IslamicFinance.de

Dear Readers,

some background on the standstill:

Sukuk prospectus of the related Nakheel entity:
http://blogs.thenational.ae/economy_blog/Nakheel%20Development%201%20Pro...

citation:
"Risks Relating to the Co-Obligors and the Co-Obligor Group Strategy

The growth strategy of the Co-Obligor Group is based on certain assumptions relating to, inter alia,
economic conditions, market for real estate and demographic conditions in Dubai. [...] This could, for example, have an impact on the rental income, sales proceeds or other income (such as management fees) available to the Co-Obligor Group and the value of its projects, which could affect its ability to make payments under he Transaction Documents."

and the issue of implicit sovereign support was nicely discussed in a blog:
http://blogs.thenational.ae/economy_blog/2009/08/nakheels-bond-prospectu...

The rational behind is explained by a rating agency here in 2007:
http://www2.standardandpoors.com/spf/pdf/media/sp_approach_to_sukuk_17-s...

"from its parent also benefited from strong implicit government support."

Press Release

Several Dubai Government-Related Entities Downgraded And On Watch Negative Following
Debt Restructuring Announcement

DUBAI (Standard & Poor's) Nov. 25, 2009--Standard & Poor's Ratings Services said it
had taken rating actions on a number of Dubai-based government related entities
(GREs) and transactions (for full details see "Ratings List" below). Standard &
Poor's has downgraded DIFC Investments LLC, DP World Ltd., Jebel Ali Free Zone
(FZE), Dubai Holding Commercial Operations Group LLC (DHCOG), and Emaar Properties
PJSC. All of these entities have been placed on CreditWatch with negative
implications. The ratings on Dubai Multi Commodities Centre Authority (DMCC) were
affirmed, although they were placed on CreditWatch negative. A CreditWatch negative
placement also applies to the notes issued by Thor Asset Purchase (Cayman) Ltd.
(Thor), which are securitized by cash flows from a revolving pool of existing and
future receivables originated by Dubai Electricity and Water Authority (DEWA; not
rated).

The rating actions are the result of the announcement on Nov. 25 of the

Dubai World, a conglomerate owned by the government of Dubai, is asking its creditors for a six-month “standstill” on its obligations. Dubai World includes Nakheel, which has USD 4 bn in outstanding Islamic debt falling due next month.

“BUILDING A BETTER WORLD”

New Horizons - Sound Strategies

The Ritz Carlton – Doha, Qatar

March 21-22, 2010

CALL FOR SUBMISSIONS

Deadline: November 30, 2009

The annual conference of World Conference of Muslim Philanthropists, now recognized as the most prestigious forum on Muslim philanthropy worldwide, invites papers as well as proposals for sessions and workshops showcasing innovative, cutting-edge and experimental work.

THEME AND TOPICS

The conference will focus on how the integrated efforts of philanthropic, public and private sectors can effectively respond to the worsening global issues of hunger, poverty, disease, climate change and conflict. The forum will also host interactive roundtable discussions on Aid-effectiveness and Impediments to Building Capacity for Transformational Change. To further elucidate the theme “Building A Better World: New Horizons-Sound Strategies,” the conference will feature a special session on emerging markets philanthropy and global trends in giving.

The International Finance Corporation (IFC), the multilateral development bank, will list a USD 100 mn 5-year Sukuk in Dubai and Bahrain. The IFC plans to return to the market with new issuances every 12 months to 18 months.

PRESS RELEASE

Washington, DC, October 16, 2009

The World Congress of Muslim Philanthropists (WCMP) is launching its first multi-donor giving circle—the “Hasanah Fund”—to develop and implement new, sustainable programs to combat world hunger and poverty.

The Fund will secure $100 million from philanthropists, foundations, and corporations in the next five years to fund long-term hunger eradication and poverty alleviation in 20 countries facing the ongoing food crisis. Funded projects will address not just the aggregate quantity of food that must be produced and distributed, but also how food is produced and by whom.

Hasanah Fund will complement the exemplary work of the Kingdom of Saudi Arabia, the Organization of Islamic Conference and the Islamic Development Bank towards hunger, which is affecting over one billion people worldwide. “This initiative clearly demonstrates the enduring commitment of Muslim philanthropists to the social and economic upliftment of the poorest people,” says Dr. Tariq Cheema, CEO of WCMP.

Press Release

DUBAI, October 15, 2009--A report published today by Standard & Poor's Ratings Services answers questions related to its view on the likelihood of extraordinary government support for Dubai-based government related entities (GREs), and what factors may affect this in the future (see "What Factors May Affect S&P's View Of The Likelihood Of Extraordinary Government Support For Dubai-Based GREs?").

Specifically, the report answers the following questions:

-- What are Standard & Poor's current expectations regarding the likelihood of extraordinary support from the Government of Dubai for its GREs?
-- What track record does the Government of Dubai have in supporting its GREs?
-- To what extent are the ratings affected by Dubai's challenging debt burden?
-- How might the GRE issuer credit ratings be affected by a restructuring of debt in an unrated GRE?
-- How might the Nakheel repayment affect the GRE issuer credit ratings?
-- Does Standard & Poor's believe the Government of Dubai has the resources to support its GREs?

Press Release of S&P:

We are assigning our preliminary 'AA' rating to TDIC Sukuk Ltd.'s certificates issuance program, under which it can issue up to $1.45 billion certificates (sukuk al-ijara).

The rating is equal to, and is fully reliant on, the rating on Tourism Development and Investment Company.

LONDON, October 1, 2009--Standard & Poor's Ratings Services today said it had assigned its preliminary 'AA' rating to TDIC Sukuk Ltd.'s certificates issuance program, under which it can issue up to $1.45 billion certificates (sukuk al-ijara). The rating is equal to, and is fully reliant on, the rating on Tourism Development and Investment Company (TDIC; AA/Stable/A-1+). The preliminary rating is based on information as of Oct. 1, 2009. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

Yasaar media published a new report called Islamic Finance in North America 2009 for free download, which is co-published by Codexa Capital, UM Financial Group, King & Spalding, and Doha Islamic.

According to the report Islamic finance in North America has developed along two quite separate paths:

• The first path focuses on retail Islamic finance and centres mostly on home financing products and credit cards.

• The second path involves a number of high profile GCC-based Islamic investment banks and their deployment of hundreds of millions of dollars in private equity and real estate developments in North America.

Read the full report for free at the link below.

Yasaar Media published a report about Islamic Investment Banking for free download, with the co-publishers Unicorn Investment Bank, Doha Islamic covering data and principles regarding Private Equity, Venture Capital, syndicated lending, real estate, asset management, fund manageement, liquidity management, treasury, trade finance and capital markets in an Islamic context.

The International Journal of Islamic & Middle Eastern Finance and Management has decided to publish a special issue of the journal, focusing on the latest financial crisis, and how this has related to Islamic financial institutions.

Other relevant points include:

• Proposed title of the special issue: Islamic Financial Institutions and the Global Financial Crisis 2008/09.

• Deadline for receiving papers: Friday, February 12th, 2010

• Date of publication: fourth issue of Volume 3 (2010).

• Papers will be reviewed in the normal fashion.

• Technical notes will also be acceptable, and they will be assessed in the usual manner.

• We are likely to have a total of five articles in the issue.

• Books relevant to this major event can also be reviewed for the issue.

• All branches of the Islamic financial services sector can be covered in materials within this issue, including banking, insurance (i.e. takaful), fund management, investment portfolios, business management etc.

The research think tank of Deutsche Bank published recently a research study with the title:

"The global food equation"

stating the challenge for future food security. DB Research believes that still believes that the growing population can be fed, provided the recommended actions are taken, requiring innovation, and a change in the system of production and distribution along with sustained productivity growth in an environmental and socially sustainable manner.

The report can be downloaded for free.

French bank BNP Paribas may raise as much as USD 300 mn for a Gulf-based private equity fund, according to a Reuters report. The fund has been set up to tap into opportunities arising from the financial crisis.

Bahrain-based Islamic investment house Tharawat said it plans to raise USD 100 million by year-end for a sukuk fund it recently launched to focus on bargains on the secondary market.

Tharawat was established in July 2008 with a paid-up capital of $33 million.

Kuwait's central bank appointed a temporary supervisor to monitor debt restructuring and compilation of financial results at Islamic firm Investment Dar.

National Bank of Abu Dhabi (NBAD) plans to launch the Middle East’s first exchange-traded fund to try to attract more international investors. The fund, known as an ETF, will be listed on the Abu Dhabi Securities Exchange (ADX) in two months, a senior NBAD official said. It will be licensed by a leading global index provider and will track some of the Gulf’s 50 biggest stocks, said Giyas Gokkent, NBAD’s co-head of asset management and chief economist.

National Bank of Kuwait announced the launch of its “Islamic KD Ijara Fund II”. This fund is the eighteenth edition of the Islamic Ijara funds and the second from the Kuwaiti Dinar series and is will offer Private Banking clients an investment product that generates monthly income of 6.25% throughout the Fund’s term.

The Fund is entirely compliant with the laws of Islamic Shariah as approved by the independent Shariah board for Islamic funds marketed by NBK in Kuwait, comprised of Sheikh Dr. Khalid Mathkor Al-Mathkor, Sheikh Dr. Essa Zaki Shakra and Sheikh Dr. Abdul Aziz Khalifa Al-Qassar.

6.10.2010: Report is update and again free for download

3.9.2009:
Funds at Work, a strategy consultant for the fund industry, updated its analysis on Shariah scholars' engagement in financial service organisations in the GCC countries and now internationally covering companies with 956 (498) Sharia Board positions and 180 (121) scholars.

The study shows that the Top 5 scholars make up at least 30.15 % of the entire univese of almost 956 board positions. The Top 5 scholars internationally (ex GCC) out of 70 scholars active beyond the GCC - make 58.21 % of all positions (201 board positions).

The detailed summary of the study is free for download.

Press Release

PARIS, September 2, 2009--New issuance of sukuk (bonds compliant with Islamic law) topped $9.3 billion in the first seven months of 2009 compared with $11.1 billion during the same period in 2008, said Standard & Poor's Ratings Services in a report published today, "The Sukuk Market Has Continued To Progress In 2009 Despite Some Roadblocks."

"The smaller amount of issuance was due not only to the still-challenging market conditions and drying up of liquidity, but also to the less-supportive economic environment in the Gulf Cooperation Council countries, particularly in the United Arab Emirates," said Standard & Poor's credit analyst Mohamed Damak. "The medium-term outlook for the sukuk market remains positive, though, in our view, given the strong pipeline--with sukuk announced or being talked about in the market estimated at about $50 billion--and efforts to resolve the major difficulties impeding sukuk market development."

Lack of capitalisation of banks, households and the state is a key policy issue according to Professor Willem Buiter, who wrote a blog in the Financial Times online. Instead of defaults and bankruptcy with all its associated costs he suggests to turn debt to equity as the more efficient economic solution; calling explicitly the application of Islamic finance principles for this purpose as a possible solution.