IslamicFinance.de

The Malaysian unit of Kuwait Finance House (KFH), the Gulf Arab state's biggest Islamic lender, is having "strategic alliance" negotiations in Japan, a newspaper reported on Sunday. Kuwait Finance Malaysia was the first foreign Islamic bank to win a licence under the Southeast Asian country's Islamic Banking Act. It is the Kuwaiti bank's Asia-Pacific hub and aims to promote business between the region and the Middle East.

Al Salam Bank - Bahrain a leading Islamic financial institution, has recently provided £38 million in a unique Shari'a compliant mezzanine facility to refinance a landmark commercial Property located in the heart of Canary Wharf, the financial district of London. The property is leased in its entirety to a leading, multinational financial institution with A+ long term rating with stable outlook form Standard & Poor's. The successful closing of this transaction demonstrates ASBB's ability to provide its valued clients with differentiated investment opportunities with attractive terms that are structured to take advantage of current market conditions. ASBB was advised by Herbert Smith LLP and Knight Frank on legal and commercial matters relating to the transaction, respectively.

Investment manager Argyll Investment Services Limited has launched the World Shariah Funds PCC Limited, a Guernsey-based suite of Islamic-compliant investments which will be listed on the Channel Islands Stock Exchange (CISX) and distributed globally. The World Shariah Funds have brought together three major Islamic investment teams within a single fund structure: From Malaysia, Reliance Asset Management (Malaysia); the south-east Asian CIMB Principal Asset Management Berhad ; and Markaz of Kuwait. The fund launch follows Argyll's participation in the Guernsey Finance presence at the Fund Forum Middle East conference in Bahrain last year at which Legis and the fund's legal advisers, Ogier, were also present. Stuart Place, of Argyll, delivered a presentation on 'Innovation vs. Conservatism: How to achieve results in a post-credit-crunch market' following which the Guernsey parties were introduced to a Middle East fund promoter.

Qatar First Investment Bank isn’t discussing the purchase of Ihlas Finans, the financial arm of Turkey’s Ihlas Holding AS. This statement was given by Emad Mansour.

A £20m capital injection into Islamic Bank of Britain will help develop more home loans in line with Sharia law, an expert from Defaqto has said. David Black, banking expert from Defaqto, said: “The £20m capital investment will enable the IBB to grow its Islamic mortgages. With some other banks recently reducing their involvement in Sharia loans in the UK, the IBB’s capital injection will provide fresh impetus for what will be a growth area.” Its products are structured in a different way to those provided by conventional banks. Instead of a traditional mortgage, customers pay monthly rent and purchase instalments over the agreed period to the bank on the basis of which the bank gradually sells its share of the property to the customer. The recent cash injection has meant IBB has launched two new home loans. “With a fresh injection of capital we are well placed to grow the business through our Home Purchase Plan products. The products will offer peace of mind for customers, both financially and spiritually, which is especially important in the holy month of Ramadan” , said Sultan Choudhury.

Some investment companies in the Gulf will likely find it difficult to pursue their operations without dramatic changes in the wake of the global financial downturn, Standard & Poor's has said in a new report. "The main reasons behind this deterioration, in our opinion, are Gulf investment companies' generally high maturity mismatches they carry in their funding profiles and the ensuing weakened liquidity, weak business profiles, high leverage, and high exposure to real estate for some of them," said Standard & Poor's credit analyst Mohamed Damak. Damak said: "But in the short term, we see some major hurdles for Gulf investment companies to overcome on the potential road to recovery."

Al Mal Capital announced that it has received approval from the Capital Market Authority (CMA) in Saudi Arabia to expand its range of activities in the Kingdom to include Asset Management and Investment Banking, alongside its existing Brokerage business. And hence will change the company name from "Al Mal Securities Saudi" to "Al Mal Capital Saudi".

Al Mal Capital Saudi, the multi-line, newly integrated business will serve clients across the spectrum of investment offerings: from underwriting, advising, arranging placement and public offerings, to performing a custody function on behalf of clients, to managing innovative fund products which take advantage of the exciting opportunities available in the exciting Saudi Arabian equity and debt markets, both public and private.

Naser Nabulsi, Executive Chairman of Al Mal Capital PSC said, "This is a landmark moment for Al Mal Capital. An expanded presence in Saudi Arabia, the largest regional market, is a key tenet in our strategy to expand our core business offering across GCC and the broader Middle East."

The paper analyses the balance sheet and business model of Gulf Finance House and identifies certain pattern to charge fees in their business model and criticises the same.

By Mohammed Khnifer, Aatef Baig, and Frank Winkler
Reading University
May 2010