IslamicFinance.de

The Senior FSD Specialist will primarily be responsible for:

Leading the Bank’s financial inclusion work in Indonesia, including through the design, delivery, implementation and monitoring of existing and prospective financial inclusion projects (lending, economic and sector work, technical assistance), including in areas such as microfinance, access to finance for MSMEs and women, micro-insurance, financial literacy and consumer protection, international migration and remittances; Islamic financing.

It is expected by early next year that the Islamic corporate social responsibility (i-CSR) General Practice framework will be ready for adoption by Islamic financial institutions. The framework has been developed by the Accounting Research Institute (ARI) of Universiti Teknologi Mara. It is now almost completed. ARI researchers at the UITM-ACCA Asia-Pacific Centre of Sustainability (APCeS) worked in collaboration with Universiti Sains Malaysia, and Indonesia's Sebelas Maret University and Universitas Muhammadiyah Surakarta. According to Professor Dr. Normah Omar - director of ARI - Shariah players including local Ulama (Islamic scholars) will be engaged by the institute in order to firm up a couple of details on the framework in a two-day workshop beginning on November 29th.

D. Subbarao, governer of RBI, explains that because of legal issues, Islamic banking will not be possible in Kerala. This is the only state in the country which has been striving for introduction of Islamic banking. RBI has already addressed Indian government on the matter pointing out the necessary amendments. Subbarao further suggests that the restriction on Islamic banking could have a work-around through other models instead of banking. These have been proposed to the government of Kerala.

Due to a shortage of Islamic sovereign debt, the new dollar-denominated sukuk of Indonesia rallied at the double pace of than non-Islamic securities this week. The sales gathered $5 billion in orders for $1 billion on offer. The bonds, which will reach maturity in 2022, are sold at a coupon of 3.3%. Since November 19th, the yield fell 17 basis points reaching 3.13%. Compared to that, not Shariah-compliant bonds declined only 8 basic points to 2.91%. The current 2.82% are a record low for Shariah-compliant borrowing costs in the international markets. It is possible that next year the shortage will become even more acute because of the government's plans to cut overseas sales in order to reduce its foreign-currency risk.

CIMB-Principal Asset Management Bhd intends to grow its funds under the government-mooted private retirement scheme (PRS). The target amount is RM2 billion which should be reached during a period of five years. This way, CIMB is working on its higher goal to become the country's top PRS provider. It is expected that pension funds will become a key part of the company's business, accounting for 20% of its revenue in five years. At the moment, CIMB is managing RM36 billion worth of assets.

According to a report by Trade Arabia, Türkiye Petrol Rafinerileri has signed a 1-year facility worth USD 200 million with a group of nine banks from the Gulf region. The sole bookrunner and structuring advisor to Tüpra? was QInvest. Lead arrangers of the deal were Ahli United Bank, Al Hilal Bank, Doha Bank and Dubai Islamic Bank. The rest of the banks involved in the facility are Qatar Islamic Bank, Barwa Bank, The Commercial Bank of Qatar and First Gulf Bank.

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

According to the Raja Muda of Perlis, Tuanku Syed Faizuddin Putra Jamalullail Sunday, private corporations should seize the opportunity to be creative in performing their Corporate Social Responsibility (CSR), thus enhancing the future of their companies as well as their current reputation. At the CSR charity sale, which was organized by Malaysia Industrial Development Finance Berhad (MIDF), he said that he was certain of the growth of popularity of the company through this event. The charity sale was made possible in collaboration with the Perlis Islamic Religious Affairs and Malay Customs Council.

A new milestone was reached by the Islamic finance industry of Sri Lanka. The first Shariahbased income fund for the country was recently launched. It has the structure of a unit trust. It will be followed by another unit trust - Adl Mudarabah Fund - which will be launched under the combined expertise of Adl Capital Limited and Comtrust Asset Management (Pvt.) Limited. The Trustee of the fund will be Deutsche Bank. Its role is to monitor all investments.

According to Neil Miller - Global Head of Islamic Finance at KPMG - despite the global financial crisis, Islamic banking has demonstrated rapid development and lossless operation reaching an average growth rate of 10%. He further adds that the most significant development is observed in Malaysia. Azerbaijan should learn from Malaysia as well as from Kazakhstan. Azerbaijan should first take care of the lack of legislation in the area of Islamic finance in order to work on development in the spheres of Islamic banking and Islamic insurance.

The new rating of Tanjung Langsat Port Sdn Bhd's sukuk musyarakah bonds and RM135mil musyarakah commercial papers/musyarakah medium-term notes programme (MCP/MMTN) by Malaysian Rating Corp Bhd (MARC) is lower than the previous one. It was downgraded from A-IS and MARC-2ID/A-ID to BBB+IS and MARC-3ID/BBB+ID respectively. The downward change in rating is a reflection of the company's continuous losses and weak cashflow due to a delay in the commencement of its port operation.

The only tool (of interest rate) for RBI to control liquidity for balancing inflation and growth rate is not enough resulting in the inability to allow India grow better without inflation. Trying to exert control on inflation, RBI fails in terms of interest rate and the country's economic growth tumbles. According to RBI Governor, growth rate will decline and there will be an increase in inflation. He further indicates that in 2013 inflation is expected to rise in the third quarter followed by an ease in the fourth quarter.

Oil palm plantation firm Golden Agri-Resources has issued its first sukuk in Malaysia worth RM1.5 billion (S$600 million). The sukuk will expire in five-year's time - in November 2017. The funds gained through the sukuk are planned to be used for the general corporate purposes of the company and are expected to strengthen its financial flexibility for growth. The issuance of the Islamic bond is a part of a RM5 billion programme.

Dear Reader,

The German language book on Islamic finance by the Editor of IslamicFinance.de and Dr Wackerbeck from Booz Consultants is now translated to Chinese.

Please find the biographical information below:

Authors: Michael Gassner / Philipp Wackerbeck
Title: Islamic Finance – Islam-gerechte Finanzanlagen und
Finanzierungen
ISBN number: 978-7-5139-0217-5
PUBLISHER: Beijing - Democracy and Construction Press
Pre-Publication Date: 2012.7

Full biographical details: http://db.lib.bua.edu.cn/asord/asorditem.php?asord_marc_no=0001344540

Orders: http://www.amazon.cn/%E4%BC%8A%E6%96%AF%E5%85%B0%E9%87%91%E8%9E%8D-%E7%B...

Book review about the German language original: http://www.rpi-virtuell.net/workspace/24686AD5-936C-476D-9EA0-65E2968590...

Best regards,

Michael Gassner

A 50 basis-point premium for a 20-year sukuk over non-Islamic sovereign debt was paid by the Finance Ministry. This makes it the biggest spread for government-guaranteed syariah-compliant notes in 2012. Turus Pesawat Sdn was appointed to sell the securities which are intended to fund aircraft purchases for Malaysian Airlined. The company managed to sell RM3.4bil of debt in total. The yield of the RM1.65bil portion of 2032 notes was 4.36%.

Islamic International Rating Agency (IIRA) made an upgrade to the ratings of Kuveyt Turk Katilim Bankasi (KTKB) on the national scale from 'A/A-2' (tr) (Single A/ A-Two) to 'A+/A-1' (tr) (Single A Plus/ A-One). Both foreign and local currency ratings have been reaffirmed on the international scale at 'BBB-/A-3' (Triple B Minus/ A-Three) and 'BBB/ A-3' (Triple B/ A-Three), respectively. The outlook on the ratings is said to be stable. Even though the Turkish economy has shown resilience in the backdrop of global economic challenges, due to the policy measures taken in 2011, it can expected for the GDP growth to endure moderation.

After achieving a revenue growth of 50% at the end of October 2012 compared with the same period last year, Great Eastern Takaful Sdn Bhd (GETSB) is convinced it will reach a 60% to 70% growth in revenue till hte end of the year. The focus of the company will be its single contribution business as well as its regular contribution businesses. Currently, GETSB has a share of 4% of the local takaful market. Apart from the growth in revenue, an increase in the number of agents from the current 5,000 to 6,500 by 2013 is expected.

Family businesses play a key role in the business scene of the Middle East and are intrinsic to the region's economy as well. According to the latest Deloitte ME Point of View publication however, challenges faced by today's family businesses grow in number. Ideas how they can be overcome are discussed in the publication. In the article titled 'Family Businesses: Addressing the challenges faced in today's environment' the competition of family businesses in a more turbulent environment is pointed out. The environment is marked by pluralistic social values, intensified competition, a global economy and rapidly changing politics and regulation.

Just as HSBC Holdings announced it would shrink its Islamic banking operations in a number of countries, the National Bank of Abu Dhabi made plans to increase the contribution of its Shariah-compliant operations three times over the next eight years. Thus, it becomes clear that HSBC's move is nothing but a sign of its own priorities. While it is set to continue its operations mainly in Malaysia and Saudi Arabia with a limited presence in Indonesia, local banks have the opportunity to step in for it.