IslamicFinance.de mission is to support the Islamic finance, banking and takaful industry with news abstracts, opinions, a free encyclopedia, a Twitter page and networking.

Indonesia Retail Sukuk demand above expectations

Muhamad Al Azhari & Dion Bisara reported on 24 February in The Jakarta Globe that Indonesia raised Rp 5.56 trillion ($467 million) from the sale of the country’s first retail Islamic bonds, or retail sukuk , beating the sales target due to strong demand from investors, according to the finance minister.

The government initially aimed to raise Rp 1.77 trillion through the debt paper sale, but later raised that target to Rp 3.7 trillion as demand appeared to be strengthening. A 12 % of return was offered for the bonds, higher than premium-grade bank deposit rates of about 10 percent for preferred customers.

The debt papers were sold at a par, or face value, of Rp 1 million per unit, with a minimum purchase of Rp 5 million. The sukuk has a fixed payout on the 25th of each month and matures on Feb. 25, 2012.

HSBC offers more funds for local UK Muslims

FT Adviser reported on 23 February that HSBC is making a number of Sharia-compliant funds available to UK investors for the first time by restructuring them into a single, Luxembourg-domiciled offering. The funds in the range include Global Equity Index, Global Equity, Europe Equity and Asia Pacific ex Japan Equity.

Andy Clark, managing director for UK and Mena wholesale at HSBC, recognises the demand in UK as growing and denounces the perception that Islamic finance is only applicable in the Middle East.

Conventional Middle East Investors reducing Hedge Fund exposure

According to a survey by Capintro Partners reported in the Hedge Fund Review a majority of conventional Middle East investors (55%) expect to decrease their allocation to hedge funds in 2009 while 14% expect to increase allocations and 31% plan no change in their allocation.

The top three regions investors favour in 2009 included emerging markets (25%), the US (24%) and Asia, excluding Japan (22%).

Over half (54%) said they use structured products regularly or periodically. Of those who use them, the majority (57%) said they made use of capital guarantee products while under a quarter (23%) said capital/risk management requirements were the main use with only 11% giving leverage as the main usage.

Text based on: http://www.hedgefundsreview.com/public/showPage.html?page=841318

Full study under linked under source.

Sukuk market and prospects, another Sukuk fund in the pipeline?

According to a report of Global Investment House more than 100 Sukuk equivalent to more than USD 38 bn are awaiting issuance if markets recover.

DIB Capital, a 100 % subsidiary of Dubai Islamic Bank, sees the long term prospect as strong for the Sukuk market according to Nadeem Lodhi, head of capital markets and syndications. Also they are planning to launch a Sukuk fund.

Hong Kong goes forward with Islamic finance

Mushtak Parker writes in Arab News on 23 February that the Hong Kong Special Administrative Region government is finalizing new tax laws which would facilitate the introduction of Islamic finance on a par with equivalent conventional products, and there is a strong possibility that the Hong Kong Airport Authority (HKAA) will issue the debut quasi-sovereign Sukuk from the island enclave during 2009.

However, Hong Kong is concerned about the effect on Islamic finance of the credit crunch and the global financial crisis, since no economy, including those in the Middle East and GCC (Gulf Cooperation Council) countries, have gone untouched. Thus it seems unavoidable that Islamic finance will slow its pace of development in the near term, "alongside growing downside risks in the global financial scene."

Al-Salam Bank Bahrain in early merger talks with Bahrain Saudi Bank

The two institutions are in the early stages exploring the possibility of a business combination through a share exchange with ASBB issuing shares to BSB shareholders. The combination is subject to approvals by the Boards and shareholders of both the institutions and regulators in Bahrain and Dubai it was revealed.

Emaar US subsidiary files for bankruptcy protection Chapter 11

The US subsidiary of Emaar Properties, John Laing Homes, has sought Chapter 11 bankruptcy protection due to sharp decline in home sales.

Deloitte sets up KL Islamic Finance Centre of Excellence

DELOITTE is setting up an Islamic Finance Centre of Excellence in Kuala Lumpur. This is Deloitte’s only such centre in the region and one of three globally, alongside London and Dubai.

Dubai Gets USD 10 bn Bailout to Ease Debt

Chip Cummins discussed in the Wall Street Journal on 23 February that the United Arab Emirates said Sunday it will spend USD 10 bn to bail out Dubai. The Emirate of Dubai financed much of its recent growth with international borrowing, and a big chunk of that debt comes due this year. The Dubai government said in a statement Sunday it would issue USD 20 bn long-term bonds, and that the first installment of USD 10 bn was fully subscribed by the U.A.E.'s central bank. The bond will be unsecured, fixed-rate paper, yielding 4% a year, with a five-year maturity.

Borse Dubai Successfully Refinances USD 3.8 bn Term Facility

Borse Dubai Limited announced today that it has successfully signed a USD 2.5 bn Term Facility to refinance the aggregate USD 3.8 billion Term Credit Facility used to fund investments into NASDAQ OMX. The multicurrency syndicated facility matures in one year and carries a one-year extension option, at the discretion of Borse Dubai. The facility has a conventional and Islamic tranche, and pays 325 basis points p.a over the London interbank offered rate (Libor).

The participating banks include Bank of Baroda, Dubai Islamic Bank PJSC, Emirates Bank International PJSC, HSBC Bank plc, Industrial and Commercial Bank of China (Asia) Limited, ING Bank N.V., London Branch, Intesa Sanpaolo - Dubai Branch, National Bank of Abu Dhabi PJSC, Skandinaviska Enskilda Banken AB (publ), The Bank of Tokyo-Mitsubishi UFJ Ltd. and Union National Bank, majority of whom are existing Borse Dubai financing firms.

BKME sees tough 2009, to turn Islamic in 2010

The Bank of Kuwait and Middle East (BKME) expects 2009 to be difficult due to a global crisis but has no exposure to troubled investment firms and will turn an Islamic bank in January 2010. BKME, owned by Bahrain's Ahli United Bank, saw Q4 net profit fall by 89.5 % to 965,000 dinars compared to KWD 9.23 mn in Q4 of 2007, according to Reuters calculations based on financial data.

Dubai`s credit situation

Rachel Ziemba analysis the credit situation of Dubai on 17 February on RGEmonitor observing that in recent weeks CDS spreads on the debt of Dubai’s largest State-linked vehicles like Dubai Holding etc shot up dramatically after Abu Dhabi announced a unilateral recapitalization of its banks. The cost to buy prrotection on the 1 year bond has doubled since late January and now stands at 1073bps. This is deemed linked to the previous market opinion that Abu Dhabi would support Dubai, while the recent step to just re-capitalise their own banks caused some doubts. The property bust in Dubai goes on with severe consequences.

The full report shows an excellent overall summary of the situation. It can be accessed via the link "source" below.

India: Taurus Asset Management launches Islamic fund

India's Taurus Asset Management will launch a sharia-compliant equity fund monitored by India's Taqwaa Advisory and Shariah Investment Solutions, an independent Sharia board, to monitor its investments.

UK working to offer sukuk in sterling

Rachna Uppal reported on 16 February that the UK Sterling Sukuk will be offered in the foreseeable future. There is work ongoing on the issue how t o treat the coupon of the Sukuk and put it on par with bonds.

Indonesia plans regular domestic Sukuk with maturity of 5 years

Indonesia plans to issue regular domestic Sukuk Al Ijara with a maturity of 5 years or more according to the finance ministry. The currency is not yet decided.

Islamic International Foundation for Economics & Finance, KSA aims to establish new standardising body

Islamic International Foundation for Economics & Finance in Saudi-Arabia aims to set up a committee of senior Islamic scholars in the kingdom by 2010 to help standardise Islamic banking edicts in Saudi-Arabia. The foundation is in the early talks with Sharia scholars and hoped to “institutionalise” Islamic rulings within a year, according to Mr Al-Zamil.

Yousef Abdullah al-Zamil is the foundation`s assistant secretary general.

Rumour: Dubai Islamic Investment Group may sell stake in Maybank

Malaysia's top lender, Maybank, said it was not in talks to buy Dubai Islamic Investment Group's stake in Bank Islam, a deal that would have created the largest sharia compliant bank in the Asia-Pacific region. Dubai Islamic Investment Group, which is part of Dubai Group, was interested in selling its 40 percent stake in unlisted Bank Islam to Maybank Islamic, the banking sources added. Approached to comment on whether it was selling its stake, Dubai Group said that it "is a long-term strategic investor" in Bank Islam.

Borse Dubai may only get half the finance it seeks

Haris Anwar reported on 17 February on Bloomberg that Borse Dubai Ltd. may get half of the USD 2.5 bn it sought to refinance a one-year loan used for the purchase of Swedish exchange operator OMX AB as lenders tighten credit for the emirate amid concern over its ability to repay. The facilty has to pay according bankers 325 basis points over the LIBOR, with an additional 125 basis-point fee and 75 basis-point margin if the lenders allow for a one-year extension. HSBC Holdings Plc is leading the syndication for Borse Dubai. The financing will have a portion compliant with Islamic restrictions.

EONCAP Islamic Bank Bhd is eyeing 8 % growth in financing

EONCAP Islamic Bank Bhd is eyeing an 8 % growth in financing despite the economic slowdown. The bank has deposits and financing worth RM 4.3 bn and RM 4.8 bn respectively.

Gulf Finance House (GFH) has approved a cash dividend of USD 52.56 mn

Gulf Finance House (GFH) has approved a cash dividend of USD 52.56 mn for last year. This is equivalent to 20 % of the par value of the paid-up capital. In addition a further 20 % will be paid in the form of bonus shares. This has been driven by strong end of year profits of USD 291mn.

Syndicate content