IslamicFinance.de

The first trade creditor has filed a lawsuit against Dubai World's Nakheel property developer unit with the special tribunal set up to handle disputes over its debt restructuring, which could further delay a settlement. The tribunal said the suit, filed in mid-August, was served by Dubai-based Construction Delivery Group (CDG). Legal experts have said that creditor claims against Dubai World or its subsidiaries with the tribunal could potentially cause the restructuring to come to a standstill until the matter is resolved in court. Under Nakheel's restructuring plan, trade creditors have been offered 40 per cent of what they are owed in cash and an Islamic bond (sukuk) in lieu of the rest.

Citigroup plans to arrange more sales of Islamic bonds, or sukuk, from Turkey. Citigroup is having talks with other potential sellers of Shariah-compliant debt in the country, said Hulusi Horozoglu, director of global Islamic banking at Citigroup, in an e-mailed response to questions. Turkey’s government is considering selling sukuk “in the future,” Finance Minister Mehmet Simsek said in an interview.

Senegal, Pakistan and Afghanistan, among the world’s 50 poorest nations, are turning to Islamic banking to spur economic growth by encouraging people to take out loans and open savings accounts. Developing Islamic nations have shunned banking in part because of the religion’s ban on interest, limiting access to funds for project financing and stunting business growth, according to the International Monetary Fund. The concept of risk-sharing in Shariah banking that prohibits interest payments would be more useful in Muslim countries because their economies are less diversified, the IMF economists said.

Saudi conglomerate Saad Group's creditors sold some of their debt cheaply for just 15 cents on the dollar two weeks ago in order to reduce exposure. The National newspaper said that the foreign banks made the sales. Saad Group is embroiled in a legal disputes with Al Gossaibi group on different fraud charges.

The following borrowers are expected to sell Islamic bonds:

TURKEY: Citigroup Inc. plans to arrange more sales of Islamic bonds from Turkey after managing a $100 million issue for Kuveyt Turk Katilim Bankasi AS, said Hulusi Horozoglu, director of global Islamic banking at Citigroup.

PAKISTAN: The South Asian country plans to sell sukuk maturing in a year or less in the domestic market by the end of this month, according to an e-mailed statement from Syed Wasimuddin, a spokesman for State Bank of Pakistan, the nation’s central bank.

CAGAMAS BHD.: Malaysia’s national mortgage company plans to sell more Islamic bonds this month following a sale in August under its 5 billion ringgit ($1.6 billion) sukuk program, the Business Times reported, citing an unidentified person familiar with the proposal.

INDONESIA: plans to sell 2 trillion rupiah ($224 million) of Islamic bonds by private placement this year, said Rahmat Waluyanto, a director at the Ministry of Finance.

First Sovereign Advisory Sdn Bhd (FSA) aims to make financial freedom a reality by offering syariah perspective financial planning, which includes zakat planning. FSA is the first Islamic value-based financial adviser firm licensed by Bank Negara Malaysia and the Securities Commission in Malaysia. The company's business model is based on fair sharing formula between the company and its financial advisor representatives as well as with capital market service representatives. It also has license to offer other services like portfolio management and tax planning.

Aware that the profit rate dropped last year to 3.5 per cent compared to the previous years' rates of six per cent and seven per cent they think that it was still better than what the banks offered in term deposits. Ali Abdullah Janahi, Mahmoud Al Twissi, Bhawna Bist and Dimple Bhatia are among the recent converts to National Bonds, attracted by what they believe is a safe investment with better returns than banks. While some see the UAE-based Sharia-compliant savings scheme as one more way to diversify their portfolio, others see it as a future fund for children and a stop-gap investment before opting for other avenues such as real estate. In most cases, it's the word of mouth recommendations from friends and relatives about the scheme that persuaded them to invest in National Bonds.

Bahrain's Islamic lender Al Baraka yesterday said it planned to enter the Saudi Arabian market through an acquisition of an Islamic investment company there, valued at around 300 million Saudi riyals ($80m). Al Baraka did not disclose the name of the Saudi firm it planned to buy, adding it would reveal further details after gaining official approval. The Al Baraka Banking Group has a wide presence in the form of subsidiary banking units and representative offices in 12 countries, which in turn provide their services through more than 300 branches. Al Baraka had signed a share swap deal with Saudi Investment in 2007 but scrapped the deal in 2009 blaming the global financial crisis.

National Bonds is providing new hope to its customers who have accumulated loans with the launch of a new initiative that will help new & current bondholders erase their debts and begin a 'debt-free' life. National Bonds Corporation PJSC, the leading Sharia compliant saving scheme, will reward prizes totaling up to AED 2 Million in value that is in addition to its regular & richest weekly and monthly rewards, including the life-changing AED 1 million monthly prize and 22,250 prizes. This initiative is part of National Bonds' efforts to inculcate a culture of regular savings in the UAE. The strategy includes the recently launched National BondsNational Bonds
National Bonds Corporation Standing Instruction Order, a service that makes regular saving easier than ever and is available at a number of banks across the UAE. The Standing Instruction Order will allow banks to automatically deduct a monthly amount from customers to purchase bonds on their behalf, thereby eliminating the need to repeat the transaction process every month.

Tricor Group, a member of The Bank of East Asia Group, is expanding into Dubai and the Middle East through a new Joint Venture with Praesidium. JV with Praesidium will be based in the DIFC; will provide a range of outsourced services to both conventional and Islamic businesses, including global Shari’ah infrastructure support services, including bookkeeping services for Shari’ah-compliant businesses, fund administration and custody advisory services to Islamic funds.

Islamic finance standards maker, Accounting and Auditing Organization for Islamic Financial Institutions announced yesterday the appointment of Dr. Abdul Sattar Al Khuwaildi to its prestigious Sharia committee. Dr Al Khuwaildi is the Secretary General of the Dubai-based International Islamic Centre for Reconciliation and Arbitration since 2007, which assists in resolving financial and commercial disputes that may arise between financial and commercial institutions.

Ethica Institute of Islamic Finance and Zawya today announced a partnership to jointly deliver online Islamic banking courses and certification. Ethica Institute's certification is chosen by more professionals and students than any other Islamic finance certificate in the world, and Zawya is widely regarded as the leading provider of business and investment intelligence in the Middle East. A partnership between Ethica and Zawya would bring unprecedented access to standardized Islamic finance training and certification to both companies' extensive community of high-end users. In the coming months the two companies intend to jointly launch a specialized Islamic finance certification focusing on Sukuk.

Islamic banks in the UAE recorded a decline of around 17 per cent in its net earnings in the first half of 2010 despite a sharp rise in the profits of the Abu Dhabi Islamic Bank (ADIB). Individually, several national banks reported growth in their net income in the first half of 2010, including the government-controlled National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB). The UAE's largest bank, Emirates NBD, reported a 51 per cent fall in profits because of its exposure to Dubai World. Central Bank figures showed UAE banks are pushing ahead with a post-crisis provisioning drive because of their exposure to Dubai World, the domestic real estate sector and two Saudi financially troubled family businesses. According to a key Western financial institution, UIAE banks have emerged as more vulnerable to real estate downturns than those in other Gulf oil producers because of their massive lending for that sector.

T'azur Company b.s.c., (T'azur), a regional Takaful (Islamic Insurance) company headquartered in the Kingdom of Bahrain, announced today the signing of an Islamic re-insurance agreement with Hannover Retakaful, the Bahrain-based Islamic subsidiary of Hannover-Re, one of the world's leading re-insurers with premiums in excess of EUR10bn. T'azur fully Sharia-compliant re-insurance panel is led by Hanover Retakaful and also includes other highly rated Islamic reinsurance companies such as ACR Re, Takaful Re, MNRB and Best Re.

Albaraka Türk Katilim Bankasi A.S. (Al Baraka Turk), a subsidiary-banking unit of Al Baraka Banking Group BSC (ABG), signed a $240 million syndicated Islamic financing in Istanbul. Twenty two GCC, European and international banks (both Islamic and conventional) participated in the syndication. The syndication was arranged and managed by Standard Chartered Bank, ABC Islamic Bank (Bahrain) and Noor Islamic Bank (Dubai). The funding deal comes as part of Al Baraka Turk's strategy to further expand and diversify its financial resources and further strengthen its name in the domestic, regional and global financial markets. Al Baraka Turk will use the proceeds of the deal towards the ongoing implementation process of a range of existing and newer products and services offered by it.

Jakarta-based Bank Syariah Mandiri joined Islamic lenders worldwide to use Ramadan to remind Muslims to obey the teachings of the Prophet Muhammad that ban interest. Emirates NBD of Dubai waived payments on personal loans during Ramadan, while Maybank Islamic in Kuala Lumpur started automating charitable donations. Banks in Indonesia, the world’s most populous Muslim nation, offered limited-edition products to generate Ramadan-linked revenue and publicity. Bank Syariah Mandiri, the Islamic unit of Indonesia’s largest bank by assets, Bank Mandiri, collaborated with a local TV operator on a program aimed at promoting Shariah-compliant banking during the holy month. Shariah finance prohibits the charging of interest as well as investments tied to gambling and alcohol. Returns are generated as a share of profits from assets.

The gesture came in response to a call from President Sheikh Khalifa bin Zayed Al Nahyan. The money was handed over to the UAE Red Crescent Authority (RCA).

On the verge of collapse, Kabul Bank operates in a financial system we would barely recognise. SHANE Warne's post-cricket pursuits and the murky nightmare that is Afghanistan would not appear to be obviously connected. It's a mess, not least because Kabul Bank is the vehicle used to pay Afghan government salaries, mostly the military and police, the very same - and sometimes mutinous - security forces that the US, Australia and other members of the Western alliance trying to keep Afghanistan safe from extremists say they will, eventually, hand their duties to. The head of the country's central bank, a close associate of the ruling Karzai clique, unconvincingly says everything is fine at Kabul Bank and blames the media. Before returning to Kabul to again run the central bank (the Taliban interrupted his first stint in 1996), this particular governor sold carpets in the US.

Standard & Poor's Ratings Services said today that its 'BBB-' counterparty credit and insurer financial strength ratings on Kuwait-based First Takaful Insurance Co. ( First Takaful) remain on CreditWatch with negative implications, where they were placed on May 12, 2010.

Seeking to diversify its financial industry after a banking crisis, oil-rich Kazakhstan is drawing on Arab and Malaysian investment in an effort to build an Islamic finance industry among its 13mn Muslims. Its success may depend on the fate of pioneer investors and the commitment of its secular government to clear the way for a long-awaited sovereign issue of sukuk, or Islamic bonds, which could prompt other issuers to follow. Al Hilal, owned by the government of Abu Dhabi, was the first bank to respond when Kazakhstan passed new laws last year to allow an Islamic finance industry. The bank opened its Kazakh offices in March 2010. Though modern Islamic finance began three decades ago, its major principles, such as a prohibition on paying interest, would have been familiar to Muslim traders on the medieval Silk Road through Kazakhstan and Central Asia. Investors, though, are cautious. The financial crisis humbled the once-proud Kazakh banking sector; international creditors were forced to write off billions of dollars of debt in a restructuring process that followed local bank defaults.