IslamicFinance.de

Dow Jones Indexes announced that Tebyan Asset Management has licensed the Dow Jones Islamic Market (DJIM) CHIME Index to benchmark its new fund, the Tebyan CHIME Opportunities Fund.
The DJIM CHIME Index is created to measure the performance of 100 leading stocks from China, India and the Middle East/North Africa (MENA) region that pass rules-based screens for Shari’ah compliance.
The index universe for the DJIM CHIME Index is determined by all stocks that pass Shari’ah screens, with hte purpose to remove companies in the following lines of business: alcohol, tobacco, pork-related products, conventional financial services, defense/weapons and certain types of entertainment. Also excluded are companies with financial ratios that are incompatible with Islamic investment principles.

Difficult funding in Europe is making Middle East issuers to tap the still-liquid Islamic finance markets for funds.
Dubai-based Emirates Islamic Bank issued a $500 million, five-year Islamic bond with a yield of 4.718%, while Abu Dhabi-based First Gulf Bank sold a $500 million, five-year sukuk with a yield of 4.046%.
Moreover, Saudi Arabia's General Authority of Civil Aviation stated it plans to launch a government-guaranteed sukuk to pay for a new terminal at Jeddah airport, and Dubai-based Islamic mortgage company Tamweel announced a five-year, $300 million sukuk.
Majid Al Futtaim recently started a $1 billion Islamic bond program, while Doha Bank, Bahrain's Al Baraka Banking Group, Emirates Telecommunications Co. of the United Arab Emirates and Abu Dhabi National Energy Co., among others, could all be looking to issue Islamic debt this year.

It is possible that Emirates NBD will attract funds to the emirate’s first sukuk sale by a bank since 2007, with debt priced at a 150 basis-point discount to the government’s Islamic bond.
It seems that the lender’s Sharia-compliant unit is likely to attract investors with returns as low as 275 basis points above midswaps, or about 4 %.

Ernst & Young's year-end Mena IPO update stated that the regional capital markets have raised $843.9m in 2011, down 69.3% from $2.8bn in the previous year. It seems that the year has closed with IPO funds worth $226.1m raised in the fourth quarter, a decline of 83.5% from $1.4bn raised in the corresponding quarter a year earlier.

Despite the fact that Zawya only covers Middle East-based funds, the sector is popular especially in Saudi Arabia, where 22 of the 24 funds listed are domiciled. The other two funds are from Kuwait and Bahrain.
There are two types of multi-manager funds: those that invest in a range of other funds controlled by different asset managers, named funds of funds, and those that appoint external managers with specific expertise to invest separate tranches of the provider’s portfolio, called manager of managers funds.
Analyzing funds of funds, it seems that there is a lot of interest in global Shari’ah compliant funds-of-funds (41.7%). Top performer is the $15.2m Al-Rajhi Multi Asset Conservative fund, managed by Mohammed Ishaq Ali of Al Rajhi Capital.

A new Shari'ah-compliant fund from Sambacapital will aim long-term capital growth through investment in global Shari’ah-compliant equities that assume their primary revenues from the production and distribution of basic commodities.
Al Nafees Global Commodities Equity Fund from Sambacapital is managed in compliance with the Investment Funds Regulations issued by the Capital Markets Authority (CMA).
The fund will invest in stocks of global companies connected to the commodities sector that are forseen to benefit from growing global demand for basic commodities.

Solum Asset Management will launch the first “investment sukuk” in the first quarter of next year, considering Islamic bonds as investment vehicles rather than debt instruments.
The 200 million sterling ($310 million) Student Accommodation Investment Sukuk will use equity to supply holders with an annual yield of 4 to 6 %. Risk in the investment sukuk will be based on the assets that are bought by the fund.

A group of Islamic banks and financial industry associations launched the industry's first international Islamic interbank rate, presenting a Sharia-compliant alternative to traditional interest-based benchmarks.
The Islamic Interbank Benchmark Rate (IIBR) is the average expected return on Sharia-compliant, short-term interbank funding.
IIBR addresses a source of tension within the Islamic finance industry, which is evaluated to have reached $1 trillion in assets: Islam forbids the use of interest in any transaction, but the industry has long used the London Interbank Offered Rate (LIBOR), a system of interest rates, as a benchmark in the absence of Sharia-compliant alternatives.

It seems that the private sector funding arm of the IDB Group, is entering a new strategy to take its financing directly to its constituencies and to make its financing impact more on the real economy through the generation of employment and promoting growth.
This contains opening regional offices; setting up two new departments at the ICD; launching more Ijara (leasing companies) in diverse markets such as Albania, Saudi Arabia and Algeria; establishing SME investment funds including a SR1 billion fund for Saudi Arabia; and establishing a mortgage finance company in Saudi Arabia in anticipation of the long-awaited mortgage law.

A consortium of Islamic banks and financial industry associations launched the industry's first international Islamic interbank rate presenting a sharia-compliant alternative to traditional interest-based benchmarks.
The Islamic Interbank Benchmark Rate (IIBR) is the average expected return on sharia-compliant, short-term interbank funding.
IIBR addresses a source of tension within the Islamic finance industry, which is believed to have reached $1 trillion in assets: Islam forbids the use of interest in any transaction, but the industry has long used the London Interbank Offered Rate (LIBOR), a system of interest rates, as a benchmark in the absence of sharia-compliant alternatives.

Despite previous high depletion of shareholders' funds due to start-up and early operational costs, Weqaya Takaful Insurance & Reinsurance Co.'s capitalization remains strong relative to risk.
Standard & Poor's Ratings Services announced that it has assigned its 'BBB' long-term counterparty credit and financial strength ratings to Riyadh-based Weqaya Takaful Insurance & Reinsurance Co. (Weqaya Takaful), with a stable outlook.

It seems that there is the possibility that the UAE might be thinking to set up a pension or superannuation scheme for the 90% plus of its more than 8m strong population.
At this point, there is a system in operation whereby expatriates who come to the end of their working life in the UAE get paid a lump sum gratuity payment. The new system could be fairer and more equitable but, critically for the Islamic finance industry, might create a significant opportunity for Shari’ah compliant asset managers if the mooted pension system was structured in such a way that it was entirely – or largely – or even partly – Shari’ah compliant.

The Muslim-majority region of Tatarstan seems to be an attractive investment destination for funds – for both Russian Muslims and foreign investors based in Muslim countries.
Two Islamic funds have recently launched operations in Tatarstan. On the one hand there is the Malaysian private equity firm AmanahRaya Capital Group, which has already launched several projects in the republic.
On the other hand there is the Foras International Investment Company, launching an investment vehicle with the newly established Tatarstan International Investment Company.

Elaf Bank B.S.C. and Ohad Trust B.S.C. have formed a joint venture in Labuan, the result being the fact that Labuan Financial Services Authorities (LFSA) has granted a "trust" licence under Ohad Trust (Labuan) Bhd (Ohad Labuan).
the licence will give permission to Ohad Labuan to work on trust, foundations, fund administration, registrar and custody assignments in Malaysia.

Because of the recent global financial crises appetite for Islamic Private Equity has surfaced.
Joined by over 50 expert regional and global speakers, Ihab Asali, QFIB Head of Private Equity embraces the global rise of Islamic Private Equity at the recently concluded Islamic Investment and Finance Forum, in Istanbul, Turkey.
Ihab along with other panellists discussed and investigated the potential of Islamic Private Equity after the economic downturn, ways to increase Islamic funds and its impact on the Private Equity market and where quality Islamic Private Equity opportunities are likely to come out.

The Islamic Corporation for the Insurance of Export Credits and Investment (ICIEC) is still taking into consideration the idea of a third party sukuk guarantee fund.
However, Abdel Rahman Taha, the chief executive officer of ICIEC, states that the corporation has began to work internally to design a new sukuk policy which can be presented as a means to improve the credit structure and appeal of sukuk. It is expected that this new policy will be able to provide the much needed pause to the sukuk market.

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It seems that the Institute of Islamic Culture needs funds desperate.
Although the institute gets grants of Rs0.5 million each from the Punjab and federal governments, and generates about Rs1.2 million from book sales, only the staff salaries are Rs1.6 million a year, plus the cost of publishing a quarterly journal, Al-Mua’araf, and an expensive legal battle underway over property, they need more money.
It has often happened that the IIC management had to pay out of pocket for budget over-runs.

The State Bank of Pakistan (SBP) has created a model product based on "Salam" to meet the production finance (working capital) needs of the country's farming community. The model product will simplify Islamic Banking Institutions (IBIs) in developing the access of agricultural Islamic financing to the farming community.
The product wrapes the Sharia related aspects as well as business cycle and financing requirements of farm/crop production activities and will offer farmers necessary flexibility to use the funds to meet farming input requirements.

It seems that HSBC Amanah anticipates a pipeline of 30 new Islamic funds to raise its assets under management for serviced funds to $10 billion.
Germain Birgen, global head of securities services, stated that the bank currently services 90 Islamic funds worth roughly $5 billion in assets. He added that 30 new funds are forseen to be launched within the next 12 to 18 months.
He underlined the fact that there is also an increasing trend in the industry for Islamic fund managers in traditional Muslim markets to start international domiciled funds in Singapore and Luxembourg, to take advantage of better financial regulations and draw more conventional investors.