grown interest for Islamic finance during the financial crisis.

Islamic finance is driven by the general precept of extending religious doctrine in the shari’ah to financial agreements and transactions. Predatory lending, deteriorating underwriting standards, and a series of incentive problems between originators, arrangers, and sponsors, of which all have infested the conventional securitization process, belie fundamental Islamic principles.

The article linked in the source relates the characteristics of this form of securitization to calls for enhanced disclosure and standardization, ratings agency reforms, and better transparency of origination and underwriting practices in conventional structured finance. In particular, it assesses the potential of conflicts of interest (which became apparent in the U.S. subprime mortgage crisis) to contaminate the integrity of the securitization process if it were conducted in compliance with shari’ah principles.

Western companies looking to Sukuk

Cecilia Valente and Frederik Richter reported 10 February on Reuters, that Western companies, especially in the UK and France, are considering issuing Sukuk to tap Middle Eastern investors.

Bank of London and the Middle East plans three funds

Bank of London and the Middle East, or BLME, plans to launch at least three funds in 2009 targeting a US dollar based fixed income fund, a UK real estate distressed assets fund and an equities fund according to Adrian Gayler, the newly appointed head of private banking at BLME, told Zawya Dow Jones.

Turkey sovereign bond sales quarter of expectations

Nevzat Devranoglu and Thomas Grove reported on 28 January on Reuters that theTurkish Treasury sold only a quarter of an expected YTL 1.89 bn in its first issue of an income-indexed bond, considered a type of Islamic bond, as it attempts to boost capital inflows by tapping the Gulf region.

Gatehouse Bank plc announces the establishment and first issue under the Milestone Sukuk platform

Gatehouse Bank plc has announced the establishment of a USD 1 bn Sukuk programme by Milestone Capital PCC ("Milestone"). Gatehouse Bank is the Arranger and Dealer of the Milestone programme as published in a press release via Zawya on 27 January.

The first Sukuk issue under the Milestone platform was successfully completed recently. The Milestone programme is listed on the Channel Islands Stock Exchange and certificates issued under the programme are entered into the Euroclear and Clearstream clearing systems, with BNP Paribas Securities Services acting as common depositary. Milestone Capital PCC is a Jersey based orphan Protected Cell Company, designed to allow the efficient creation of new, segregated, bankruptcy remote cells. Each cell has the ability to issue a diverse range of Sukuk certificates, which is proving very appealing for issuers and investors alike.

David Testa is the CEO of Gatehouse. Ashurst LLP is the legal advisor to Gatehouse Bank on the transaction.

Bank of London and the Middle East launches Private Banking

TradeArabia reported on 27 January that the Bank of London and the Middle East (BLME), will be extending its wealth management division with the launch of a private banking business. The new project will be headed by the newly appointed head of private banking Adrian Gayler, who joins BLME from Merrill Lynch International Bank Limited. Gayler will be based in BLME’s new private banking offices in Mayfair, London, along with the already established specialist wealth management team

Bank of London and the Middle East arranges GBP 10 mn facility for OCADO LTD

Press Release

London, 27 January, 2009 – Bank Of London And The Middle East plc (BLME), the London based wholesale, Sharia’a compliant bank, today announced that it is providing a £10 million leasing facility to Ocado Ltd (Ocado), the UK independent online grocer.

Full text attached

Dow Jones Islamic Market Index Monthly Performance Report

Press Release - full text attached:

New York (January 27, 2009) — Based on the close of trading on January 26, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -5.55% month-to-date, closing at 1646.71. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -9.00%, closing at 131.03.

- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased -9.90%, closing at 1252.00. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of -11.40%, closing at 90.89.

- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1596.39, a loss of -7.60%, while the pan-European blue chip Dow Jones STOXX 50 Index lost -10.97%, closing at 1926.07.

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Literaturempfehlung

Suchen Sie Informationen auf Deutsch, wie Islamic finance arbeitet, welche Produkte es geben kann und wie diese strukturiert werden, so verweise ich auf das Fachbuch (zweite Auflage nun erschienen):

Gassner/Wackerbeck: Islamic Finance, Bank-Verlag, Köln.

und zu den steuerlichen Fragestellungen:

Leila Momen: Vertragsmodelle Islamic Finance, Bank-Verlag, Köln.

Rat und Tat

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."

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.

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.

Sukuk Issuance Fell Dramatically In 2008 But Long-Term Market Prospects Are Good, Says S&P

Press Release

PARIS, January 14, 2009--Despite a dramatic decline in volumes in 2008, the long-term perspectives for global sukuk issuance are still good, said Standard & Poor's Ratings Services in a report published today "Sukuk Market Declined Sharply In 2008, But Long-Term Prospects Remain Strong."

"The decline in sukuk issuance in 2008 was as a result of global market turmoil, drying up of liquidity, widening of credit spreads, and investors' wait-and-see attitude," said Standard & Poor's credit analyst Mohamed Damak. "Although difficult to measure, part of this decline could also have been due to comments about the Sharia compliance of some sukuk by the Accounting and Auditing Organization for Islamic Financial Institutions.

More than 45% of sukuk issued in 2008 were "ijara" (lease financing), most probably as a direct consequence of the debate about Sharia compliance among some scholars. The value of sukuk issued in 2008 dropped by more than 56% compared with 2007, to $14.9 billion. "We do not expect the market to start reviving before the second half of 2009 or early 2010," added Mr. Damak.

Deutsche Bank launches new platform in Luxembourg

Deutsche Bank announced the launch of “Al Mi’yar”, a platform to facilitate the issuance of Sharia compliant securities domiciled in Luxembourg with Luxembourg Financial Group AG as the Sharia investment manager. Deutsche Banks Trust & Securities Services group providing the settlement framework. The platform allows for access of all asset classes including money market instruments.

4 million child trust funds opened in UK

A total of 4.01 million child trust funds have been opened since the scheme stated. Latest data from HM Revenue & Customs (HMRC) show since January 2005 4.3 million child trust fund vouchers have been issued – but only three-quarters of parents are investing the vouchers. However, parents investing the average GBP 24 a month into an account could provide their offspring with GBP 9,750 at the age of 18, according to estimates from the Children’s Mutual.

Source: 

http://www.myfinances.co.uk/news/investments/child-trust-fund/4m-child-trust-funds-now-open-$1259681.htm

Gatehouse Bank appoints new head of real estate

Gatehouse Bank released that Philip Churchill has been appointed as Head of Real Estate. Philip Churh has been previously Head of Investment Management, Europe for four years with HDG Mansur, fund manager of the HSBC Amanah Global Properties Income Fund.

Crisis offsets Islamic wealth management 2008 gain

Guardian reported based on Reuters on 7 January that market volatility wiped out all of the asset gains made by the Islamic fund management industry in the year to September 2008, citing US-based research and data provider Cerulli Associates. Sharia-compliant fund managers had assets of USD 65 bn at the end of the 3rd quarter 2008, including assets managed via discretionary mandates for institutions and high net-worth individuals and mutual funds. Assets invested in Islamic-compliant mutual funds rose by 50 % while the number of such funds doubled in the three years to 2008. Islamic mutual funds alone accounted for USD 35 bn-- up from USD 23.2 bn gathered in 2005. Sukuk funds remained a rare offering. Once markets stabilise this industry can potentially expand at a rate of above 10 % a year, the report said. Saudi Arabia is currently the largest domestic market for shariah investments. Challenges named in a poll by Cerulli were named the Sharia compliance costs, convincing investors of the Sharia compliance, the discrepancy in Sharia standards and the lack of 3rd party distribution.

Report order form: http://www.cerulli.com/pdfs/2008_Shariah_Info_Packet.pdf

Bank of London and the Middle East plc completes GBP 31.5 mn refinancing for client

Bank of London and The Middle East plc (“BLME”), has announced on 7 January the completion of a 3-year GBP 31.5 mn finance transaction for Premio Group Holdings to refinance Premio’s property portfolio in Mayfair, London. This is the first Islamic finance transaction completed by Premio Group Holdings.

Premio Group Holdings is a joint venture between Chelsfield Partners LLP and Rollpost established in December 2005. Premio owns over 50,000 square ft of prime residential and commercial property in London’s Mayfair.

Advisers to both firms were Alexander Marks, SJ Berwin and KPMG for Premio and Herbert Smith LLP for BLME.

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