IslamicFinance.de

According to leaders in the area of real estate investment, Malaysian real estate investment trusts show a positive developmen this year. The strong returns which Axis REIT Managers Bhd provided over the past year include Al-Hadharah Boustead REIT, Al-Aqar Healthcare REIT, Pavilion REIT, CapitaMalls Malaysia Trust, Axis REIT, Starhill REIT and Tower REIT. A further positive development is expected.

The Viability Rating of Kuwait Finance House has been downgraded to 'bb' by Fitch Ratings. The bank's Long-term Issuer Default Rating, however, remains at 'A+'. According to Fitch Ratings, the decrease in the VR is caused by he high concentrations in KFH's financing portfolio as well as asset quality indicators which continuously become worse. In addition, the bank reported slightly weaker regulatory Tier 1 and Fitch Core Capital ratios in H112. A positive move on KFH's side is expected: they plan to bolster their capital in the months to follow.

As part of its Sukuk programme, Axiata Group has priced its maiden two year Chinese yuan renminbi (CNY) denominated Sukuk. The whole multi-currency Sukuk programme is planned to be worth about $1.5bn. On Tueday Axiata priced the first part of the Sukuk. It is expexted that the issue will be listed Bursa Malaysia Securities and on the Singapore Exchange. Among the banks which worked on the issue are CIMB Investment Bank, HSBC and Merrill Lynch Singapore.

A few days ago, the Board of Directors of Saudi Hollandi Bank has made a decision to issue Sukuk worth SR 1,400 million. The issuance is a private offering aiming to support its capital base by using a Shariah compliant structure. The latter is to be approved by the competent authorities.

After the initial announcement that the Turkish Treasury has mandated Citigroup, HSBC and Liquidity Management House (LMH) to inspect existing opportunities for a Lease Certificate issuance, it turns out that the mandate aim to advise and structure Turkey's proposed debut sovereign Sukuk Al-Ijara. In this context, a number of investor meetings in significant financial centers in the Middle East and Asia are organized and will take place until Thursday.

Barclays and Absa keep their focus on Africa and plan to accept the group’s Islamic Insurance offering - Takaful. Due to the huge number of Muslim population in the continent - over 500 million people - there are excellent market opportunities for Islamic finance and, in particular, for Absa.

International Finance Corporation (IFC) proposed an equity investment in Gulf African Bank (GAB) worth $5 million. The investment is expected to improve the bank's strength and provide additional capacity for growth. under IFC’s Global Trade Finance Program (GTFP), an additional $3 million trade line will be made available by IFC to the bank.

The book titled An Islamic Analysis of the Grameen Bank presents a detailed analysis of the Grameen bank model. Key factors for the success of the Nobel Prize awarded bank are discussed. Furthermore, the model is inspected from Islamic point of view, thus explaining the contradictions between the Grameen Bank and the Islamic principles in terms of economics and society. In the last part of the book a new Shari’ah-promoting model - the Positive Circle - is introduced.

Saudi management company SEDCO Holding has started its corporate social responsibility program - Riyali. The program adresses the educational needs of the Saudi population in terms of financial literacy and aims to give people the financial skills to achieve a desirable standard of living. In the first phase of this program students will be the subjects.

In an announcement by National Bank of Abu Dhabi (NBAD) its plans to seek an Islamic banking licence in Malaysia were revealed. This licence is to meet the demand for Shari'ah-compliant financing. After starting non-Islamic commercial banking operations, the company endeavours further expansion. According to CEO of National Bank of Abu Dhabi Malaysia Bhd, Leong See Meng, good opportunities exist for operations abroad.

According to a statement by the Undersecretariat of the Treasury in Turkey, Citigroup, HSBC and Liquidity House have been mandated to investigate opportunities concerning the issuance of a Lease Certificate in the international capital markets. For this purpose numerous road shows for the Sukuk are planned and will be held in financial centres across the Middle East and Asia. The show will take place in the period 10-13 September. The Sukuk is supposed to be dollar-denominated and issued in the week of 17 September.

Kuwait Finance House (KFH) has put an ent to talks about the potential sale of its stake in Al Salam (International) Hospital. As the largest investor in the hospital, KFH contributes to the stability, integrity and strength of the latter. Thus, Al Salam contrasts with other competitive hospitals which are of individual ownership. The end of discussions on KFS's side will not affect the bank's financial position.

The senior notes under HSBC Amanah Malaysia's proposed Multi-Currency Sukuk Programme of up to MYR 3 billion have received a long-term rating of AAA by RAM Ratings. At the same time, respective long- and short-term financial institution ratings of the bank have been reaffirmed at AAA and P1. The outlook for both long-term ratings in terms of stability looks positive.

Regulators changed the rules on non Islamic loans for the purchase of motor vehicles like cars and motorcycles in favour of Islamic loans. As a result, consumer-finance companies in Indonesia increasingly consider Shariah-compliant lending. PT Adira Dinamika Multi Finance, which recently started Shariah-compliant business, expects for it to make up 20% of its overall operations. Other Shariah lenders clain that Islamic loans will grow as fast as 30% a year in the near future.

After almost a decade of preparation works, Turkey makes the next step in its Islamic bond plan. Citigroup, HSBC and Liquidity House of Kuwait are mandated to examine opportunities for sukuk issuance. The expectations are that the government will be able to gain a profit of up to $1bn through the sukuk. Also, the sukuk is likely to bridge the funding gap in the country's budget deficit target of 1.5 per cent of gross domestic product for 2012.

According to a recent report by Kuwait Finance House (KFH), Islamic microfinance is a good solution for decreasing poverty. Since it is a combination of economic, social and religious principles, it uses two types of resources: external ones like Zakat and charity on one hand, and internal ones like deposits and equity. A number of institutions among which the Islamic Development Bank (IDB) and the World Bank are working on studying the viability of Islamic microfinance.

Due to economic chaos in Sudan, foreign investors cannot easily receive their bond payments. There is no legal possibility to directly convert bond payments into dollars. Therefore, it is recommended to reinvest, e.g. in real estate, using the money paid out in local currency. The main reason for impossibility of payment in dollars is the independence of South Sudan in July 2011. Since South Sudan was the country's main source for oil as well as for dollars, now it finds itself cut off. The central bank hardly allows conversion of shares or bonds into dollars in order to preserve money for food imports.

Looking for expansion opportunities, Noor Islamic Bank focuses on South East Asia as a strong growth market. While the development of global lending markets remains uncertain, Asian countries have growing needs in the areas of infrastructure and development combined with solid economic growth. The goal of Noor Islamic Bank is to cooperate with already establishedd financial institutions in countries like Malaysia, Indonesia and Singapore. This way the gap in funding, which was caused by the shrinkage of the global liquidity pool, shall be bridged.

Nine months ago Al Baraka Banking Group cancelled the debut sales of sukuk due to very high yields. Now that the situation has turned and Al Baraka Turk Katilim Bankasi again considers its previous intentions. It plans to offer $250 million (Dh917 million) of seven-year dollar-denominated sukuks this year.

The Deputy Governor of State Bank of Pakistan (SBP) - Kazi Abdul Muktadir - announced that the bank is working on a new five-year (2013-17) strategic plan for Islamic banking industry. This plan shall define an overall direction for the Islamic banking industry. According to Mr. Muktadir, an increase in Islamic finance's share in the banking system is very likely and can reach up to 15% in the five years to follow.