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The Shoura Council has completed 12 sittings regarding the draft of the mortgage law and to solve the differences of opinion. However, a timescale for when the draft law would be approved has not been given. The implementation of the Saudi mortgage law is expected to increase demand for housing by around 50 percent.

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.

Saudi Arabia's parliament delays the decision concerning the mortgage law until the members return from summer recess. Saudi Arabia, the Middle East's biggest economy, needs 1.2 million new homes by 2015, says the Deutsche Bank research.

Hawkamah issues a DRAFT Policy Brief for consultation purposes only. Please find the related full document under source.

Please submit comments and feedback to Ms. Jahanara Sajjad Ahmad , Program Manager Hawkamah, The Institute For Corporate (jahanara.ahmad@hawkamah.org) .

In the current issues the following questions are discussed:

How should we recognize excellence in the Islamic finance industry?
How do we identify greatness – of bankers and financiers, of lawyers, of consultants, of scholars?
How do we discourage a culture of „Islamic Awards for Cash??
How do we develop an „Islamic? methodology for rewarding achievement?

Press Release

Gulf Finance House Long-Term Rating Lowered To 'CC'; Outlook Negative; Ratings
Withdrawn At GFH's Request

*Gulf Finance House's liquidity is under immediate and severe stress, and the
institution has not been able to strengthen it, in our view. *We note that GFH has a
large debt repayment coming due in the next few weeks. *We are lowering our
long-term rating on GFH to 'CC' from 'CCC-' and are affirming the 'C' short-term
rating. *We are withdrawing all the ratings on GFH at its request. *The outlook was
negative at the time of withdrawal.

PARIS (Standard & Poor's) July 5, 2010--Standard & Poor's Ratings Services said
today that it has lowered its long-term counterparty credit rating on Bahrain-based
Gulf Finance House to 'CC' from 'CCC-'. At the same time, we affirmed GFH's 'C'
short-term counterparty credit rating. Subsequently, we withdrew all the ratings on
GFH at its request. The outlook was negative at the time of withdrawal.

"The downgrade reflects our expectation that GFH is likely to restructure its debt
soon because of its weakening liquidity and revenue generation. In our view,

Debt management agency ISDM calculated the average debt load of its customers is AED500,000.

The agency has more than 3,000 clients on its books and about 70 percent of its customers are defaulting on consumer rather than business loans. About 5 % of the clients are ex-UAE residents who have skipped the country rather than face jail for their debts. Banks can recover 80 cents on the dollar through consolidation. Through a debt collection agency, may receive 40 cents on the dollar according to the firm's director Yohannes Mazeingi.

Dubai-based ISDM advises clients in debt distress to consolidate their loans and negotiate with the banks. It collects a two percent fee commission based on the overall value of the debt.

Under UAE law, bouncing a cheque is a criminal offence that can result in a jail sentence.

Some investment companies in the Gulf will likely find it difficult to pursue their operations without dramatic changes in the wake of the global financial downturn, Standard & Poor's has said in a new report. "The main reasons behind this deterioration, in our opinion, are Gulf investment companies' generally high maturity mismatches they carry in their funding profiles and the ensuing weakened liquidity, weak business profiles, high leverage, and high exposure to real estate for some of them," said Standard & Poor's credit analyst Mohamed Damak. Damak said: "But in the short term, we see some major hurdles for Gulf investment companies to overcome on the potential road to recovery."

Gulf Finance House, the Bahrain-based investment bank, aims to reach an agreement with creditors by early July on renegotiated terms for a $100 million loan as the lender seeks more time to implement its new business plan. The global financial crisis cut liquidity and lending, while Middle East property prices slumped, hurting investors in real estate projects in the region. Chief Executive Officer Ted Pretty said that the bank’s presentation of its restructuring package was “well received” by lenders along with its plan to change its business model to develop Islamic financial services.

Qatar is expected to be the largest source of real estate capital during 2010, a Jones Lang LaSalle report said. Recent investments - such as the purchase of London department store Harrods in May are likely to be followed by further investments in other markets across Latin America, Eastern Europe and Asia, it said. Qatar's competitive advantage will be helped by the decline in investment from German funds.

Saudi based Alinma Bank said that it would grant a $1bn credit facility to SABIC, plugging a financial gap at the petrochemical group. SABIC Chief Executive Mohamed al Mady declined to comment while Chief Financial Officer Mutlaq al Morished could not immediately be reached for comment. Alinma said Morished signed the agreement on behalf of SABIC. Ratings agency Moody's assigned the planned bond an A+ rating and said it understood it would be used to refinance or repay debt at SABIC Innovative Plastics Holding, the renamed GE Plastics.

The number of High Net Worth Individuals (HNWIs) in the UAE dropped almost 20 percent last year. The growth levels in the Middle East were the lowest of all the regions surveyed in the report and Amir Sadr, head of Middle East Merrill Lynch Wealth Management, said this was evidence that the region had underperformed in 2009. A new study by the Boston Consulting Group (BCG) found that millionaire households owned more than half of the wealth in the Middle East and Africa region in 2009.