IslamicFinance.de

Maldives Islamic Bank (MIB) and Islamic Banking and Finance Institute Malaysia (IBFIM) will sign a Memorandum of Agreement (MoA) to set up the first Islamic bank in Maldives.
According to the agency, the agreement will bind both parties to co-develop Islamic finance in Maldives through extensive study of Maldives’ legal and banking framework to create a harmonise environment for the growth of Islamic finance.
MIB Chairman Khalid Khaled Al-Aboodi and IBFIM Chief Executive Officer Dr Adnan Alias will sign the agreement during the Global Islamic Finance Forum (GIFF) to be held from October 25-28 in Kuala Lumpur.
The agency quoted MIB Managing Director Harith Harun as saying that the bank is expected to be established within the next six months.

Sharjah Islamic Bank (SIB) has announced the launch of zero per cent profit financing service for Hajj under the theme "Perform Hajj this year and pay it off over the year with no profit".
The service, the first-of-its-kind to be offered by an Islamic bank in the UAE, will enable a lot of people to perform Hajj and pay back the cost via easy and affordable monthly instalments for one year without any profit, fees or extra costs.

At a macro level, it is needed, beyond short term liquidity and risk management, standardisation, scholars, qualified human capital the following:
First, we need to scientifically establish the size and growth rate of the industry.
Second, we need to establish leading and lagging economic/financial indicators for this geographically fragmented market, some will be same as “conventional”, but others will be different, i.e., more emphasis on applied over academic research.
Third, post crisis, deposit taking Islamic banks need to under go a stress test, as exposure to realty is greater, risk and liquidity management is not as robust, issues with deposit insurance, etc., as a confidence building measure.
Areas that need work are: syariah screening, funds, convergence of IF and halal industry, and venture capital (VC).
Suggestions for Malaysia:
There are five FSA approved Islamic banks in the UK, a G20 country, but not one had a Malaysian founding shareholder, and, now, the European wholesale market may have potential for comparable profits to Indonesian retail.

The government forecasts a rapid growth in assets managed by Indonesian sharia-based microfinancing institutions, or baitul maal wat tamwil (BMTs), on the back of rising public trust.
Speaking at the BMT Summit last week, Cooperatives and Small and Medium Enterprises Minister Syariefuddin Hasan said popular awareness of the benefits of sharia-based microfinancing had grown rapidly after the Asian financial crisis in the late 1990s.
According to the ministry, there are presently 3,307 BMTs in Indonesia with assets of Rp 3.6 trillion (US$403.2 million). BMT serve 2.5 million of the nation’s 39 million small and medium enterprises (SMEs) and control about 6 percent of total SME credit.

The state-run Islamic Bank of Thailand will delay the nation’s first sale of sukuk until early next year as it awaits new guidelines from the securities commission.
Thai Securities & Exchange Commission spokeswoman Charuphan Intararoong said in July that the guidelines would be published in the fourth quarter.
The Thai government is also considering selling 40 billion baht to 50 billion baht of Islamic bonds to fund infrastructure projects.
Prime Minister Abhisit Vejjajiva has advocated more development aid for the region, where separatists have fought for an independent state since Thailand formally annexed the autonomous Malay-Muslim sultanate in 1902.

Asian Finance is conducting a due diligence and aims for the acquisition by Qatar Islamic to be completed by April next year.
Qatar Islamic, the Persian Gulf country’s biggest lender that complies with the religion’s ban on interest, is seeking to expand its services to take advantage of growth in the $1 trillion industry. Asian Finance also held meetings with Australian government officials to advise them on Islamic products, as the nation plans to change laws to attract investors from the Middle East and Asia.
Indonesia, the world’s most populous Muslim country, is studying ways to make tax laws more conducive to developing Islamic finance.

Demand for Islamic bonds from the Middle East will return to “pre-crisis” levels by the end of the third quarter as companies restructure debt and higher yields lure investors, according to Citigroup Inc.
Shariah-compliant bond sales from the Persian Gulf are rising after Dubai World, the state-owned holding company, reached an agreement with 99 percent of its creditors in September to change terms on $24.9 billion of debt. Economic growth in the Middle East and North Africa will accelerate to 5 percent in 2011 from 3.8 percent this year and 1.1 percent in 2009.

The chief executive of the Association of Consultancy and Engineering (ACE) has warned companies to write off “sukuk” bonds from indebted Dubai developer Nakheel.
Nakheel is finalising a plan to pay creditors 40% in cash up front, and 60% in sukuk bonds, which are redeemable in five years and pay a return of 10% a year.
Nakheel chief executive Chris O’Donnell told conference delegates, many of whom are still owed money, that the developer would reach an agreement on the plan with creditors before the end of the year, after which the sukuk would be issued.

The Islamic Banking and Finance Institute Malaysia (IBFIM) and the Maldives Islamic Bank will sign a Memorandum of Agreement (MoA) to set up the first Islamic bank in Maldives and to develop Maldives Islamic Bank Shariah-compliant banking products. The MoA, among others, will bind both parties to co-develop Islamic finance in Maldives through extensive study of Maldives legal and banking framework to create a harmonise environment for the growth of Islamic finance.
The MoA will be sign by Maldives Islamic Bank s Chairman, Mr. Khalid Khaled Al-Aboodi and IBFIM s Chief Executive Officer, YBhg. Dato Dr. Adnan Alias and witnessed by YBhg. Dato Mohd Razif Abd Kadir, Deputy Governor of Bank Negara Malaysia and YBhg. Dato Sri Zukri Samat, Chairman of IBFIM during the Global Islamic Finance Forum (GIFF) in Kuala Lumpur.

Banks in the Persian Gulf are settling for lower fees as competition for bond sales intensifies.
Bond transactions in the six-member Gulf Cooperation Council are recovering after concerns Dubai World, the state- owned holding company, would default on $24.9 billion in debt raised loan costs for businesses, deterring borrowing. Banks led by HSBC Holdings Plc and Standard Chartered Plc advised on $9.4 billion of Gulf bond sales in the third quarter, the most since the last three months of 2009, according to data compiled by Bloomberg.
The fees for bond sales in emerging markets can often be lower than those in the U.S. The weighted average of disclosed fees banks charge for emerging market bond mandates is 28 basis points this year, compared with 37 basis points in the U.S.

Taylor Wessing's Islamic Finance team has been commended in the Financial Services section of the 2010 FT Innovative Lawyers report for its development of a tax law to benefit Islamic finance. The team collaborated with Clifford Chance to lobby the UK government to ensure that the UK tax regime could operate as intended to keep London as the western centre of Islamic finance.
Tax Partner Peter Jackson and Corporate Partner Hamid Yunis led the Taylor Wessing team to resolve complicated tax issues surrounding a property financing transaction Sukuk al Ijara.

Capivest, a Bahrain-based Islamic investment bank, will support Jewellery Arabia 2010, the region’s largest and most prestigious jewellery and watch exhibition, as a sponsor.
Jewellery Arabia will be held at the Bahrain International Exhibition and Convention Centre from October 26 to 30 under the patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa, Prime Minister of Bahrain.

Fitch Ratings has affirmed Qatar Islamic Bank's Long-term Issuer Default Rating (IDR) at 'A' with a Stable Outlook. Fitch has simultaneously affirmed QIB's Short-term IDR at 'F1', Individual rating at 'C', Support rating at '1' and Support Rating Floor at 'A'. At the same time, QIB Sukuk Funding Limited's $ 750m Sukuk issue of senior unsecured trust certificates has been affirmed at 'A'.
QIB's Individual Rating also considers the bank's well-established and strong domestic franchise, together with an environment reflecting high levels of economic activity. Fitch considers that the trend of rapid credit growth could negatively affect the bank's financial performance indicators as the loan book seasons or if there were further stresses in Qatar's real estate segment.

Businessman and investor Ibrahim Al Asmakh has donated QR100m to Qatar Charity to set up a micro-lending bank based on Shariah law for supporting poor and low-income segments of the society in Qatar and other Arab and Islamic countries.
Al Asmakh and Qatar Charity have signed an agreement in this respect. The proposed bank will help unemployed youth set up income-generating projects and undergo training.

Saudi Arabia needs 150,000 housing units annually as demand for residential property is soaring, while a long-awaited mortgage law will not solve the top oil exporter's housing problem.
Saudi Arabia, the biggest Arab economy, is facing a massive housing problem due to rapid population growth and an inflow of expatriate workers coming to the kingdom rolling out a $400 billion infrastructure spending plan.
In addition, the country has only a small secondary real estate market, and land prices are higher than in other Gulf Arab states.
Rentals prices for residential housing units would keep rising by some 10 percent annually like in previous years. Saudi Arabia has been working for years on a mortgage law but Harris said the bill, if finally approved, would not solve the problem as there was not sufficient land available for sale and few experienced real estate developers operating.

Shariah-compliant insurance (Takaful) is gaining traction in the Middle East with prospects for insurers to create distribution channels that meet the dedicated clientele needs.
Takaful segment was certainly growing though it was not yet a major component in the global insurance industry.
In Saudi Arabia, many insurers were now offering takaful products, covering life, non-life and personal lines.
Although the growth is slow, a noteworthy feature is that takaful activities have not “stagnated” in the recent past.
On challenges facing the global insurance industry, the sector was still governed by macro-economic issues, which were a fall-out of the economic turmoil. The insurance industry has been hit worldwide; not just in the US or the Eurozone.

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IDB), the Statistical, Economic & Social Research & Training Center for Islamic Countries (SESRIC) and the Economic Policy Research Foundation of Turkey (TEPAV) signed a memorandum of understanding (MOU) to promote and support the development of Special Economic Zones (SEZs).
Khaled Al-Aboodi, CEO and General Manager of ICD, Dr. Savas Alpay, Director General of SESRIC and Dr. Umit Ozlale, Director of TEPAV, signed the MOU in Istanbul, Turkey, on Oct. 6 on the sidelines of the 26th Session of COMCEC.
The institutions will liaise with one another and would also consider supporting each other through jointly conducting due diligence on specific feasible projects that have been identified for possible cooperation.

Beltone Financial, an Egyptian investment bank with more than 20 billion Egyptian pounds in assets under management, expects its shares to begin trading next month after completion of a share-transfer plan.
Shareholders are entitled to expect such a step, Chairman and Chief Executive Officer Aladdin Saba said in an interview in Cairo yesterday.
Beltone had delayed the move while it was in talks to merge with Pioneers Holding, a securities firm. The two companies abandoned the transaction in July, saying they had failed to reach agreement on strategy. Beltone is listed on the Egyptian Exchange, though its shares don’t trade because they are held by a limited number of investors.
Egypt’s benchmark EGX30 stock index has gained 10 percent this year, according to data compiled by Bloomberg.
Beltone may receive a license as an exchange-traded fund before the end of the year, Khaled Seyam, the chairman of the Egyptian Exchange, said in September. The funds, known as ETFs, trade like stocks and allow investors to track indexes and make bets on whether they will rise or fall.

HSBC Amanah, the Islamic banking window of banking giant HSBC, is planning to launch its Islamic banking services in full scale in Bangladesh, a visiting top official of HSBC said Tuesday.
With the re-launch, HSBC Amanah in Bangladesh will be the largest presence in South East Asia, the deputy CEO said. Currently HSBC Amanah is operating in the UK, Malaysia, Middle East countries, Indonesia and other countries.
HSBC Amanah products are rigorously audited and approved by HSBC central Shariah committee.

Australia plans to change laws to ensure Islamic finance products are taxed fairly as the government seeks to attract investors from the Middle East and Asia, paving the way for sukuk sales.
The national taxation board will hold talks next month in Sydney, Canberra and Melbourne on how to best ensure that Islamic finance transactions are treated the same as equivalent non-Islamic deals. The board noted this month that mortgages that comply with religious principles may lead to stamp duty being paid twice, as the financier buys the property and then sells it to his client. Under a conventional mortgage there is only one sale that attracts the duty.
Australia is looking to join countries from Egypt to South Korea in seeking to ease barriers to Shariah- compliant products and tap the industry’s $1 trillion in assets, which the Kuala Lumpur-based Islamic Financial Services Board predicts will reach $1.6 trillion by 2012.