IslamicFinance.de

Kazakhstan’s government expects to pass legislation within the next two months. This legislation will enable companies to sell Islamic bonds.
Kazakhstan has reportedly identified two prospective issuers for its flagship corporate sukuk, one a South East Asian company registered in Kazakhstan, and a local company, Yerlan Baidaulet.

Meezan Bank Ltd (MBL) has emerged as the tenth largest bank in terms of branches. She is the first full-service Islamic bank of Pakistan. Its subsidiary, Al Meezan Investment has also attained the status of the largest private sector asset management company with Rs25 billion assets under management.
Globally and locally Islamic banking in one of the fastest growing segments of the banking sector and without being prejudiced towards conventional banks, it is evident that during difficult times globally Islamic banks have performed better as compared to conventional banks mainly because each transaction in Islamic banking is backed by assets and is designed to cater a real economic transaction. On top of this more prudent risk evaluation and willingness to help the client avoiding a default in difficult times keeps the delinquency rate low.

On a regional and sub-regional plane several countries are struggling to become the hub of Islamic Finance in African continent or in the West African Sub-region or at least to become pioneers in the field.
On the national scale, market operators including banks, insurance companies and asset management entities are busy exploring this alternative financial model and its potentialities.

Last week in Jeddah was signed a memorandum of understanding (MoU) between the Islamic Development Bank (IDB) and the African Development Bank (AfDB) to cooperate in co-investment in projects in member countries mutual to both multilateral development banks (MDBs).
The two MDBs will commit to contribute $500 million each in a $1 billion cooperation spanning three years starting in 2011 and based on the AfDB's medium term strategy and the IDB special program for the development of Africa (SPDA), whose main focus is to assist in scaling-up interventions in Africa in agriculture, infrastructure, water and sanitation, education and healthcare.

The issue, known as the Government of Pakistan Ijara Sukuk, is a three-year bond.
The central bank said in October it planned to raise 80 billion rupees by selling Islamic bonds, with the first auction on Nov. 8, with settlement on Nov. 15, in which it raised 51.84 billion rupees .

The Central Bank of Nigeria (CBN), has identified the dearth of knowledge, skills and technical capacity to regulate, supervise and operate Islamic bank as major hindrances to the successful take off of the model.
The non interest banking model is a banking regime that offers services, products and financial instruments based on compliance to Islamic laws.

The Islamic Development Bank is ready to help countries in the Gulf and Africa to formulate a joint plan to promote trade between the regions.
IDB has carried out projects and development programs in Africa valued at $15 billion, and member countries could take advantage of this program, which includes the presence of the Arab Bank for Economic Development in Africa.

Companies within the industry are continuing to debate the standards that need to be met to be considered a "Sharia-compliant" hotel.
One such company is Shaza Hotels. The luxury operator, which is a joint venture between Kempinski Hotels and Guidance Hotel Investment Company, based in Paris, is aiming to open hotels that are alcohol-free and "display the values and cultures of the Middle East and North Africa".
Shaza announced plans to manage a luxury hotel in Karbala, Iraq, which is being developed by Range Hospitality, based in Dubai.

An order for setting up an international insurance company aiming to overcome global sanctions in this field was issued by the finance and economic affairs ministry of Iran.
On 26 July, the European Union imposed sanctions on Iran, hitting the energy, transport, finance and insurance sectors, as well as expanding the number of ""listed"" individuals and entities with whom commercial dealings are prohibited.

A new global Islamic liquidity management corporation backed by central banks will start issuing Islamic bonds next year to help Islamic banks manage their liquidity.
The Islamic Financial Services Board (IFSB) said in October it would set up the International Islamic Liquidity Management Corporation to issue sharia-compliant instruments.
The liquidity management company will be backed by 11 central banks, including Malaysia, Iran and Turkey and some Gulf states and is expected to have up to $1 billion in authorised capital.

There were more business transactions in the past six months than they where achieved in the previous three years.
Business is booming not only in the UK and Europe but in new markets in Africa and in republics of the former Soviet Union in Eastern Europe.

Senegal is the latest African nation looking to tap the growing Islamic finance market by issuing its first sovereign Islamic bond in 2011.
94% of the population are Muslims, therefor is the potential for Islamic banking strong within the West African nation.
The country has emerged as a relatively stable hub for regional business, which is attracting increasing investment interest from the oil producing Gulf.

Aman Union will hold on November 23 and 24, 2010 its first annual meeting in Tunis.
The meeting is organized with the support of the Tunisian Foreign Trade Insurance Company (COTUNACE). At the meeting there will be discussed topics as credit insurance industry of trade finance and investment in Arab and Islamic countries and the development of partnership relations between professionals in the finance sector in general and insurance in particular.

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group, signed a Memorandum of Understanding (MOU) with the State Bank for Foreign Economic Affairs of Turkmenistan in Ashgabt, to promote mutual cooperation between ICD and the private sector particularly the small and medium enterprises (SMEs).
The MOU provides a general framework to facilitate cooperation in promoting economic development and emphasize priorities for joint action on accelerating private sector contribution to the country’s GDP especially in the financial, agricultural, logistics, affordable housing, services and manufacturing industries.

Moody's Investors Service has today downgraded the Ba2 ratings for Dar Al-Arkan Real Estate Development Company, Saudi Joint Stock Company , Dar Al-Arkan International Sukuk Company II and the US$450 million USD Certificates ("sukuk") to Ba3. The outlook is stable.
The reason is a combination of:
(1) DAAR's weaker than anticipated operating performance continuing in the third quarter of 2010 attributed to lower land sales, resulting in a departure from Moody's original expectations where land sales are an important part of the funding mix;
(2) DAAR's weaker than anticipated financial metrics, such as Moody's adjusted debt to book capitalisation (LTM 35.3% per end of September 2010), or FFO/Debt (LTM 18.4% per end of September 2010) which are not in alignment with Moody's guidelines for the Ba2 rating category;
and (3) the negative free cash flows DAAR has generated over the first nine months of 2010

There is the possibility that Senegal will sell its first sukuk with involvement from Citigroup Inc.
The West African nation is considering the bond to strengthen ties with investors and governments in the Middle East.
The funds raised may be used for improvements in roads and energy.

Dear Reader,

Many times I read, and on all conferences we debate on the issue of form over substance - is their a simple solution?

Let's revisit:

Form over substance means that contemporary Islamic finance takes more emphasize on the form of the contracts (in their Arabic terminology like Murabaha, Musharaka etc.) as in their substance, especially their economic substance, which often looks the same after conducting a sequence of Arabic named contracts.

Scholars have to judge the appearance of the form, meaning the contracts in front of them. A judge shall not guess the intentions of the contractual parties but typically has to rely on the text itself to come a decision. Different schools of Islamic law have different degrees on reliance on the form and considering or rejecting to assume 'intentions' . The hesitance to guess about 'intentions' is based on the fear to commit injustice to the parties and a procedural cause to get evidence about them.

Tharawat Family Business Forum is a non-profit organization representing the first Arabian network for family businesses. Tharawat bases its activities around the four main pillars networking, research, education, and advocacy, thereby catering to the heart of family business needs. The forum, founded in 2006, has the clear vision of becoming the prime knowledge resource, research hub and networking forum for family-owned and -controlled firms in the Middle East and North Africa.
The Tharawat members are some of the largest and oldest family businesses in the region and the network accepts members upon application. While hosting activities across the entire Arab world, Tharawat has its headquarters situated in Dubai, UAE.

Pakistan’s largest Shariah funds plan to bid for the 80 billion rupees of Islamic debt the government will offer in coming weeks after a 14-month suspension of sales.
Pakistan is selling the debt as the nation’s Islamic banking assets increased an average 30 percent in the past four years. Investors might prefer securities due in a year or less after record floods in August pushed up prices of goods and forced the central bank to raise its benchmark interest rate to the highest level in 17 months, according to Al Meezan and NBP Fullerton.

Albaraka Banking Group BSC, the biggest publicly traded Islamic lender in Bahrain, expects to complete an acquisition in Indonesia in the first quarter of 2011 as part of an expansion.
The bank has identified targets for the planned transaction in the Asian country. Albaraka has also identified an acquisition target in Malaysia.
Albaraka this year acquired Pakistan’s Emirates Global Islamic Bank Ltd., which boosted its network in the country to about 90 branches. It also began operations in Syria this year.
The Manama-based bank has received approval to set up a representative office in Libya to benefit from the country’s strong trade ties with other markets where the bank operates, such as Egypt, Turkey, Algeria and Jordan.
The bank expects total loans to increase 20 percent in 2010.