Pakistan Islamic Chamber To Host World Islamic Finance Summit

It has been reported that Pakistan will be hosting the World Islamic Finance Summit on September 21st and 22nd 2011.

The theme of the first World Islamic Finance Summit in Pakistan is "Islamic Finance Growth and Opportunities", said Chairman of the Conferences and New Initiatives Ozair A. Hanafi, while briefing the media on this occasion.

He said that the mix of local and international participants is an impressive development and the organisers, with the help of supporters and sponsors, are all poised to make this event a big success.

Managing Director of the Conferences and New Initiatives, Syed Shahjahan Salahuddin, said the objective of the Summit is to bring together industry leaders, academicians, think tanks, Shariah scholars, regulators, policy makers, government officials. The participants would get an ideal platform to have fruitful discussions and knowledge sharing with delegates participating from Pakistan and overseas, he said.

The summit aims to provide a forum for the government and private sector organisations to promote the opportunities for investment in Islamic financial instruments and gain greater understanding of the challenges faced by both the sectors,the statement issued on this occasion said. It said the World Islamic Finance Summit marks the beginning of this journey towards the growth of Islamic finance through joint efforts of the industry and the regulators.

The State Bank will be a supporter, Bank AlFalah as its Lead Partner, Al-Baraka Islamic Bank as the Co Lead Partner, IBM as the technology partner, Pak Qatar Takaful Limited, Faysal Bank Limited and Askari Bank Limited as the Partners, Meezan Bank Limited as the TechnicalPartner, Riphah International University asthe technical affiliate.

Emirates Islamic Bank exceeds its Emiratization plan for 2011

In line with its commitment to attract and recruit UAE Nationals, Emirates Islamic Bank announced that they hired 76 UAE nationals since the beginning of this year plus 50 more nationals are expected to join before the end of September 2011.

This would mean achieving 105% of the target for the year. Emiritization is a key priority for us and we hope that through our employee development programs we can continue to attract UAE national talents to join our ranks. With the right people onboard, along with the right training and support, our journey to continue to be a center of excellence in our products and services, is bound to be a smooth, efficient and a sustainable one," said Mr. Faisal Aqil, GM Retail Banking for Emirates Islamic Bank.

"We had a commitment to recruit 120 UAE national as part of our 2011 strategy, and I am proud to announce that we will exceed this figure by the end of Q3 itself as we are in the process of hiring 50 new UAE nationals," he added.

The bank has a strategic plan in place to train, and develop UAE National employees through development programs segmented into three areas: Al Awael, Al Ruwad and Al Mudara. Al Awael will focus on tailored programs for new joiners, Al Ruwad for middle management and Al Mudara, for existing high performing senior management employees.

Emirates Islamic Bank's plan to attract UAE Nationals includes organizing open days for walk-in interviews, participating in Emiratization career fairs and exhibitions and arranging for recruitment fairs at schools, colleges, and universities across the UAE.

Eid Mubarak!!!

On behalf of Global Islamic Finance Magazine, we wish you all a happy and blessed EID.

Malaysia Still at the Top For Domestic Sukuk

Malaysia has made unprecedented achievements in the Islamic finance sector and it currently dominates domestic Sukuk,with 72 per cent by value, Sudan leads short-term issuance (maturity one year or less)

Ijlal Ahmad Alvi, Chairman & CEO, IIFM Chairman and Chief Executive Officer of the International Islamic Financial Market (IIFM) Ijlal Ahmad Alvi said ,"The trend toward issuing shorter tenure Sukuk is slowly increasing and is again driven by sovereign issuers through central banks."

He was speaking at the launch of the second edition of the International Islamic Financial Market (IIFM) Sukuk Report in Labuan. Bahrain is the most active market within the Gulf Cooperation Council (GCC), regularly issuing short-term Sukuk Al Salam and Sukuk Al Ijarah. "It is the first government in the GCC to use Sukuk as one of the primary tools for raising finance," he said, adding, "Moreover, it is expected that Bahrain, Brunei, Sudan plus several new entrants, will contribute to the development of the short end of the market.”

Separately, Zawya’s Sukuk Quarterly Bulletin notes that global Sukuk issuance rose by 18 per cent in Q2 2011 on year-ago levels to $16 billion. Across H1 2011, some $43.8 billion was raised globally, setting a new record. Government issuance dominated in Q2 2011, totalling $11.651 billion. Malaysia was responsible for $12.676 million in Sukuk, all denominated in MYR. By structure, Murabaha was the most important, accounting for $7.56 billion, followed by Bai Bithaman Ajil ($2.49 billion) and Musharaka ($2.2 billion).

The top five Sukuk lead managers (excluding central banks) were: HSBC Bank Middle East (four issues worth a total of $904 million); Aminvestment Bank (24 issues, $789 million); Maybank (46 issues, $625 million); RHB Islamic Bank(six issues, $591 million); Standard Chartered Middle East & South Asia (nine issues, $402 million).

Kuwait Finance House launches Ijarah Promotions

Kuwait Finance House (KFH) announced that it has launched competitive promotions to finance car purchase through leasing, since KFH is keen, through its Cars Department, to offer its clients best services and promotions that are convenient to various client segments seeking to purchase a car.

Acting Cars Department Manager Wael Al-Kharraz explained that the cars promotions offer unprecedented privileges, such as takaful insurance, providing the client with another car is leased car requires over 24 hours of repairing, and having the agent's warranty.

He added that KFH client takes advantage of paying a low monthly rent, because there is a final payment in order to own the leased car.

He revealed that all KFH's car showrooms have various cars that meet all requirements, but clients can also obtain a price quote for a new car from any car agents in Kuwait.

He stressed that KFH is making great strides in the field of car financing through Murabaha, which is reflected in its possession of a significant market share of this competitive sector.

He noted that such a success highlights KFH's strategy that is based on meeting clients growing needs, in addition to making premium Shariah compliant offers that suit all segments.

Moreover, Al-Kharraz stated that this kind of leasing service is highly demanded, since it offers them various financing solutions to their requirements.

Shariah Compliant Finance Facility Signed By Tamkeen

It has been reported that the leading Middle Eastern company Tamkeen and Bahraini Saudi Bank sign a Shariah-compliant financing facility agreement to fund private sector projects.

A Shariah-compliant agreement was signed today between Tamkeen and the Bahraini Saudi Bank (BSB) by which the Bank will provide Shariah-compliant financing facilities aiming to fund, finance, and support private sector businesses.

The agreement was signed by Dr. Ahmed AbdulHameed Al-Shaikh, Tamkeen's VP for Enterprise and Human Capital Development and Dr. Anwar Khalifa Al-Sada, BSB's Chairman of BSB. BSB is a subsidiary of Al-Salam Bahrain Bank.

Dr. Ahmed Al-Shaikh made a statement pointing out that this project comes within the scope of Tamkeen's objectives to develop and support the national economy on the private sector front and make it the real stimulator of economy in the Kingdom. This is an unmatched opportunity to provide financing on concessional terms in full compliance with the Shariah laws and principles.

The initiative is inspired by Tamkeen's objectives to facilitate enterprise growth to develop businesses in collaboration with financing bodies of the Kingdom of Bahrain which already have Shariah-certified funding system.

Dr. Al-Sada also commented that providing support and funding to private sector enterprises has the effect of enabling those enterprises to increase their success factor and increase growth opportunities and sustainability.

He went on to further comment that the Bank is keen through this agreement to boost all initiatives supporting private businesses consequently leading to economic development and prosperity for the Kingdom of Bahrain.

Labuan FSA hosts IIFM's 24th Board of Directors meeting

The 24th Board of Directors meeting of the International Islamic Financial Market's organization (IIFM) was held at the Labuan Financial Services Authority (Labuan FSA) offices which is one of the founding and permanent members of IIFM.

Besides Labuan FSA, the IIFM Board of Directors are represented by senior officials from the Central Bank of Bahrain, Authoriti Monetari Brunei Darussalam, Bank Indonesia, Central Bank of Sudan, State Bank of Pakistan, Islamic Development Bank, Bank Islam Malaysia Berhad, National Bank of Kuwait, Credit Agricole CIB, Standard Chartered Saadiq, Kuwait Finance House-Bahrain, European Islamic Investment Bank and ABC Islamic Bank.

Dato' Azizan Abdul Rahman, Director General of Labuan FSA and Board member of IIFM welcomed the IIFM Board of Directors to Labuan and reiterated its strong support to IIFM's Islamic financial market unification efforts through standardization of Islamic Capital & Money Market (ICMM) products, documentation and related processes.

Mr. Khalid Hamad Abdul Rahman Hamad, Executive Director-Banking Supervision, Central Bank of Bahrain & Chairman of IIFM, thanked Labuan FSA for their hospitality and appreciated the IIFM Board of Directors for their commitment to IIFM's efforts in the standardization of documentation for liquidity management and hedging products over the past few years, which will greatly facilitate the development of the ICMM.

The Board reviewed the progress on market implementation of the Tahawwut Master Agreement (TMA) and also deliberated on the related current IIFM initiative of Islamic hedging products standardization under the TMA. The progress of IIFM's other current market initiatives such as the Master Wakalah Agreement was also discussed.

Mr. Ijlal Ahmed Alvi, Chief Executive of IIFM, briefed that as per the directives of the IIFM Board during its meeting held in December 2010 as well as in line with IIFM's comprehensive industry wide process of market standardization; the "IIFM Market Consultative Meeting on the Master Wakalah Agreement" was held on 12th June 2011 in Dubai. The meeting was very well received by the market practitioners as well as Shariah scholars and resulted in establishing the need to address various issues in the existing Wakalah arrangements in order to provide further enhancement to current practices keeping in view the Shariah requirements of such liquidity management tools.

The IIFM Board formally approved the standardization of Wakalah for the Islamic inter-bank market.Mr. Alvi stressed the need of bringing the Islamic banking institutions, regulators, Shariah scholars and other market participants on a common platform to address their needs and requirements as well as create awareness in the markets.


In this regard, the IIFM's events such as its project consultative meetings, industry seminars and workshops which have benefitted institutions in various jurisdictions. This IIFM seminars and briefings so far held in 2011 are Pakistan, Labuan (Malaysia) and Brunei on 23rd June, 5th July and 6th July respectively.

The IIFM Sukuk Report (2nd Edition) was launched at the press conference following the Board meeting. Mr. Alvi said that this report has now become an annual research feature for the industry.

Islamic Finance Education To Be Offered by Dar Al Sharia

The Islamic finance sector can further prosper from companies offering innovative methods of educating their employees.Dar Al Sharia, a consultancy and advisory services unit of Dubai Islamic Bank (DIB) has partnered with UK-based Durham University and Hawkamah, the Institute for Corporate Governance, to offer training courses in Islamic finance.

The new courses will be offered at an affordable price and will last for between three and five days. It will initially be run in Dubai, said a DIB statement.

The courses will suit professionals working within the finance industry in particular, as well as university students hoping to work in the field of business and finance, it added.

The courses are aimed at meeting the needs of the UAE’s rapidly expanding Islamic finance industry for high quality academic and practical training, said the DIB in its statement.

Certificates for the courses will be awarded jointly in the names of Dar Al Sharia, Durham University and Hawkamah.

Through this workshop, students will benefit from a unique curriculum that teaches simultaneously the academic and practical elements of Islamic finance, including the role of corporate governance in it. This will provide the participants a complete picture of how Islamic finance operates.

With the support of Hawkamah, the courses will be developed under the guidance of two experts - Dr. Hussain Hamed Hassan, chairman - DIB Sharia Board and the managing director of Dar Al Sharia who has been instrumental in developing the structure for several landmark Sukuk and products, and Professor Rodney Wilson of Durham University, a leading Islamic finance academic for over 25 years.

Dr Hassan said, "Islamic finance is one of the fastest growing industries in the world. However, authentic education on the subject is not widely and easily available."

"We are delighted to work with Durham University and Hawkamah to fill this vacuum and create what will be the benchmark in Islamic finance teaching," he noted.

"For the first time in the UAE, practitioners as well as students can benefit from a curriculum designed to teach both the academic and practical skills needed to succeed in Islamic finance," he added.

Dr Nasser Saidi, executive director of Hawkamah, said: “We are pleased to partner with Dar Al Sharia and Durham University on holding this course, as capacity building of those who are involved first hand in this industry is key to the development of the Islamic Finance Industry."

"Hawkamah strongly advocates creating awareness about corporate governance in the Islamic finance industry and is also providing solutions to the Islamic finance industry on how to bridge the corporate governance gap in the region,"he stated.

Prof Wilson said, "Working with Dar Al Sharia and Hawkamah, we will set the standard in excellence for the teaching of Islamic finance, fuelling development in this fast growing sector of the UAE economy."

The first course, 'Understanding Sukuk Structures and Documentation', will run from September 12 to 14 and will be conducted by the Dar Al Sharia team.-

Indonesia & Malaysia Colloborate To Boost Islamic Banking

The Indonesian and Malaysian central banks have agreed to improve cooperation to boost the development of Islamic finance in the two nations.

“Islamic finance like Shariah banking is no longer just complementary but has now become a genuine alternative financing option,” said Darmin Nasution, the governor of Bank Indonesia. “So there is a strong need for Islamic banks in Malaysia and in Indonesia to improve their cooperation and develop the Islamic finance market.’’

Darmin was speaking at the opening of a two-day conference on Islamic finance, which was also attended by Vice President Boediono and the governor of Malaysia’s central bank,Zeti Akhtar Aziz.

Darmin said Indonesia’s Shariah banking sector should learn from Malaysia, which has become the center of Islamic finance in Asia. Total assets of Islamic banks in Malaysia stood at $116 billion as of the end of 2010, according to data from its central bank.

“Islamic finance in Malaysia has developed extremely quickly, while Indonesia has a huge potential market given that it has the largest Islamic population,’’ Darmin said.

Assets of Shariah banks in Indonesia totaled Rp 104 trillion ($12.2 billion) at the end of last year. Indonesia has 11 banks that offer Islamic finance options, including Bank Syariah Mandiri, Bank Muamalat Indonesia, Bank Mega Syariah, BRI Syariah and BCA Syariah.

Separately, Zeti said that Malaysia and Indonesia should improve cooperation in Islamic finance and help to develop the sector in the global market.

“Islamic finance will continue to play an important role in the global economy,” he said. “So it’s important for us to grab this opportunity, not only for Malaysia and Indonesia but also for other Asian countries. Islamic finance will help improve welfare and boost economic growth.”

Halim Alamsyah, a Bank Indonesia deputy governor, said the bank wanted to discuss the technical aspects of Shariah banking with its Malaysian counterpart in greater detail. “This will help to create added value in the Shariah banking sector,’’ he said.

In the banking sector overall, Bank Indonesia forecast lending by the country’s 120 commercial banks would rise 24 percent this year, slightly higher than the 23.8 percent gain in 2010. In the first half, loans climbed 24 percent to Rp 372.8 trillion from the same period last year.

Last year, banks’ combined net profit rose 26 percent to Rp 57.1 trillion from a year earlier, according to central bank data.

HSBC Amanah Wins Six Prestegious Islamic Finance Awards

HSBC Amanah has been doing unprecedently well as they have been reported to have won a staggering six awards, in recognition of its leading Islamic capabilities, from arranging Sukuk to structuring Islamic investments, providing custody services and trade financing.

The awards that HSBC Amanah received were: The Asset’s Triple A Islamic Finance Awards 2011, Sukuk House of the Year, Best Islamic Investment Bank, Asia , Best Islamic Investment Bank, Middle East, Islamic Custodian of the Year for the second consecutive year, Euromoney’s Trade Finance magazine Awards for Excellence 2011, Best Islamic Trade Finance Bank for Europe, Middle East and Africa (EMEA), Credit Awards 2011, and Best Bank for Islamic finance for third consecutive year.

Razi Fakih, Deputy CEO of HSBC Amanah, said, “We are grateful to be recognised time and again as the leading international Islamic bank across customer segments, be it corporates, institutions or individuals. HSBC Amanah is at the forefront of the industry, helping structure innovative Islamic finance deals for customers. So far in 2011, HSBC Amanah is the No 1 underwriter of international Sukuk, with a 37.4 per cent market share.

“We are also pleased to retain the ‘Islamic Custodian of the Year’ award for the second consecutive year. The launch of HSBC Amanah Securities Services in March 2011 allows managers of Islamic funds to have for the first time, a globally consistent Shariah-compliant securities service in 17 markets across the Middle East, Asia Pacific, Europe and the Americas. This is crucial for asset managers who are looking to distribute products beyond their home markets.”

HSBC Amanah is also ‘Best Islamic Trade Finance Bank (EMEA)’, according to Trade Finance magazine’s Awards for Excellence 2011. With a wide range of Islamic commercial banking and treasury products and presence in six markets across Asia and the Middle East, HSBC Amanah is uniquely positioned to connect customers between Asia and the MiddleEast.

Cross-border trade flows have indeed been increasing in recent years, especially between Asia and the Middle East, according to WTO data. HSBC’s Islamic products for corporate customers include account services, working capital and trade finance, long-term and project finance, payments and cash management solutions, treasury hedging solutions, Sukuk (Islamic bonds), syndications and takaful (Islamic insurance).

HSBC Amanah has also been named ‘Best Islamic Investment Bank, Asia and the Middle East’ for its broad array of Islamic funds, spanning from equities (global, emerging markets, Europe, Asia, GCC and Saudi Arabia), money markets, real estate, balanced funds, income-focused funds and capital-protected funds. Besides the six awards, 10 of the deals that HSBC Amanah arranged between July 2010 to June 2011 were also selected as winners in The Asset’s Best Islamic deals.

The deals are; Republic of Indonesia’s 8.03 trillion rupiah retail Sukuk; Qatar Islamic Bank’s $750 million Sukuk; Saudi Electric Company Saudi Riyal 7 billion Sukuk; Sabana Shariah-compliant industrial REIT’s $636 million IPO; Trans Thai-Malaysia (Thailand) 600 million ringgit Sukuk; National Bank of Abu Dhabi’s 500 million ringgit Sukuk; Abu Dhabi Islamic Bank’s $750 million Sukuk; Government of Malaysia’s $1.25 billion Sukuk Ijara; Saudi Bin Laden Group’s Saudi riyal 700 million Murabaha Sukuk and Cagamas’ 230 million ringgit variable rate Sukuk.

Gatehouse London Enters into Takaful Sector

Gatehouse London is entering into the Takaful sector with the facilitation of the city's first Takaful brokerage. Gatehouse London (GNL) said "We're for the first time offering global corporations Takaful support from London, the world's leading insurance market," Richard Bishop, CEO of GNL Insurance.

He said: "Up until now large multinationals that have required global Shari'ah compliant insurance solutions have been forced to use small brokers in Asian and Gulf countries, whereas they can now be serviced from London."

GNL Insurance is a joint venture between British Islamic bank, Gatehouse and Paul Napier, a Lloyd's insurance broker based in London.

The new firm will provide a global gateway for corporate and institutional clients seeking commercial risk protection, with its initial mandate being the provision of insurance for real estate, trade finance and financial institutions.

The firm will only be focusing on large commercial clientele, not retail or general Takaful. Bishop said: "The retail insurance market is not ready for Takaful, this is why [UK retail Takaful firm] Salaam Halal Insurance failed, as the market, especially at the retail level is dominated by a handful of large, aggressive firms who will force any competition out of the game by all means necessary."

GNL's first client is Chartis UK a diversified global risk solutions leader. For several years Chartis has recognized the importance of Takaful financial products and through Chartis Takaful in Bahrain has been offering Shari'ah compliant commercial and consumer products since 2006.

Ajman Bank Chief Operating Officer Awarded Prominent Position

Ashraf Shokry, Chief Operating Officer of Ajman Bank, was inducted into the Who’s Who of Financial Technology-Middle East 2011. The accolade from the World Development Forum, organisers of the Financial Technology Summit Middle East, recognised Shokry’s dedication, leadership and excellence in financial technology.

Commenting on this selection, Khaled Eid, CEO of the World Development Forum and founder of the Financial Technology Summit, said: “The induction of Ashraf Shokry recognises his commitment to excellence in financial technology and the leading role he is playing to bring business value to the financial industry through the effective use of Information Technology.”

“Ashraf presented a paper on QR Codes at this year’s Financial Technology Summit, explaining how a new innovative technology with low implementation costs has added great value to Ajman Bank. The paper was rated as one of the summit’s best sessions as it inspired the audience and showed them how technology and innovation can make difference. I would like welcome Ashraf to the prestigious group of Who’s Who of Financial Technology and I am confident that this gathering of leading minds will bring added value and innovation to the industry and the region,” concluded Eid.

Shokry said: “Ajman Bank is committed to transforming the offering and experience of Islamic banking. Central to this goal is the adoption of leading-edge financial technology that enhances the customer experience. I thank the World Development Forum for recognising Ajman Bank’s commitment to innovation, and I look forward to working with my industry peers as we strive to stay at the forefront of financial technology.”

Ashraf Shokry joined Ajman Bank in June 2008 as CIO, and now holds the position of Chief Operating Officer. Mr. Shokry has more than 22 years of experience in banking and non-banking operation and information technology. Before Ajman Bank, he was Head of IT at Khaleeji Commercial Bank and Bahrain Islamic Bank in Bahrain. Shokry holds a bachelor’s degree in Electronics & Communication Engineering and a master’s degree in Computer Science, in addition to many certifications from international bodies.

Malaysia Hosts 2nd World Conference on Riba Islamic Interest

The 2nd World Conference on Riba scheduled to be held in Malaysia on 26 and 27 July 2011 will set the stage for an in-depth andcomprehensive deliberation on Riba (usury) from all perspectives.

With the theme “The Riba Conundrum: Impartial Outlook from Accounting,Legal and Religious Perspectives”, the conference will be held at the TunHussein Onn Hall, Putra World Trade Centre.

Conference Convener, Professor Dr. Ahamed Kameel Mydin Meera said that the conferencewill critically look at the element of interest, commonly known as Riba in Islamic finance fromthe banking and accounting perspectives.

It also aims to take Islamic bankingas it is practised today to the next level and re-visit the legal tender law to mitigate the use of ‘fiat’ money with gold or community currencies.

“The inaugural WorldConference on Riba which was heldlast November received tremendous support from both Islamic and Western scholars, as well as industry leaders.

We discussed the issue of Riba amid signals of another financialcrisis looming. This was despite constant reports of economic recovery,” hesaid.

“Almost nine months later, wesee turmoil in Arab countries, weakening US$, sharp rise in gold prices,countries going bankrupt and many other worrying financial developments--- allsignalling that the discourse on Ribais even more pertinent in addressing entrenched financial practices whichcorrespond directly to the political and economic upheavals around the world,”said Kameel who is also the Head of Departmentof Finance, Faculty of Economics and Management Sciences, International IslamicUniversity Malaysia (IIUM).

Kameel, the author of the highly critically acclaimed book, The Theft of Nations said Riba is nolonger an isolated term which is relevant only to the Islamic finance.

“Riba is no longer an ‘Islamic’issue. The term could be different, some may call it interest, some will callit usury, but the effect is felt by everyone, irrespective of race or religion.”

According to the Organizing Committee Chairman, Shirazdeen Adam Shah, thesecond conference will be a continuation of the first especially on thediscussion of the core meaning of Riba itself.

“The conference will continue the discussion on the coremeaning of Riba – from religious, scientific and economic perspectives.

Additionally,this year the discussions by the intellectuals, business community and the policymakers will revolve around one central theme which is the relationship between accountingstandards, legal tender and Riba.”

“The key question remains: Can we blame the practiceof Riba for the current global economic and political turmoil? If so, what can be done to mitigate the issue? This is what the conference is all about,” reiterated Shiraz.

Leading speakers for this conference will include Attorneyand President of the Public Banking Institute (USA) Ellen Hodgson Brown, Founderof the Global Exchange Trading Systems (UK) Richard Logie, Founder and Chairmanof the al-Ghazzali Centre for Islamic Sciences and Human Development (Australia)Imam Afroz Ali, former CEO of Bank Muamalat Datuk A. Manap Wahab, Rector of Kolej University Islam Selangor ProfessorDatuk Dr Aziuddin Ahmad, Dean of the Graduate School of Management UniversitiPutra Malaysia Associate Professor Dr Arfah Salleh and many others.

He added that there is an overwhelming response for the conference, with participantsfrom all over the world including United States, Nigeria, United Kingdom,Canada, Jordan, Indonesia and Singapore among the 200 who have registered tilldate.However, he said that there arelimited spaces left.

The two day conference is organised by Thinkers TrendsResources Sdn Bhd, Kulliyah of Economics & Management Sciences, InternationalIslamic University Malaysia and Kolej University Islam Antarabangsa Selangor.

Memorandum Signed Between Meezan Bank and Publicatas Ltd

A memorandum of understanding (MoU) was signed this morning by Meezan Bank Limited (MBL) with Publicitas Pvt Ltd (PPL) at the MBL head office to be the Technical Supporter for World Islamic Finance Summit (WIFS) 2011.

This agreement was signed in the presence of Mr Ahmed Ali Siddiqui and Mr Fayyaz ur Rehman Khan from MBL while from World Islamic Finance Summit, Mr Syed Shahjahan Salahuddin and Mr Ozair Hanafi were present.

WIFS is a two-day summit being organized by Publicitas Pvt Limited with support from the State Bank of Pakistan. This summit is endorsed by a ‘Consultative Group’ comprising of senior bankers, Islamic finance specialists and academicians including Syed Salim Raza-Former Governor State Bank of Pakistan; Mr. Muneer Kamal-Chairman KSE; Mr. Irfan Siddiqui – CEO & President, Meezan Bank Ltd and Mr. Muhammad Ayub- Director Research & Training, Riphah International University Islamabad.

A large number of prominent practitioners and experts in Islamic finance from the region including the Middle East, Malaysia, Indonesia and other key Islamic countries are expected to attend this two-day summit which is due to be held on 21-22 September 2011 in Karachi.

Speakers and chairpersons representing regional and Pakistani Islamic finance institutions will be making presentations and deliberating on practical issues and opportunities, specifically those which can move the Islamic finance to its next level.

This summit is being organized at a suitable time when Pakistan and Islamic countries in the region have various successful programs and products which can serve as the key elements for discussion during the summit.

It will be a high profile event which has already started generating interest both locally and internationally as queries have flooded in the WIFS Secretariat and delegate registration process has commenced.

Global Islamic Finance Awards & Rankings Now Open For Submissions!!!!!!

The need for the Islamic finance industry to innovate original and genuinely Shariah-compatible products is widely acknowledged. Not only is innovation necessary to compete with the conventional finance sector, but it could also help the Islamic finance industry to work together with its conventional counterparts in order to create a more sustainable, ethical financial system worldwide. Leaders in Islamic banks, Takaful firms and Shariah-compliant investment companies play a major part in the process of innovation, inspiring everyone involved in their organisation. As such as a leader it is paramount that you have access to resources that can in turn inspire you and inform your ideas.



Our primary aim is to reward institutions and individuals for demonstrable achievement in promoting and developing the Islamic finance market regionally and internationally. The Awards are open to everyone involved in the Islamic finance and banking industry. Winning a Global Islamic Finance Award demonstrates that your company is leading the world in its innovative thinking, ethical approach, and that your team is delivering effective, impactful solutions to the Islamic financial market.

Pakistan on Top for Dow Jones Listing in Islamic Finance

It has been reported that the Pakistan Index posted the highest first-half 2011 advance (as of the close of trading of June 28) of all the country indexes in the DJIM series.

In June, the DJIM Pakistan index achieved the second-highest monthly return, closing up 6.54% to 16,385.68, just behind the DJIM Philippines Index, which gained 7% to 1,953.46. These were the only advancing equity composites of the DJIM country indexes.

The Dow Jones Citigroup Sukuk Index was the third “highest” performer, finishing the month unchanged at 130.13. Pakistan has partly recovered from the tragic flood catastrophe in mid-2010 and the country is regarded as a causeway in Islamic finance -- bridging the Middle East with East Asia. The Karachi Stock Exchange has also been relatively unaffected by theconcerns over a possible government bond default in Greece.

The trouble around Greece has clearly affected European shares, whether Shari’ah-compliant or not. The Dow Jones Islamic Market Europe Titans 25 Index last month fell 5.33% to 2,242.54.

The index suffered from poor performances by DJIM Indexes covering Shari’ah-compliant Thailand (down 6.26% to 1,841.04) and Taiwan (down 7.40% to 5,155.74).

As a comparison, the Dow Jones U. S. Titans 50 Index ended down 3.42% to 2,330, while the bellwether Dow Jones Industrial Average declined 3% to 12,188.69.

Despite fears of a debt contagion contaminating financial Europe, there was some good news, at least for -importing countries. Oil prices dropped to a multi-month lows in June after the International Energy Agency released 60 million barrels of government-held reserves.

Consequently, the DJIM Oil and Gas Index declined the most among the sector indexes, falling 5.57% to 3,861.62. Nevertheless, Swiss private bank Sarasin’s Commodity Strategist Eliane Tanner expects oil prices to rise again in the longer term. “Chinese demand for oil grew on average by 11.4% in the first four months of this year compared with the same period in 2010,” she said. “Although industrial production has decreased somewhat over the past few months, other factors suggest demand from China will remain robust.”

Regarding the supply side, Tanner adds “the high-quality crude oil from Libya is likely to remain absent from the marketplace in the coming months. It is unclear when production and deliveries will resume, but as long as Muammar Gaddafi remains in power, a rapid improvement in the situation is not expected.”

With a loss of 2%, the DJIM Consumer Goods Index was the “best” performing industry composite, closing at 2,489.95. In order to give clients the chance to benefit from growing consumer purchasing power in Asia, Dubai Islamic Bank has provided access to the Prudential Shari’ah Opportunities - Asia Pacific Equity Fund.

The fund is benchmarked against the Dow Jones Islamic Market Asia Pacific ex-Japan Index, which finished June lower by 4.09% to 1,486.57.

June also saw the launch of the Dow Jones Global Commodity Equity 100 Index, the flagship of a new index series that measures the stock performance of companies engaged in the exploration or production of both scarce and renewable commodities.

Its sub-index Dow Jones Islamic Market Global Equity Commodity Index measures all companies from the parent index that pass Shari’ah screens. Both moves indicate that, despite the maturing of the Islamic finance industry, there is still much room for innovation and expansion. It also helps that the Sultanate of Oman recently legalized Islamic Banking, the final Gulf Arab state to do so.

Kuwait Finance House-Turkey Branch Takes Part in ‘Dialogue with Europe’

It has been reported that Kuwait Finance House-Turkey CEO Ufuk iwan stressed that the Islamic banking industry has reinforced its competitiveness during the economic crisis, and that Islamic banks were less vulnerable to the impact of the crisis that their traditional counterparts.

Since Islamic banks deal in real products instead of relying on offering loans. Iwan, who took part in a conference in Hungary about dialogues between Europe and the Islamic world to bride any gaps, made a demonstration about the Islamic banking industry and its development.

He added that by the end of 2010, Islamic banking assets reached 83 percent of total Islamic assets in general, followed by sukuk 11 percent and Islamic funds 4.6 percent. He noted that Islamic assets grew by 20 percent every year to reach $150 billion by 2010, while they are expected to reach $1.6 trillion by 2012.

Moreover, Iwan stated that KFH-Turkey invests in Europe, the United States, Central Asia, the Middle East, and the GCC, in collaboration with major international institutions, where KFH plans to expand and add new markets on its map. He went on to say that the bank’s total assets have reached $6.7 billion while shareholders’ equity reached $836 million.

Furthermore, Iwan said that Turkey is making great strides in the field of Islamic finance at a time when the bank became a prominent player in the international sukuk market after making several successful issuances. He added that the bank plans to issue new Ijarah sukuk for five years, since it managed to sell sukuk worth $100 million over three years.It is worth noting that the conference was hosted by Hungarian Prime Minister, and was attended by numerous prominent figures in the European Union.

KFH-Turkey’s Chairman Mohammed Al-Omar had presented KFH’s experience for over 34 years before several EU ambassadors in Kuwait after being invited by the Hungarian Embassy.

Tokyo Nomura Exhibits Opens New Shanghai Asset Management Office

Tokyo – Nomura Asset Management Co. has announced that it has opened a representative office in Shanghai as part of its push to build up its global investment management capabilities.

The company's Shanghai office, located in Shanghai Central Plaza and headed by Takeshi Ebihara, will focus on researching companies in mainland China. The Shanghai-based analysts will be an integral part of Nomura Asset Management's global research team that spans Japan, Singapore, Hong Kong, Malaysia, the US, and the UK.

'China's strong growth and solid fundamentals offer investors a broad set of investment opportunities', said Toshihiro Iwasaki, Chairman and CEO of Nomura Asset Management. 'Research is a high priority for us so we are excited to have a local presence in China that will allow us to identify promising Chinese companies. The new office is another step in our strategy of building a world-class asset management firm with a strong competitive edge in Asia'.

Nomura Asset Management, one of the leading Japanese and Asian fund managers, provides a diverse range of products and services for both retail and institutional investors around the world. As of March 31, 2011, Nomura's Asset Management division had assets under management of around $300 billion.

Nomura has been building up its asset management capabilities outside Japan, with a particular focus on Asia. The company has moved into Islamic finance in Malaysia and recently set up a joint venture in India with LIC, India's largest life insurer, that offers mutual funds to retail investors in India.

Waqf Fund signs key training deal

The Waqf Fund, the special fund to support Islamic finance training, education and research, has announced the launch of its Shariah Reviewer Development Programme.

It is aimed at capacity building of reviewers at Islamic financial institutions and to better equip them to handle their job. The Waqf Fund has signed an agreement with the Bahrain Institute of Banking and Finance (BIBF) for the execution of this programme.

"The Waqf Fund conducted a successful two-day training session for internal Sharia reviewers of Islamic financial  institutions in April last year to orient them with conventional banking concepts and practice, said Central Bank of Bahrain executive director of banking supervision and Waqf Fund chairman Khalid Hamad.

"Based on the feedback received from the participants we have now developed a full programme aimed at improving the knowledge base of internal Sharia reviewers and others working in Islamic financial institutions' Sharia departments.

"Starting from September, the programme will be conducted by BIBF after office hours in self-contained sessions."We believe that it will help improve the efficiency of internal Sharia review personnel working for our member institutions."

These include understanding financial statements for Islamic financial institutions, business, banking and trust law, Islamic liquidity and treasury management, risk management in Islamic financial institutions, Sharia auditing and corporate governance and an introduction to Accounting and Auditing Organisation for Islamic Financial Institutions and Islamic Financial Services Board standards.

"The objective is to provide a high level perspective on the above topics in order to help Sharia reviewers better  understand the business and financial implications of Sharia and familiarise them with the relevant laws, regulations, standards and best practices," Mr Hamad said.

"The cost of the participants will be picked up by the Waqf Fund. We have received enthusiastic response from our members and we continue to receive nominations."

The Waqf Fund, established in 2006, has been a major contributor to the development of Islamic banking industry in Bahrain.Twenty Bahrain-based financial institutions are its members.

Dubai Islamic Bank Launches Asia Pacific Equity Fund

Dubai Islamic Bank (DIB) has launched a new Sharia-compliant Asia Pacific Equity Fund for regional investors to participate in the growing economy of Asia.DIB has been doing unprecedently well in establishing key investments, products and services in the Islamic financial sector.

The Asia Pacific fund aims to provide medium to long-term capital appreciation by investing in Sharia-compliant companies within the Asia Pacific region (excluding Japan).

According to DIB, capitalizing on the sustained economic growth and increasing wealth across the APAC region, the fund is offered by Prudential Asset Management, based at DIFC.

The fund benchmarked against the Dow Jones Islamic Market Asia Pacific ex-Japan Index, participation in the fund allows investors to gain exposure across a range of growth countries and industries through a single platform.

Dubai Islamic Bank deputy CEO - chief of consumer and wholesale banking Adnan Chilwan said this new product is in line with DIB's commitment to introduce pioneering, high quality financial products.

"It is designed for our valued high net worth customers who understand the opportunities presented by the Asia Pacific equities markets, and would like to capitalise on the same," Chilwan said. DIB can further excel with the expansion and funding of such beneficial funds which will help to spur the Islamic financial industry in the Asia Pacific region.

Bahrain Financial Exchange in 1st Annual Islamic Finance Conference

The Bahrain Financial Exchange (BFX), the first multi-asset exchange in the Middle East and North  Africa (MENA), participated in the 1st Annual Middle East Islamic Finance & Investment Conference  (MEIFIC 2011) held in Dubai.

 

The conference, which focused on the vital role of the global Islamic finance industry, provided key industry players with an ideal platform to discussthe reality of the Islamic finance market specifically in the Middle East. 

Mr. Craig Hewett, Chief Business Officer of the Bahrain Financial Exchange, hosted a session entitled "Exchanges: the catalyst for growth in Islamic Finance", where he addressed the significance of exchanges and their integral role in Islamic finance and driving liquidity into Islamic markets, as well as in facilitating price discovery, transparency, transaction cost efficiency and risk mitigation. 

Mr. Hewett commented on the success of the 1st Annual MEIFIC conference and the benefit it provided to the industry, saying that, "The Islamic finance industry has been on a steady and consistent growth pattern for a number of years now, which has lead to a wealth of options and opportunities for the investor. In order to help encourage the industry to continue following this upwards growth trend, we have strategically positioned our business to offer a unique and powerful toolset that will not only simplify Islamic transactions, but ensure it continues to adhere to the underlying Islamic Shariah principles upon which our industry is built.

The e-Tayseer product, which was recently introduced, is the first of these tools, and through i  we offer financial institutions the option to purchase assets directly from asset suppliers to be used for Murabaha liquidity management transactions, all in a secure online environment." 

The BFX is the first multi-asset exchange in the MENA region providing a unique opportunity for the MENAfinancial services sector to link-in with established markets and take a step forward on the global financial services stage.

Source

Article from Global Islamic Finance Magazine 

UAE Banks A Leading Force in Mortgage Fees Change

An Islamic finance house is thought to be the UAE’s first bank to waive hefty fees charged to mortgage customers due to delays in the completion of their properties.

Homeowners in the country have been hit hard by conventional banking rules, which state that mortgage holders must continue to pay profit rates to their banks, even if the handover date has passed and their properties have not been finished.

But Dubai Bank has said its Ijarah property finance customers who have been affected by late handovers will have their payment schedules readjusted with new rates, with many clients receiving refunds on the fees they have already been charged.

‘Customers who took out Ijarah Property finance whose profit rates were calculated using a previous method, will see their profit rate retroactively revised to align with the applicable EIBOR plus  a margin however, subject to  the terms specifically stated in the Ijara property finance agreement,’ the bank said in a statement.

‘Dubai Bank will provide these customers with a rebate, as necessary. For existing clients who have Ijara facilities where the Ijarah rate is based upon the Dubai Bank Base Rate (DBBR), the applicable rate will also be reduced by 1%. This reduction will affect future profit rates and will not be applied retroactively,’ the statement continued.

Dubai Bank has also undertaken to complete all adjustments and refunds by the end of May. Chief executive officer Giel-Jan Van Der Tol said that the move had been approved by the bank’s Sharia board, and was ‘entirely in line with a commitment to share the risk with our customers’.

The move could put pressure on the UAE’s other Islamic lenders, such as Amlak, Tamweel and Dubai Islamic Bank to put similar measures in place. Many projects in Dubai have stalled over the last two years due to oversupply and a collapse in the emirate’s property prices.

However, as few developments have been officially cancelled, many investors and potential homeowners have been forced to continue paying large sums to their banks for delayed projects.

Source

Article from Global Islamic Finance Magazine 

Diaz Reus opens office in Dubai International Financial Centre

It has been reported that Diaz Reus & Targ, LLP, a Miami-based full-service international law firm focusing on project finance, trade, customs, financial, commercial and corporate transactions and governance, foreign government relations, tax planning, immigration, litigation, and arbitration, has opened a new full service office in the Dubai International Financial Centre Dubai International Financial Centre (DIFCDIFC), announces Michael Diaz, Jr., managing partner.

"Having an office in DIFCDIFC makes it easy and convenient for clients to contact Diaz Reus about business, trade, government relations and investment matters," said Arti Sangar, partner in charge of the firm's Dubai office.

In addition to their physical location within the DIFCDIFC, Sangar, Diaz, and fellow partner Carlos F. Gonzalez, are admitted within the DIFCDIFC Courts. Noted Gonzalez, who is fluent in Arabic and has worked on matters in the Middle East, "Our ability to provide clients seamless representation, from starting or growing their physical presence in Dubai and throughout the MENA region, to quickly and efficiently resolving business related disputes within the DIFC's world-class facilities, made our decision to stay and grow in Dubai simple."

As the leading business hub in the United Arab Emirates, DIFCDIFC supports economic development in the region by providing the needed legal and business services, as well as physical infrastructure. "It is considered a global gateway for finance, capital and investment," added Sangar. 

DIFCDIFC focuses on banking services (investment banking, corporate banking and private banking); capital markets (equity, debt instruments, derivatives and commodity trading); asset management and fund registration (fund registration, fund administration and fund management); reinsurance;Islamic finance and back office operations. One of the key subsidiaries of the center is NASDAQ Dubai (formerly Dubai International Financial Exchange (DIFX).

 

In addition to Dubai, Diaz Reus operates offices in Miami and Orlando, Florida; Shanghai, China; Mexico City, Mexico; Frankfurt, Germany; Caracas, Venezuela; Bogota, Colombia: and Buenos Aires, Argentina, as well as an affiliate office in Sao Paulo, Brazil.

Source

Article from Global Islamic Finance Magazine 

Islamic Banks in Turkey Are Thriving

Islamic Banks in Turkey are said to be continuing to thrive and prosper in the heart of a rich population who want to tap into the Shariah compliant methods of financing. 

According to Osman Akyuz, the secretary general of TKKB and the former General Manager of Albaraka Turk Participation Bank, total assets of participation banks in 2010 increased by 25 percent on 2009 reaching $28.1 billion; deposits increased by 22 percent to reach $21.9 billion, of which 66 percent were in Turkish lira and 34 percent in foreign currencies; financing allocated by the participation banks grew by 25 percent to reach $20.8 billion; total shareholders' equity increased by 19 percent to $3.5 billion; net income however increased by 4 percent to reach $491.6 million; and the number of branches and number of staff of participation banks  totaled 607 and 12,694 respectively growing at a year-on-year rate of 8 percent.

Turkey is still far from other Islamic hubs such as in countries like Saudi Arabia (38 percent);Brunei (40 percent) and Malaysia (21 percent). The current market share of participation banks in Turkey is a mere 6 percent, although bankers such as Ufuk Uyan, CEO of Kuveyt Turk Participation Bank are confident that a target of between 10 percent to 12 percent market share is achievable over the next few years, given the current growth of the sector in Turkey and globally. In fact, there are two new applications with the Turkish banking authorities from  abroad for licenses to launch participation banks.

Similarly, the market share of participation banks assets is 4.31 percent; of participatio  deposits is 5.4 percent; and of participation financing 6 percent. The financing to deposit ratio of participation banks in 2010 was 96 percent compared with 83 percent for th  conventional banking sector in Turkey. In terms of non-performing loans, participation banks also fared better. The NPL for participation banks in 2010 was 341 million Turkish liras or 0.34 percent compared with 379 million liras or 0.47 percent in 2009.

In recent months Kuveyt Turk Participation Bank has pioneered an exchange-traded fund (ETF) backed by physical gold; gold-based current and term accounts; the purchase of gold coins through ATMs; launched the first cooperate sukuk in Turkey (a $100 million Sukuk Al-Ijara); and is planning a second $500 million sukuk later this year. Turkiye Finans pioneered the first participation ETF in the world; it has launched several mutual funds; and a spate of gold-backed current and savings accounts. Albaraka Turk Participation Bank is also finalizing its debut Sukuk issuance; has pioneered products such as the Barakat Card aimed at the small and rural farming  community; a franchise and business card.

Asya Bank, the only wholly-Turkish owned of the four participation banks, is setting the pace in several ways. It joined up with the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank (IDB) Group, to set up Tamweel Africa, a holding company which invests in the equity of Islamic banks, leasing companies and finance and investment entities in Africa. Asya Bank is also planning to expand abroad and according to reports it has applied to the Reserve Bank of India (RBI), the central bank, to open a representative office in Mumbai.

Asya Bank like other Turkish banks is an active raiser of funds through the international Murabaha syndication market. The lack of sukuk legislation has meant that Turkish banks are forced to venture offshore to raise medium-to-long-term funds to finance some of their activities, instead of deposits which are largely short-term. In fact, the Turkish National Assembly in February passed tax and other measures to facilitate the introduction of Sukuk Al-Ijara in Turkey.
 

As such Turkish participation banks are increasingly exploring the possibilities of raising funds through a Sukuk issuance, albeit dependent on the quality and volume of available Ijara assets that can be securitized.

Asya Bank in fact recently went to the market to raise $300 million in a Murabaha (cost-plus financing) syndicated loan - the largest single such facility extended to a Turkish bank. Because of the huge appetite from the market, the Murabaha facility was upsized from the original $150 million to $300 million. The facility actually comprised two tranches - a $171 million tranche (in US dollars) and a 94.5 million-euro tranche. A record 26 international financial institutions participated in the syndication. They included Standard Chartered Bank in the UK, ABC Islamic Bank in Bahrain, Noor Islamic Bank in Dubai, National Bank of Abu Dhabi, as well as 22 others from the United States, Europe, Turkey, Pakistan and other Middle East and North Africa countries.

Source

Article from Global Islamic Finance Magazine 

Islamic Bank Sees Potential in Thailand

It has been reported that the Islamic Bank of Thailand (IBank) plans to expand its financial  services to the upper southern provinces to support Muslim communities affected by recent flooding,according to president Dheerasak Suwannayos.

The bank will focus on Surat Thani, Nakhon Si Thammarat, Phatthalung and Trang provinces for its business expansion, which is scheduled for the second quarter this year after the flooding eases.

IBank's operations currently cover Narathiwat, Yala, Pattani, Satun and Songkhla."There is business potential i the upper south because of rising farm prices," said Mr Dheerasak.Prices of key regional products including rubber and palm are likely to keep rising, he added. Shrimp farms will also contribute handsome income to farmers.

With IBank's niche market of only Muslim clients, it will face less competition than otherf inancial institutions in the area, he added.

Mr Dheerasak said that mortgages and related financial products would be the bank's initialofferings. Loans will be focused mainly on those affected by recent flooding that require home renovation.

Later on, the bank plans to offer hire-purchase options to its customers.Existing clients of the bank affected by the flooding receive extended debt repayment periods and special credit lines lasting until July.

IBank, a state-owned institution, is in the process of recapitalising to 9.87 billion baht from 3.43 billion after it receives approval from the Finance Ministry.

The new funds raised will be used to facilitate loan expansion. It expects total outstanding debt will rise to 100 billion baht this year from around 90 billion.

Moreover, the recapitalisation will help maintain the bank's strong capital adequacy under its business expansion plan for this year. IBank's Bank for International Settlements ratio is currently 12%.ratio.

The bank also plans to launch around 50 billion baht worth of Islamic bonds in local and overseas markets in the second quarter this year.

Source

Article from Global Islamic Finance Magazine 

Malaysia's Governer Zeti Prioritises Talent In Developing Islamic Finance

Malaysian Governer Zeti has said that she will prioritise talent development in the financial sector, making its approach a holistic one and across the spectrum of the financial services industry, as quoted in a statement from Tan Sri Dr Zeti Akhtar Aziz.

This is to develop a strong pool of financial sector talent with world class capabilities to driveresponsible growth and development of the sector.

“As many of the initiatives supporting these strategies are multi-disciplinary and multi-layered,the approach is grounded in a shared commitment with the industry in a comprehensive, coordinated aid in her keynote address at the AIF International Symposium 2011, yesterday “With the strong support of all the key stakeholders and practitioners in the industry, we can make a critical and lasting contribution towards creating a talented workforce for the industry,” she said.

Zeti said Malaysia’s financial sector has continued to forge ahead and its contribution to thecountry’s Gross Domestic Product had increased from 9.2 per cent in 2000 to 11.7 per cent in 2009 and expected to grow further in time.

Likewise, there will be greater employment and increasing demands for specialised skills and enhanced expertise in finance.

The workforce must not onlyrise above current challenges but must be well equipped to excel in the significantly changed environment, she said.

Zeti said the regulatory reform in the financial sector and the onset of new standards and requirements and the emergence of new risk disciplines and fundamental changes in financialreporting standards required financial professionals to be equipped with new knowledge and skills.

Talent shortages continue to be acute in high growth areas such as wealth management, Islamic finance and investment advisory services.

Source

Article from Global Islamic Finance Magazine 

NEST pension scheme names Sharia, ethical managers

By Cecilia Valente

LONDON | Mon Apr 11, 2011 4:14am EDT
 

LONDON (Reuters) - Britain's new national pension scheme for workers whose employers do not run their own plans has appointed HSBC and F&C to run the Islamic and ethical portfolios respectively.

The National Employment Savings Trust, expected to become Britain's largest pension fund with up to 100 billion pounds in total assets by 2030, will offer the two portfolios, among others, when it launches next year.
Contributions of members choosing Islamic fund management will be paid into the HSBC Life Amanah Pension Fund, run by the banking group's Islamic finance unit. Such investments would shun association with areas forbidden by Islam, such as alcohol, weapons, pornography, gambling and mainstream financial services because they charge interest, also seen as sinful.

"The NEST Sharia fund will be 100 percent invested in this fund," NEST's head of investment Mark Fawcett told Reuters.

The contributions of those who want to invest in a portfolio which takes into account issues such as employment practices, human rights and the environment, will be funnelled into F&C's Stewardship International Fund.

"There are positive focuses that align very well with what we know about our members; protecting human rights, good employment practices, positive impact on local communities," Fawcett said, adding he expected the option to be reasonably popular.

NEST will charge members, potentially millions of workers with no corporate pension, the same fee as the default option, which is expected to attract around 80 percent of inflows given most members were expected to shy away from making specific investment choices.

The scheme has already appointed UBS, BlackRock and State Street to manage global equity, bond, cash and British sovereign debt.

NEST is setting up a pre-retirement fund for members who want to save in the short term to buy insurance. This is likely to invest in money markets, gilts and corporate bonds, Fawcett said, adding a request for tender would come later this year.

(Editing by Dan Lalor)

Source

Article from Reuters

Sri Lanka & Bangladesh Eyes New Areas of Islamic Finance

LankaBangla Finance Limited, a leading non-banking financial institution (NBFI) is going to launch new Shariah-based products to broaden its business.

"We are going to launch the Islamic shariah-based product on deposit and financing by June next,"  Mafizuddin Sarker, managing director of LankaBangla Finance Ltd told the FE recently.The company in its drive will also expand the growing businesses in credit cards, SME and factoring in the coming months.

"We are set to expand our network in Sylhet, Jessore, Khulna and Bogra this year," the LankaBangla  chief executive added.The company held its 14th annual general meeting March 27 last and approved 55 per cent stock dividend for the shareholders.

"We had only 25 per cent public shareholders out of our total company equity-owners when we went public in 2006, but now it has reached to a whopping 56.6 per cent," Mr Mofiz mentioned.

He said the growing number of general shareholders prove that the company is committed towards  maintaining the responsibility and accountability. The company's net profit jumped to Tk 1,700.15 million in 2010 showing a whopping 128.49 per cent rise against the amount of 2009. Total portfolio of LankaBangla reached to Tk 15,064.57 million registering a 40.8 per cent growth.

Mr Mafiz said his company is working hard to expand the secondary market.LankaBangla Finance is one  of the recipients of license awarded by Bangladesh Bank to act as primary dealer (PD). "But our efforts will not be fruitful unless the government allows a transparent policy on taxation against the income of bonds," Mr Mafiz clarified.

He mentioned that at present the policy on bonds of Bangladesh is not conducive like the policies of neighbouring countries.He further added that the central bank should not allow participation of non-licensee FIs at the Bangladesh Bank auction.

Emphasising the need for developing the bond market, he said mobilization of internal resources has become a core necessity to reduce the dependence on external resources."We have the opportunity to develop bond market, but the chance should not be missed," he commented.

Established in late-1996, LankaBangla Finance is a joint venture financial institution established  with multinational collaboration of foreign equity investment from Sri Lanka and Kingdom of Saudi  Arabia.

Reviewing the sectoral performance, Mr Mafizuddin Sarker, also chairman of Bangladesh Leasing and  Finance Companies Association (BLFCA) demanded of the government to exempt the financial institutions(FIs) from double taxation in case of booking income by the parent FIs from subsidiary.

"Effective tax liability for the parent company would be 50 per cent against the current rate of  42.5 per cent under a directive of the Securities and Exchange Commission (SEC) on establishing separate subsidiary for stock trading by banks and FIs,"

Currently FIs have been paying 42.5 per cent income tax on its taxable income and upon opening of a  subsidiary, income tax payable would be 37.5% on the taxable income of the subsidiary company and the parent company would book the dividend income in its books.

However 20 per cent tax on dividend is required to be imposed on the dividend income to be received  by the parent company under the prevailing regulation.

"This is certainly not an encouraging factor to go for opening of subsidiary which was aimed at  expanding the businesses of our companies," the BLFCA chief said.

Making a plea for avoiding payment of income tax twice on the same income by the parent company and  subsidiary company, the BLFCA chief cited example of India.

"India handled the matter by inserting a special provision in the Finance Act of 2009," he added.In another demand, the BLFCA chief said in order to reduce the dependency on bank borrowing, FIs should be more focused to attract deposit from public in a three-month plus tenor.

Currently FIs can take deposit from institutions and individual with a tenure of not less than 6  months.Many FIs have short term product as well like factoring, credit card, treasury operations etc.The BLFCA chief also demanded that the 'existing exemption on the cumulative exposure in the form of  underwriting and portfolio loan of a merchant banker at any time should not exceed five times of its equity' should be applicable in case of subsidiary of FIs as well.

Source

Article from Global Islamic Finance Magazine 

Gulf’s Finance Seek To Purchase Banks in Turkey

It has been reported that many banks in the gulf are looking to Turkey to make key Shariah compliant investments as Turkey is spurring ahead in the Islamic finance and banking industry.

Adnan Ahmed Yousif, chairman of the Union of Arab Banks (UAB), has said banks from the Gulf are  looking for Turkish banks to acquire.

Speaking at the “Enhancing Shamgen Banking: Turkey, Syria, Lebanon and Jordan” conference in  Istanbul on Tuesday, Yousif said big Arab banks such as Al Rajah Bank, Qatar National Bank and Abu  Dhabi Islamic Bank were seeking opportunities to become established in Turkey by purchasing a national bank.

He said regional countries have the potential to grow more if they cooperate more. “We need more cooperation in the banking and finance sector in the coming period. Globalization forces us to become involved in more joint projects,” Yousif said, referring to a regional cooperation agreement in the field of banking that was signed between Turkey and three of its southern neighbors with whom it envisions establishing a single market, an example of regional economic cooperation that many said  was the Middle East version of the European Union.

This aim of the agreement is to support and facilitate trade and investments between Turkey, Jordan,Syria and Lebanon. The four countries also earlier signed free trade and visa-exemption agreementsto improve trade and bilateral cooperation amongst themselves.

Source

Article from Global Islamic Finance Magazine 

Abu Dhabi Commercial Bank Announces New Head

Abu Dhabi Commercial Bank Islamic Division has announced that Amr Saad Al Mehnali will be new head of Islamic Banking. Mr Mehnali is a UAE national who has been with ADCB since the year 2006. 

During his time at ADCBADCBAbu Dhabi Commercial Bank Amr has played a significant role in the  development of the Islamic Banking division. He was instrumental in the launch of ADCB Abu Dhabi Commercial Bank's Islamic Banking Business in 2008 and has been an acting member of the Steering Committee in monitoring the project since its inception. 

As SVP and Head of Retail Credit, Amr oversaw the restructuring of Abu Dhabi Commercial Bank's  entire credit division, most notably through the acquisition of the Royal Bank of Scotland's retail business in the UAE.

In addition to his business role, Amr is also a nominated board member by Abu Dhabi Commercial Bank for Abu Dhabi Finance (ADF) and Abu Dhabi Commercial Islamic Finance Company (ADCIF). He also represents bu Dhabi Commercial Bank in National Anti Money Laundering Committee of the Central Bank of UAE Ala'a Eraiqat, Chief Executive Officer and Board Member at Abu Dhabi Commercial Bank,said:

"It is with great pleasure that we appoint Amr to the position of Head of Islamic Banking for the Bank. He has done an exceptional job contributing to ADCBADCBAbu Dhabi Commercial Bank over the past five years and has shown a continuous ambition to help develop the products and services that we offer our clients. Amr is an advocate for prudent management to further the Bank's success in the UAE and we are proud of his accomplishments and confident that he will perform at thehighest level in his new role as Head of Islamic Banking." 

Amr Saad Al Menhali, Head of Islamic Banking at Abu Dhabi Commercial Bank ,said: "I am delighted to be appointed to this new position and look forward to working with our expert team to enhance the benefits Islamic banking brings to our customers at Abu Dhabi CommercialBank. It is a very exciting time for Islamic Banking as investors look for stability across the region." 

Source

Article from Global Islamic Finance Magazine 

Promising Islamic Investment Prospects in Kazakhstan

It has been reported that there is promising investment prospects in Kazakhstan for Shariah compliant  products and services. Malaysia's largest trading partner in central Asia, is keen to have more  investments from Malaysia and is providing attractive incentives in Kazakhstan.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed, who met its Deputy Prime  Minister Yerbol Orynbayev at his office last week, said the country has big infrastructure plans as well as housing.

 

"The Construction Industry Development Board of Malaysia can look into these opportunities."Mustapa said companies also stand to enjoy incentives such as development grants as well as a 7 per cent subsidy in interest rates.

The oil-rich economy is enjoying strong growth and wants to accelerate the growth of its townships."We also discussed the prospects of importing tropical fruits for them and in return, export beef to Malaysia."In 2010, Malaysia's bilateral trade with Kazakhstan recorded a 307.8 per cent growth in trade to US$107.2 million (RM324.82 million) from the previous year".

Malaysia's main exports to Kazakhstan in 2010 include iron and steel products, electrical and  electronic products, wood products, chemical products and palm oil.

Both countries may venture into assessing cooperation prospects in new areas such as science and  technology especially biotechnology, Information and Communication Technology (ICT), Islamic finance, insurance and banking besides production of halal food for the global market.

To date, there is no significant investment between both countries, according to the Ministry of International Trade and Industry however there are growing prospects for the countries to seek fruitful Shariah compliant investments in order to further develop the growing Islamic financial industry.

Source

Article from Global Islamic Finance Magazine 

Islamic finance system lacks a comprehensive law: Expert

By P.K. ABDUL GHAFOUR | ARAB NEWS

Published: Mar 28, 2011 23:55 Updated: Mar 28, 2011 23:55 

JEDDAH: Islamic banks and finance institutions should have a comprehensive law to regulate their activities, make their products Shariah-compliant and win investor confidence, according to a professor at the Department of Economics in the International Islamic University, Malaysia (IIUM).

"At present there is no law defining what is Islamic banking and finance. We need a complete set of rules and regulations. In the absence of such a law, discrepancies will continue," Muhammad Yousuf Saleem told Arab News.

A comprehensive law would bring about dramatic improvement in the quality of Islamic banking and finance services, he said. There are now thousands of Islamic banks and financial institutions across the world, dealing with more than $1 trillion in deposits and assets. "These institutions are in need of a substantial law defining Islamic banking products and banking activities," said Saleem, who holds a doctorate degree in law from IIUM.

He added that many Muslim scholars are not happy with the present Islamic banking system due to the absence of a comprehensive law. The law would create public confidence in the system and encourage more Muslims and non-Muslims to deal with it. "Islamic banks should prove that they are totally different from conventional ones to attract faithful Muslims," he pointed out.

Saleem said Islamic banks should invest in real economy such as industries and agriculture to boost the development of countries and create more job opportunities. "They should take care of not only the interests of shareholders, but also those of common people," he said. He attributed the progress of the Islamic banking sector in Malaysia to strong central bank control.

The IIUM professor demands greater independence for Shariah boards that monitor the activities of Islamic banks and financial institutions. "At present, the board members are appointed and paid by the banks where they work. This is one of the weaknesses of the present system. The power of appointing and removing a board member should be vested in the central bank."

Saleem does not favor the opening of Islamic finance windows at conventional banks. "We can only approve these windows as a transitional step, not as a permanent system, because we don't know how they separate their transactions and use their funds. Traditional banks should open separate branches for Islamic banking to avoid mixing of funds," he explained.

Professor Saleem is optimistic about the future of Islamic banking in the world. "There is a good future for Islamic banks, provided they improve services and focus on real economy, infrastructures and SMEs, and do not invest in credit cards and derivatives," Saleem said. "Conventional banks encourage people to spend more. Islamic banks can put a break on this negative trend," he added.

Source

Article from ArabNews.com

Emirates NBD Introduces Special Pricing on Seed Capital Loans

In its continued effort to facilitate Emirati entrepreneurs to set up their own businesses, Emirates NBD, a leading bank in the region, announced today that it had further enhanced the offering on its Seed Capital Loan initiative.

UAE Nationals intending to start their own enterprise can avail up to Dhs2.5m via the Seed Capital  Loan initiative to fund their initial capital requirement. For a limited period of time, Emirates NBD is also offering special pricing and attractive repayment tenor of 12 years.

"Surveys have shown that Emiratis have led the growth in business start up activity in the UAE in  recent years, with much of the endeavour coming from young adults," said Saif Al Mansoori, Deputy Head - Group Marketing and Branding, Emirates NBD. "Challenges of accessing finance however, have also compelled a relatively high number of start-up businesses to discontinue operations in the early stages.

Emirates NBD's enhanced offering on the Seed Capital Loan is expected to support the recent increase  in new business activity in the UAE. In 2009, the UAE had a business start-up activity rate of 6.5%,  which was an increase of 38% from pre-global recession results of 2006-2007, according to the Global Entrepreneurship Monitor (GEM) report: "Entrepreneurship in the United Arab Emirates."

The report also noted that among 54 innovation-driven economies measured, the UAE marked the  strongest growth in business start-up activity in 2009. During the same period, the US and countries  of the Eurozone recorded significant drop in business start up activity. The GEM report also states  that UAE Nationals contributed 8.4% to new business start-up activity in 2009 in comparison to 4.9% in 2007.

"The Seed Capital Loan has continued to attract great interest from UAE Nationals since it was first launched last year, and the enhanced offering is evidence of our commitment to support UAE nationalentrepreneurship. Now, all UAE nationals aged 25 and over can avail a tailor-made option to seed finance and get their business enterprises off to a promising start. We believe it will inspire moreEmiratis to develop their ideas into fully fledged business enterprises, which are of vital importance to the growth and prosperity of the UAE economy," added Al Mansoori.

 

According to the enhanced offering, UAE Nationals need minimal documentation to apply for a loan amount up to Dhs2.5m for setting up a new business.

Source

Article from Global Islamic Finance Magazine 

JEF 2011 Debates The Future Needs Of Islamic Finance

The last and final day of JEF 2011 included a prolific discussion on Islamic banking and finance  with Sheikh Saleh Kamel, as a keynote speaker. Governor of SAGIA HE Amr Al Dabbagh shed light on what Saudi's  Investment plans for the next 5 years.

The Chairman of the Jeddah Chamber of Commerce and Industry, Sheikh Saleh addressed the audience  during the opening session and called for the unification of Fatwa Authorities at banks. He highlighted the importance of a managing entity to ensure that Islamic transactions are viably controlled and stressed need for proper understanding of its true meaning for proper application of Islamic Finance.

Islamic finance has gone global, not just in Islamic countries. Abdulkarim Abu Al Nasr, CEO National  Commercial Bank, stated that the Islamic industry worldwide exceeded US$ 1 trillion and is expected  to grow up to US$ 4 trillion USD by 2020.  Islamic insurance alone is expected to reach 25Billion USD by 2015.

Following the global financial crisis, Islamic finance has gained popularity. Mutlaq Al Morshed, VP  of corporate finance, SABIC added: "We also suffered during the economic crisis. We are different but not isolated from the world, we cannot isolate ourselves and this is the truth."

Humayan Dar, Managing Director, BMB highlighted that currently 75% of Muslims worldwide are  convinced that they should not be involved in Islamic finance and this due to a lack of understanding. From a global perspective, the large majority of the populations do not understand what Islamic finance is.

Sheikh Saleh stated that the General Council of Islamic Banks is striving to put the industry on the  right track, and that he looks forward to the establishment of Al-Kabeer Islamic Bank by end of 2011.

All speakers discussing the future of Islamic Finance unanimously agreed that Islamic finance is  growing but needs a regulatory authority to ensure that as it grows it still abides by true Shariah Laws.

Abdullah Al Rajhi, CEO, Al Rajhi Bank, named the Islamic Services Council in Malaysia as an  international reference point for safer Islamic Monetary guidelines, regulation and supervision over Islamic financial institutions.

Morshed recommended for Islamic finance to flourish on solid ground and banks need to work on  creating secondary market to foster liquidity in the market. He also urged to gain knowledge from  various information portals and warned not to directly rely on Shariah experts.

Al Morshed pointed out that Islamic Finance needs to come up with innovative ideas such as the CDS  (Credit Derivatives) that were launched JP Morgan launched recently.

"The only way to stand up to global standards is to set local standards. The legal framework needs to be standardized" he added. He concluded by referring to need for experts of Islamic Finance who understand the two worlds of Shariah and Finance. "There are a lot of Shariah scholars and a lot offinancial scholars but the connection between the two is lacking however is being pursued and requires time to be fully witnessed" he added.

Moving on to Saudi Arabia's investment outlook, HE Amr Al Dabbagh explained that the Kingdom has  made a great deal of progress in economic diversification, educational reform, etc however, he  remarked that this is just a drop in the sea to what is going on in the world.

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Article from Global Islamic Finance Magazine

Tamkeen and Bahrain Development Bank Sign Agreement

Tamkeen and Bahrain Development BankBahrain Development Bank signed an agreement to increase the  value of the finance scheme portfolio providing financing facilities to private sector enterprises at BD 2 million targeted at emerging enterprises.

The agreement was signed by the Vice President of Enterprise & Human Capital Development, Dr. Ahmed  Abdul Ghani Al Shaikh and CEO of Bahrain Development BankBahrain Development Bank, Mr. Nidhal Saleh Al Aujan.

The finance scheme supported around 2,353 emerging and existing enterprise from various sectors at a  total value of more than BD66 million since May 2008. The financing support dedicated to emerging enterprises amounted to BD13 million of the portfolio's total value, which contributed to establishing 726 new emerging enterprises.

Dr. Al Shaikh also highlighted that "increasing the finance portfolio value under the agreement "provision of Islamic finance facilities to private sector enterprises" is proof of the large and growing demand for the support provided by such an integrated scheme. He also indicated that this agreement between Tamkeen and Bahrain Development Bank".

"These financed enterprises have realised an added value for the national economy at BD 20 million  until 2009 and created more job opportunities that exceeded 3,226 jobs. The enterprises financed by Tamkeen"
 
Bahrain Development Bank have introduced about BD 1 million of foreign currency and contributed as  well to increasing the Kingdom's exports through their products, which amounted to about BD1.6 million.

On his part, Mr. Nidhal Saleh Al Aujan, the CEO of Bahrain Development Bank said "The importance of  supporting emerging enterprises are highly capable of creating job opportunities as the cost to create jobs in small enterprises is substantially low and the employability of workers is high. In addition, small and medium-sized enterprises are capable of geographical outreach, which contributes to promoting positive principles represented in the concepts of time management, quality, productivity, efficiency, effectiveness, initiative and innovation".

Under the agreement, the finance facilities will be provided according to the needs and objectives of beneficiaries within the limits of a total amount not exceeding 72 million BHD. The agreement states that the other BD 2 million added to the portfolio shall be dedicated to emerging enterprises.

Source

Article from Global Islamic Finance Magazine