IslamicFinance.de

Indonesia's finance ministry raised 1 trillion rupiah ($102.88 million) worth of sharia bonds on Tuesday, below its target of 1.5 trillion rupiah. The ministry only sold the 30-year, project-based sukuk with the yield at 6.82781 percent. There were no winning bids for the rest of the bonds, which included 5-, 14- and 24-year project based sukuk. According to the debt office, total incoming bids were 2.43 trillion rupiah.

Saudi Electricity Company (SEC) has issued the world's first international 30-year sukuk. The benchmark $2 billion deal is SEC's first sukuk offered to US and other international investors. More tan six-and-a-half times oversubscribed, the sukuk evidences strong international demand for longer-dated Islamic instruments. Although the debut bond has opened new vistas for Islamic finance, the number of companies eligible to take advantage of the precedent is unclear. In the short term, it is likely that only quasi-souvereigns will suceed in securing longer tenors.

Bombay Stock Exchange (BSE) and S&P Dow Jones Indices have announced the launch of the S&P BSE 500 Shariah index, the first new index resulting from the strategic partnership formed between the two companies in February of this year. The S&P BSE 500 consists of 500 of the largest, most liquid Indian stocks trading at the BSE. The index represents nearly 93% of the total market capitalization on the BSE and covers all 20 major industries of the economy. S&P Dow Jones Indices has contracted with Ratings Intelligence Partners (RI) to provide the Shariah screens and to filter the stocks. BSE and S&P Dow Jones Indices announced on February 19, 2013, a strategic partnership to calculate, disseminate, and license the widely followed suite of BSE indices.

The Islamic division of South Africa's First National Bank has hired a new sharia advisory committee and aims to rebrand itself. The new committee consists of Aznan Hasan, Yusus Patel and Zaid Haspatel. According to the chief executive of the Islamic business, Amman Muhammad, they will no longer be called board, but “sharia advisory committee” and their role is clearly defined. He added that the new team would review the bank's previous sharia products. FNB's previous sharia board resigned last July after disagreements over the board's role when new management took charge of the división. Under the new structure, the committee will no longer play a role in the day-to-day running of the business, removing the potential for conflicts.

Liquidity Management Centre (LCM) has announced its results for the first quarter ended 31st March 2013. The insitution recorded a net profit of USD 1.427 million compared to a net profit of USD 0.511 million for the same period of the year 2012 resulting in a 179.25% increase in the net profit. The average interbank rate remains below 0.5%. Moreover, the total operating income recorded an amount of USD 3.181 million in comparison to USD 1.958 million for the same period in 2012. The positive results were due to various advisory services provided for transactions for Islamic Banks and corporations in the region and a portfolio of Sukuk and equities with a diversified investment approach. The Bank's balance sheet witnessed significant improvement in quality and liquidity. Furthermore, the Shareholders' equity increased by 2.7% during the same period.

Islamic Bank of Britain (IBB) narrowed its losses in 2012 a week after it raised £10 million ($15.5 million) from majority shareholder Qatar International Islamic Bank (QIIB). Last week, IBB raised £10 million by placing 1 billion shares with QIIB at a price of 1 penny each, raising the number of its outstanding ordinary shares to 4.5bn. In 2012, IBB posted a loss of £6.99m versus a loss of £9m a year earlier. Home financing business helped narrow the gap by nearly doubling to £117m in 2012 versus £61m a year earlier. The bank did not disclose personnel or administrative expenses, which in the past have represented the bulk of its costs. QIIB, which now owns 91 percent of IBB, has been in discussions since last June with Qatari lender Masraf Al Rayan to sell a controlling stake in the British bank.

Bank Muamalat Indonesia reported a 42.3 percent increase in net profit to Rp389.4 billion (RM121.48 million) last year from Rp273.6 billion (RM85.35 million) in the previous year. The net profit before tax reached Rp521.8 billion (RM162.78 million) or an increase of 40.4 percent from Rp371.7 billion (RM115.96 million) in 2011. The increase in net profit of the bank was attributable to a 38.1 percent rise in assets to Rp44.9 trillion (RM14 billion) in 2012. Its non performing financing remains at 1.81 percent. In 2012 , Bank Muamalat issued sharia bonds valued at Rp800 billion (RM249,57 million).

The Saudi Capital Market Authority (CMA) board has approved Aljazira Takaful Ta’awuni Company’s (ATT) initial public offering (IPO) of 10,500,000 shares, representing 30 percent of its share capital, amounting to SR 350 million. The offer price will be SR 10 per share and the subscription period will be from May 13 to 19. ATT's chairman Abdulmajeed Al-Sultan said the step will improve the company’s financial position and enable it to realize its strategic objectives to become the local and regional leader of Shariah-compliant cooperative insurance. Despite being still under establishment, Aljazira Takaful Ta’awuni is considered to be one of promising companies in the cooperative insurance sector in Saudi Arabia.

Arcapita Bank yesterday announced that a US court has approved the disclosure statement for the amended Chapter 11 plan of reorganisation. The court's decision relates to the adequacy of the disclosures in the disclosure statement about the company and the plan, and the process for voting on it. In early May, the plan will be submitted to creditors for a vote, and following this, presented to the US court for confirmation. A hearing to confirm the plan has been scheduled before the US court for June 11. The provisions of Chapter 11 allow the filing companies to continue to operate their businesses and manage their properties under the direction and control of their boards and management.

The Islamic Development Bank has decided to withhold the award of the IDB Prize in Islamic Economics for 2013. According to the Bank, the decision made in the light of the recommendation of the Selection Committee was unanimous after examination of 24 nominations. The IDB established the Prize in 1988 to recognize, reward and encourage activities of outstanding merit to promote Islamic Economics, Banking and Finance. In the last 25 years, 34 researchers, bankers, economists, Shariah scholars and institutions have been awarded the IDB Prize, which alternates annually between Islamic Economics and Islamic Banking & Finance.

Prime Minister David Cameron is looking to Southeast Asia to boost the UK’s role in Islamic finance. It’s the Bank of England he needs to convince first, say Shariah-compliant lenders based in Britain. Central bank rules require lenders to hold easy-to-sell assets as protection against short-term funding shocks. Most are off-limits for Islamic banks because they pay interest. Cameron visited Malaysia last year to build on a pact to promote bilateral engagement in the industry and created an Islamic Finance Task Force in March. Britain’s six Shariah-compliant lenders will struggle to grow unless regulators adapt bank liquidity rules or highly rated borrowers issue sukuk in pounds.

The event to support "Generation F" on Tuesday 16 April at Kuwait Oil Company (KOC) saw a collection of 70 Kuwaiti female oil and gas professionals congregate to develop their financial skills necessary for smart wealth preservation. London-based Gatehouse Bank participated in the workshop. The company has a history of supporting Arab women through education. Encouraging female financial literacy and supporting the development of the financial skills necessary for long term wealth preservation is a core objective for the Bank. According to Vice President Ms Azeemeh Zaheer, Gatehouse Bank works with women on education programmes to demystify the financial markets, enabling women to make their own decisions about how to build and diversify their investment portfolios in the best possible way.

In the past, European arrangers and investors dominated issuance of international bonds from Turkey. But in recent months the Gulf has started to play a major role, for commercial and possibly even political reasons. About $10 billion of last year’s Turkish issuance came in the final four months of the year, and was dominated by banks. The Gulf is central to the current stream of issuance. One reason for the shift is Turkey’s move into Islamic finance. The fact that three of Turkey’s four Islamic banks are affiliates of Gulf banks has also helped steer sukuk issuance to the region. Another factor behind the trend is Turkey’s increasing emphasis on developing political and economic ties with the Gulf. Pricing is also a factor because yields from Turkey are generally higher for similar credit ratings.

Less than one per cent of investment products in Australia are Shariah compliant, suggesting huge opportunities for fund managers in this segment. The Muslim Community Co-operative Australia (MCCA) manages a Shariah compliant property income fund which has just surpassed $30 million in assets under management. MCCA chairman Dr. Akhtar Kalam said this growth shows strong support for IBF products within Australia. MCCA is also reported to be in advanced discussions with an unnamed Middle Eastern company with a view to setting up a $180 million mortgage fund, a $150 million property fund, a $180 million Sukuk fund and a $5 million asset-leasing fund. Kalam said that this deal could signal the start of an exciting growth story driven by overseas interest in investment in Australia.

Leonardo Peklar, the new chief executive of Hawkamah Institute for Corporate Governance, is planning an initiative to encourage regional companies to appoint more women to their boards. He hopes to invite female board members from global multinationals to the GCC region to extol the virtues of women business leaders. Currently, only 1.5 per cent of board seats in the GCC are held by women, according to Hawkamah statistics. Another priority for Mr Peklar is the issue of reforming the way the region's mainly family-owned businesses are run. Banks and Islamic finance and private equity were other sectors he planned to focus on improving corporate governance.

Jaiz Bank Plc has commenced operations in Gombe State, is now located in four states in Nigeria. In the next four years, the bank plans to be in all the 36 states of the federation. Chairman of the Board of Directors of the Bank, Alhaji Umru Mutallab emphasized the bank’s desire to make positive contributions in the society as well as to provide access to innovative channels of financing as alternatives to interest-based systems. He assured that the bank was opened to all irrespective of race or religion.

In the past, European arrangers and investors dominated issuance of international bonds from Turkey. But in recent months the Gulf has started to play a major role, for commercial and possibly even political reasons. One reason for the shift is Turkey’s move into Islamic finance. The fact that three of Turkey’s four Islamic banks are affiliates of Gulf banks has also helped steer sukuk issuance to the region. Another factor behind the trend is Turkey’s increasing emphasis on developing political and economic ties with the Gulf. Pricing is also a factor. A compression of yields in the Gulf over the past 18 months has reduced the returns from bonds issued within the region.

Al Bayan Holding became the first Saudi Arabian company to issue an Islamic bond in Malaysian ringgit by issuing 200 million ringgit ($65.4 million) as the first tranche of a newly established 1 billion ringgit programme. Pricing details were not immediately available. Al Bayan issued the sukuk as a wakala. HSBC Holdings' Islamic unit in Malaysia, Hong Leong Islamic Bank, and Kenanga Investment Bank Bhd acted as joint lead managers on the deal, while Abu Dhabi's Al Hilal Bank was manager in the United Arab Emirates.

Khazanah Nasional Bhd., Malaysia’s state investment company, selected CIMB Group Holdings Bhd. (CIMB), Deutsche Bank AG (DBK) and Standard Chartered Plc (STAN) to help arrange a sale of $1 billion of convertible Islamic bonds. Khazanah could raise $500 million to $1 billion, though a final decision on whether to proceed has yet to be made. The sukuk would be exchangeable into shares of companies controlled by Khazanah. No decision has been made on which companies’ shares would back the Islamic bond.

Mashreq Bank has said its investment unit plans to set up an Islamic equity fund of up to $100m in the third quarter of this year to invest in stocks across the Gulf region, given lower returns in the bond market. Mashreq Capital hopes to raise between $75m and $100m for the fund, and will seed it with a $20m investment from the bank.