IslamicFinance.de

Indonesia's finance ministry plans to sell its first global sharia-compliant bond issue, or sukuk, before June, backed by 7.5 trillion rupiah (USD 650 mn) worth of assets. The sukuk will be issued according to the ijara, or lease-based, principle.

PRESS RELEASE

Conventional to Strategic: A New Paradigm in Giving

March 22-23, 2009 • Abu Dhabi, UAE

Abu Dhabi, UAE: The 2nd World Congress of Muslim Philanthropists (WCMP) concluded today after several key developments had been achieved that indicate an evolution in Muslim giving. The WCMP is a high-level network of donors and foundations established to promote informed and effective giving. The annual Congress itself is a unique event which brings together a diverse set of participants, with the hope that enhanced cooperation between different philanthropies through strategic partnerships will add profound value to address global challenges that affect both humanity and the environment.

Dr. Tariq Cheema, the founder of the WCMP, affirms that the World Congress of Muslim Philanthropists (WCMP)' brings together leaders who understand the risks and opportunities they have are common as global citizens, and therefore realize that collaboration across the lines of faith and race is a necessity and not merely a choice'.

Developments

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is offering Export Credit Insurance which offers to protect the exporters from the risk of payment default by their buyers or importers on one hand, and offers them a number of indirect and direct financing products on the other hand. This dual solution approach mitigates the principal inherent risks in international trade, encouraging exporters in entering new markets and expanding customer base.

The concept was presented in Saudi-Arabia and the ICIEC is going to present the possibilities to other IDB member countries.

Experts are expecting further drop in Sukuk isssuance in 2009. Local currencies help to support the markets, K. Salman Younis, head of Kuwait Finance House's Asian operations was cited.

Dawood Islamic Bank Limited has received Rs. 1 billion (USD 12.9 mn) investment from Unicorn Investment Bank Limited, based in Bahrain , this was stated in a statement issued from Bank’s headoffice in Karachi. Dawood Islamic Bank launched in 2007 with an initial paid-up capital of Rs. 3 billion. The Dawood Islamic bank has a branch network of 21 branches spread over the major cities of Pakistan , including Karachi , Lahore , Islamabad , Faisalabad , Multan , Sialkot , Iqbalabad and Joharabad.

Unicorn already had a 22.2 % equity stake in Dawood Islamic Bank prior to the current investment. With the new investment the equity of Unicorn Investment Bank, in Dawood Islamic Bank has increased to 37% percent

Aamir Khan is Managing Director and Head Global Private Equity of Unicorn Investment Bank and a founder Director of Dawood Islamic Bank

Said Rafique Dawood is Chairman Dawood Islamic Bank.

The UNEP FI Insurance Working Group, supported by leading academic institutions from the United States and Europe, is conducting a landmark global survey on the understanding and integration of environmental, social and governance (ESG) factors in insurance underwriting and product development. The nature and scope of this survey makes it the first of its kind.

The core objectives are to:

- Assess the understanding and integration of ESG factors in insurance underwriting and product development globally
- Assess the financial materiality of ESG factors in insurance underwriting and product development
- Provide recommendations for sustainable insurance underwriting
- Provide research input for potential projects on other core insurance processes (e.g. investment, claims management, and sales & marketing)
- Establish a solid business case for the development of "Principles for Sustainable Insurance"

Visit http://www.unepfi.org/events/2009/survey to find out more and participate.

In order to attract Muslim investors to stock markets, Reliance Capital Services has launched in Kanpur the 'Imaan Investment Plan'.

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.

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.

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.

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.

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

Jakarta, 3rd March, 2009

The Islamic Development Bank Group (IDB Group) provided “Gold Sponsorship” to the 5th World Islamic Forum WIEF being held in Jakarta, Republic of Indonesia. In his speech in the Leadership Panel on “Innovative Solutions to Global Challenges”, HE Dr. Ahmad Mohamed Ali, President of the IDB Group praised WIEF for addressing these critical topics, and emphasized three avenues to new innovative solutions to meet global challenges, namely, ethics-based rather than rule-based financial governance structure, investment partnership with the poor and the vulnerable, and unleashing the God-given potential and innate strength of the full human resources. In his speech, he briefed the participants on IDB Group activities in meeting global challenges.

The first day of the Forum included two panel sessions titled “Leadership Panel” and “Global CEO Panel” followed by four plenary sessions namely; Beyond Scarcity: Overcoming the Global Food Crisis, Paving Greener World: Creating a Future for Alternative Energy, Stemming the Tide of the Global Financial Crisis, and Global SMEs: Business Beyond Boundaries.

According to Moody' s worldwide fall in oil prices and the global economic crisis has affected the Islamic finance industry, but the institutions' accumulated liquidity and capital will help them withstand these pressures.

According to Moody's, the drop in oil prices poses two key challenges for the Islamic finance industry. "Firstly, there is still a vital link between oil prices and Islamic banks as most of the latter operate in hydrocarbon-exporting economies. As they face increasingly limited funding sources, Islamic banks will find it more difficult to grow going forward. Secondly, oil liquidity has been a major driver of the disintermediation process in the Islamic finance industry. With reduced oil liquidity, not only have sukuk issuances been slowing sharply, thereby depriving Islamic banks of much-needed long-term funding, but pricing on such instruments has been distorted," says Anouar Hassoune, a Moody's Vice-President/Senior Credit Officer and co-author of the report.

Pak-Qatar Family Takaful Limited (PQFTL) has been assigned an initial Insurer Financial Strength (IFS) rating of 'A-' (Single A Minus) by JCR-VIS Credit Rating Co. Ltd.

Etiqa Takaful Bhd recorded for the financial year ended June 30 last year a premium of RM 1.044 bn. It is the first takful company to cross this level and the largest in the world. Currently, the company has about a million policy holders.

Mohd Tarmidzi Ahmad Nordin is Chief Executive Officer.

Adviser to PM on Finance Shaukat Tareen has asked Islamic banks to bring billions of rupees in formal banking which are kept with the people on religious grounds.

Tareen said that this huge amount can be brought in for productive purposes and channelised into a profit and loss based system of banking.

Zafar and Uves Sareshwala, promoters of broking firm Parsoli Corporation, were debarred by the Securities and Exchange Board of India (Sebi) after they were found to have fraudulently transferred shares of genuine investors to their own accounts.