IslamicFinance.de

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.

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.

Gulf Finance House announced that its landmark $300 million development project, Jordan Gate, based in Amman, Jordan is due for completion early 2011 following the signing of a new agreement between Bayan Holding Jordan Gate Company, Alhamad Company, the construction company responsible for delivering the project and Hektar as a new investor. With the signing of the new agreement, the Jordan Gate project is expected to be completed early next year. Jordan Gate is the most extensive and significant infrastructure development in Amman. The project consists of two 43 storey towers, with one of the towers to be transformed into a hotel to be operated by Hilton Hotels and the other tower to provide offices, multi-purpose lounges and halls for meetings, presentations and conferences. A commercial podium connecting the two towers will host shops, entertainment centres, a food court and other services.

Al Salam Bank - Bahrain a leading Islamic financial institution, has recently provided £38 million in a unique Shari'a compliant mezzanine facility to refinance a landmark commercial Property located in the heart of Canary Wharf, the financial district of London. The property is leased in its entirety to a leading, multinational financial institution with A+ long term rating with stable outlook form Standard & Poor's. The successful closing of this transaction demonstrates ASBB's ability to provide its valued clients with differentiated investment opportunities with attractive terms that are structured to take advantage of current market conditions. ASBB was advised by Herbert Smith LLP and Knight Frank on legal and commercial matters relating to the transaction, respectively.

Leading Islamic finance scholars are preparing the first global certification for Shariah experts, seeking to bolster the industry’s reputation and make it easier for banks to find qualified advisers. The International Shariah Research Academy for Islamic Finance in Kuala Lumpur will pick a board of regulators by year- end to issue permits for scholars qualified to sit on Shariah boards. The scholars decide whether financial products meet the religion’s precepts, including a ban on interest payments. Scholars are now required to have recognized university degrees before they can act as advisers to banks and companies. The council of scholars at the academy includes Sheikh Nizam Yaquby of Bahrain, Mohammad Daud Bakar of Malaysia and Abdul Sattar Abu Ghuddah of Syria. A centralized regulator for scholars will help increase investment because banks would save time in choosing experts to ensure products meet religious principles. The institution doesn’t plan to restrict scholars on the number of advisory panels they can join.

Patrick Imam and Kangni Kpodar note that the 9/11 attack on the US ‘had a positive impact on assets of Islamic banks, perhaps because Muslim investors, who traditionally invested in the West, were compelled to keep more money at home for fear of expropriation.

The study said that while oil prices have a positive and statistically significant impact on the diffusion of Islamic banking, the effect is likely to be asymmetric. They found that the probability for Islamic banking to develop in a given country rises with the share of the Muslim population, income per capita, and whether the country is a net exporter of oil. Trading with the Middle East and economic stability also are conducive to diffusion of Islamic banking and proximity to Malaysia and Bahrain, the two Islamic financial centers, also matters.

The Solidarity Group Holding board has appointed of Ashraf Bseisu as group chief executive officer. Mr Bseisu is a long-standing Solidarity executive and a prominent member of the region's insurance industry. Solidarity Group Holding, one of the largest takaful companies in the world, includes the Solidarity Family Takaful Company and Solidarity General Takaful Company in Bahrain as well as subsidiaries and associates in Saudi Arabia, Jordan, Egypt, Malaysia and Luxembourg. Mr Bseisu is currently Bahrain Insurance Association chairman and the General Arab Insurance Federation vice-president. He has been with Solidarity since his appointment as general manager - finance and corporate management in July 2006 and has held several senior posts within the organisation. He has more than 20 years of experience in the insurance and financial services sector, where he held several executive positions.

Bahrain (665km²) is smaller than King Fahd airport (780km²) and has achieved being the biggest centre of Islamic finance in the world, democracy, its very own airline. Moody's, a ratings agency, says it doesn't think Bahrain has sufficient cash to be able to underwrite its banking sector anymore, and has consequently downgraded the investment rating it bestows upon the country from A2 to A3. "Reduced fiscal flexibility makes it more challenging potentially to meet contingent liabilities arising from Bahrain's financial sector, which is relatively large compared with the government's resources," Moody's said.

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,

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.

The paper analyses the balance sheet and business model of Gulf Finance House and identifies certain pattern to charge fees in their business model and criticises the same.

By Mohammed Khnifer, Aatef Baig, and Frank Winkler
Reading University
May 2010

Unicorn Investment Bank (Unicorn), the Bahrain-based financial services group, announces that its successful close of a US$450 million 5-year Sukuk on behalf of leading Saudi real estate developer Dar Al-Arkan Real Estate Development Company (Dar Al-Arkan) has been named Islamic Finance Deal of the Year for the Middle East by pre-eminent international business magazine The Banker.

The International Islamic Financial Market, the Bahrain-based organization seeking to set standards for Islamic securities, may issue new global guidelines to facilitate the sale of Shariah-compliant bonds, an official at the industry body said.

Kuala Lumpur, 22 March 2010 – As the global Islamic financial services industry gains momentum both in terms of confidence and recovery in a global economy that is still coming to terms with the twin effects of the credit crunch and financial crisis, the 7th Islamic Financial Services Board (IFSB) Annual Summit due to be held on 4th-5th May 2010 at the Ritz-Carlton Hotel in Manama, Bahrain under the patronage of the Central Bank of Bahrain, is attracting wide spread interest from regulators and market participants from various parts of the world, including countries that are attending the Summit for the very first time.

The growing interest in Islamic finance from new markets and the industry’s ability in general to absorb the shocks of the financial crisis better than the conventional sector has prompted several countries and analysts to take a further or a new look at Islamic finance.

Bahrain will establish the world's biggest Islamic bank within the next 6 to 12 months. The creation of a planned Islamic investment megabank is in "fairly advanced stages" and it will likely be launched in the next 6 to 12 months, an executive at a firm advising on the project said this week, Barcelona News wrote.