IslamicFinance.de

Indonesia aims to raise about USD 580 mn from its first global 5-year Sukuk issue this year, targeting specifically Mideast investors among others, such as from Asia.

Kuwait News Agency citing that the Moroccan newspaper "Al-Jareeda Al-Oula" reported that three Gulf investment groups have revealed their intention to invest USD 250 mn this year in Morocco, including the Kuwait Fund for Arab Economic Development (KFAED and the Kuwait Finance House Group (KFH).
In the same context, the newspaper quoted an official from the "ENOCENOC" group of the United Arab Emirates as saying that the group decided to invest USD 150 million to set up an investment project in the northern city of Tangier.

The Executive Director of the ENOCENOC Group Saeed Khoury said the investment will be to build the first phase of the plant in Tangier which is scheduled to enter service in the first quarter of next year.

Bahrain-based First Leasing Bank (FLB) made a net profit of USD 3 mn in 2008 last year. The bank's income from financing activities grew to USD 8.4 mn from US 3.6 mn in 2007 and total portfolio grew to USD 142.5 mn from USD 54.5 mn at the end of 2007.

Khalid Kanoo is Chairman.
Greg Brinkerhoff is CEO.

India has an increasing number of Islamic mutual funds, most recently joined by Benchmark AMC, a fund house that specialises in index-based investing, has recently closed subscriptions for a Shariah-based fund. A similar offering from Taurus Mutual Fund, Taurus Ethical Fund, is currently open for subscription. The Taurus Mutual Fund notices that about 50 % applicants subscribers are non Muslims.

The Islamic funds have since inception outperformed the broader indexes. Nevertheless in current market conditions it is difficult to sell an equity scheme. Benchmark AMC is said to have placed somewhere between Rs 1-1.5 crore.

Malaysia’s capital market is fundamentally and prudentially stronger than during the 1997/98 financial crisis, according to the Securities Commission (SC). The market’s exposure to the current global financial turmoil is indirect, the commission said in its Annual Report 2008 released yesterday.

The country also guarantees 100 % of bank deposit until 2010, it said.
The Malaysian Islamic capital market also proved to be relatively resilient with 47 sukuk issues worth RM 43.2 bn approved by the SC last year, which accounted for 31 % of all corporate bonds approved.

Les Afriques reported on 7 March that Mohamed Sakhr El Materi, President of Princesse El Materi Holding has received end of January the regulatory agreement to create the commercial bank Zitouna.

Existing Islamic banks in Tunisia are Best Bank (Bank Ettamwil Tounsi Saoudi) and Noor Islamic Bank, the latter with its regional office.

Shashank Shekhar reported in Emirates Business 24/7 on 11 March that regional fund managers expect the emergence of several new Shariah-compliant funds focused on infrastructure projects, which offer returns in the range of 15 to 18 per cent. Infrastructure projects in sectors like health, agriculture and green energy are expected to attract the bulk of investments.

Futurebank sees 20.9% increase in net profit in 2008 and net profit rises to BD 10.7 mn.

Dr. Valiollah Seif is Chief Executive Officer and Managing Director.
Dr. Hamid Borhani is the Chairman of Futurebank.

Malaysia's PLUS Expressways issues additional RM 745 mn via a specical purpose company, PLUS SPV Berhad based on Musharaka to investors identified via a book building process. The size of the book was successfully increased from RM 400 mn to RM 745 mn under the Sukuk program.

International Investment Bank (IIB), Bahrain announces a Net Income of USD 13.5 mn and the approval of a cash dividend payment of 7% for the year ended 31 December 2008.

At USD 13.5 mn, the 2008 Net Income represents a 12.3% return on Paid up Capital (ROC). The Capital Adequacy ratio at 31 December 2008 of 86% is over 7 times of 12% required by the Central Bank of Bahrain.

Mr. Aabed Al Zeera is the Chief Executive Officer and Board member.

For full details on IIB’s financial results, please see the ‘Financial Section’ on IIB’s website at source.

The InNyx Centre for Microfinance Development (ICMD) is a UK non-profit making organisation and our main activity is the promotion and development of microfinance banks in Sub-Saharan Africa. The ICMD has recently completed a scoping study for the establishment of a Greenfield microfinance "Sharia compliant" banking institution and is looking for strategic investors currently.

Press Release

LONDON (Standard & Poor's) March 11, 2009--Standard & Poor's Ratings Services said today that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54% holding, and is also the major service provider.

Adam Schreck wrote on 10 March on Associated Press that Dubai Islamic Bank sets aside cash amid fraud probe and that it has foreclosed on a real estate project after court papers indicated the bank was the victim of a half-billion dollar fraud. In a statement, Dubai Islamic Bank said it had exposure of about USD 330 mn to a company named CCH linked to some of the suspects in the court papers.

Cecilia Valente reported on 9 March on Reuters that Amiri Capital, the Islamic asset manager backed by investment firm Olivant, has teamed up with broker Newedge to launch an Islamic fund of long/short hedge funds to be marketed in the Middle East. The Amiri Equity Alternative Strategies Fund (AEAS) will operate under the same Sharia-compliant structure agreed with original prime broker Lehman Brothers to replicate short selling, which involves profiting as a stock price falls.

Amiri co-founder Richard Ellis told Reuters that Gulf-based investors have pledged assets to the fund of funds but investments will be made when the market shows signs of improvement. Philippe Teilhard de Chardin, global head of prime brokerage at Newedge, told Reuters that the market segment is small but developing.

Liau Y-Sing reported on Reuters, 5 March that Malaysia's stock exchange will launch in June a platform to allow banks to execute Commodity Murabaha transactions, a popular but controversial Islamic contract with a market worth more than USD 100 bn according to the International Islamic Financial Market. Any tangible asset that is sharia-compliant can be used in commodity murabaha transactions and palm oil is one obvious example. Malaysia is the world's No. 2 palm oil producer.

But some religious scholars have criticised the structure, saying it resembles conventional-based lending instruments. The Accounting and Auditing Organisation for Islamic Financial Institutions is of the view that the contract, while not invalid, is not ideal.

Malaysia is well placed to weather the global financial crisis, well capitalised and with adequate liquidity, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz told the Oxford Business Group (OBG), a global publishing, research and consultancy firm. She said several years of reforms, institutional development and capacity building, continuous efforts to enhance corporate governance and risk management standards and practices had significantly strengthened Malaysia’s banking system.

OBG is to publish The Report: Malaysia 2009, the latest of its annual business guides, with a comprehensive review of the country’s economy.

Liau Y-Sing reported via Reuters on 4 March that Mohd Daud Bakar, a renown Malaysian Sharia scholar, says banks may charge fees for guarantees but cannot sell the risk to a third party.

James Rutter wrote on 9 March in Wealth Bulletin that the crisis creates opportunity for Islamic wealth management as conventional wealth management and its brands looking less attractive. Current market conditions favour more simple products. Ironically, the trend in Islamic finance in recent years has been towards trying to mimic complex and risky western financial products.

By giving money to a counterparty which separately invests in underlying hedge funds or derivatives, an Islamic investor is able to receive a payout that tracks the performance of assets to which he would not otherwise be able to gain exposure. Islamic investors who bought such products have seen hefty losses, prompting a backlash against financial institutions adopting more flexible interpretations of sharia law.

Humayon Dar, CEO BMB Islamic sees ongoing demand for such products in a so-called Sharia wrapper, because of the limited choice of Islamic products.

Loretta Napoleoni and Claudia Segre suggesting in the Vatican related L'Osservatore Romano, that Islamic finance offers ideas for the Western financial crisis. Citing the main concepts of Islamic finance and emphasizing specifically Sukuk.

The original article is in Italian linked via Source.

Press Release

PARIS (Standard & Poor's) March 9, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Dubai-based insurer Dubai Islamic Insurance & Reinsurance Co. (Aman) to negative from stable. At the same time, we affirmed the 'BBB' long-term counterparty credit and insurer financial strength ratings on Aman.

"The outlook revision reflects the increasing pressure on Aman's risk-adjusted capital adequacy, arising mainly from the continuing decline in investment markets in the Gulf region," said Standard & Poor's credit analyst Lotfi Elbarhdadi.