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Islamic finance industry grew by 24.4% & global Sukuk issuance increased by more than 60% in 2011

The National Commercial Bank has recently cooperated in the Islamic Finance Forum coordinated by Harvard University in the United States of America. The forum is a praised annual event that gathers top scholars, researchers and analysts, with economists and industry leaders in Islamic Finance from around the world.
Being at its tenth session this year, the forum's agenda was centered on discussing the role of Islamic finance in the global economic development, underlining the latest challenges facing the growth of the industry and defining the competitiveness and opportunities inherent in Islamic finance as a potential alternative for the conventional financial system.

Natural Capital Declaration a statement by the financial sector demonstrating itscommitment at the Rio+20 Earth Summit

Who will be the first Islamic financial institution to become signatory of the Natural Capital Declaration? "The Natural Capital Declaration is a statement by the financial sector demonstrating our commitment at the Rio+20 Earth Summit to work towards integrating Natural Capital criteria into our financial products and services for the 21st century.

Through it we wish to acknowledge and re-affirm the importance of Natural Capital in maintaining a sustainable global economy, and call upon the private and public sectors to work together to create the conditions necessary to maintain and enhance Natural Capital as a critical economic, ecological and social asset.

Natural Capital comprises Earth's natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible. Neither these services, nor the stock of Natural Capital that provides them, are adequately valued compared to social and financial capital. Despite being fundamental to our wellbeing, their daily use remains almost undetected within our economic system. Using Natural Capital this way is not sustainable.

IIFM and ISDA Launch Mubadalatul Arbaah (MA) Profit Rate Swap (PRS) Product Standard

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association, Inc. (ISDA) are pleased to announce the launch of the ISDA/IIFM Mubadalatul Arbaah (Profit Rate Swap) product standard to be used for Islamic hedging purposes.

The Mubadalatul Arbaah (MA) standard follows on from the “ISDA/IIFM Tahawwut (Hedging) Master Agreement” and provides the industry with a framework for Islamic risk mitigation. The launch of the Tahawwut Master Agreement as the template for Shari’ah-compliant risk management was officially announced at a press conference hosted by Central Bank of Bahrain in March 2010.

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IslamicFinance.de aims to raise USD 2'500 for quarterly running costs

Dear Reader,

IslamicFinance.de is privately funded for many years. Now, for the first time, you have the possibility to make a contribution, from one Dollar upwards!

The technical details, and the money transfer via paypal is organised by Kapipal a new online fundraising tool:

http://www.kapipal.com/islamicfinance

On the blog I gave some more thoughts about Islamic finance media for those interested: http://www.islamicfinance.de/?q=node/3454

Please also note: The fundraising action has a deadline, so act today, not tomorrow and tell your friends about it!

All donors who will leave a message will be listed in the article, which follows after closure of the fundraising period.

I am happy to meet you in person either on 19th March in Milano (http://www.islamicfinance.de/?q=node/3396) or on 10th May in Frankfurt (http://www.islamicfinance.de/?q=BAFINII) at the respective Islamic finance conference.

Wa at Taufiq min Allah, all the best,

Michael Saleh Gassner

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Islamic finance media - a challenge, and what one could do

Dear Readers,

Islamic finance media are a tricky service. This is true for various reasons: The Internet eats up the revenues, because everything ought to be free. Islamic banks are still a niche phenomena, and international banks like UBS or Deutsche are almost as large as the entire global Islamic finance industry. Consequently the marketing budgets are much lower, too.

Last not least, who should advertise? The banks among themselves or to the clients? Advertising from bank to bank, does usually not make much sense, but real client oriented formats are hard to find, too. May be this is a niche. Others, who could finance Islamic finance media are basically the service providers to the banks, but due to the limited number of Islamic financial insitutions, direct marketing, e.g. face to face meetings will be preferred.

This in short is the background why Islamic finance media are not so well established in terms of journalism and research, but mostly reflecting the press release as criticised by the makers of the Islamic Globe. See: http://www.theislamicglobe.com/index.php?option=com_content&view=article...

European Islamic Investment Bank Plc : Non-Executive Director Appointment

Mr. John Robertson Wright was appointed Non-Executive Director of EIIB by the Board of EIIB.
Mr. Wright is a career Banker with important experience in UK and international markets including assignments in India, Sri Lanka, West Africa, Canada, Hong Kong and the United States. Before this appointment he was Chief Executive of Oman International Bank for 7 years, Chief Executive of the Northern and National Irish Banks in Ireland for 5 years, Chief Executive of the Gulf Bank in Kuwait and finally Chief Executive of Clydesdale & Yorkshire Banks prior to retirement.

CALL FOR PAPERS - Islamic capital markets

CALL FOR PAPERS - Islamic capital markets, Deadline: Submission of Abstract: March 15, 2012
Islamic Research and Training Istitute – Islamic Development Bank, Jeddah, Saudi Arabia

Islamic capital markets are to become an important part of the Islamic financial system. While new products are steadily coming into the market and the Islamic investment instrument are growing, Islamic capital markets still constitute a very small niche. For a discernible impact on the investment promotion, market stability, and equitable socio-economic development there is a growing need to accelerate the process of product development, to create conducive regulatory environment and to improve the market practices. This task requires development of new human capital and knowledge base.

With this larger objective, the immediate focus of this conference is on three issues:
• Design and use of Islamic financial products for Islamic capital markets.
• Identification of the needs for and the implications of market regulations for development of Islamic capital market.

TENTH HARVARD UNIVERSITY FORUM ON ISLAMIC FINANCE, March 24-25, 2012

Islamic Finance and Development, March 24-25, 2012, Austin Hall

Harvard Law School, Cambridge, Massachusetts, U.S.A.

The Tenth Harvard University Forum on Islamic Finance, hosted by Harvard Law School’s Islamic Finance Project, will be held at Austin Hall, Harvard Law School in Cambridge, Massachusetts on March 24 and 25, 2012. The theme of the conference will be “Islamic Finance and Development.”

The Harvard University Forum on Islamic Finance provides a venue for the critical and objective examination of the purposes, theory, practice, structure, and institutions of the rapidly developing field of Islamic finance. Continuing in this direction, the Tenth Forum sets the evolution of the Islamic financial industry within the context of the economic and political development of Muslim majority markets. The Forum will critically examine traditional frameworks under which Islamic Finance has developed as well as the new challenges raised by recent events, including the global financial crisis and the “Arab Spring” movements in the Middle East.

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Report for free download: Sarasin releases Islamic Wealth Management Report 2012

In its 2012 Islamic Wealth Management Report illustrated by masterpieces of Islamic calligraphy, by the Chinese Muslim master Hajji Noordeen, deals with the theme “The path to corporate transformation – converting a company to Islam”.

Bank Sarasin reviews the complexities of converting a business to Islam, a topic which is rarely discussed or written about. Conversion is complicated by the need to address every aspect of a business, the lack of broadly accepted standards and regulations, and differences in the Muslim world itself. The Report, released today, is the Bank’s third on Islamic Wealth Management.

Converting a business to Islam can increase the value of a company by 18-25% due to the scarcity of genuine Islamic investments. But the conversion process is arduous, extending from the design to distribution and beyond, to how the company spends its profits. As Sarasin notes, the market potential is massive, with the global Muslim population expected to increase by 26% to 2030, to 2.2 billion, rivalling China and India in terms of market size.

Gatehouse Bank net USD half billion in real estate for GCC investors

Gatehouse Bank based in London, has surpassed the USD half billion mark in real estate investment acquisitions, on behalf of its GCC investors. This was succeeded after the acquisition of a multi-million dollar US student property portfolio, "The Republic at Denton" and "The Republic at Lubbock" in Texas, USA providing investors a net cash yield of 7.0% per annum and a projected IRR of 9.0% over a hold period of five years.
The newly built, multi-million dollar developed properties were obtained in partnership with US-based student housing specialty operator, The Scion Group LLC.

Islamic Finance in India can attract investments from Middle East

Taking advantage of the situation emerging out of the economic crisis in Eurozone and countries like United States, India should adopt the Islamic Finance System to pump-in investments from the Middle East. This interest-free and more inclusive system will in turn accelerate the financial inclusion of the Indian Muslims.
Dr Shariq Nisar, Director of Research and Operations of India’s premier shariah advisory firm TASIS and one of the senior most professionals of Islamic Finance in India, was in Malegaon to address a seminar on "Prospects of Islamic Finance in India".
Pointing at the demands in the country of reliable and committed investors in stock market, and banking and insurance sectors, he added that while China and the Middle East are the two areas in the world where surplus funds more than their requirements are generated, the Arab world doesn't have such problems.

Gatehouse Bank seals $54.5m US property investment

Gatehouse Bank delivered successfully a real estate realized investment in the sale of VA Oceanside Clinic for $54.5 million. The medical facility is placed near San Deigo, California, USA.
The statement was given by Fahed Boodai, Chairman of Gatehouse Bank. The chairman added that the property is a specialized medical clinic leased to and operated by the US Department of Veteran Affairs for a period of 20 years, and has been generating an annual return of 7% that is distributed to shareholders on a monthly basis.

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Goldman Sachs Sukuk

Dear Reader,

The last weeks we have read about criticism in regard to the Sharia compliance of the Sukuk program of the investment bank Goldman Sachs:

< Mohammed Khnifer reveals, after examining the offer circular thoroughly, three possible flaws in the overall structure.
1- Strong indication from the proposed structure and the prospectus as well that the sukuk is not, as they claim, Murabaha, but a Reverse Tawarruq.
2- Strong indication that Goldman will be using, eventually, the proceeds to fund its conventional activities.
3- The so called Murabaha sukuk is listed on the Irish Stock Exchange (ISE). There are some concernes on how the ISE will make sure that the securities will be traded at par value.>>

http://www.islamicfinance.de/?q=node/3155

Some remarks to this discussion:

E&Y: World Islamic Banking Competitiveness Report 2011-12

The 1st Ernst & Young World Islamic Banking Competitiveness Report 2011 presented at the 18th Annual World Islamic Banking Conference stated that Islamic banking assets with commercial banks globally will reach US$1.1 trillion in 2012, a significant jump of 33% from their 2010 level of US$826 billion. In the MENA region, Islamic banking assets increased to US$416 billion in 2010, representing a five year CAGR of 20% compared to less than 9% for conventional banks. As new geographies open up to Islamic banking, the MENA Islamic banking industry is expected to more than double to US$990 billion by 2015.

Source: 

http://www.ey.com/Publication/vwLUAssets/IBCRR_Report/$FILE/IBCRReport2011(LR)%20Final.pdf

ISLAMIC INDEX INVESTING: THE INTERNATIONAL EVIDENCE

Abstract academic paper:

Using a large international sample of 35 developed and emerging markets, we analyze
whether Islamic indices exhibit a different performance to conventional benchmarks. While there is no compelling evidence of performance differences in robust Sharpe ratio tests and after controlling for market risk, we find a significantly positive four-factor alpha for the aggregate developed markets region. This outperformance stems, however, mainly from the U.S. and is largely attributable to the exclusion of financial stocks in Sharia-screened portfolios. As the extensive downturn of financials is related to the recent financial crisis, we do not argue that this outperformance will continue over time. The style analysis reveals that

Islamic indices invest mainly in growth stocks and positive momentum stocks. This, for a passive portfolio intriguing result can, however, be explained by the strong sector allocation towards energy firms and their strong momentum characteristic during the sample period.

Islamic mortgage lender in Canada fails

Although UM Financial Inc went into receivership back in October, the consequences of the bankruptcy are beginning to be noticed only now.
Besides the fact that the case risk is giving a bad name to sharia-compliant finance in North America, it also poses a series of legal hurdles that could have as a result to mortgage holders the losing of their homes.
Since the use of interest is forbidden in Islam, sharia-compliant mortgages are organized so that lender and homebuyer share the costs of purchasing a home. Instead of paying interest, homeowners preffer to rent the property from the lender while gradually purchasing the outstanding share of their house.

CALL FOR PAPERS - Islamic Finance in a Changing World - Abu Dhabi, October 15-16, 2012

The prime theme of this event will be the impact of the recent rapid changes on the
Islamic finance sector in all pertinent aspects. The Conference will consider the
spectacular political and socio-economic developments that we have been witnessing and
their probable effects on the performance and future position of Islamic financial
institutions (IFI’s), the regulatory set-ups, and popularity of Islamic products being
offered to the public, governments and business firms.

The Conference is being organised by Emerald Group Publishing, the world’s leading
scholarly publisher of journals and books on business and management. Over 220
academic journals are currently published by Emerald, covering some 24 managerial
disciplines, in addition to a strong and growing presence in other related fields such as
LIS, social sciences, and engineering.

This Conference follows on the success of the Global Islamic Marketing Conference held
in Dubai over the period 20-22 March 2011, organised by Emerald in association with the
United Arab Emirates University.

Conference Objective

The chief objective of the forthcoming Conference is to assess the future of this sector,

Charity of the month: UNESCO - Call for Donation

UNESCO works in education, the sciences, culture and communication and information. Recently it lost a substantial portion of funding as the newspapers reported (see for details: http://www.bbc.co.uk/news/world-middle-east-15527534 ). It is worth considering how to support the UNESCO and their goals:

"UNESCO works to create the conditions for dialogue among civilizations, cultures and peoples, based upon respect for commonly shared values. It is through this dialogue that the world can achieve global visions of sustainable development encompassing observance of human rights, mutual respect and the alleviation of poverty, all of which are at the heart of UNESCO’S mission and activities.

The broad goals and concrete objectives of the international community – as set out in the internationally agreed development goals, including the Millennium Development Goals (MDGs) – underpin all UNESCO’s strategies and activities. Thus UNESCO’s unique competencies in education, the sciences, culture and communication and information contribute towards the realization of those goals.

Global leaders point way to economic recovery at UN summit

Global leaders point way to economic recovery at UN summit

Gordon Brown, Mary Robinson and global CEOs call for sustainable financial sector reform

Washington D.C., 20 October 2011 – With economic recovery topping the United States and global political agenda, a group of CEOs, major investors and bankers together with former United Kingdom Prime Minister Gordon Brown and President of Ireland Mary Robinson called for a far-reaching reform of the global financial system at a summit which ended in Washington D.C. today.

Amid a growing wave of protests highlighting economic concerns in countries from the US to the UK, Japan and Greece, more than 500 senior finance executives and policy-makers from around the world met at the United Nations Environment Programme Finance Initiative Global Roundtable (UNEP FI) summit to find sustainable solutions to tackle the drivers of market volatility and address the deepening rift between the rich and the poor.

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