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Moody's Investors Service has today assigned an Investment Manager Quality (MQ) rating of MQ2 to Jadwa Asset Management, a division of Saudi Arabian investment bank Jadwa Investment. This is the first MQ rating in the Middle East region and reflects Moody's opinion of the firm's very good investment management capabilities, financial profile and investment performance. At the same time, the rating also takes account of the firm's limited operating history, exposure to "key man" risk and the challenges the firm may face in managing growth.
Moody's believes that Jadwa's challenge to grow is primarily personnel-driven. A shortage of local investment talent and the challenge of retaining key members of the intestment team are likely to test Jadwa's ability to maintain the high standard of its personnel.
However, Moody's notes that Jadwa has been successful in attracting talent both locally as well as from outside the GCC. Moreover, the firm also reinforces the team's capabilities through internal and external training, and offers equity-based incentives to align interests and minimize turnover of key staff.

Although efforts have been made over the past twenty years to bring Islamic banking into India — a country that has more Muslims than Pakistan — as yet the Reserve Bank of India and its master, the Union Finance Ministry, has not given permission for the same. The reason is simple. Across the financial establishment in India, the influence of US and EU financial interests is overpowering.
Several senior civil servants have their close relatives working in such institutions, and therefore accept the advice given by them. Certainly, banks in foreign countries will not want the Indian government to clear the way for the establishment of Islamic banking centres, for that may result in funds flowing from Zurich, London, Frankfurt and New York (all major “Islamic” banking locations) to Mumbai or Kochi. Acting on cue, the monetary and finance authorities in India have continued to block access to Islamic banking avenues, thereby denying millions of observant Muslims in India a chance to keep their assets in safety.

Standard & Poor's Ratings Services said today it lowered its counterparty credit and insurer financial strength ratings on Kuwait-based First Takaful Insurance Co. to 'BB+' from 'BBB-'.
At the same time, the ratings were removed from CreditWatch, where they were initially placed with negative implications on May 12, 2010. The outlook is stable.
Although takaful insurance appears to represent a promising niche in the Kuwaiti market, competition seems to have become extremely fierce, especially owing to the large number of takaful participants in recent years.
The risks of this scenario are intensified by what we see as reduced insurance opportunities.
Renewed pressure on the ratings may occur if the company's performance appears insufficient to maintain earnings and capitalization at levels supportive of the current ratings. Conversely, we could see positive ratings momentum if the company is able to manage a return to a more robust financial and business profile over the next 12 months.

Historically, Bermuda has been at the forefront of the growth and success of the global, conventional insurance and reinsurance market. However, interest has been sparked in the relatively new and growing market of Shari'ah-compliant takaful and retakaful, the insurance and reinsurance of the Islamic world.
The immense wealth held in the Middle East and North African region bodes well for global growth in takaful and retakaful businesses, as well as pointing to a growing need for Bermuda service providers to support such opportunities. It is widely accepted that the conventional insurance model is incompatible with Islamic beliefs – consequently, Shar'iah-compliant structures have been developed as a way for Muslim clients to share risk.
Bermuda is the world's leading domicile for captives so it makes sense that there are opportunities for Middle East corporations to form takaful/retakaful captives on the basis of mutual indemnification of losses. There are also opportunities to develop retakaful and retro-takaful entities for the US market due to Bermuda's prime global location.

Allen & Overy (A&O) has bolstered its Paris arm with the hire of a tax team from CMS Bureau Francis Lefebvre.
Jean-Yves Charriau joined A&O as a partner last week (1 October) from Bureau Francis Lefebvre, where he was also a partner, with a team including counsel Sophie Maurel and associate David Sorel.
Charriau, who specialises in advising real estate companies and foreign funds on their real estate investment transactions, becomes the third partner in the firm's Paris tax practice. He was previously at Bureau Francis Lefebvre for seven years prior to which he spent a decade at Ernst & Young.

A recent survey conducted by YouGov Siraj, to understand consumer banking preferences in the region, with a focus on Islamic banking, revealed that 54 percent of consumers cannot differentiate between Islamic and conventional banking services. The reason cited was both banks provide similar products and services.
The findings are crucial particularly, during a period when Islamic banks are differentiat-ing themselves with a renewed emphasis on fundamental ethics at the heart of Islamic banking model.
The survey has also been conducted with an aim to answer an important question: “Would the average customer prefer a bank that promises moral salvation or one which offers friendly, convenient service, value for money, and an envy inducing credit card?” The complete results of the survey will be released exclusively at the International Islamic Finance Forum

Salah Al Jaidah is not the CEO of Qatar Islamic Bank anymore. He has instead been appointed advisor to the bank's board of directors. Ahmed Meshari has been appointed acting CEO of the bank. The QIB statement said that its board of directors held a meeting yesterday to discuss, among other issues on the agenda, a request received from Al Jaidah to release him from his current duties as CEO of QIB due to personal reasons.

From Dow Jones: Indonesia raised IDR2 trillion ($224 million) from a private placement of non-tradable Islamic debt, or sukuk, the Finance Ministry said Thursday.
The ministry sold the four-year sukuk at a yield of 7.13% to the Haj Fund, managed by the Ministry of Religious Affairs.

The Islamic Financial Services Board today facilitated the signing of the Memorandum of Participation for the establishment of the International Islamic Liquidity Management Corporation (IILM). The primary objective of the IILM is to issue Shari`ah-compliant financial instruments in order to facilitate more efficient and effective liquidity management solutions for institutions offering Islamic financial services (IIFS), as well as to facilitate greater investment flows of Shari`ah-compliant instruments across borders.
This initiative is in line with the IFSB mandates (as stated in its Articles of Agreement) to: a) enhance and coordinate initiatives to develop instruments and procedures for the efficient operations and risk management; and b) encourage cooperation amongst member countries in developing the Islamic financial services industry.

Leading banks in the Kingdom of Bahrain will come to Washington D.C. on the 8th of October 2010 when the Bahrain Association of Banks (BAB) hosts an important reception at the Mandarin Oriental Hotel.
The reception is in honour of Bahrain's delegation to the IMF/World Bank meetings. The delegation will be led by H.E. Shaikh Ahmed B?n Mohammed Al-Khalifa, the Minister of Finance, H.E. Mr Rasheed Mohammed Al Maraj, the Governor of the Central Bank of Bahrain and Mr Abdulkarim Bucheery, CEO of BBK and BAB's Chairman.
The financial community of the Kingdom of Bahrain has shown the depth of its support for the event through sponsorship, which includes Ahli United Bank, BBK Bank Muscat International, Gulf International Bank, Investcorp, Kuwait Finance House, National Bank of Bahrain and United Gulf Bank, together with the Economic Development Board of Bahrain.

International insurers seeking a bigger share of the potentially lucrative Gulf market need to adapt quickly to regulatory changes and tap into growth areas like Islamic finance or risk being muscled out of consolidation.
The overall Middle Eastern insurance sector lags mature markets but its enormous growth potential has already attracted global heavyweights such as AXA and Allianz.
However, the sector's regulatory framework is transforming rapidly and some multinationals remain cautious in developing their Islamic product offering, giving domestic competitors such as Abu Dhabi National Insurance Company, Saudi's Tawuniya and Qatar Insurance Company the chance to build a dominant position.
Foreign insurers have discovered the region in recent years, lured by its large population and the untapped potential, but with 180 firms jostling for space in the market, they need to get their acts together.

The following prospectus has been approved by the UK Listing Authority and is available for viewing:
Prospectus for the issue by QIB Sukuk Funding Limited of sukuk certificates due in 2015 and to the value of $750,000,000.
To view the full document, please paste the following URL into the address bar of your browser.
http://www.rns-pdf.londonstockexchange.com/rns/9373T_1-2010-10-6.pdf

The first Sharia-compliant insurance company in Kenya has been formed as the race for Islamic cash intensifies.
The firm, which will operate as Gulf Takaful Company Ltd, is being fronted by GulfCap Investments — the principal shareholder in Gulf African Bank.
Under the model, people seeking insurance cover will pay premiums to a collective fund from which payments will be made to members who suffer from the risks covered.
But unlike conventional insurance practice, the new insurance model, known in Islamic parlance as Takaful, is both an investment offering as much as it covers members.
Gulf African Bank will act as the fund manager for the insurance company, earning fees for its services to the insurance scheme.
Analysts say that by introducing Sukuk, the government could diversify the base of investors bidding for government debt papers, given the cash flush investors from the East who have shown interest in Africa as an investment destination.

HSBC Holdings Plc, the second-largest underwriter of Islamic bonds, plans to start its first Shariah- compliant exchange traded funds in the Persian Gulf, a region that is struggling to lure international investors.
ETFs may help local markets attract some of the $49.4 billion that EPFR Global says poured into emerging market stock funds this year. Restrictions on foreign participation in Gulf markets range from bans to caps on ownership. Investors have sidestepped most countries in the Middle East and North Africa during a recent surge in capital inflows to emerging markets because of debt restructurings.
The funds will give overseas investors greater access to the region’s markets, Razi Fakih, deputy chief executive officer of HSBC’s Islamic unit in Dubai, said in a telephone interview Oct. 5. National Bank of Abu Dhabi PJSC started the Gulf’s first non-Shariah compliant ETF in March, followed by Falcom Financial Services’ Islamic fund in Saudi Arabia that month.

MUSLIM ENTREPRENEURS in Ireland need access to Sharia-compliant financial products to develop their businesses.
According to research carried out by Thomas Cooney, academic director of DIT Institute for Minority Entrepreneurship, some 76 per cent of Muslim business people in Ireland believe securing finance is their biggest challenge and 90 per cent said there is a need for Islamic law compliant financial products.
Keynote speaker Tayyibah Taylor, founder of American Muslim women’s magazine Azizah, said business was not just a mechanism for creating wealth, it was a form of worship.
Mr Cooney’s research, which he presented at the conference, also found almost half of Muslim entrepreneurs in Ireland were working in food or retailing and were primarily targeting their own communities.

Award-winning Shariah product developer and advisor, Shariah Capital, announced today that Shaykh Yusuf Talal DeLorenzo, internationally-renowned Shariah scholar, Chief Shariah Officer and Board Member of Shariah Capital, has relocated to the Dubai office in order to lead the Company's growing Gulf initiatives.
In addition to assuming responsibilities for Shariah Capital's Dubai's office, Shaykh Yusuf has been named the General Manager of Dubai Shariah Asset Management (DSAM), Shariah Capital's joint venture company with the Dubai government's Dubai Commodity Asset Management (DCAM), a wholly-owned subsidiary of the Dubai Multi Commodities Centre.

AL BARAKA BANK EGYPT ESC, a unit of Bahrain-based Albaraka Banking Group, may sell dollar-denominated Islamic bonds in the second half of 2011, the bank’s chairman said Sept. 29. The bank has not decided on the size of the bond, he said.

This latest transaction completed in collaboration with GSH Kuwait, follows the acquisition of two earlier student accommodation properties in Loughborough and Liverpool last April, and brings the total value of Gatehouse Bank’s real estate portfolio in excess of £150 million.
The property has been purchased at a net initial yield of 6.73%, and will deliver an average cash yield of 9.3% per annum, with the university guaranteeing the term time rent and the developer, Berkeley Homes plc guaranteeing the summer vacation rent for the first five years.
The property, developed by Berkeley Homes, is subject to a Nominations Agreement with the Oxford Brookes University. The UK’s largest operator of privately managed student accommodation, CRM, will provide day to day management.

Just as conventional finance, Islamic finance has been vulnerable to fits and starts, to severe and disquieting hiccups whenever sound economic rules are being ignored. Last year showed how intertwined its future and health is with what happens to the global economy, and for that reason, the performance of an economy will significantly affect the growth of Islamic finance, says CIMB Islamic CEO Badlisyah Abdul Ghani. He considers the Islamic finance industry lucky not to have been involved in subprime credit and not to have been heavily engaged in highly leveraged activities.
Badlisyah contends that whichever financial or fiscal problems that the GCC countries have been facing of late do not have a significant bearing on the stability of Islamic finance in this part of the world.
Considering the clear restrictions placed on the use of derivatives on Islamic transactions, Badlisyah does not believe that the ability of Islamic banks to manage their risk has been constrained or compromise

Saudi Arabia-based Islamic Development Bank (IDB) has hired CIMB (KUL:COMMERZ), Citigroup (NYSE: C | PowerRating), HSBC (LON:HSBA) and Standard Chartered (LON:STAN) to serve as lead-managers of its planned sukuk offer, Reuters reports today, citing a source at one of the arrangers.
IDB will also launch a roadshow ahead of the dollar-denominated debt issue, according to the source.