IslamicFinance.de

Saudi Arabian NCB Capital is about to launch a range of Irish-domiciled Islamic mutual funds. This way the company is broadening its investor base and tries to appeal to emerging market investors. The company manages US$12.1bn worth of assets. It has launched two funds investing in Saudi Arabian and GCC equities. NCB's plans include the launch of other funds including one that will invest in sukuk.

QIB UK, which is situated in London, has closed its seventh Islamic capital-protected note. The bank's plans further include rolling out similar products every year. Since the launch of its "Hemaya" structured note programme in 2010, QIB UK was able to raise over US$190m. US$153m of the sum were raised by the first six tranches.According to Anouar Adham, the bank intends to launch several tranches every year.

This month, the first international mutual funds, which will be run by a Saudi Arabian manager, will be launched from Dublin. Equity funds investing in Saudi Arabia and the Gulf region will be launched by NCB Capital. The operations will be compliant to the principles of Islamic Sharia law. This move is considered to be a continuation of the bank's strategy to become a significant player in the sharia market.

Kuveyt Turk has made an application for a a German banking licence. According to its Chief Executive - Ufuk Uyan - it thus aims to become the first Islamic bank in Germany. The company is now waiting for a response from German financial watchdog BaFin. Kuveyt Turk's plans include opening a number of branches in Germany and probably in other European countries later. Moreover, it is decided upon an initial capital investment worth 45 million euros ($58 million) in the planned German unit.

The State of Kuwait belongs to the three largest trading partner of the United Kingdom in the Gulf region with a trade exchange between of about 3.59 billion U.S. dollars. In order to strengthen bilateral relations, the Amir of Kuwait has made a visit to the UK at the invitation of Her Majesty Queen Elizabeth II.

Director, Retail, Private & Islamic Banking

Our client is a Middle Eastern bank seeking to grow their base in the UK/Europe. The main office is based in the West End of London and they have multiple offices located throughout the GCC. First class opportunity for an Arabic speaker
Experience of Retail, Private and Commercial (SME) Banking within an Islamic Finance framework is key.

26.11.2012: eFC Ref Nr 1130266

GFH Capital is a private equity firm based in Dubai, UAE. According to its website, the company has been highly successful investments and fund management over the past ten years. It also points out that it has handled investments worth more than eight billion US dollars in 25 different countries. Its funds to some extent come from the Dubai Islamic Bank, the World Bank and the Islamic Development Bank. The Gulf Finance House is an investment bank Bahrain. It completely owns GFH Capital Limited. Just as GFH Capital, the Gulf Finance House has made numerous successful investments worth billions of American dollars. GFH Capital has made its bid for Leeds United on its own and will handle the deal independently of Gulf Finance House.

James Bagshawe, 53, was the Chief Operating Officer of the Gatehouse Bank. He claims that he lost his £185,000-a-year job with the bank because he wasn’t a Muslim. Mr Bagshawe who has 25 years of experience in banking working for JP Morgan and Flemings, is claiming to be whistleblower in regard to an investment and so can be awarded unlimited damages if he wins the case.

Last night a spokesman for the bank said: ‘Mr Bagshawe was made redundant by the CEO a Christian. His appeal was heard by a non-executive director, another Christian. His redundancy was supported by the Board comprised equally of Christians and Muslims. Gatehouse Bank deny the allegations and say Mr Bagshawe’s position remains redundant a year after he left the company and there are no proposals to appoint a successor.

The tribunal continues and is expected to last 12 days.

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

The global Islamic capital markets advisory firm Amanie Advisors has launched an Irish operation aiming to boost Ireland's growing Islamic finance sector. It is also expected to facilitate both Irish and European companies to have access to funding means of the Islamic capital markets. Amanie's group chairman Dr Daud Bakar explained the choice of Ireland with the country's increasing reputation as a hub for operations in the branch of Islamic finance.

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

It is still discussed how to salvage the takeover of the Islamic Bank of Britain based in Birmingham. However, it is a fact that no offer for the business has been forthcoming. According to the IBB, Islamic bank Masraf Al Rayan appears to be a possible bidder following to collapse of takeover talks between the IBB and majority shareholder Qatar International Islamic Bank (QIIB). If MAR acquires IBB, QIIB will sell their 88.41% of the issued share capital of the Birmingham operation to MAR.

UBS recently closed the bank account of Islamic Relief. Because of nervousness about counter-terrorist regulations, the charity organisation is under constant scrutiny by other banks. Incoming as well as outgoing transactions are stopped on a daily basis. It is yet not known whether this is a temporary measure or a permanent one. Since 9/11, Islamic Relief and other similar charities have been object of high scrutiny and had to explain themselves at every juncture.

It was recently stated in the Financial Times that Saudi Arabia intends to lobby the UK government in November in order to set up a confidential court in London. The court is to settle multimillion pound commercial disputes coming from the Middle Eastern country. The people of Saudi Arabia hope that an arbitration centre based in London will contribute to countering investor concerns about the Saudi Arabian legal system. This way, foreign investment could be stimulated. According to Amgad Husein and John Balouziyeh from SNR Denton, the success of such an arbitration centre depends on its implementation.

Well, repeatedly we read and hear about the lack of profit/loss sharing (equity finance) in Islamic finance. Here my five cents about it:

1) Islamic commercial law, Fiqh Muamalat, per se has no preference of either permissible mode of finance, be it musharaka, ijara or murabaha whatsoever. All is halal. However, the call for modesty of debt in many hadith and the seriousness of being indebted upon death (withholding of death prayer) shows a call for a solid equity portion in business; let's call it a technical preference.

2) If we look up all debt financing modes (e.g.Murabaha, Ijara) there are remaining difficulties to finance wages, rents and installments on fresh debt. This is a true indicator for a required minimum amount of equity in a company.

3) Point 1) and 2) leads us to demand a sound debt/equity ratio.

IslamicFinance.de offers an overview about new job openings of October 2012 herewith - firms aiming to be included please send a job profile/hyperlink to newsdesk@islamicfinance.de - the full details of the advert has to be accessed by the hyperlink below the brief description:

Product Manager, Islamic Banking

Standard Chartered Bank - United Arab Emirates-SCB (United Arab Emirates)
Job Description
?Development of Islamic wealth products across CBMS, insurance and investment streams to create customer value proposition.
?Ensure successful implementation of the Islamic banking strategy across high value segment.
?Concentrated responsibility to work with the Priority/Wealth/Private/SME product/frontline teams and support functions to build on the current Islamic banking capabilities and to create seamless customer experience
?Act as a product specialist for RMs on client meetings to introduce and explain the Saadiq solutions to meet their needs
?Financial budgeting and business forecast. Evaluation of financial performance.

According to a recent announcement by Ithmaar Bank, it will convert the banking licence of its wholly-owned subsidiary in Switzerland, Faisal Private Bank, to a family office. The decision to make such a conversion includes focusing on the further development of Ithmaar Bank's core business of retail and commercial banking. The conversion will be compatible with the interests of the clients and stakeholders. The format of Ithmaar Bank's presence in Switzerland is to be approved in due course by the Swiss financial services regulator.

Read more on: http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=340872

According to Ernst & Young, the strong move Jersey Finance has made into the Gulf region will result in huge benefit to the company due to an expected significant rise in Islamic finance. Estimates predict a growth in sukuk demand from US$300 billion to US$900 billion by year 2017. The leading source of demand is said to be South East Asia and the Middle East. An increase of Jersey's involvement in the Arab world is possible through capitalisation on its strong links with the Arab states.

Read more on: http://www.thisisjersey.com/business/2012/10/29/jersey-poised-to-profit-...

The last couple of years of financial crisis proved to be unfavourable for the international banking sector. Nevertheless, one sub-sector was growing rapidly and reached significant success - Islamic finance. The majority of people still have not enough understanding and appreciation for Islamic finance. However, the facts show it is a US$1.3 trillion global industry with annual growth of 15% to 20%. During the past few years alone this sector has expanded to even not particularly expected markets adding to the portfolios of conventional international banks. The latter have already made the development of sharia-compliant services a priority.

Read more on: http://www.scmp.com/comment/insight-opinion/article/1071883/islamic-fina...

THE NINTH INTERNATIONAL CONFERENCE ON
ISLAMIC ECONOMICS AND FINANCE (ICIEF)
Growth, Equity and Stability: An Islamic Perspective
10-12 September 2013, Istanbul, TURKEY

The Ninth ICIEF at a Glance

Recovery from the global financial crisis and subsequent economic downturn remains fragile. Persistent risks to financial and economic development include sluggish growth in developed countries – which is now spilling over into developing economies as well; increasing income and wealth inequalities; and still-unrestored financial, economic and political stability in many regions. High poverty and unemployment rates, large macroeconomic imbalances, deteriorations in sovereign credibility, increasing food price volatility and food shortages, and lack of access to basic infrastructure further intensify and magnify these risks – particularly for the underprivileged segments of the world population. As a result, for many countries it has become even more challenging to achieve the Millennium Development Goals (MDGs) set by the United Nations.