IslamicFinance.de

The economic committee of the Shura Council (SC) showed its support to the Islamic Research Academy of al-Azhar's decision to reject the bill of the ministry of finance on Islamic sukuk. It is said that the bill lacked legitimate aspects. Meanwhile, a new draft law over Islamic bonds has been made public by al-Azhar Grand Sheikh Ahmed el-Tayyeb.

2013 is the 38th year for the global Islamic banking industry in its contemporary phase. The start of the new year is filled with invigorated optimism, partly due to its continued proliferation in new markets, particularly in Oman and Arab Spring countries. Another reason for the optimistic attitude is the impressive momentum of the sukuk market. However, the Islamic finance industry tends to be beguiled by its own relative success largely because of the absence of independent evaluation of its performance and policy and architectural development.

2012 is considered to be a turning point for banking in compliance with Islamic principles. New markets and new regulations in the Middle East contributed very much to the flourishing of the sector. According to data from Ernst and Young, globally assets managed in line with Shari'ah will reach in 2013 record heights, amounting to 1. 8 trillion U.S. dollars, up from 1.2 trillion U.S. dollars in 2012. The ongoing turmoil in the Middle East and the Euro zone debt crisis were not able to stop Islamic banks in the Middle East from expanding their markets and business.

According to experts from Ernst & Young, Saudi Arabia and Egypt are poised to become the most attractive private equity (PE) destinations in the MENA region. Saudi Arabia is the first in the ranking of the most attractive PE investment destinations in 2011. The reasons for that were the initiatives of the Kingdom's government and its relaxed foreign ownership norms. There are some basic factors such as demographics, the robustness of its financial institutions, a very healthy economic outlook and steady growth which play a key role in positioning Saudi Arabia as a leading PE destination.

Dear Reader,

Islamic finance had another great year. Many of its market segments progressed, like for example the Sukuk market gaining more maturity. Despite the ongoing debt crisis a good sign of hope and happiness.

Nevertheless we are - as an industry - still not satisfied with the achievements. Islamic finance shall grow stronger in terms of social impact and in terms of substance:

Hence, please allow me to re-iterate my call for participating in international initiatives beyond just our own industry to learn and spread knowledge and experience:

Calling Islamic financial institutions to become member of the United Nations Finance Initiative
http://www.islamicfinance.de/?q=node/811

Inshallah we see more Islamic financial institutions taking a lead in SRI, Social Impact Investing and other approaches while contributing with Islamic finance knowdledge to the conventional industry. The time is now; and there are signs that Malaysia aims for a lead:
http://www.islamicfinance.de/?q=node/4151

This year's record of $46 billion in terms of global sukuk sales is very likely to be exceeded in the coming year. A key reason is that countries like Oman, Tunisia and Egypt are just entering the market. Borrowing costs on Sharia-compliant debt have decreased 11.4 percentage points reaching 2.82% since the end of 2008 due to central banks in Europe, the US and Japan pumping funds into their economies in order to enhance growth rates. A rise in the Islamic banking assets will drive the demand so that it can reach $1.8 trillion next year. Compared to that, in 2011 the demand was $1.3 trillion.

Tunisian government became an offer for financing of the purchase of four brand new airplanes from the Qatari Islamic Investment Bank. The discussions were led among the management of the bank, the Minister of Transport of Tunisia and the CEO of Tunisair.

The Jordanian government announced its intention to establish regional center for Islamic finance. By now, the total amount of Islamic assets in the country reaches 5% of total banking assets. Islamic banks of Jordan perform considerably better than traditional banks as they offer various unique services and products.

Lebanese banks anticipate the Syrian market to grow once the political stability will be reached. By now, there are seven Lebanesse banks that are operating in Syria.

Maximizing the Arab world's gains from energy resources is possible through cross-border collaboration. Since a large number of opportunities are currently available, energy resources can be piped and distributed across the region through a regional energy grid. 60% of the world’s proven oil and 40% of gas reserves are held by the region. The energy demand in the Middle East and North Africa (Mena) region has grown 500% over the last 30 years, thus representing a highly beneficial target for energy trade.

Together with some of the leading global managers, SEDCO Capital has worked on the development of sophisticated Shariah-compliant investments. Due to low leverage they often are even more rewarding than conventional investments. Through Islamic finance real value in the economy can be created, enabling the creation of real growth and jobs. Also, the sukuk market continuously grows on a global scale because of ncreasing interest in Islamic financing modes.

The draft of the sukuk law aiming to regulate the trading of bonds in a manner compliant with Islamic law was finished by the Egyptian Financial Supervisory Authority (EFSA). In a statement, EFSA explained that the draft was created following a detailed study of international experiences in such regulations. Topics included in the draft are activities which can be financed by sukuk and the various kinds of financing instruments available. Before issuance, the bill stipulates the approval of a committee of three Islamic finance scholars on any sukuk offering.

The Egyptian Financial Supervisory Authority's (EFSA) draft law regulating Shari’a compliant debt tools has been brought to a final version. The proposition consists of 30 articles which establish a legal framework for the issuance and transaction of sukuk. The purpose of the law is to expand the scope of activities that sukuk can finance. Moreover, it shall allow the issuance of business sukuk.

While the government of Morocco is working on a framework to introduce Islamic finance to the country, an international conference on Islamic finance takes place in Casablanca. Starting on November 29th, insurers, bankers and heads of financial institutions from various countries currently involved or intending to engage in Islamic finance, will take part in the conference. Among the participating countries are Tunisia, the UAE, Malaysia, Bahrain, France and Luxembourg.

A number of investment professionals united in a collective is planning to set up a US$ 1 billion integrated Islamic finance investment platform in Morocco. This will be made possible by the creation of Sharia compliant financial institutions for the first time in the country, including a private equity management company and an Islamic microfinance organisation. As part of the "1 Million Jobs for MENA initiative", the project aims to provide appealing opportunities for investment. Thus, it is supposed to make its contribution to the high growth employment expectations of the MENA region.

Following the example of other North African countries, Morocco is working on the draft of a law aiming to allow the sale of Islamic bonds. Thus, the country makes efforts to lure more investors to their debt after the surge of global sukuk offerings reached record amounts. The bill will be put to parliament immediately after the completion of the draft. Details on the exact time when this is to be expected are not revealed. Other two African countries - Tunisia and Egypt - are working on draft laws concerning sukuk sales as well.

The International Monetary Fund claims, the political instability as well as the stability of state institutions in Egypt could delay the financial injection in value of $4.8bn loan from the fund.

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

According to Bank of Khartoum's plans, the bank will increase its capital more than three times with the help of an expansion in the resource-rich country enabled by its Gulf investors. The investors are certain that peace with South Sudan will be maintained. Due to wars, poverty and a decade-long conflict with South Sudan, Sudan could not make use of the possible large-scale foreign investments so far. The U.S. sanctions against Sudan in place over its human rights record since 1997 have had an enormous effect. Since the agreement to end hostilities in September, Gulf Arab investors look more positively on Sudan.

The Hamas own bank, 'Islamic National Bank', was destroyed on Tuesday in an Israeli strike. Among other targets following was a villa that residents said belonged to Azzam al-Showa, the president of al-Quds Bank, which has no obvious ties to Hamas. No one was home when an Israeli F-16 struck late Tuesday night.