IslamicFinance.de

After a seven-year string of losses, the US-based Shariah Capital will delist from London's Alternative Investment Market (Aim). According to the hedge fund manager, a cancellation of the shares will be sought. The company expressed its opinion that cost of maintaining the listing, which is US$300,000 per year, is better spent elsewhere.

According to a Discussion Paper by the Stresemann foundation, which in turn is sponsored by
Daniel Pipes and his Middle East Forum, Islamic finance has so far been largely unsuccessful, it is claimed.

Further it is outlined that the comparison with other European countries should suggest that this is not due to the specific legal framework of the country but to other reasons: First, Muslim immigrants have lower than average incomes, because of lacking formal education and low labour participation rates of Muslim women . Thus, their investment potential for financial products is rather marginal and focused on real estate in Turkey. Second, the system of Shariah scholars causes some trouble due to insufficient economic knowledge and conflicting legal opinions opines the author.

Standard Chartered arranges a one-year $35 million Islamic structured trade finance facility for Pakistan International Airlines (PIA). This transaction has been arranged and structured solely by the bank. The facility is structured as an Islamic offshore transaction. It uses innovative services Ijara concept-based on purchase and distribution of airline seats.

Indonesia plans to let Shariah-compliant banks hedge against exchange-rate movements. This way, the growth in Islamic financial assets will be stimulated and the gap with Malaysia’s industry will be narrowed. The instruments, available in Malaysia since 2006, have been approved by the Bank Indonesia, the National Shariah Board and the Indonesia Institute of Accountants. As a result of hedging, Bank Muamalat Indonesia will be able to hold more global bonds and issue more dollar loans.

The chief operating officer of Bahrain-based Islamic investment bank Gulf Finance House - Haider Al Majali - has resigned. At the time of going to press, no name of a new COO has been mentioned. Meanwhile, the country's position as an Islamic finance capital of the GCC is strongly questioned. Ethnic conflicts and misuse of tear gas by the police against vocal opponents to the ruling regime are the main threat. The financial position of Bahrain depends on the development of its domestic situation.

Islamic lending companies from Dubai’s DIFC Investments LLC to Saudi Arabia’s Etihad Etisalat take advantage of falling borrowing costs. As a result, Islamic syndicated lending in Europe, the Middle East and Africa rose to a four-year high this year. Shariah-compliant transactions this year are as high as $8.37 billion (Dh30.74 billion). The largest share belongs to Etihad Etisalat and is worth 10 billion-riyal ($2.67 billion). This year’s lending is over $3 billion higher than last year's.

UK-based law consultancy company Clifford Chance has prepared and handed over the draft law for forming Sharia-compliant takaful insurance firms and sukuk debt instruments. While a new set of law will serve as the rules takaful insurance companies, amendments will be made in Capital Market Law to accommodate Islamic debt instruments like sukuks. The final draft is expexted to be finished in about a month's time.

According to a report by KFH-Research, the volume of issuance of international Sukuk in July reached USD 12.9 billion. Since the beginning of the year, this amount is as high as USD 79.3 billion. A significant market expansion for the third consecutive month is observed. The total issuances so far for the current year mark an increase of 51.2% compared to the same period last year.

Incepta Pharmaceuticals Ltd signed a Musharaka deal worth US $ 20 million with Standard Chartered Bank, thus becoming the bank's Wholesale Banking Saadiq client. The money is a term finance for 5 years and will be used for Incepta Pharma expansion projects.

The Islamic trade industry neglects trade finance and leaves it to the domination of conventional banks. Direct lending is preferred over trade business. The youth of Islamic banks is pointed out as the mail reason for this kind of banking policy. However, due to a shift in the global trends pattern, an increase of the scope for Islamic banks to expand in trade finance is expected.

The Turkish AV Havalimanlari Holding announced a consortium including TAV secured $1.2 billion in Islamic financing for Medina Airport. The financing facility was secured from Arab National Bank, The National Commercial Bank and The Saudi British Bank.

In preparation to assume risks of firms offering Islamic Insurance cover known as ReTakaful, Kenya Reinsurance Corporation (Kenya Re) has decided upon a Sharia board. This way, the establishment of a dedicated ReTakaful window has been brought closer within the corporation. The board of Muslim scholars and people conversant with the Quran will contribute to the preservation of Kenya Re's responsiveness to requirements of its clients and to its development of solutions that satisfy the takaful industry demands for Sharia-Compliant reinsurance services.

Political, humanitarian and financial aid to the victims of violence in northwest Myanmar is being organized by the Organisation of Islamic Cooperation. According to Secretary-General Ekmeleddin Ihsanoglu, the dimensions of the violent conflict between ethnic Rakhine Buddhists and Muslim Rohingyas are hardly known. Therefore, the call for help including housing, food, medical help and political support must be answered.

Islamic Development Bank (IDB), based in Jeddah, is willing to spend almost $1 Billion USD for development projects in a number of countries. The sum of $912.8 million USD will be used for projects regarding water, energy, food and security in countries in Africa, the Middle East and Central Asia.

According to CTPartners, a huge number of family-owned businesses, which now have expanded into regional and global conglomerates, are concerned with succession planning to manage and preserve their wealth for future generations. Family-owned businesses should ensure sustainability beyond the founding fathers and their immediate offspring. Since these businesses constitute 75% of the private sector economy, their sustainability is essential for their contries as well.

This week, sukuk yields have reached a seven-year low, the declines are expected to continue. As the main reason the strong support of the sukuk demand by Asia and the Gulf is pointed out. The average yields approach the levels of January 2005.

The vote of Morocco's parliament on the new draft banking law will take place in September. A chapter of the new law concerns Islamic banking. It is expexted, that in the very near future, Islamic banking will start in the country, already there are investors for the sector. A boost to Sharia-compliant finance is discussed.

The civil war in Syria epands to the capital, which is why banks experience some difficulties. Even though corporate lending and trade financing have almost stopped, banks still continues deposits and withdrawals. The higher inflation and weaker pound are possible to start a crisis, however, there is no immediate threat of collapse of the banking system.

The net profit of Dubai Islamic Bank (DIB) for the first half of the year have been announced. They are as high as Dhs555m, which result is a demonstration of a continuous growth. Compared with it, the same period of 2011 brought a profit of Dhs552m. A 27% increase from the first quarter of 2012 to the second has been registered.

The Islamic Bank of Britain will bring about a savings account with a rarely high rate - 4%. The new account has a fixed rate for two years. The deposited money will be used to support Sharia-compliant and ethical trading companies.