IslamicFinance.de

The 4th Langkawi Islamic Finance and Economics (LIFE-4) Global Forum, scheduled for mid-February 2013, will provide a global platform to discuss key issues around the competitiveness, growth and sustainability of Islamic finance. Its theme is 'Islamic Financial Planning and Wealth Management as the New Frontier for Global Islamic Banking and Finance Industry'. Financial regulators, experts, jurists, academics and stakeholders across the world will meet in order to move the industry forward.

North Africa is moving towards the development of the Islamic financial industry as a response to the protests in several countries of the Arab world. Although there are some difficulties to overcome like low banking penetration and limited development of retail banking in general, there ist still potential for growth and progress. However, until a more stable political environment is provided, Shari'ah-compliant banking will be a niche market in North Africa.

Islamic bonds trailed emerging-market debt for a second year, a trend that is expected to continue this year. Compared with a 18.5 per cent yield for developing-nation securities, Global Sharia-compliant notes gained 9.6 per cent last year.
Falling yields have helped to push worldwide sales of debt that comply with Islam's ban on interest, and sales may increase this year as new countries including Oman, Tunisia and Egypt tap the Sharia-compliant capital market for the first time.

Zain Saudi has extended the maturity of a nine billion riyal ($2.40bn) Islamic loan for another four weeks until February 27. The lending banks accorded to put back the maturity of the murabaha facility for the seventh time since it was agreed in July 2009. Zain Saudi said it would use the extension to conclude negotiations with lenders over a new long-term financing agreement, but also warned the existing facility could be further extended.

In order to allow Brazilian farmers to sell their crops between harvests and therefore achieve higher return, Abu Dhabi Equity Partners (Adep) provides inventory finance to them. In return, Adep takes title of the soft commodity. The Abu Dhabi firm has struck deals with Brazilian growers to provide financing worth $100 million for the first half of this year. Despite the risks in form of natural disasters the business has been widely welcomed by Adep founder Muneef Tarmoom's investors.

The paper makes an attempt to understand how the balance sheets of various sectors of GCC got impacted due to the financial crisis. There is also an attempt to understand why Bankruptcy laws in GCC are inadequate and what lessons can be learnt post Global Financial crisis to deal with Bankruptcy in GCC region. Estimation has been made to understand the current size of problem in GCC and we have included studies of Investment companies seeking to restructure their debt.

The Pearl Initiative has launched a new piece of regional research focused on family firm governance. The Report “Family Matters, Governance Practices in GCC Family Firms” is based on research carried out jointly by the Pearl Initiative and PwC.

The research is based on interviews with over a hundred family firms across the GCC.

Multinational corporations and nations buy up land in foreign countries, most of them intending to export the production. Oxfam recently published a report about this phenomenon, called land-grabbing and its problems for the local societies. However, the Oxfam’s study also gives recommendations for a possible solution to the dilemma.

Paper by Funds@Work regarding Islamic Finance vs. Sustainability from a network perspective insight; "Our aim was to show that we should never look at phenomena in an isolated manner. Islamic, ESG as well as conventional investors can greatly learn from each other by being more open. Islamic Finance should not be looked at from a religious perspective but rather from what it brings to the table from which ESG and conventional investors can profi t. Our fi nance and investment system globally will be more resilient if individual participants approach each other more openly and share ideas converging into a mainstream “sustainable fi nance system” which borrows the best of all worlds. From a network analytic perspective we should be aware that openness leads to greater innovation and stability and creates more opportunities to interact. In this context we need to address prejudices which stem from mere ignorance and act as barriers to cooperate. Because ultimately what the world needs is a greater integration of networks such as the Islamic Finance, ESG, and conventional investments communities to make their individual achievements accessible to a broader audience.

The Islamic Financial Services Board is actively working on organizing an Islamic Financial Services Industry (IFSI) Stability Report. The publication is due in May 2013. The goal of the report is to achieve a number of objectives, among which to stress on the growth trend and challenges faced by the IFSI post-crisis, and to bring the progress on various financial initiatives undertaken to promote global financial stability and the impact on the IFSI up to date. The Roundtable on the Islamic Financial Services Industry Stability Draft Report will take place on 21st of January 2013 at Sasana Kijang, Kuala Lumpur, Malaysia.

The first edition of the Qatar CSR Report 2012 has been released. The central part of the report are the most recent developments in CSR from both government and private institutions. Reviewed developments include Qatar National Vision 2030, National Development Strategy 2011-16, Qatar 2022, National Day, and National Sports Day. In addition, the Millennium Development Goals are described in detail. The United Nation's ten principles on climate change in Qatar, and strategies carried out by the respective public and private sector entities to implement it in the country are incorporated in the report.

Dear Reader,

Islamic finance had another great year. Many of its market segments progressed, like for example the Sukuk market gaining more maturity. Despite the ongoing debt crisis a good sign of hope and happiness.

Nevertheless we are - as an industry - still not satisfied with the achievements. Islamic finance shall grow stronger in terms of social impact and in terms of substance:

Hence, please allow me to re-iterate my call for participating in international initiatives beyond just our own industry to learn and spread knowledge and experience:

Calling Islamic financial institutions to become member of the United Nations Finance Initiative
http://www.islamicfinance.de/?q=node/811

Inshallah we see more Islamic financial institutions taking a lead in SRI, Social Impact Investing and other approaches while contributing with Islamic finance knowdledge to the conventional industry. The time is now; and there are signs that Malaysia aims for a lead:
http://www.islamicfinance.de/?q=node/4151

Global Islamic banking assets are expected to reach over $1.8 trillion in the coming year. This forecast by Ernst & Young is significantly higher than some industry estimates published earlier. The Islamic banking industry continuously grows worldwide and manages to sustain its quick pace. The top 20 Islamic banks demonstrate growth rates of 16% during the last three years. Saudi Arabia appears to be the largest market for Islamic assets.

According to Hasan S. AlJabri - CEO of SEDCO Capital - banks in Saudi Arabia have success in Shariah-compliant financing and arouse attention and excitement around the world. Together with some of the leading global managers SEDCO has been working on the development of sophisticated Shariah-compliant investments making them more rewarding than conventional investments. The reason for that is pointed out to be the low leverage.

A recent report by the Association of Chartered Certified Accountants (ACCA) and KPMG states makes a call for co-operation between standard setters and Islamic banks. Thus, harmonization of financial reporting shall be enabled. ACCA supports the opinion that due to the rapid global growth in Islamic finance reports must be harmonized and consistent. Guidance and standards should be developed and the investor community should be educated on the most significant matters.

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

Ratings Intelligence conducted an indepth study on the quality of Shariah equity screening. The authors of the paper are Dr. Mushtaq Shah (CEO), Dr. Nabhan Al-Nabhan (chairman) and Abdul Hadi Shaikh (head of equity screening and audit). It discusses the different ways results are obtained for a company under review by adopting different research approaches. A further topic are possibilities and ways to improve the quality of Shariah screening. An interactive, knowledge-based and Shariah board guided approach to Shariah equity screening is advocated by the research.

The new web portal that launched in Egypt claims to be the first crowd funding service in the country subject to the principles of Islamic finance. The portal enables a huge number of investors to become shareholders in a project. In order to that, they will need to contribute only very small amounts of money and will not have to go through stock exchange. Co-founder of the portal Shehab Marzban explains that micro-projects and larger projects are funded by banks. However, projects worth between $50,000 and $300,000 need to find another source of funding. The portal is aimed to bridge this gap.

Today the certification institute Ethica launched an e-book on practical, usable information about Islamic finance. The 700 pages of the book cover a number of topics from sample Islamic finance contracts, over 1,000+ scholar-approved Q&As, to the entire "Meezan Bank Guide to Islamic Banking," study notes to Ethica's award-winning Certified Islamic Finance Executive (CIFE) program, etc. At the end of the e-book there is an easy-to-use subject index. The emphasis lies on entrepreneurship.

Dear Reader,

The German language book on Islamic finance by the Editor of IslamicFinance.de and Dr Wackerbeck from Booz Consultants is now translated to Chinese.

Please find the biographical information below:

Authors: Michael Gassner / Philipp Wackerbeck
Title: Islamic Finance – Islam-gerechte Finanzanlagen und
Finanzierungen
ISBN number: 978-7-5139-0217-5
PUBLISHER: Beijing - Democracy and Construction Press
Pre-Publication Date: 2012.7

Full biographical details: http://db.lib.bua.edu.cn/asord/asorditem.php?asord_marc_no=0001344540

Orders: http://www.amazon.cn/%E4%BC%8A%E6%96%AF%E5%85%B0%E9%87%91%E8%9E%8D-%E7%B...

Book review about the German language original: http://www.rpi-virtuell.net/workspace/24686AD5-936C-476D-9EA0-65E2968590...

Best regards,

Michael Gassner