IslamicFinance.de

Turkmenistan prepares to establish the first investment company jointly with the State Bank for Foreign Economic Affairs of Turkmenistan and the Islamic Corporation for Private Sector Development. As Turkmenistan's Vice Premier Tuvakmamed Japarov reported at a government meeting on September 17, the main task of the investment company will be to revitalize activities related to direct investments in Turkmenistan through equity capital of small and medium-sized businesses enterprise.

National Bonds is providing new hope to its customers who have accumulated loans with the launch of a new initiative that will help new & current bondholders erase their debts and begin a 'debt-free' life. National Bonds Corporation PJSC, the leading Sharia compliant saving scheme, will reward prizes totaling up to AED 2 Million in value that is in addition to its regular & richest weekly and monthly rewards, including the life-changing AED 1 million monthly prize and 22,250 prizes. This initiative is part of National Bonds' efforts to inculcate a culture of regular savings in the UAE. The strategy includes the recently launched National BondsNational Bonds
National Bonds Corporation Standing Instruction Order, a service that makes regular saving easier than ever and is available at a number of banks across the UAE. The Standing Instruction Order will allow banks to automatically deduct a monthly amount from customers to purchase bonds on their behalf, thereby eliminating the need to repeat the transaction process every month.

Islamic derivatives are still struggling to gain traction in the Gulf, six months after the launch of a much-touted over-the-counter contract aimed at creating a standard legal framework for hedging products. Experts said the contract, known as the Tahawwut Master Agreement, in theory provides Islamic institutions with a simpler template for risk management that has been approved by sharia scholars. But the contract has been slow to catch on among Islamic institutions in the region as many are put off by the dense language of the document and still question the sharia compliance of hedging products, which are often associated with speculation. Harris Irfan, head of Islamic products at Barclays Capital, said the tahawwut agreement was an important first-step in creating much-needed derivatives products in the Islamic finance industry, but the fear of the unknown was hindering growth.

Since the global financial crisis started to unfold in 2008, there have been several reports suggesting that Islamic banks have been less affected by the crisis because they are not allowed for ethical reasons to invest in the pernicious derivatives such as CDOs (credit default obligations) that precipitated the worst crisis the world has seen since the Great Depression in the 1930s. Such reports have largely been based on oversimplified assumptions about Islamic finance and in a few instances on an emotional attachment based more on religiosity than on dispassionate non-descriptive empirical analysis. Now the International Monetary Fund (IMF) this month published a working paper titled "The Effects of the Global Crisis on Islamic and Conventional Banks: A Comparative Study" in which the authors Maher Hasan and Jemma Dridi conclude and confirm that in general Islamic banks fared better than conventional banks during the global financial crisis, although they warn that such comparisons are subject to a motley of caveats and should not be over-simplified.

BNP Paribas (BNPP.PA) named Tariq Al-Samahiji as global head of its Islamic finance and investments business and chief executive of the bank's Islamic finance arm, Najmah. Al-Samahiji will be based in Bahrain, which is the bank's regional hub, and the appointment is effective from Sept. 1.

Tricor Group, a member of The Bank of East Asia Group, is expanding into Dubai and the Middle East through a new Joint Venture with Praesidium. JV with Praesidium will be based in the DIFC; will provide a range of outsourced services to both conventional and Islamic businesses, including global Shari’ah infrastructure support services, including bookkeeping services for Shari’ah-compliant businesses, fund administration and custody advisory services to Islamic funds.

Islamic finance standards maker, Accounting and Auditing Organization for Islamic Financial Institutions announced yesterday the appointment of Dr. Abdul Sattar Al Khuwaildi to its prestigious Sharia committee. Dr Al Khuwaildi is the Secretary General of the Dubai-based International Islamic Centre for Reconciliation and Arbitration since 2007, which assists in resolving financial and commercial disputes that may arise between financial and commercial institutions.

Ethica Institute of Islamic Finance and Zawya today announced a partnership to jointly deliver online Islamic banking courses and certification. Ethica Institute's certification is chosen by more professionals and students than any other Islamic finance certificate in the world, and Zawya is widely regarded as the leading provider of business and investment intelligence in the Middle East. A partnership between Ethica and Zawya would bring unprecedented access to standardized Islamic finance training and certification to both companies' extensive community of high-end users. In the coming months the two companies intend to jointly launch a specialized Islamic finance certification focusing on Sukuk.

Islamic banks in the UAE recorded a decline of around 17 per cent in its net earnings in the first half of 2010 despite a sharp rise in the profits of the Abu Dhabi Islamic Bank (ADIB). Individually, several national banks reported growth in their net income in the first half of 2010, including the government-controlled National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB). The UAE's largest bank, Emirates NBD, reported a 51 per cent fall in profits because of its exposure to Dubai World. Central Bank figures showed UAE banks are pushing ahead with a post-crisis provisioning drive because of their exposure to Dubai World, the domestic real estate sector and two Saudi financially troubled family businesses. According to a key Western financial institution, UIAE banks have emerged as more vulnerable to real estate downturns than those in other Gulf oil producers because of their massive lending for that sector.

Javelin Investment Management has announced that its JETS Dow Jones Islamic Market International Index Fund will cease trading on October 19, 2010. Launched on July 1, 2009, the fund failed to attract the level of investor interest that had been anticipated. Marketing efforts for Javelin's second offering, JETS Contrarian Opportunities Index Fund, have proved more successful since its launch in April of this year. Trading under the symbol JCO, the fund consists of stocks that have been identified by Dow Jones as having underperformed in recent years while maintaining relatively strong fundamentals. JETS Dow Jones Islamic Market International Index Fund invests in companies whose principal activities are outside the United States. This creates the risk that currency fluctuations will impact the company's results. Trading on foreign markets often carries the risk that regulatory "circuit breakers" will interrupt trading. Trading practices vary around the world, as do sovereign risk and the possibility of war or civil disturbance. These risks can be more serious in the emerging markets.

T'azur Company b.s.c., (T'azur), a regional Takaful (Islamic Insurance) company headquartered in the Kingdom of Bahrain, announced today the signing of an Islamic re-insurance agreement with Hannover Retakaful, the Bahrain-based Islamic subsidiary of Hannover-Re, one of the world's leading re-insurers with premiums in excess of EUR10bn. T'azur fully Sharia-compliant re-insurance panel is led by Hanover Retakaful and also includes other highly rated Islamic reinsurance companies such as ACR Re, Takaful Re, MNRB and Best Re.

Funds will be utilised to finance ESI's capital expenditures for its expansion plans for additional manufacturing facilities. This transaction also comes in line with Al hilals commitment to Abu Dhabi's vision 2030 and supporting the Emirates strategic and vital business initiatives.

Albaraka Türk Katilim Bankasi A.S. (Al Baraka Turk), a subsidiary-banking unit of Al Baraka Banking Group BSC (ABG), signed a $240 million syndicated Islamic financing in Istanbul. Twenty two GCC, European and international banks (both Islamic and conventional) participated in the syndication. The syndication was arranged and managed by Standard Chartered Bank, ABC Islamic Bank (Bahrain) and Noor Islamic Bank (Dubai). The funding deal comes as part of Al Baraka Turk's strategy to further expand and diversify its financial resources and further strengthen its name in the domestic, regional and global financial markets. Al Baraka Turk will use the proceeds of the deal towards the ongoing implementation process of a range of existing and newer products and services offered by it.

There is huge room for growth in Islamic exchange traded funds with around 1.6 billion Muslims worldwide and $950 billion in assets under the management of the Islamic finance industry, it is claimed. The first Sharia compliant ETF was launched in January 2007 based on a large cap global index from Dow Jones. Since then, other ETF providers have entered the market. Since the first Sharia compliant fund, iShares, a leading provider of ETFs, has also introduced Sharia compliant ETFs that are all currently based on holding physical equities. ‘Private clients’ advisers in conventional banks also report including Sharia compliant ETFs in client portfolios in combinations with actively managed funds and structured products, according to Broadwell, iShares vice president.

Jakarta-based Bank Syariah Mandiri joined Islamic lenders worldwide to use Ramadan to remind Muslims to obey the teachings of the Prophet Muhammad that ban interest. Emirates NBD of Dubai waived payments on personal loans during Ramadan, while Maybank Islamic in Kuala Lumpur started automating charitable donations. Banks in Indonesia, the world’s most populous Muslim nation, offered limited-edition products to generate Ramadan-linked revenue and publicity. Bank Syariah Mandiri, the Islamic unit of Indonesia’s largest bank by assets, Bank Mandiri, collaborated with a local TV operator on a program aimed at promoting Shariah-compliant banking during the holy month. Shariah finance prohibits the charging of interest as well as investments tied to gambling and alcohol. Returns are generated as a share of profits from assets.

The gesture came in response to a call from President Sheikh Khalifa bin Zayed Al Nahyan. The money was handed over to the UAE Red Crescent Authority (RCA).

UK insurance giant Legal & General has signed a partnership with Islamic Bank of Britain (IBB) to make two Islamic home finance products available to financial intermediaries. The Home Purchase Plan (HPP) is IBB’s flagship Islamic mortgage product and is a mortgage alternative, which offers home finance without the use of interest. The Shari’ah-compliant product allows customers to purchase their home in partnership with the bank on a leasing (Ijara) and diminishing partnership (Musharaka) agreement. Islamic Bank of Britain pioneered Shari’ah-compliant retail banking in the UK and has launched a wide range of products, including the Home Purchase Plan (the halal mortgage alternative) Current Accounts, Savings Accounts and Personal Finance. Several of the bank’s products remain unique in the UK retail market.

NEW tax laws will level the playing field between Islamic banks and conventional banking, say banking and tax analysts. The new laws are intended to encourage foreign direct investment into SA, says Amman Muhammad, MD for Absa Islamic Banking. Islamic banking is in its infancy in SA. Albaraka Bank and the Islamic Bank were the first Islamic banks to be granted a licence by the Reserve Bank in the 1980s. The proposed amendments to the Income Tax Act take into account three different types of Islamic financing on which one can develop products. First , mudurabah, a form of deposit where the client invests with a bank and, the bank invests deposits in Sharia -compliant enterprises or products. Second , murabaha, which is a mark-up financing transaction offered by a bank so that a client can obtain financing for various assets, such as property and equipment. Third, diminishing musharaka, a partnership arrangement usually used for project financing. Mr Muhammad hopes that the implementation of a sovereign sukuk (Islamic bond) will be the next step by the government.

African Reinsurance Corporation has launched a new subsidiary called African Takaful Reinsurance Company (Africa Retakaful). The new company is a subsidiary of African Re to give the much needed back up to takaful insurance companies around the globe. Africa Retakaful is wholly owned by Africa Re and licensed in Egypt under the Investment and Free Zone Law. It was decided that the clients will decide to place the business with either Africa Retakaful or Africa Re exclusively. In all cases Africa Re, which enjoys the A- rating from S&P and AM Best respectively will provide all the required support for Africa Retakaful. Meanwhile, Mr. Omar Gouda has been appointed Managing Director of African Reyakaful. Omar, a seasoned and respected reinsurance expert who is well known at home ( Egypt ) and in the Middle East was the Regional Director of North East Africa and Middle East of Africa Re before his appointment.

On the verge of collapse, Kabul Bank operates in a financial system we would barely recognise. SHANE Warne's post-cricket pursuits and the murky nightmare that is Afghanistan would not appear to be obviously connected. It's a mess, not least because Kabul Bank is the vehicle used to pay Afghan government salaries, mostly the military and police, the very same - and sometimes mutinous - security forces that the US, Australia and other members of the Western alliance trying to keep Afghanistan safe from extremists say they will, eventually, hand their duties to. The head of the country's central bank, a close associate of the ruling Karzai clique, unconvincingly says everything is fine at Kabul Bank and blames the media. Before returning to Kabul to again run the central bank (the Taliban interrupted his first stint in 1996), this particular governor sold carpets in the US.