IslamicFinance.de

The front page pictures that appeared last Friday in newspapers across Korea of President Lee Myung-bak and his wife kneeling at the National Prayer Breakfast portray an image of contriteness and humility. It’s almost as if President Lee was asking for forgiveness from the Protestant church after he became the target of criticism for supporting legislation that would give tax breaks to Korean companies that issue Islamic sukuk bonds.
The pastor of Yoido Full Gospel Church, the largest Protestant congregation in the world, at first threatened to topple Lee over the issue, but he later backed away from that comment.

Kuwait Finance House's (KFH) Turkish unit will launch a 500 million US dollar Islamic bond by the end of the year.
Mohammed Al-Omar said the Islamic lender will issue the benchmark Sukuk following the success of Turkey's first Islamic bond offering, from lender Kuveyt Turk in August.
Al-Omar noted that the law is a significant step forward that reveals a great desire by many Turkish companies that have good assets but lack the suitable financing to expand locally and overseas to benefit from this new financing instrument; especially after those companies realized the numerous benefits of Sukuk, which include providing financing through Sukuk while neither hindering projects nor exhausting their budgets.

The Malaysian government’s recent encouragement of Korean financial institutions to issue “sukuk” instead of ringgit-denominated bonds is part of the country’s aim to foster a strong Islamic financial hub.
They want to develop an Islamic financial market, so they give tax exemptions for bond holders and sukuk holders here.

The Islamic bond market is expanding rapidly due to large liquidity inflows and large and growing Muslim populations worldwide.
The issuance of the Islamic bonds by Korean companies has recently been at the center of controversy as some Christian groups are lobbying to block legislation that would promote the practice.
The ruling Grand National Party has delayed consideration of the sukuk law until after the April by-elections.

Almost unnoticed, the Turkish National Assembly in Ankara passed the Finance Bill 2011 in February 2011 which includes tax neutrality measures for Sukuk Al-Ijara (leasing certificates) thus paving the way for a spate of corporate Sukuk issuances in the country.
The Istanbul Stock Exchange also launched the first Participation Bank Index paving the way for Islamic equity funds and products to be launched in the Turkish market.

Iranian Deputy Oil Minister Mohsen Khojastehmehr says Tehran will issue Islamic bonds (Sukuk) for procuring financial resources for the country's oil projects.
Sukuk will be issued in the next Iranian calendar year which starts on March 21 as part of the ministry's plans to diversify financial resources for implementing various upstream and downstream projects in the oil industry.

Islamic bonds, led by securities in the Arabian Gulf, underperformed emerging-market debt in February as spreading unrest across the Middle East caused the biggest monthly rise in yields since May.
Investors are shunning Middle East assets as protests expanded to Oman, Bahrain, Yemen and Libya, holder of the largest proven oil reserves in Africa. Moody’s Investors Service and Abu Dhabi Commercial Bank say Islamic bonds aren’t likely to recover unless demonstrations that have toppled Tunisia’s and Egypt’s rulers and killed hundreds end soon.

State-owned Islamic Bank of Thailand expects to finalise details of its long-delayed Islamic bond in the second quarter.
The planned sale of Islamic bonds worth 5 billion baht ($164 million) has been repeatedly delayed, pending regulations governing the issue of sukuk in Thailand.

The recent inflow of funds into the Malaysian sukuk market from the Gulf Cooperation Council (GCC) is temporary, fuelled by the build-up of investable funds in the GCC from the hike in crude oil prices amid the political upheaval in the Middle East and North Africa region.
Industry observers and analysts viewed the withdrawals of funds from the region and their inflows into the domestic sukuk market and other more stable ones would depend on the severity and duration of the region's ongoing political turmoil.

President Lee Myung-bak called for a greater role for the Christian community in addressing social conflicts, in an apparent appeal to some church leaders who have opposed the government’s plan to give tax benefits to holders of Islamic bonds, or “sukuk.”
The meeting drew keen attention amid controversy regarding collective action by some Christian groups to nullify such a plan aimed at attracting investment from oil-rich Muslim countries.

Global sales of Shariah-compliant bonds surged to $2.8bn in the first two months of this year, compared with $676mn in the same period of 2010. This statement was given by Bloomberg.
Badlisyah Abdul Ghani, chief executive officer at Kuala Lumpur-based CIMB Islamic Bank Bhd has the oppinion that the rising yields are deterring potential issuers.

Indonesia's finance ministry sold 1.15 trillion rupiah ($130.36 million) of 25-year sukuk.
The ministry received offers for more than four times that amount. The 25-year sukuk yield was slightly higher than the country's 20-year conventional bond.
Indonesia aims to issue global sukuk in the second half this year and is finishing regulations for the issue.

Gulf Investment Corp GSC Kuwait (GIC) has issued its maiden local currency sukuk yesterday, making it the first Gulf Cooperation Council (GCC) issuer in the Malaysian sukuk market.
The RM600mil sukuk is an inaugural issue from GIC’s RM3.5bil sukuk medium-term note programme.
The Royal Bank of Scotland Bhd (RBS) is the sole principal adviser and sole lead arranger. RBS also acted as joint lead managers and joint bookrunners alongside Maybank Investment Bank Bhd.

International Islamic (QIIB) has got shareholders’ approval for issuing sukuk the bank can utilise to boost capital, if required, at a later stage.
Addressing the shareholders earlier, QIIB chairman Sheikh Dr Khalid bin Thani al-Thani said the bank kept strengthening its position as leading Islamic bank in line with the requirements of a rapidly developing economy.

The State Bank of Pakistan (SBP) Tuesday accepted bids worth Rs 47.539 billion for 3-year government of Pakistan Ijara Sukuk against the bids offered worth Rs 56.839 billion.
The SBP further announced that the cut-margin will be applicable to all accepted bids and the benchmark is 6-month Market Treasury Bill (MTB) auction weighted average yield.

The report, "Global Standards Needed To Give Breadth And Depth To Growing Sukuk Market," says that issuance reached a record high of $51.2 billion in 2010--including those issued and matured that same year.
In 2011, Standard & Poor’s believes that the depth and breadth of Sukuk issuance will continue to hinge on the extent of the global economic recovery.

Gulf Investment Corporation GSC Kuwait (GIC) had on Tuesday, March 1 issued its first local currency Sukuk amounting to RM600 million in the Malaysian market.
The GIC stated that this would be its third bond offering in Malaysia.

The Finance Ministry’s debt management office plans to introduce new sharia-compliant debt instruments, including project Islamic bonds (sukuk) designated for infrastructure projects and sharia short-term Treasury bills.
The ministry was also studying plans to introduce one-year sharia and regular T-bills to meet demands for short-term sharia notes and to help the liquidity management of sharia banks.

Referred to as the Bursa Malaysia Sovereign Shariah Index (BMSSI), the new Malaysian ringgit sukuk index was developed with the help of the Association of Islamic Banking Institutions Malaysia (Aibim) and will form part of Bloomberg's Islamic Finance Platform which seeks to leverage on the growing demand for information for syariah-compliant products and services.

Pastor David Yonggi Cho has declared war against President Lee Myung-bak over the administration’s backing of a bill that will provide a tax exemption for the local issuers of Islamic sukuk bonds.
Sukuk bonds conform to an Islamic law that bans interest payments and instead offers bondholders dividends or leasing profits as compensation. The pending legislation would have offered tax concessions to Korean corporate issuers of sukuk bonds in order to tap funds from oil-rich Middle Eastern countries.