IslamicFinance.de

Dear Reader,

The last weeks we have read about criticism in regard to the Sharia compliance of the Sukuk program of the investment bank Goldman Sachs:

< Mohammed Khnifer reveals, after examining the offer circular thoroughly, three possible flaws in the overall structure.
1- Strong indication from the proposed structure and the prospectus as well that the sukuk is not, as they claim, Murabaha, but a Reverse Tawarruq.
2- Strong indication that Goldman will be using, eventually, the proceeds to fund its conventional activities.
3- The so called Murabaha sukuk is listed on the Irish Stock Exchange (ISE). There are some concernes on how the ISE will make sure that the securities will be traded at par value.>>

http://www.islamicfinance.de/?q=node/3155

Some remarks to this discussion:

The National Treasury invited on 6th December banking institutions to submit proposals for the provision
of advisory services for the structuring and issuance of a government Islamic bond (“Sukuk”) in
the local and international markets.
The invitation is in line with the National Treasury’s intention to diversify its funding and
investor base.
“There is a great interest in the SUKUK market and this is the first step towards meeting the
growing appetite for government backed Shariah compliant investments” said Lungisa Fuzile,
Director General of the National Treasury.
Interested service providers are expected to submit proposals by close of business (RSA time)
on or before 21st December 2011. Shortlisted bidders will be informed by 20th January 2012.
ENDS

Further Information:

Request for Proposal (RFP):
http://www.treasury.gov.za/comm_media/press/2011/RFP%20-%20TOR%20Islamic...

Annexure to RFP:
http://www.treasury.gov.za/comm_media/press/2011/Annexure%20A%20-%20Suku...

The 2nd Quarter 2011 issue of the Malaysian ICM quarterly bulletin published by the Securities Commission Malaysia (SC) is now available online at:
http://www.sc.com.my/eng/html/icm/11_2Q_msianicm.pdf

Morocco plans to authorise first Islamic bonds. Central bank of Marocco wants to allow sukuk.

CIMB Asset Management has launched a monthly newsletter about the Sukuk market:

"Industry practitioners are positive that 2011 will favour the sukuk industry and various indicators show that a delayed resuscitation of the Islamic bond market is on track this year. As economies recover and high crude oil prices help to revive the market, sales of international sukuk are forecasted to grow over USD22 billion this year, which represents a 29 per cent increase from the previous year. The upswing in corporate spending, an increase in issuers seeking funding diversification and improving investor sentiment in the Gulf are also expected to fuel the sukuk market globally.

According to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, the difference between average yields for emerging-market sukuk and the London interbank offered rate narrowed to 282.7 basis points on
6 January 2011 - the least since August 2008. Industry practitioners agree that the low sukuk yield spreads should entice sukuk issuers to tap the market.

The Minister of Finance and National Economy, Ali Mahmoud, has called on the Islamic Investment Insurance and Export Credit to provide collateral for the security of the Sudanese exports and investment in Sudan in all fields.
He added that providing of security for these products will enable Sudan to provide food security to the Arab and Islamic worlds, urging coming out with an obvious vision in coordination with the Sudanese institutions to benefit from security provision availing by the the Islamic institution for the exporters and investors from the member countries.

North east company International Innovative Technologies (IIT), UK, issued a Sukuk. The 4-year, USD 10 mn musharaka sukuk – small by international capital markets standards – was placed privately with Millennium Private Equity and regulated by Dubai Financial Services Authority.

Steuerliche Würdigung im nationalen und internationalen Kontext

Der Markt Islamic Finance wächst rasant und umfasst bereits heute ein erhebliches Anlagevolumen. Demgegenüber besteht ein großer Kapitalbedarf in der europäischen, speziell auch in der deutschen Realwirtschaft ebenso wie ein Bedarf an Investoren.

Bei der Umsetzung von Islamic-Finance-Vertragsmodellen kann die Besteuerung im Einzelfall eine ausschlaggebende Rolle spielen. Daher erläutert die Autorin in diesem Buch für ausgewählte schariakonforme Finanzierungs- und Anlageformen zunächst die Scharia-Rahmenbedingungen der jeweiligen Vertragsmodelle aus deutscher rechtlicher, ertragsteuerlicher und verkehrsteuerlicher Sicht. Die steuerlichen Fragestellungen werden anhand von Beispielen im grenzüberschreitenden Corporate Bereich im Schnittpunkt von deutschem internationalem Steuerrecht und ausländischem Steuerrecht der weiteren beteiligen Staaten verdeutlicht.

Inhalt

* Einleitung
* Grundzüge von Islamic-Finance-Vertragsmodellen
- eigenkapitalbasierte („Musharaka“ und „Mudaraba“),
- fremdkapitalbasierte („Murabaha“ und „Tawarruq“) sowie

ResearchGATE is the largest social network for academic research globally. Dedicated social profiles of researchers allow to enter academic careers, published articles in journals and books, announce fields of research for international exchange just to name a few of the features.

IslamicFinance.de took another effort to create a dedicated group and invite researchers globally to use this platform and foster research in Islamic finance. The last academic initiative taken was to sponsor and start a full fledged platform for the Islamic Finance WIKI, the online encyclopedia.

Researchers are invited to participate in these initiatives.

Please visit:
http://www.researchgate.net/group/Islamic_Finance/

Kuveyt Turk Katilim Bankasi, a subsidiary of Kuwait Finance House, will pay a coupon of 5.25 per cent on Turkey’s first Islamic bond offering that was oversubscribed, said people close to the transaction. Kuveyt Turk launched the three-year $100 million sukuk on August 17. This is the first ever sukuk from Turkey and the first bank sukuk originating from Europe, according to law firm Norton Rose, which advised on the offering. “This is another significant step towards growing Islamic finance in Europe. “The sukuk by Kuveyt Turk further demonstrates continuing interest and appetite for Islamic finance within key emerging economies,” Neil D. Miller Global Head of Islamic finance at Norton Rose (Middle East), said in the statement. The joint lead managers on the transaction were Citigroup Global Markets and Liquidity Management House.

Razi Fakih, HSBC Amanah deputy chief executive, says the company is optimistic and sukuk is unlikely to fade out. HSBC has already served as Islamic bond manager on 13 sukuk issues in the first half of the year according Reuters Data. Research firm Oliver Wyman expects industry growth to about 20% until 2012.

Faysal Asset Management Limited (FAML) has introduced Faysal Asset Allocation Funds for its customers.

Press Release

Today sees the launch of a new Journal on Islamic finance from dedicated Islamic finance media entity Yasaar Media.

The Journal, called So Far – the Journal of Strategic Thinking in Islamic Finance, is written and edited by members of an Islamic finance Think Tank and is modelled on traditional academic journals. The difference with So Far is that the members of the Think Tank are predominantly practitioners rather than academics.
Member of the Think Tank are drawn from the ranks of committed Islamic finance professionals around the world and range from the Gulf and the Far East to the USA and Europe.

Each issue of So Far is dedicated to a single topic of core importance to the Islamic finance industry – and the launch issue looks at the thorny issue of the problems facing the Sukuk market. Unlike many other journals So Far is distributed free in PDF format and is available from a variety of sources including Yasaar Media thus guaranteeing maximum readership and exposure.

IslamicFinance.de has created a fanpage on Facebook - for all the users wishing to follow the news abstracts on the Facebook platform. Please join and enjoy!

Press Release

*Bahrain-based Gulf Finance House earlier today completed the partial extension of a
$100 million facility. We consider this as another "distressed exchange" due to
partial extension of initial maturity. *We then reassessed GFH's creditworthiness
and raised the ratings to 'CCC-/C'. *The outlook is negative and reflects our
opinion of GFH's very weak liquidity position, from a rating standpoint, because it
still faces challenges to meet debt repayments coming due in the very near term.

PARIS (Standard & Poor's) March 3, 2010--Standard & Poor's Ratings Services today
said it raised its long- and short-term counterparty credit ratings on Bahrain-based
Gulf Finance House G.S.C. (GFH) to 'CCC-/C' from 'SD/SD' (selective default). The
outlook is negative.

"The rating action follows GFH's completion of the partial extension of maturity of
a $100 million facility," said Standard & Poor's credit analyst Goeksenin Karagoez.

The first tranche of this facility was a $50 million payment due March 3, 2010, with
the remainder due on March 3, 2011. We understand that GFH has obtained consent for

Blom Developments Bank SAL (“Blom”) placed US$10 million with The Investment Dar Company KSCC (“TID”)under a wakala agreement (the “Agreement.

The Agreement was governed by English law and provided that TID would invest the Capital Sum (as the agent of Blom) in a shari’ah compliant manner. The Agreement further provided that at the end of the investment period TID had an obligation to pay to Blom the Capital Sum together with the anticipated agreed profit (the “Profit”).

TID failed to fulfill its obligations under the Agreement to pay to Blom the Capital Sum and the Profit at the end of the investment period. As a result Blom brought a summary judgment application in the English High Court. The Court ordered TID to pay to Blom the Capital Sum (but not the Profit).

Press Release

Bahrain-Based Gulf Finance House Lowered To 'SD/SD' (Selective Default) On Partial Debt Extension

*Bahrain-based Gulf Finance House (GFH) yesterday extended the maturity of $100
million of its $300 million syndicated loan by six months. *Because we consider the
partial debt maturity extension a "distressed exchange", we are downgrading GFH to
'SD/SD' (selective default) from 'CC/C'. *We expect GFH to soon extend the maturity
of another facility (subject to final approval from all syndicate members). Once the
maturity extension is finalized, we plan to reassess GFH's credit standing and
change the ratings accordingly.

PARIS (Standard & Poor's) Feb. 10, 2010--Standard & Poor's Ratings Services said
today it lowered its long- and short-term counterparty credit ratings on
Bahrain-based Gulf Finance House G.S.C. (GFH) to 'SD/SD' (selective default) from
'CC/C'.

"The downgrade to 'SD/SD' follows GFH's completion of the extension of maturity of
$100 million of its $300 million syndicated loan facility due Feb. 10, 2010," said
Standard & Poor's credit analyst Emmanuel Volland.

IslamicFinance.de is calling Islamic financial institutions to become member of the UNEP Finance Inititiave to learn and contribute to international best practice in ethical and faith based finance:

"UNEP FI is a global partnership between UNEP and the financial sector. Over 180 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance."

membership information package:
http://www.unepfi.org/fileadmin/forms/MembershipInformationPack.pdf

Korea's plan to tap into the Islamic finance market faces a setback as a parliamentary committee failed to approve a bill aimed at relieving tax burdens that have virtually blocked local companies from selling Sukuk. It will be discussed, however, in the February session.