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Turkey sovereign bond sales quarter of expectations

Nevzat Devranoglu and Thomas Grove reported on 28 January on Reuters that theTurkish Treasury sold only a quarter of an expected YTL 1.89 bn in its first issue of an income-indexed bond, considered a type of Islamic bond, as it attempts to boost capital inflows by tapping the Gulf region.

S&P: Arcapita Bank B.S.C. Downgraded To 'BB+/B'; 'BB+' Placed On CreditWatch Negative

Press Release

PARIS (Standard & Poor's) Jan. 28, 2009--Standard & Poor's Ratings Services said today that it has lowered its long- and short-term counterparty credit ratings on Bahrain-based Arcapita Bank B.S.C. to 'BB+/B' from 'BBB/A-2' and placed the long-term rating on CreditWatch with negative implications.

"The downgrade and CreditWatch placement reflect our opinion of Arcapita's weak liquidity profile amid an increasingly difficult operating environment," said Standard & Poor's credit analyst Mohamed Damak.

At the same time, we believe that the value of Arcapita's own investments--mainly in private equity and real estate--could decline in value given current market conditions (like other private equity firms). We view Arcapita's leverage as high. We understand that Arcapita made certain investments in 2008 that it was not able to fully place with customers that triggered a decline in liquidity and an increase in investment leverage (as measured by the ratio of total investments to total equity).

Indonesia sets coupon rate for retail sukuk

Indonesia has set a coupon rate of 12 % for its first 3-year retail Sukuk, which is due to be issued on Feb. 25 according to the ministry of finance.

Amlak meeting to consider job cuts

Amlak Finance, the mortgage financer will consider job cuts at its board meeting on 31 January the company announced in a statement along to discuss the merger proceedings with Tamweel and earnings. Amlak and Tamweel will be both taken over by Abu-Dhbai based Real Estate Bank, merge with the Emirates Industrial Bank under the new name Emirates Development Bank according to reporting by the state news agency WAM in November.

ALAFCO Aviation Lease And Finance Company Financial Results

ALAFCO Aviation Lease And Finance Company released their Financial Results as published on Zawya on 27 January. Ahmad A. Alzabin announced that the operating profit of the company during the 1st quarter of the current fiscal year that ended 31 December 2008 reached KD 3 million, and that ALAFCOearned a net profit of KD 1.45 mn. The company's assets reached KD 281.21 mn and shareholders equity reached KD 82.29 mn during the quarter.

Pakistan’s Islamic Banks Plan to Open 230 New Outlets in 2009

Shanthy Nambiar and Farhan Sharif reported on Bloomberg, 27 January, that Pakistan's Islamic banks plan to expand their network of outlets this year to take advantage of rising demand for Shariah-compliant financing according to Pervez Said, director of Islamic banking at the State Bank of Pakistan. These banks have 500 branches, after adding 210 outlets last year. Pakistan is promoting growth in Islamic finance to expand the reach of the banking sector which has less than 25 million deposit accounts. Shariah-compliant facilities are forecast to rise to 277 billion rupees ($3.5 billion) this year from 185 billion in 2008, according to central bank data.

Bank of Alexandria creating Islamic fund

Les Afriques reported on 27 January that the Egyptian central bank has approved the request to create an Islamic fund by Bank of Alexandria. Details are not given.

New Saudi-Arabian Property Financer as JV between Al-Khabeer and Al Mutajara

Al-Khabeer Merchant Finance Corporation built a Joint-Venture with Al Mutajara installments company to establish ‘Dari for Home Loans,’ a new SAR 1 bn capitalised Saudi joint-stock company-under development stage, which will specialise in financing the construction and purchase of houses and residential properties in accordance with Islamic Sharia principles.

Dari Home Loans will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. It will not include property developers among its pool of clients.

Dari Home Loans is currently appointing personnel and officials for managing its human resources and is negotiating with a global partner for the transfer of management experience to this sector in the Kingdom. Al-Khabeer is adopting its turnkey and integrated banking solutions to develop Dari, as Al-Khabeer directs the finance and advisory for the company. The new property funding firm’s founders are confident that it will be fully established in a short span of time given the strength of the Kingdom’s economy.

Mohammad Sheikh is Chief Operating Officer of Dari Home Loans.

Gatehouse Bank plc announces the establishment and first issue under the Milestone Sukuk platform

Gatehouse Bank plc has announced the establishment of a USD 1 bn Sukuk programme by Milestone Capital PCC ("Milestone"). Gatehouse Bank is the Arranger and Dealer of the Milestone programme as published in a press release via Zawya on 27 January.

The first Sukuk issue under the Milestone platform was successfully completed recently. The Milestone programme is listed on the Channel Islands Stock Exchange and certificates issued under the programme are entered into the Euroclear and Clearstream clearing systems, with BNP Paribas Securities Services acting as common depositary. Milestone Capital PCC is a Jersey based orphan Protected Cell Company, designed to allow the efficient creation of new, segregated, bankruptcy remote cells. Each cell has the ability to issue a diverse range of Sukuk certificates, which is proving very appealing for issuers and investors alike.

David Testa is the CEO of Gatehouse. Ashurst LLP is the legal advisor to Gatehouse Bank on the transaction.

Bank of London and the Middle East launches Private Banking

TradeArabia reported on 27 January that the Bank of London and the Middle East (BLME), will be extending its wealth management division with the launch of a private banking business. The new project will be headed by the newly appointed head of private banking Adrian Gayler, who joins BLME from Merrill Lynch International Bank Limited. Gayler will be based in BLME’s new private banking offices in Mayfair, London, along with the already established specialist wealth management team

Bank of London and the Middle East arranges GBP 10 mn facility for OCADO LTD

Press Release

London, 27 January, 2009 – Bank Of London And The Middle East plc (BLME), the London based wholesale, Sharia’a compliant bank, today announced that it is providing a £10 million leasing facility to Ocado Ltd (Ocado), the UK independent online grocer.

Full text attached

Dow Jones Islamic Market Index Monthly Performance Report

Press Release - full text attached:

New York (January 27, 2009) — Based on the close of trading on January 26, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -5.55% month-to-date, closing at 1646.71. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -9.00%, closing at 131.03.

- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased -9.90%, closing at 1252.00. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of -11.40%, closing at 90.89.

- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1596.39, a loss of -7.60%, while the pan-European blue chip Dow Jones STOXX 50 Index lost -10.97%, closing at 1926.07.

Gulf Finance House Outlook To Negative On Deteriorating Operating Environment; 'BBB-/A-3' Ratings Affirmed

Press Release
PARIS (Standard & Poor's) Jan. 26, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Bahrain-based Gulf Finance House (GFH) to negative from stable. At the same time, we affirmed the 'BBB-/A-3' long- and short-term counterparty credit ratings on the bank.

"The outlook revision reflects the increasingly difficult environment in which the bank operates, which is likely to limit its capacity to execute new transactions and therefore lead to a weaker financial performance," said Standard & Poor's credit analyst Emmanuel Volland.

In addition, the value of GFH's own investments, largely illiquid by nature, is set to decline. On a positive note, we believe that the nature of these assets means that they are less subject to marked-to-market deterioration than those of GFH's peers.

Saudi-Arabia Falcom Shariah Index launched

Mushtak Parker reported in Arab News on 26 January about the launch of Falcom Sharia Index licensed by Tadawul (the Saudi stock exchange). The promoters claim that this index is the first of its kind on the Tadawul, and comprises some 112 companies which in turn comprise nearly 78 percent of the Tadawul All-Share Index (TASI).

Investment Dar appoints Credit Suisse as financial adviser

AMEinfo reported on 25 January that Kuwait-based financial services company Investment Dar has appointed Credit Suisse Group to advise the firm on its financial strategy.

Saudi banks suffer end of year losses

Joanna Hartley reported on 24 January that the Saudi banking sector has posted poor results for the last quarter of 2008 impacted by the global economic environment according to Fitch rating, saying that 2009 will be challenging. The preliminary 2008 results released by the 10 main commercial banks in the kingdom confirmed that the last quarter of 2008 was the worst quarter of the year for all. Despite this the 10 banks remain among the highest rated by Fitch Ratings across the GCC region and generally have sound domestic franchises.

The expectation of tougher conditions for the banks and lower profitability in the coming months resulted in most banks' individual ratings being downgraded in December 2008. Their long-term issuer default ratings largely remain driven by the extremely high probability of support from the Saudi Arabian government (rated 'AA-').

Axis REIT considers Islamic financing

The Star Malaysia reported on January 24 that AXIS Real Estate Investment Trust (REIT) is looking at various options to raise capital, including Islamic financing, to buy more properties. The REIT became Sharia compliant last December.

CEO is Stewart LaBrooy.

2008 Sees Worst Decline in Sukuk Market, Improvement in Islamic Syndicated Lending, Says IFIS

IFIS published a report on 24 January discussed on Albawaba that Sukuk or Islamic bond markets have witnessed a dramatic decline during 2008, especially during the 4th Quarter, which was the lowest since 2002, and 2008 was a worse year for sukuk than both 2006 and 2007 with no issuances even of a Dollar Sukuk and the total amount dropping to only USD 584 mn in Q4 2008. South East Asia was more severely impacted than the GCC in 2008, with issuance falling by 76% down to USD 6.57 bn for the entire year. The decline in the GCC was quite severe as well, however, with issuance falling to USD 9.06 bn, a 51% drop. The global total for sukuk issuance, USD 15.77 bn, was 66% lower than the figure for 2007. This is the first year on year drop in sukuk issuance since the year 2000.

Islamic syndicated lending expanded from USD 19.6 bn in 2007 to USD 27.2 bn in 2008, a 32% increase. But as with credit markets worldwide, Islamic syndicated lending froze almost completely in Q4 2008.

Bahrain Islamic Bank lowers profits marginally

Bahrain Islamic Bank announced on 21 January that its financial results for the year 2008, decreased to BD 22.3 mn net income from BD 25 mn for the year 2007, after making provisions against contingences that may arise in case the current international financial and economic crisis continues further.

The board of Directors has decided to propose to the Bank's AGM the distribution of 20% of dividends of paid up capital as of 31st December 2008 as 10% cash and another 10% bonus shares.

Largest Islamic bank to be launced by June

Liau Y-Sing reported on 23 January that the largest Islamic bank is announced to be launched in June operating out of Bahrain with a paid up capital of USD 11 bn; the Islamic Development Bank being the largest shareholder according to Sheikh Saleh Abdullah Kamel, chairman of the General Council of Islamic Banks and Financial Institutions. The bank, which has yet to be formally named, has been in the pipeline for several years and is currently undergoing final review by IDB on its capital input. While a total of $1 billion will be raised by private investors, including IDB, the other $10 billion is expected to come from an IPO on the Bahrain stock exchange, Sheikh Saleh Abdulla Kamel is cited.

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