IslamicFinance.de

Agha & Co (the Firm), a Shariah compliant legal consultancy established by Oliver Ali Agha, commenced operation in Dubai in May 2010 and is scheduled to have a formal office inauguration on October 25, 2010. Previously, Agha and Dr. Saeed Mohammed Al-Shamsi established Agha & Shamsi, an affiliated firm, in Abu Dhabi. The Firm and its affiliate are said to be the first Shariah compliant legal consultancies established globally.
Agha & Co’s strategic position in the UAE, fast becoming a major commercial hub for the Gulf Cooperation Council (GCC), includes a network of affiliation arrangements with leading law firms both internationally.
Agha & Co’s partners have previously lead practice areas at top Am Law 50 and top tier English firms, and are well-respected in the fields of Islamic Finance, Islamic Law, Corporate (including cross-border M&A), Projects, Project Finance, Energy, Public-Private Placements (PPPs), Commercial Transactions, Capital Markets, Islamic Funds & Private Equity, Restructuring, Insurance (Takaful), Arbitration and Dispute Resolution.

Bahrain-based Gulf Finance House (GFH) plans to reduce its capital and raise up to $500 million in fresh funds to plug the holes a regional property crunch cut into its balance sheet.
The Islamic investment house said in August it would hold a shareholder's meeting in October to approve plans to raise up to $300m through a murabaha, an Islamic equity-linked money market instrument.
GFH is one of the Bahraini investment houses that relied on fees charged on investor money raised for private equity and property projects, a market that collapsed when the global financial crisis triggered a regional property crash in 2008.
It posted a $728m loss for 2009 and has since struggled to pay back its debt as it failed to sell down illiquid property assets and find a new business model.
It narrowly escaped default in February when it reached a last-minute deal with lender to roll over a $300m loan and now needs to find fresh fund to finish the property projects it started from Morocco to India.

Gulf Finance House (GFH), the troubled Islamic investment bank based in Bahrain, wants to raise up to US$500 million (Dh1.83 billion) from investors after declines in Gulf property prices and the fracturing of its business model led to huge losses last year.
GFH was among the hardest hit in the region by the financial crisis and is one of many in Bahrain and Kuwait forced to restructure debts and rethink their methods for raising money, making investments and borrowing.
Shareholders are also to vote on a consolidation of shares through which four old shares would be exchanged for one new.
And the bank will seek a reduction in capital, which observers say will allow it to swallow accumulated losses and start paying dividends immediately after raising new capital. The consolidation would reduce the number of shares on the market but would not affect the company's market value.
Hit by a lack of revenues to finance its operations and pay debts, GFH was forced to reach new terms with creditors on hundreds of millions of dollars of debt.

Asset managers in the Gulf Arab region are looking to partner with regional players and third-party providers to break the bottleneck of distributing their offerings solely through banks.
The industry, still at its nascent stage, is heavily dependent on banks, but as the funds grow in size and get international focus, better distribution methods are in demand.
The challenge is even bigger for small regional players who do not have the ability to market their products effectively to international players or comply with global regulations like Ucits III, a European Union (EU) framework for funds that can be sold across borders.
For smaller players, the operational cost of complying with global regulations like Ucits III are too high, forcing them to set up partnerships with others in the region. Local fund managers are also looking to set up funds domiciled in off-shore locations to attract global clients.

Al Rajhi Capital, the investment-banking subsidiary of Al Rajhi Bank and a leading asset manager in the Kingdom of Saudi Arabia, announced the launch of the Al Rajhi Saudi Equity Fund, a Specialized Investment Fund (SIF) established under Luxembourg law.
Al Rajhi Capital Company is the independent, wholly owned investment subsidiary of Al Rajhi Bank, the world's largest Islamic bank and the largest commercial bank in the GCC region in terms of market capitalization.

Jabal Omar Development Company the leading planner and developer of the Jabal Omar mountain area, has received agreements for bridge funding collectively worth SR1.35 billion from five national banks, namely Al Rajhi Bank, National Commercial Bank, Bank Al Jazira, Saudi British Bank (SABB) and Saudi Hollandi Bank.
The bridge loan provides immediate cash flow that would serve as a working capital until the round of funding goes through and acts to bridge the gap between times when financing is needed.
The Jabal Omar development in Makkah project calls for construction of residential and commercial center in area close to the Grand Mosque in Makkah. The master plan of development covers 230,000 square meters.
The development consists of 39 commercial and residential towers, notable of which is the 50-storey Twin Tower.
The project has led other developers to follow our lead in improving and urbanizing the central area surrounding the Mosque.

“The Islamic fund industry needs to evaluate new strategies to restimulate growth. Islamic fund assets remained flat in 2009 at $52 billion, whereas the potential wealth pool grew by 20 percent, now estimated at $480 billion,” concludes the Islamic Funds & Investments Report (IFIR) 2010.
The other key messages from the IFIR similarly are stark — the sector needs to achieve scale to ensure its long-term sustainability; the priority over the next two years is to rebuild investor trust through staying close to the investor base and to have transparency in cost and revenue structures.
The IFIR 2010 may serve a purpose to those interested in the Islamic funds industry. But it could have been much more useful if it had clarity in structure; concentration on the 3 major markets by far; in-depth analysis not only of the performances but also of the shortcomings — both regulatory, legal, management, investor knowledge, asset allocation etc; and above all a much more rigorous empirical approach in primary data collection which would have given the analysts at Ernst & Young to draw much more authoritative conclusions about the global Islamic fund and investment industry.

Corporate sukuks by UK organisations are expected in the coming few months following the recent launching of the first corporate sukuk out of United Kingdom by Gateshead-based International Innovative Technologies, or IIT.
A major GCC-based sukuk arranger, which is reportedly working on a corporate sukuk issuance for a UK healthcare company for the last year, hopes to launch the issuance in September. A London-based Islamic bank is also working on a sukuk issuance for a UK client which is near to being finalised. Tom Wilkinson, chairman of IIT, is confident that there is potential for other UK companies to access Islamic finance including sukuk as an alternative source of funding.
The sukuk issue was placed privately with Millennium Private Equity Ltd, leading private equity firm based in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority. The sukuk is essentially a convertible sukuk, whereby Millennium Private Equity Ltd can convert the sukuk into equity.

he asset management side of Islamic finance, which has been at a virtual standstill in the $1 trillion industry, is set to break out of its rut as demand rises for investment products catering to Muslim laws.
There are signs that investment managers are slowly moving to tap demand for Islamic products. Qatar First Investment Bank and Gulfmena Alternative Investments last week unveiled plans for a sharia-compliant asset management firm.
Islamic investment products are commonly perceived to underperform conventional asset classes due to restrictions on investment avenues and the overall conservatism of portfolios. But the MSCI World Islamic Index has managed to outperform the conventional MSCI World Index over the last 13 quarters due to its focus on low-debt companies and non-financial stocks.
The global financial crisis added risk aversion to the mix, with institutions becoming shy about investing in new funds.

Australian investment manager Hyperion Asset Management has launched an Islamic equity fund that will initially target Middle East investors seeking to benefit from Australia's economic growth potential.
Hyperion uses a proprietary process to manage a high-conviction portfolio made up of a limited set of stocks that meet strict selection criteria, for Shariah compliance and other business attributes, the company said in a statement.

Abu Dhabi Islamic banking is growing at a fast pace and its size globally is expected to reach $2.7 trillion (Dh9.9 trillion) by 2015. Abu Dhabi Islamic Bank announced the launch of its wealth management service that will cater to the needs of mass, affluent and high net worth customers.
Abu Dhabi Islamic Bank Wealth Management offers a range of investment solutions such as sukuk, equity, treasuries, commodities, mutual funds, real estate advisory, trust, private equity and other Sharia-compliant opportunities worldwide.

Allfunds Bank, the business-to-business fund platform, has launched an Islamic Services Unit to comply with Sharia principles. The company, jointly owned by the Santander and Intesa Sanpaolo groups, offers over 80 sharia-compliant funds from asset management firms based in Luxembourg, Ireland, the United Arab Emirates and Saudi Arabia.
The unit has a fatwa endorsed by the Sharia'h Board of Amanie Dubai, a specialist Islamic consultancy firm, making it the first sharia-compliant platform.
Allfunds said its clients would have direct access to the largest available range of Islamic funds and it would take further opportunities to expand the service, such as setting up a dedicated website for the sector.

The Saudi joint stock company's focus on the real estate sector stems from the fact that this sector is among the most promising ones in the Kingdom, a team of Alawwal executives told a press conference at Hilton's Qasr Al Sharq hotel on Sunday.
The real estate sector is capable of absorbing more capital injections locally and from overseas. Market studies reveal that the Kingdom requires over 200,000 housing units annually.
To achieve the fund's objectives, the expertise of Ulayya Real Estate Development has been called on. It is one of the pioneers in land development and is represented by Hamad Bin Seaidan who has over 30 years of real experience in the field.
The participation in the fund is open to both citizens and resident expatriates through its head office in Jeddah and branches in Riyadh and the Eastern Province. To facilitate participation in the fund, the company has formed a specialized team and has reached an agreement of cooperation with Samba and the National Commercial Bank.

Bank of London and the Middle East (BLME), the totally-Shariah based bank, is currently working on the development of a Shariah-compliant Absolute Return Fund. The bank, which has its own Shariah Supervisory Board (SSB), has been doing quite well since opening just three years ago and has been providing Islamic investment and finance services to the 15 million Muslim population in Western Europe, as well as customers in Turkey. Nigel Denison, director and head of asset management, explained that the bank's customer base includes people of all faiths who want a trustworthy place to bank. The bank currently has predominantly Kuwaiti shareholders and would someday like to build a presence in the Kingdom.

Steuerliche Würdigung im nationalen und internationalen Kontext

Der Markt Islamic Finance wächst rasant und umfasst bereits heute ein erhebliches Anlagevolumen. Demgegenüber besteht ein großer Kapitalbedarf in der europäischen, speziell auch in der deutschen Realwirtschaft ebenso wie ein Bedarf an Investoren.

Bei der Umsetzung von Islamic-Finance-Vertragsmodellen kann die Besteuerung im Einzelfall eine ausschlaggebende Rolle spielen. Daher erläutert die Autorin in diesem Buch für ausgewählte schariakonforme Finanzierungs- und Anlageformen zunächst die Scharia-Rahmenbedingungen der jeweiligen Vertragsmodelle aus deutscher rechtlicher, ertragsteuerlicher und verkehrsteuerlicher Sicht. Die steuerlichen Fragestellungen werden anhand von Beispielen im grenzüberschreitenden Corporate Bereich im Schnittpunkt von deutschem internationalem Steuerrecht und ausländischem Steuerrecht der weiteren beteiligen Staaten verdeutlicht.

Inhalt

* Einleitung
* Grundzüge von Islamic-Finance-Vertragsmodellen
- eigenkapitalbasierte („Musharaka“ und „Mudaraba“),
- fremdkapitalbasierte („Murabaha“ und „Tawarruq“) sowie

ResearchGATE is the largest social network for academic research globally. Dedicated social profiles of researchers allow to enter academic careers, published articles in journals and books, announce fields of research for international exchange just to name a few of the features.

IslamicFinance.de took another effort to create a dedicated group and invite researchers globally to use this platform and foster research in Islamic finance. The last academic initiative taken was to sponsor and start a full fledged platform for the Islamic Finance WIKI, the online encyclopedia.

Researchers are invited to participate in these initiatives.

Please visit:
http://www.researchgate.net/group/Islamic_Finance/

Javelin Investment Management has announced that its JETS Dow Jones Islamic Market International Index Fund will cease trading on October 19, 2010. Launched on July 1, 2009, the fund failed to attract the level of investor interest that had been anticipated. Marketing efforts for Javelin's second offering, JETS Contrarian Opportunities Index Fund, have proved more successful since its launch in April of this year. Trading under the symbol JCO, the fund consists of stocks that have been identified by Dow Jones as having underperformed in recent years while maintaining relatively strong fundamentals. JETS Dow Jones Islamic Market International Index Fund invests in companies whose principal activities are outside the United States. This creates the risk that currency fluctuations will impact the company's results. Trading on foreign markets often carries the risk that regulatory "circuit breakers" will interrupt trading. Trading practices vary around the world, as do sovereign risk and the possibility of war or civil disturbance. These risks can be more serious in the emerging markets.

Funds will be utilised to finance ESI's capital expenditures for its expansion plans for additional manufacturing facilities. This transaction also comes in line with Al hilals commitment to Abu Dhabi's vision 2030 and supporting the Emirates strategic and vital business initiatives.

There is huge room for growth in Islamic exchange traded funds with around 1.6 billion Muslims worldwide and $950 billion in assets under the management of the Islamic finance industry, it is claimed. The first Sharia compliant ETF was launched in January 2007 based on a large cap global index from Dow Jones. Since then, other ETF providers have entered the market. Since the first Sharia compliant fund, iShares, a leading provider of ETFs, has also introduced Sharia compliant ETFs that are all currently based on holding physical equities. ‘Private clients’ advisers in conventional banks also report including Sharia compliant ETFs in client portfolios in combinations with actively managed funds and structured products, according to Broadwell, iShares vice president.

The Kuwait investment Authority, or KIA, has turned down a parliamentary proposal to set up a shariah-compliant specialized entity to support small projects by Kuwaiti nationals. The sovereign wealth fund said that it is engaged in undertakings that have been in place for a long time that make creating such entity unnecessary.