IslamicFinance.de

The Kuwait Finance House (KFH) is set to open an investment bank in Saudi Arabia with a capital of SAR 500 mn (USD 133.3 mn). KFH is further looking into investment opportunities in the UAE, Oman and Qatar.

Fitch Ratings affirmed Kuwait Finance House's (KFH) Long-term Issuer Default Rating (IDR) at 'A+' and Short-term IDR at 'F1'. KFH’s Individual Rating was downgraded to 'C/D' from 'C' and placed on Rating Watch Negative (RWN). KFH's Support '1' and Support Rating Floor 'A+' were affirmed. The Outlook for the Long-term IDR is Stable.

Stanley Carvalho reported on 31 March on Reuters that Abu Dhabi's government-owned Al Hilal Bank will set up an Islamic bank in Kazakhstan. Al Hilal will headquarter the new bank in the central Asian state's capital Almaty, opening in the second half of 2009 with an initial capital of AED 100 mn(USD 27 mn).

Chairman of Hilal Bank is Ahmed Ateeq al-Mazrouei.

The chairman of Bahrain-based Islamic lender Al Baraka Banking Group BARKA.BH expects a 7 % rise in profit this year.

Shariah scholar Abdulazeem Abozaid is cited in the Qatari newspaper The Peninsula to say that promises are binding in Islamic finance structuring to the degree of compensation for loss but not for entering into the contract.

Emaar Economic City in Riyadh, as subsidiary of Emaar Properties Dubai, announced that it has so far earned SAR 2 bn from the sale of the first phase of residential units.

http://archive.gulfnews.com/business/Real_Estate_Property/10300746.html

Nakheel has joined Thailand's Amburaya Hotels & Resorts to transform Thailand's idyllic Koh Samui Island with the launch of a stunning integrated resort development comprising 17 luxurious private residences and a 75-key all-villa hotel.

http://archive.gulfnews.com/business/Real_Estate_Property/10300825.html

Dubai-based developer Limitless said Thursday it is reviewing a $12 billion (Dh44.04 billion) residential and commercial project in India because authorities there have not yet bought the required land. Its announcement came a day after the developer cut 7 per cent of its workforce and delayed a key contract on its $61 billion Arabian Canal project due to the global economic downturn.

http://archive.gulfnews.com/business/Real_Estate_Property/10300811.html

The well-diversified Al Ghurair Group has signed a USD 347.2 mn (AED 1.275 bn) Islamic facility with a group of financial institutions including Mashreq. The facility has been structured in Ijara and Musharaka that require a sale and lease-back of the asset owned by the client.

Standard Chartered and Mashreq, which is majority owned by the Al Ghurair Group, were the lead book-runners and participating banks include First Gulf Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Arab African Bank and Ajman Bank.

I just published an article with the Dow Jones Islamic Market Indexes Newsletter, giving an overview about the lines of arguments regarding performance and ethical screens, be it Islamic or Sustainability and what empiricial findings have been published.

It is claimed by critics that the reduction of the universe through ethical screens shall reduce the performance, likewise corporate social responsiblity comes against a cost. Similar counterarguments have been raised regarding Islamic screening criteria.

Bank Sarasin published a study doing own research with partners and reviewing published empirical analyses in the literature. It shows that there is no negative impact on performance. My review of empirical analyses in regard to Islamic finance concluded the same and all publications let conclude that ethical screens add value by way of risk management. An example is the debt limitation of the Sharia tolerance criteria.

Ethical screens may therefore improve the investment decision process and more research shall determine, which factors add value to the portfolio and therefore form part of a professional process.

Nopporn Wong-Anan wrote in Arabianbusiness on 30 March that Saleh Malaikah, chairman of Islamic reinsurance operator BEST Re sees the takaful business growing by 17 % over the next 3 years. The growth prospects lying in the fact that insurance coverage is not widely used in the Middle East and shows therefore potential; Saudi Arabia has a market share of 20 % in takaful from the overall insurance market, and promises the highest growth rate. In Malaysia the takaful market share has reached 30 %.

Allianz Indonesia grew by 8.5 % and is the fourth biggest life insurer in the country. In 2008 the MENA region has proven to be one of Allianz's growth powerhouses. Revenues from the region grew to 2.4 billion euros, an increase of 40 percent from last year. In Asia Pacific Property and casualty business (P&C) remains growth driver, unique opportunities to strengthen distribution.

Allianz offers conventional and Islamic coverage.

Inovest (previously Al Khaleej Development Company – Tameer), a Bahrain-based shariah compliant investment company, has launched a new water technology venture in partnership with a US company.

The project size is USD 32 mn, from which USD 24 mn will be the net equity, and USD 7.2 mn is being subscribed by Inovest and its technology partner.

The product launch is subject to approval from Central Bank of Bahrain and other statutory approvals, the company added

Inovest CEO is Dr. Khalid Abdulla.

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Sukuk sales may rebound and reach a record this year, with the Gulf accounting for about two-thirds of the debt issued as higher yields attract investors according to NCB Capital. There is an estimated ‘pipeline’ of about USD 39.3 bn of so-called sukuk, Jarmo Kotilaine, chief economist at Saudi Arabia’s NCB Capital, said in a report. He estimates the pipeline from the Gulf Cooperation Council to be USD 24.6 bn.

The average extra yield on corporate and government sukuk above the London interbank offered rate is 12.26 % points, up from 5.76 % points a year ago, according to HSBC-Nasdaq Dubai indexes.

Press Release

LONDON, March 30, 2009 -- In a report published today, Standard & Poor's Ratings Services explains the way that its rating approach has been adapted to meet the growth of takaful insurance.

The article, "Standard & Poor's Approach To Rating Takaful And Retakaful (Islamic Re/Insurance) Companies," says that the last five years have seen takaful (Islamic insurance) grow from a niche product servicing relatively limited demand to become a mainstream risk management offering.

"In particular, we have seen rapid growth in the Arab world and an expansion across Europe. A further market development has been the growth of retakaful as a Sharia-compliant version of reinsurance," said Standard & Poor's credit analyst Kevin Willis.

Standard & Poor's has rated a number of Islamic insurers and reinsurers and so is able to comment on the way that the rating criteria have been adapted to address the specifics of this product.

Stanley Carvalho reported in Arabianbusiness on 29 March that Abu Dhabi Islamic Bank became the fourth Abu Dhabi bank to announce it has secured financing from the Ministry of Finance. ADIB secured AED 2.2 bn of government deposits and converted it into regulatory capital following similar moves by rivals in the credit crisis.

With the conversion into Tier 2 capital, ADIB's total equity increases to AED 11.02 bn and its capital adequacy ratio (CAR) will be 19.75 percent.

Tiras Mahmoud is CEO of ADIB.

Albaraka Banking Group B.S.C (ABG) held its Ordinary and Extra Ordinary General Meetings today in Manama, the capital of Bahrain. A cash dividend of USD 27.9 mn was decided, which represents 4 % of the issued capital further bonus shares were approved in an amount of USD 46.5 at the rate for one share for every 15.

After deducting all the expenses, the total net income amounted to USD 201 mn in 2008, reflecting an increase of 37.1 % over the income in 2007 after excluding the effect of the extraordinary profit arising from the IPO of the Group's unit in Turkey from the profits of 2007.

The Saudi Capital Market Authority aims to promote the bond and Sukuk markets said its chairman Chairman Abdulrahman Al Tuwaijri according to Arabiya.

Dubai Islamic Bank is set to implement this year its joint-venture with Jordan Dubai Capital and Dubai International Capital to invest in Industrial Development Bank and convert it to the Jordan Dubai Islamic Bank.

"The opportunities offered by Islamic finance in promoting global financial stability and financial inclusion are worth assessment by the leadership of the G-20 countries," said Jeddah-based Islamic Development Bank President Ahmed Mohamed Ali, reported Mushtak Parker in the Arab News.

The President told an Islamic Financial Architecture Colloquium hosted yesterday by Lord Mayor of the City of London Ian Luder at his official headquarters that it is time that the wider world should consider mainstreaming Islamic financial services. And the best way to do this is to accord the relevant Islamic finance stakeholders "observer status" within the framework of the G-20 and the expanded Financial Stability Forum of the International Monetary Fund (IMF).

New Horizon reported that other IT vendors now think about certification by the Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI) and following the example of Path Solutions.

Amanie Business Solutions LLC. officially launched its web integrated Shariah stock screening service, the service will target new entrants into the Islamic fund management industry.

The web delivery platform of Amanie Screening can be accessed through http://www.amaniescreening.com . Investors and fund managers will be able to view the details and features of the Shariah Stock Screening service.

Amanie is a Shariah advisory and education company seeking to serve the global Islamic finance community.