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International Shariah Research Academy for Islamic Finance (ISRA) established

Bernama reported on 26 March that Bank Negara Malaysia announced the establishment of the International Shariah Research Academy for Islamic Finance (ISRA) to promote applied research in the area of Sharia and Islamic finance. It will also act as a repository of knowledge for Sharia views or fatwas and undertake studies on contemporary issues in Islamic financial industry. ISRA will be part of the International Centre for Education in Islamic Finance (INCEIF).

A Council of Scholars, comprising local and international Syariah scholars will be set up. Dr Mohamad Akram Laldin will be appointed as the executive director of ISRA.

Source: http://www.bernama.com.my/bernama/v3/news_lite.php?id=322895

Al Islami Foods and Alf Yad launch a regional venture capital initiative

Al Islami Foods and Alf Yad, a Dubai based venture capital fund for young Arab entrepreneurs announced their strategic collaboration. Alf Yad will raise and deploy AED 100 mn to promising Arab entrepreneurs across the region. Initially, Alf Yad will support Al Islami with the introduction of a business franchise for fast foods - the Al Islami Cart - a business franchise for fast foods primarily distributed in major Co-Op supermarkets, high traffic mall outlets as well as the Global Village and university campuses.

Mr. Saleh Abdullah Lootah, is Chief Executive Officer of Al Islami Foods. Mr. Shehab Gargash is the Chief Executive Officer of Daman Investments, the manager of the fund.

Source: http://www.zawya.com/story.cfm/sidZAWYA20080327115425

NBK Capital aims to arrange Sukuk and close Private Equity transactions

Ulf Laessing reported in ArabianBusiness on 27 March about NBK Capitals plans to arrange Sukuk issues worth up to USD 700 mn in 2008 and to finalise four purchases for a Private Equity Fund.

The article confirms the slow down due to the credit crisis and that the pricing does not meet the clients requirement easily.

Further the company is buying into a car leasing company in Saudi, according to the Head of investment and merchant banking, Amjad Ahmad. It also aims to open offices in Qatar and Saudi-Arabia next year. It is operation in Turkey and interested in Syria.

NBK Capital operates currently in Kuwait and Dubai and focusses on mid-range deals in the triple-million dollar digit range.

Source: http://www.arabianbusiness.com/514909-nbk-capital-plans-700mn-islamic-bo...

Qatar Islamic Bank arranges USD 137.5 mn Musharaka Sukuk for Salam Bounian company

The Peninsula reported on 27 March about the Musharaka Sukuk USD 137.5 mn arranged by Qatar Islamic Bank on behalf of the ‘Salam Bounian Development Company Limited’. Qatar National Bank Al Islami, the Islamic branch of Qatar National Bank and ALSAFA, the Islamic banking division of the Commercialbank of Qatar QSC, were joint lead managers and bookrunners for the issue. Only Qatari financial institutions participated for the first time. The Sukuk will be listed in Luxembourg and traded by the Qatar Islamic Bank and its affiliates, European Finance House and Asian Finance House.

Source: http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&...

Al Rajhi licensed to open branch in Kuwait

Kuwait News Agency reported on 24 March that the Saudi-based Al-Rajhi bank, the largest Islamic bank globally, received approval to open a branch in Kuwait.

Full Text: http://aawsat.com/english/news.asp?section=6&id=12201

Bahrain: Islamic stock market and mega bank

Bahraini and GCC investors plan to establish an Islamic stock market in Bahrain. The stock market is part of the proposed Islamic mega bank project, which is said to have received licence from Central Bank of Bahrain.

Businessman Shaikh Saleh Kamel is quoted to have said that the bank aims for a capital of USD 11 bn, of which USD 1 bn are administrative shares for the bank's strategic investors, among them Al Baraka Group, a Kuwaiti bank, Saudi Investment Bank, Islamic development Bank and Bahrain Islamic Bank.

The mega bank is supposed to launch USD 33 bn worth of investment funds in regional and international markets.

Source:
http://www.gulf-daily-news.com/Story.asp?Article=212659&Sn=BUSI&IssueID=...

ICD studies new bank for Maldives and Sukuk for Mauritania and Indonesia

Khaleej Times reported on 26 March about The Islamic Corporation for the Development of the Private Sector (ICD), an arm of the Jeddah-based Islamic Development Bank (IDB).
 
According to Khaled M. Al Aboodi, the new CEO, international projects include the feasibility study to establish an Islamic bank in Maldives and further studies regarding sukuk issues of banks in Mauritania and Indonesia. ICD has also initiated an Islamic investment bank in Azerbaijan.
 
In Saudi-Arabia ICD has established a real estate company called Ewaan, which is capitalised at SR4 00 mn. The company plans to build housing complexes for the low and middle-income people.
 
ICD provides a variety of financial products to its clients such as direct financing through equity participation, term-financing, line of financing to commercial banks and national development financing institutions (NDFIs), short-term corporate finance, asset management, structured financing, and advisory services to private and public companies.
 
Source:

Moody's sees USD 235 bn Islamic finance market in Africa

Forbes reported on 26 March about Moody's statement that the actual size of Islamic finance in Africa was only USD 18 bn as of year-end 2007, equating to a market share of less than 8 pct of its potential size. The industry is currently focussed on some regions; more than half its assets are located in Sudan, with Egypt ranking second, but with a much lower share of around one-fifth.
 
Moody's said that the Islamic finance market in Africa is potentially worth close to USD 235 bn. According to Moody's 37 Islamic financial institutions operate in Africa, serving a Muslim population of 412 mn. Average per capita GDP on the continent was a low 1,137 usd in 2007, but given the fact that Africa is host to the second-largest Muslim population in the world, the absolute size of its economic production reached 469 bln usd last year, Moody's said.
 
Source: http://www.forbes.com/markets/feeds/afx/2008/03/26/afx4814325.html

State Bank of Pakistan issues updated guidelines

The new standards of the State Bank of Pakistan (SBP) cover appointment of Shariah advisers, conflict resolution in Shariah rulings, use of charity fund and introduction of new products, reported The News Pakistan on 26 March.

Currently, total assets of Islamic banking industry in Pakistan had exceeded Rs 200 bn and the branch network of 18 Islamic banking institutions (i.e. six full-fledged Islamic banks and 12 conventional banks having Islamic banking branches) has expanded to 47 cities.

Full text: http://www.thenews.com.pk/daily_detail.asp?id=102998

Noor forms venture with Adventity

Babu Das Augustine reported in Gulf News on 26 March that Noor Investment Group, the parent company of Noor Islamic bank, announced a 50:50 joint venture with Adventity BPO India Pvt Ltd. Adventity is an Indian business process outsourcing firm. Both parties aim to set up a business process outsourcing (BPO) facility in Dubai Outsource Zone with a seed capital of Dh50 million targeting Middle East and North Africa region focussing on the financial services outsourcing business.
 
While Noor Islamic Bank and other new ventures from the Noor Investment Group will utilise the BPO services from the new joint venture entity, Adventity already has signed up more than 12 clients in the region.
 
http://archive.gulfnews.com/business/Technology/10200278.html

Lawyer Michael McMillen joins Fulbright & Jaworski

The reknown Islamic finance specialist lawyer, Michael McMillen, joins Fulbright & Jaworski as partner to lead its global Islamic finance practice. He used to work previously for Dechert and King & Spalding.

Source: legalweek.com

Performance of UK based Islamic banks

Malar Velaigam wrote on 25 March in Investors Chronicle about the progess of Islamic banking in UK from an investor's perspective. Only two Islamic finance companies have UK quotations, and neither of them has proved a very attractive investment so far.
 
The first Western Shariah-compliant commercial bank, the Islamic Bank of Britain (IBB). The bank floated in October 2004 at 25p a share, but now trades at half that price having hit a high of 13.7p and a low of 4.75p in the last year. It reported losses in 2005 till 2007. However, deposit basis and account numbers are growing substantially, while IBB customer base only represents 2.3 % of the 1.8 mn Muslim target market in UK yet.
 

Amlak, UAE to sell Sukuk worth Dh 4.8 bn

John Irish reported on Monday, 24 March in ArabianBusiness that Dubai-based mortgage lender Amlak Finance plans to sell as much as 1.8 billion dirhams convertible and 3 billion dirhams non-convertible Sukuk this year to help finance expansion.
 
The CEO, Arif Al-Harmi confirmed the approval to Reuters given by the extraordinary general meeting of the board and the Chairman, Nasser Al-Shaikh, revealed that the total plans are to raise 6 billion dirhams this year. Amlak, an affiliate of Emaar Properties, will launch operations in Qatar and Jordan this year and has applied for a licence in Bahrain, Al-Harmi said. Syria is in discussion state.
 
Amlak delayed a sale of Sukuk late 2007 because of unsecure demand situation caused by the US credit crisis.
 
Source: http://www.arabianbusiness.com/514474-amlak-to-sell-islamic-bonds-worth-...

ABC Islamic Bank in USD 100 mn general syndication for Kuwaits "Munshaat"

ABC Islamic Bank (the Initial Mandated Lead Arranger and Bookrunner) launched general syndication for Kuwaits Munshaat Real Estate Projects Company ("Munshaat"). ABC Islamic Bank had successfully closed the senior phase of the US$100 million, 3-year Syndicated Revolving Murabaha Financing Facility.
 
Prior to general syndication BNP Paribas, Emirates Bank International PJSC, and Saudi British Bank joined the facility as Mandated Lead Arrangers at the senior stage.
 
This is the debut syndication for Munshaat and the funds will be used to finance development of prime properties in the Holy Haram area in Makkah and Madinah in Saudi Arabia. Athman Investment Company, Kuwait is acting as the financial advisor to Munshaat Real Estate Projects Company for this financing.
 
Summary of the facility is as follows:
 
Borrower: Munshaat Real Estate Projects Company K.S.C.
 
Amount: US$100 million
 
Facility Type: Revolving Murabaha Financing Facility Purpose: Financing of prime properties in Makkah & Madinah
 

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Responsible Investing Guidelines Include Shari'ah Law and Prohibited Nations

Northern Trust announced that it has enhanced its investment compliance monitoring capabilities for institutional asset servicing and wealth management clients globally, by expanding the range of environmental, social and governance (ESG) factors monitored by Northern Trust Compliance Analyst® to help clients meet responsible investing goals.

Compliance Analyst is a customizable, Web-based tool that alerts investors when portfolios are nearing or have breached established limits in a client's investment policy. In addition to corporate governance rankings and the 10 socially responsible investment restrictions currently available on Compliance Analyst, Northern Trust has extended its agreement with RiskMetrics Group to offer additional screening capabilities that cover the following issues:

Prohibited Nations according to US legislation or government, Shari'ah Law, Landmines and Cluster Bombs, Animal Testing/Welfare

For more information, visit http://www.northerntrust.com.

Source: Northern Trust, http://biz.yahoo.com/prnews/080318/aqtu043.html?.v=54

Dubai Financial Market Sharia Board issues first Islamic standards for classifying listed companies

Business Intelligence reported on 18 March that the Sharia Board of the Dubai Financial Market (DFM) has issued the first standards for trading shares. The establishment of such standards is in line with DFM becoming an Islamic exchange as decided on the Annual General Meeting in 2007. Since then the Sharia Board with its Chairman, Dr Hussain Hamid has focused on the establishment of criteria to classify listed companies in terms of Sharia-compliance and accounting practices.

The standards are divided into five sections and cover the following areas: definitions of terms and criteria; implications for brokers and investors; guidelines for compliance for conventional firms; conventional income guidelines; and general rules and regulations.

Mr Essa Kazim is Chairman of the DFM.

Source: http://www.bi-me.com/main.php?c=3&cg=2&t=1&id=18389

Sukuk market challenged by subprime crisis

Arthur Macdonald reported in Gulf Daily News that the Sukuk market has suffered from the global financial crisis, but it is likely to recover. It impacted pricing and access to investors. Further the discussion on the Dollar peg of Gulf currencies created addtional uncertainties. Nevertheless the market has grown in ten years from millions to billions, participants of a Sukuk conference in Bahrain said.

Source: http://www.gulf-daily-news.com/Story.asp?Article=211884&Sn=BUSI&IssueID=...

Qatar Islamic Bank studies expansion into Egypt and Turkey

Matthew Martin reported on 18 March that Qatar Islamic Bank (QIB) is evaluating opportunities to acquire a conventional Egyptian bank and convert it into an Islamic bank, and is also applying for a banking licence in Turkey.
Qatar Islamic Bank will likely follow its strategy of independent brands, like before in regard to European Finance House in London, Asian Finance House in Malaysia and Arab Finance House in Lebanon.

Source: meed.com

CIMB to latch on Islamic banking expertise in China expansion

Joyce Goh reported in The Edge Daily, Malaysia about plans of Bumiputra-Commerce Holdings Bhd (BCHB), parent company of CIMB Group, will use its 20% stake in Bank of Yingkou (BOYC) of China as a springboard to expand its business there, particularly latching on its Islamic finance expertise to carve a niche for itself in one of the world’s fastest-growing economies. China has a larger Muslim community than China. BOYC is looking to expand to Shenyang — the city in Liaoning province earmarked to be an Islamic finance hub of China. Just three months ago, BOYC received the approval from the Chinese government to transform itself from a local commercial bank into a regional bank, thereby giving it the green light to expand its services in the Liaoning province.

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