IslamicFinance.de

BankMuscat's Board of Directors decided to arrange an independent Islamic banking window at the bank and launch Islamic banking operations in accordance with the injunctions of Shariah, subject to approval from the Central Bank of Oman.
The bank revealed the logo of its Islamic banking window under the brand name 'Meethaq' at the Oman Islamic Economic Forum.
The bank's Islamic banking operations will be separated from its conventional counterpart in all aspects. Further, in line with CBO requirements, the bank noted the formation of a 3-member Shariah board to ensure the Meethaq operations are in compliance with Shariah.

Bank Sarasin-Alpen won the Best Islamic Wealth Manager award at the Islamic Business and Finance Awards 2011 that took place at the Emirates Towers Hotel, Dubai on 13th December, 2011 and was managed by CPI Financial. The award was handed to Rohit Walia, Executive Vice Chairman & CEO of Bank Sarasin-Alpen Group and Mahboob Murshed, Managing Director.
Bank Sarasin-Alpen offers a complete range of first class private banking and investment advisory solutions to private and institutional clients in GCC and South Asia.

Raub Australian Gold Mining Sdn. Bhd. ("RAGM") has started an agreement with Alkhair International Islamic Bank Berhad ("AIIB") for an Islamic working capital facility, known as a Murabaha Facility, (the "Facility") of up to US$6 million.
The Facility will be used to supply RAGM with additional working capital over a one year period. It will also give additional flexibility over the coming year whilst RAGM will be having the purpose to increase production from both tailings and shallow in-situ ore at its Raub mine.
The main terms of the Facility are the following:
- the Facility is available for a period of 1 year from the first drawdown of Facility, providing that the first Murabaha Transaction shall take place no later than 11 February 2012;
- each Murabaha Transaction will be subject to a profit rate of 2.75% above the Bank's cost of funding rate (currently 5.0% per annum)
- each Murabaha Transaction will be for a period of 3 months;

Bahrain’s BMI Bank has signed a strategic agreement with regional insurer Medgulf Allianz Takaful.
This agreement will allow the bank to present customers a suite of life and non-life Takaful products through its branch network.

Takaful Insurance for Africa’s largest shareholder, Cooperative Insurance Company (CIC) is admiring its decision to invest in Kenya’s first Takaful company.
CIC’s GM, Kenneth Kimani, noted TIA’s strong progress and the fact that Takaful in Kenya offers better opportunities for growth than conventional insurance. CIC owns 20% of TIA which saw more than $1m of premiums raised in the first four months of operations.

Saudi Arabia has the largest population, GDP and oil reserves in the GCC region and is strategically and militarily important on both a regional and global scale. Despite all this, unlike its neighbors the UAE or Bahrain, Saudi Arabia is not a culturally or economically-welcoming place for international business and as such much of Saudi Arabia’s non-oil related business is an internal market.
The country has given birth to some monumental Sukuk over the last few years, like the 20-year $2.1bn Saudi Basic Industries Corporation issue of 2007.
Most of the Sukuk issued have been for internal consumption.

Oman Arab Bank is now ready to launch Islamic banking products through dedicated windows, after the regulatory framework is announced by the Central Bank of Oman in January.
Bishara Qafiti, deputy manager of Oman Arab Bank, stated that in the beginning they will focus on the retail and commercial sector, vehicle and real estate loans, rather than trying to do corporate finance.

Africa has begun to move its economic attention away from the west to the Middle East and Asia as a primary source of capital raising. This shift in alignment partially explains the forthcoming launch of a number of Sukuk across the continent in 2012.
South Africa, Senegal, Nigeria and Kenya have all divulged sovereign Sukuk to raise capital for their budgets, a marked move away from aid and loans from the economies of Europe and the US and a move broadly welcomed by sovereign wealth and Islamic finance institutions – especially in the GCC.
Senegal, for exmaple will issue a $200m Sukuk, initially planned for this year but now most likely for the begin of 2012. Finance minister Abdoulaye Diop stated that proceeds from the Sukuk will be used for budgetary support.

The State Bank of Pakistan has awarded Silkbank with an Islamic banking license.
The bank will be initially aiming Pakistan’s main population centers, Karachi, Lahore, Islamabad and Faisalabad.

A man named Omar Kalair was told to rendezvous in the dead of the night in a deserted suburban parking lot and hand over a consignment of gold and silver bullion to achieve recognition on the debts of a secretive organization.
The bizarre payment of $2.1m in gold and silver made by Kalair to Joseph Adam, the finance manager of the newly formed firm Multicultural Consultancy Canada, was for Shari’ah compliance services the MCC supplied to the Canadian Islamic mortgage company.
Kalair and Mufti Yusuf Panchbhaya, chairman of this local Shari’ah board, were deposed by the receiver Grant Thornton to explain the transfer of gold and silver to Adam outside a suburban drug store in early October, three days before the court ordered UM Financial Inc into receivership. A month later, the gold had disappeared and Adam had flown Canada for Egypt. The receiver tries now to get permission from the court to enter Adam’s store, with assistance from the sheriff in order to recover the missing gold.

Despite an eight-month revolt that has delayed Syria in violence and economic uncertainty, the recently opened Syrian unit of Al Baraka Bank aims to continue developing.
While new, small private banks seem to have largely escaped the worst, the Syrian economy is striving under rising international pressure against its army crackdown on protests calling for President Bashar Assad’s ouster.
Mohammad Halabi stated that the impact of the unrest on the private banking sector during the third quarter had caused a 20% drop in the sector’s liquidity, while lending had gone down 16 percent.

It seems that Saudi Arabia is discussing with banks the issuing of a riyal-denominated Islamic bond. High-level talks are currently ongoing between the Saudi Arabian Monetary Agency (Sama) and a number of local and international banks with operations in the kingdom regarding the details, expecting an issue as early as the first quarter of next year.
The sukuk will not be launched directly by the government but will instead be marketed by either a governmental agency or a state fund.
The discussions with banks are focusing on the technicals of the issue, such as the tenor and whether the sukuk will have a fixed or floating profit rate.

The Gulf Bond and Sukuk Association (GBSA) has revealed a detailed compendium of the nascent markets for local currency government-issued instruments. This is the first collection of its kind in the Gulf region.
The summary was put together with the contributions from many of its member institutions across the Gulf region.
The document concentrates for the first time all of the conventional and Islamic treasury bills and bonds, certificates of deposit and other instruments available in local money and capital markets.
This publication is one of a series of steps taken by the GBSA to accelerate the growth of regional debt capital markets.

Foreign issuance of sukuk in Malaysia is anticipated to increase by 25%-30% next year from 10%-15% currently owing to the global economic calamities and eurozone sovereign debt crisis.
Amanie Advisors Sdn Bhd director Baiza Bain noted that the sukuk issue would be US dollar and ringgit denominated issues mainly from the Gulf Cooperation Council (GCC) and Europe.
Asian Islamic Investment Management Sdn Bhd CEO and executive director Akmal Hassan has a positive outlook regarding the fact that the Government's pump priming activities would ignore impact from the tough external environment and this would augur well for the local economy and Islamic investment.

Abstract academic paper:

Using a large international sample of 35 developed and emerging markets, we analyze
whether Islamic indices exhibit a different performance to conventional benchmarks. While there is no compelling evidence of performance differences in robust Sharpe ratio tests and after controlling for market risk, we find a significantly positive four-factor alpha for the aggregate developed markets region. This outperformance stems, however, mainly from the U.S. and is largely attributable to the exclusion of financial stocks in Sharia-screened portfolios. As the extensive downturn of financials is related to the recent financial crisis, we do not argue that this outperformance will continue over time. The style analysis reveals that

Islamic indices invest mainly in growth stocks and positive momentum stocks. This, for a passive portfolio intriguing result can, however, be explained by the strong sector allocation towards energy firms and their strong momentum characteristic during the sample period.

The latest development in Tanzania and East Africa’s emerging Islamic finance industry is the opening of Tanzania’s first Islamic bank, Amana Bank, last month. The headquarters of the bank are in the Kariakoo trade centre in the city, the hub of commerce in Tanzania, where an important portion of merchants are Muslims.
The area is so meaningful that another bank, the People’s Bank of Zanzibar (PBZ) has launched this month a branch specializing on Islamic banking.
President Ali Mohammed Shein encouraged the Bank of Tanzania to create a conducive atmosphere for positive service delivery in Islamic finance.

Indonesia's finance ministry want to speed up the rate at which it launches bonds in 2012 because of concern over a global economic downturn and will issue 55-60% of its target in the first half of the year.
According to Arga Samudro, a Jakarta-based analyst at Bahana Securities, the government was convinced that its bond issues in the year's first half would succeed because it thinks the global turmoil during that period would not be as bad as in 2008. He added that the bonds would attract foreign investors searching for high yields in emerging markets at a time of slow opportunities elsewhere.

Abstract Islamic banks are said to possess ethical identity (Haniffa and Hudaib, 2007) because their social goals are just as important if not more important than financial goals because of the fact that they are based on religious foundations, i.e. the Islamic Shari?ah which has as its ultimate goal, the betterment of society. Islamic banks are thus expected to portray a high level of corporate social responsibility which would be evident in their social reporting practices as evidenced in their annual reports. However, two prominent studies of the social reporting practices of Islamic banks have shown otherwise (Maali et.al, 2003; Haniffa and Hudaib, 2007). This study replicated the Haniffa and Hudaib study by examining the social reporting practices of Islamic Banks in Saudi Arabia. This examination involved a comparison of the social disclosures of 4 Islamic banks made through their annual reports against an ideal level of social disclosures that Islamic banks ought to make, over the years 2008-2009. This comparison was accomplished using the Ethical Identity Index (EII) developed by Haniffa and Hudaib (2007).

The 25th Board of Directors meeting of the International Islamic Financial Market (IIFM) took place on December 11 at Islamic Development Bank (IDB) offices in Jeddah. Present at the meeting were senior representatives from IDB, Central Bank of Bahrain, Central Bank of Sudan, Autoriti Monetari Brunei Darussalam, Labuan Financial Services Authority (Malaysia), Bank Indonesia, State Bank of Pakistan, ABC Islamic Bank - Bahrain, Bank Islam Malaysia Berhad, Kuwait Finance House-Bahrain.
Mr. Khalid Hamad Abdul Rahman Hamad, Executive Director-Banking Supervision, Central Bank of Bahrain & Chairman of IIFM, welcomed the Board members and thanked them for their foresightedness and guidance which has been influential in IIFM’s focus on standardized documentation & products for the Islamic Capital & Money Market.

PLUS Bhd’s record RM23.4 billion (US$7.3 billion) sukuk sale is attracting life insurers with higher-than-average yields and maturities of as much as 25 years.
The Malaysian company is taking over the nation’s biggest toll-road operator PLUS Expressways Bhd in the first leveraged buyout using syariah-compliant bonds. It seems that a portion of the total issue will be privately placed, at tenors of 20 to 25 years.
PLUS was set up by Malaysia’s biggest pension fund, the Employee Provident Fund, and government-owned UEM Group Bhd. to take over the highway assets of PLUS Expressways following their RM23 billion acquisition of the company.