IslamicFinance.de

Sukuk issuance in 2012 will increase by 25-30% to eradicate the USD 200 billion barrier, despite challenges that face prosperity of this industry, such as the financial struggles of some European countries and their effect on the rest of the world. This was shown in a report prepared by KFH-Research about the expected horizons of global Sukuk in 2012.
The report noted that the Sukuk market witnessed unprecedented growth during 2011 that reached 88% compared to last year. It added that Kuwait has come back to the Sukuk issuance market after three years through the issuance of Al-Oula Investment Company. It also indicated that the sukuk industry has emerged as one of the main components of the Islamic financial system.

Islamic banks’ credit to the real estate sector has sprang to a staggering 71.24% at the end of November 2011, compared to the same period in 2010.
However, the credit facility to the contracting sector saw a major drop of 69.995. The sector included construction and maintenance of roads, water and electricity projects. The credit facility to these sectors saw a decrease by QR2.13bn against 2011 figures.

The issue of Islamic finance has taken centre stage in Morocco following the Justice and Development Party's (PJD) electoral triumph. The PJD has talked of promoting Islamic finance on a number of occasions.
Bank Al-Maghrib Governor Abdellatif Jouahri stated last month that Morocco was interested in Islamic finance and viewed the idea of creating Islamic banks as part of the new financial platform in Casablanca. The new banking law will include a chapter on finance to meet the demands of sharia law.
However, according to economist Slimi Noureddine, the political will to promote Islamic finance is lacking. He underlined the idea that Morocco should take the matter in hand to benefit from Arab investment, particularly from the Gulf states.

UAE energy group Dana Gas appointed an international firm to advise on its $920 million convertible sukuk maturing in October, adding it won't stop to meet its obligations.
Dana Gas shares were up 5.9 per cent at 0945 GMT, while the sukuk was unchanged at 64 cents on the dollar.
Dana Gas has a 3 per cent stake in Hungarian group MOL, worth around 55.2 billion forints ($225m). Potential sales of businesses in Egypt and Kurdistan are also filled with political risk, which would hit the price.
Dana Gas' chief executive told Reuters in September the company was owed around $200m by Egypt.

HSBC Amanah anticipates global sukuk issuance to grow to US$44 billion in 2012 from US$26.5 billion last year. Malaysia was forseen to account for 60% of the total while the Middle East and North Africa (MENA) region 32%. It also stated that governments and government-related entities were likely to account for 50% while the finance and corporate sectors 25% each.
To encourage more Asian sukuk issuances, however, there was a need to help Middle Eastern investors understand Asian sukuk and capital markets better.

Dow Jones Indexes announced that Tebyan Asset Management has licensed the Dow Jones Islamic Market (DJIM) CHIME Index to benchmark its new fund, the Tebyan CHIME Opportunities Fund.
The DJIM CHIME Index is created to measure the performance of 100 leading stocks from China, India and the Middle East/North Africa (MENA) region that pass rules-based screens for Shari’ah compliance.
The index universe for the DJIM CHIME Index is determined by all stocks that pass Shari’ah screens, with hte purpose to remove companies in the following lines of business: alcohol, tobacco, pork-related products, conventional financial services, defense/weapons and certain types of entertainment. Also excluded are companies with financial ratios that are incompatible with Islamic investment principles.

A.M. Best Co. has released its criteria report, "Rating Takaful (Shari'a Compliant) Insurance Companies." The report can be accessed at http://www.ambest.com/ratings/methodology.asp.
The updated criteria report takes into consideration the changes reflective in the Takaful market, especially regarding the increasing development of the regulatory framework within certain countries and the key issues relating to Takaful operating structures.

There is a need to help Middle Eastern investors understand Asian sukuk, because if investors from the Middle East become familiar with Asian sukuk, it can be a driving force for more of its issuance in Asia. The statement came from Rafe Haneef, HSBC Amanah Malaysia Bhd chief executive officer.
He stated that infrastructure projects in Asia and the Middle East are anticipated to lead the growth of sukuk issuance this year, adding that Malaysia's biggest toll expressway company has recently launched a US$10 billion sukuk.

Taking advantage of the situation emerging out of the economic crisis in Eurozone and countries like United States, India should adopt the Islamic Finance System to pump-in investments from the Middle East. This interest-free and more inclusive system will in turn accelerate the financial inclusion of the Indian Muslims.
Dr Shariq Nisar, Director of Research and Operations of India’s premier shariah advisory firm TASIS and one of the senior most professionals of Islamic Finance in India, was in Malegaon to address a seminar on "Prospects of Islamic Finance in India".
Pointing at the demands in the country of reliable and committed investors in stock market, and banking and insurance sectors, he added that while China and the Middle East are the two areas in the world where surplus funds more than their requirements are generated, the Arab world doesn't have such problems.

AirAsia X Sdn Bhd will put off a US$200 million Islamic bond issue planned for March by at least 12 months after the airline abandoned routes from Kuala Lumpur to London, Paris, Mumbai and New Delhi.
AirAsia X announced Jan. 12 that it was cutting its flights to Europe, justifying the cost of complying with the European Union’s emissions trading system and rising taxes.

Emirates Islamic Bank (EIB) has successfully ended the issuance of $500 million sukuk certificates, maturing in 2017 off their $1,000 million Trust Certificate Issuance Programme. The programme is guaranteed by Emirates NBD rated A3 by Moody's and A+ by Fitch.
Joint lead managers and bookrunners on the transactionwere following banks: Citigroup, Emirates NBD Capital, HSBC Bank Plc, National Bank of Abu Dhabi, Royal Bank of Scotland Plc and Standard Chartered Bank. The transaction structure was a Sukuk Al Musharaka based on Sharikat Al Melk (Co-ownership), with the certificates remaining a senior obligation of EIB.

It seems that Brunei Darussalam possesses a conducive environment for a strong Islamic finance sector and has the potential to be an Islamic finance hub for the global market if it looks outwards.
Sheikh Faizal Manjoo states that it would have been a very difficult progress without the strong backing of the state, in which Brunei has an advantageous position.
Despite this, he indicated that with a relatively small population, Brunei would not be able to speed up growth in the sector and encouraged the Sultanate to look at offshore markets for further growth.

There is currently a tremendous opportunity for Kuwait to profile itself as a hub for Islamic finance and Islamic banking, states Belgian academic and economist Professor Laurent Marliere.
He addes that Islamic finance itself is being challenged to redefine its model, the world having great expectations concerning Islamic finance and Islamic banking, which is discipline that does not belong to the Muslims exclusively but has turned into a global phenomenon.
He underlined the fact that Islamic finance is in a riper state in Asian Muslim countries than in Arab Muslim countries.

Prince Talal, chief of the Arab Gulf Program for Development (AGFUND), stated there was a possibility to design a credit delivery system to present banking services aiming the poor segment of Saudi society with a mission to uplift them. He added that he wanted the poor members of Saudi society to benefit from AGFUND or a bank created by the body.

Takaful is coming out globally as a very viable model and being used successfully as engine of growth in a number of Muslim countries. The statement came from Chief Executive Officer Pak-Qatar Takaful, Pervaiz Ahmad while speaking at Lahore Chamber of Commerce and Industry.
He added that, despite of the fact that it is an untapped market, Islamic mode of banking and all its tools are fast gaining ground in Pakistan when compared to conventional mode of banking.
It seems that Islamic financing products such as Murabaha, Ijara, Musharaka and Islamic Export Refinance, etc, are catering to a diverse cross-section of the economy, including corporate, SME and consumer sectors.

According to HSBC Holdings Plc, sales of Islamic bonds may rise to US$44 billion this year as request outstrips supply and as Asian and Middle East investors tap the market complying with Islamic banking rulings. Companies and governments are tapping the Islamic bond market as borrowing costs decline amid rising investor demand.
Emirates Islamic Bank PJSC and First Gulf Bank PJSC of Abu Dhabi raised US$500 million each from sukuk sales.
Shariah-compliant bonds won 7.2% last year, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index, while debt in developing markets rose 8.5%, shows JPMorgan Chase & Co.’s EMBI Global Composite Index .

The primary market recorded a year-on-year increase of 0.7 percent in December, despite the fact that it was a quiet month for issuances outside of Malaysia.
The largest issuance for the month was the third issuance of the year for Pakistan Domestic Sukuk Company Limited which launches on behalf of the government. The $781.1 million Sukuk Ijarah was structured with a three-year tenure.
A burst of Sukuk issues from the Persian Gulf shows borrowers are worried about limited global liquidity and future access to debt markets, and are turning to Islamic finance as a source of money that is rather untouched by the global turmoil.

Infrastructure sukuk has received a major boost after Projek Lebuhraya Usahasama Berhad (PLUS Berhad) closed a record landmark RM30.6 billion sukuk issuance program including both government guaranteed (GG) and non-government guaranteed AAA-rated (AAA) issuances of varying tenors, sizes and expected returns and yields to maturity (YTMs).
The issuance was through PLUS Malaysia Sdn Bh, which is a jointly-owned special purpose company of UEM Group Berhad and the Employees Provident Fund (EPF), which was arranged to obtain the Malaysian business and undertakings including the assets and liabilities of PLUS Expressways Berhad, the major provider of expressway operation services in Malaysia, under a privatization exercise.

Al Baraka Banking Group will launch Itqan Capital in Saudi Arabia, through its fully-owned subsidiary Al Baraka Islamic Bank.
Mr. Khaled Al Zayani, chairman of Al Baraka Islamic Bank, stated that the firm's future center of attraction will be on four areas: asset management, principal investment, investment banking, and custodial services - all supported by centralized advisory, research and business development capabilities.

According to Morgan Stanley & Co., Middle East and North Africa foreign bond sales from this year will surpass last year’s $27.6 billion because borrowers need to pay loans and will increasingly choose bonds.
It seems that International bond sales from the Middle East and North Africa fell 17% in 2011 from $33.1 billion in the previous year.
Bloomberg states that borrowers in the Middle East and North Africa have gathered $1.3 billion from three issues this year, all of them sales of sukuk by financial institutions.
Tamweel PJSC raised $300 million from five-year Islamic bond Jan. 12, while Emirates Islamic Bank PJSC sold $500 million in five-year Islamic bonds Jan. 10.