IslamicFinance.de

A body promoting development of debt sales to block climate change, with sponsors including National Australia Bank Ltd. and HSBC Holdings Plc, plans to accelerate green Islamic bond markets as the Middle East diversifies from oil.
The Climate Bonds Initiative will build up a panel to help create financial products complying with Islamic shariah law. It will work together with the Clean Energy Business Council.
Oil-rich Gulf nations are searching to diversify away from fossil fuel production and toward green-energy projects as they look to longer-term sustainable development of their economies. Higher international crude prices also encourage the countries to sell more of their oil abroad.

According to HSBC Holdings Plc, sales of Islamic bonds may rise to US$44 billion this year as request outstrips supply and as Asian and Middle East investors tap the market complying with Islamic banking rulings. Companies and governments are tapping the Islamic bond market as borrowing costs decline amid rising investor demand.
Emirates Islamic Bank PJSC and First Gulf Bank PJSC of Abu Dhabi raised US$500 million each from sukuk sales.
Shariah-compliant bonds won 7.2% last year, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index, while debt in developing markets rose 8.5%, shows JPMorgan Chase & Co.’s EMBI Global Composite Index .

Majid Al Futtaim Holding LLC initiated a $1 billion Islamic bond program to boost cash reserves.
It appears that HSBC Holdings Plc, Standard Chartered Plc, Abu Dhabi Islamic Bank PJSC and Dubai Islamic Bank PJSC were hired as arrangers of the program.
The company wants to raise about $500 million from the sale of five-year Islamic bonds.

Standard & Poor's (S&P) is inspecting again the credit ratings on 50 banks in the Middle East and North Africa under a new set of criteria, a move that could arise in higher funding costs for lenders already hit by the euro zone crisis and the Arab Spring revolts.
The agency reduced its ratings on 15 big global banks last month, mostly in the Europe and the US, because of the revamp of its ratings criteria.
JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, Goldman Sachs, Barclays Plc and HSBC Holdings Plc were among the banks that had their ratings cut by one notch each.

In order to help the government of Malaysia with a planned sale of U.S. dollar denominated Islamic notes, CIMB Group Holdings Bhd., Citigroup Inc., HSBC Holdings Plc and Malayan Banking Bhd. were hired.

Islamic Development Bank, or IDB, gave out a $750 million five-year, benchmark sukuk with a price guidance of 35 basis points over mid-swaps.
One of the banks that is leading the sale told Dow Jones that BNP Paribas SA, Deutsche Bank AG, HSBC Holdings PLC and Standard Chartered Bank were joint bookrunners on the transaction.

HSBC Holdings Plc is seeking clarification of an order by Qatar’s central bank requiring non- Islamic lenders in the nation to end services that comply with Shariah law.
HSBC Amanah is in discussions with the central bank “to find a workable solution”.

CIMB Group Holdings Bhd. is seeking to boost its business in the Persian Gulf to fight off HSBC Holdings Plc’s challenge to its dominance.
CIMB’s only Persian Gulf deal this year was a $125 million sale in October for a unit of Saudi Arabia’s Islamic Development Bank.

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.

The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.
SAUDI ARABIAN OIL CO.: Saudi Aramco, the world’s largest state-owned oil company, and Total SA plan to sell Islamic bonds valued at $1 billion this year to fund construction of their joint oil refinery in Jubail, said Simon Eedle, global head of Islamic banking at Credit Agricole SA, the lead arranger of the sale.
ABU DHABI ISLAMIC BANK PJSC: The United Arab Emirates’ second-biggest Shariah-compliant lender hired HSBC Holdings Plc, Standard Chartered Plc and Barclays Plc to help sell bonds, according to two bankers familiar with the plan. The bank has a $5 billion sukuk trust certificate program, according to a prospectus dated July 8 posted by the company on the London Stock Exchange’s website.
PT BANK MUAMALAT INDONESIA: The Islamic lender plans to sell 1 trillion rupiah ($112 million) of Islamic bonds in the second half of 2011, Andi Buchari, director of compliance and corporate planning at the Jakarta-based bank, was quoted as saying by the Investor Daily newspaper last week.

Saudi Arabian shares fell for a fourth day after banks in the kingdom reported lower third- quarter profit on provisions for bad loans.
Saudi banks have been hurt since the onset of the global credit crisis as provisions for bad loans rose and lending slowed after the Saad and Algosaibi business groups defaulted on at least US$15.7 billion of loans. Saudi British Bank, the lender 40% owned by HSBC Holdings Plc, Al-Rajhi Bank, Saudi Arabia’s biggest by market value, and Arab National Bank were among 10 out of the 11 banks in the nation that reported a decline in third-quarter profit last week.
The country’s banks will be required to make 100% provisions against non-performing loans, central bank Governor Muhammad al-Jasser said in an interview shown on Dubai-based Al Arabiya television on October 12.