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Relaunch IslamicFinance.de Newsletter - Free Download

Dear Reader,

On the occasion of the 10th anniversary of IslamicFinance.de please find at the hyperlink below the relaunch of the newsletter.

http://www.islamicfinance.de/files/20140529%20IslamicFinance%20dot%20de%...

Any new issues will be announced to our registered users of IslamicFinance.de and to the members of the related LinkedIn Group of IslamicFinance.de.

If you wish to register please go to http://www.islamicfinance.de/?q=newsletter/subscriptions or become member of the LinkedIn Group: http://www.linkedin.com/groups?mostRecent=&gid=147616&trk=my_groups-tile...

Enjoy reading! And if you do, please consider sharing the free newsletter with your friends & colleagues by forwarding or subscribing an internal email address to forward it your entire firm.

NB: I appreciate feedback to improve the content and better understand what readers are looking for. Please allow time for reply, which I may not be able to give to all enquiries after sending out the newsletter.

All the best,

Michael Saleh Gassner

Frankfurt MENA Finance Conference - "What does Germany gain through Islamic Finance?"

Ladies and gentlemen,

One of the highlights of this year’s Euro Finance Week is the Frankfurt MENA Finance Conference on November, 21st 2013.

The speakers of the panel ‘What does Germany gain through Islamic Finance?’ are:

Dr. R. Ahmet Albayrak, Executive Vice President, Kuveyt Türk Participation Bank Inc.

Horst Bennin, Founding Managing Partner, Alp View Capital Partners GmbH

Dr. Manfred Dirrheimer, Chairman of the Board, FWU AG

Dr. Johannes Engels, Banking Supervisor for International Cooperation, BaFin

Dr. Ivo Schwartzkopff, Member of the Board, StarCapital AG

The host of this panel will be Zaid el Mogaddedi, Founder and Managing Director, Institute of Islamic Banking and Finance (IFIBAF).

Dr. R. Ahmet Albayrak will deliver a speech about ‘Opportunities in the European Financial Markets’ beforehand in the conference.

The conference language is English.

The event is without charge.

Location:

Congress Center Messe Frankfurt
Ludwig-Erhard-Anlage 1
60327 Frankfurt am Main

If you are interested to participate, please send an e-mail (company/name/e-mail address) to info@kuveytturk.de

Germany's FWU issues rare asset-backed sukuk

FWU Group, a Munich-based financial services company, has issued a $20 million five-year Islamic bond backed by insurance policies. FWU, which offers takaful solutions, used a structure known as wakala. The sukuk is the first tranche of a $100 million programme rated BBB- by Fitch, and arranged by EIIB-Rasmala. Proceeds of FWU's sukuk, which carries a profit rate of 7 percent, will be used to fund a set of re-takaful transactions for its Luxembourg-based unit Atlanticlux, which is the ultimate obligor under the programme. The assets for the transaction are the beneficial rights of insurance policies; ownership is transferred to a Guernsey-based company which is in turn managed by AON PLC, which acts as the agent.

Islamic Finance in Germany: Roundtable Report

On 4 June 2013, Rüdiger von Hülst and Matthias Grund of the Berlin and Frankfurt offices of international law firm K&L Gates hosted a roundtable in relation to the future role of Islamic finance in the German economy. Represented at the roundtable were representatives from the investment management, banking, legal, academic and diplomatic communities. One of the general findings was that there has been an increasing depth and breadth of experience in the UK from which Germany could benefit. However, current activity in Islamic finance in Germany is still nascent. There are several possible areas for the expansion of Islamic finance in Germany, such as investments in the healthcare sector and municipal owned real estate. Islamic finance would offer various advantages like diversification of financing sources, or attracting foreign direct investments. For more information on the roundtable, please see the attachment.

RPT-Fitch Assigns ATLANTICLUX's Salam III Sukuk Programme 'BBB-(EXP)' Rating

Fitch Ratings has assigned Salam III Limited's USD100m insurance-linked Sukuk programme an expected rating of 'BBB-(EXP)'. Fitch has also assigned a rating of 'BBB-(EXP)' to the proposed first USD20m tranche under the programme. ATLANTICLUX Lebensversicherung S.A. (ATL) acts as ultimate obligor in the programme, which is sponsored by ATL's parent company FWU AG. The Sukuk programme's rating is the same as ATL's Long-term Issuer Default Rating (IDR). Each tranche of the Salam III Sukuk programme will have its final payment date five years after its issuance. The first tranche of USD20m is currently planned to be issued in September 2013. Proceeds from the programme will be used to finance upfront acquisition costs of new business. The Sukuk programme has no material impact on ATL's credit fundamentals such as financial leverage or capitalisation.

European Central Bank published research about Islamic finance

European Central Bank, Occasional Paper No 146, June 2013

ABSTRACT

Islamic finance is based on ethical principles in line with Islamic religious law. Despite its low
share of the global financial market, Islamic fi nance has been one of this sector’s fastest growing
components over the last decades and has gained further momentum in the wake of the financial
crisis.

The paper examines the development of and possible prospects for Islamic finance, with a special
focus on Europe. It compares Islamic and conventional finance, particularly as concerns risks
associated with the operations of respective institutions, as well as corporate governance. The paper
also analyses empirical evidence comparing Islamic and conventional financial institutions with
regard to their: (i) efficiency and profitability; and (ii) stability and resilience. Finally, the paper
considers the conduct of monetary policy in an Islamic banking context. This is not uncomplicated
given the fact that interest rates – normally a cornerstone of monetary policy – are prohibited under
Islamic finance. Liquidity management issues are thus discussed here, with particular reference to
the euro area.

FAO and Germany call for more responsible investments in agriculture

José Graziano da Silva - Director-General of Food and Agriculture Organization - and Ilse Aigner - the German Minister of Food, Agriculture and Consumer Protection - have pointed out the importance of a significant increase in responsible investments in agriculture. Thus the issue of eradicating hunger and feeding a growing world population can be addressed. They further explained that investments in regions with severe rural poverty and hunger are still too low. Efforts should be concentrated on farmers because they play a key role in the rural environment.

Funds@Work: The Best of all Worlds – Towards a more Sustainable Financial System

Paper by Funds@Work regarding Islamic Finance vs. Sustainability from a network perspective insight; "Our aim was to show that we should never look at phenomena in an isolated manner. Islamic, ESG as well as conventional investors can greatly learn from each other by being more open. Islamic Finance should not be looked at from a religious perspective but rather from what it brings to the table from which ESG and conventional investors can profi t. Our fi nance and investment system globally will be more resilient if individual participants approach each other more openly and share ideas converging into a mainstream “sustainable fi nance system” which borrows the best of all worlds. From a network analytic perspective we should be aware that openness leads to greater innovation and stability and creates more opportunities to interact. In this context we need to address prejudices which stem from mere ignorance and act as barriers to cooperate. Because ultimately what the world needs is a greater integration of networks such as the Islamic Finance, ESG, and conventional investments communities to make their individual achievements accessible to a broader audience.

UPDATE 1-Kuveyt Turk aims to be Germany's first Islamic bank-CEO

Kuveyt Turk has made an application for a a German banking licence. According to its Chief Executive - Ufuk Uyan - it thus aims to become the first Islamic bank in Germany. The company is now waiting for a response from German financial watchdog BaFin. Kuveyt Turk's plans include opening a number of branches in Germany and probably in other European countries later. Moreover, it is decided upon an initial capital investment worth 45 million euros ($58 million) in the planned German unit.

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Islamic finance title from German translated to Chinese

Dear Reader,

The German language book on Islamic finance by the Editor of IslamicFinance.de and Dr Wackerbeck from Booz Consultants is now translated to Chinese.

Please find the biographical information below:

Authors: Michael Gassner / Philipp Wackerbeck
Title: Islamic Finance – Islam-gerechte Finanzanlagen und
Finanzierungen
ISBN number: 978-7-5139-0217-5
PUBLISHER: Beijing - Democracy and Construction Press
Pre-Publication Date: 2012.7

Full biographical details: http://db.lib.bua.edu.cn/asord/asorditem.php?asord_marc_no=0001344540

Orders: http://www.amazon.cn/%E4%BC%8A%E6%96%AF%E5%85%B0%E9%87%91%E8%9E%8D-%E7%B...

Book review about the German language original: http://www.rpi-virtuell.net/workspace/24686AD5-936C-476D-9EA0-65E2968590...

Best regards,

Michael Gassner

Can Islamic finance provide salvation for the banking sector?

Due to rapid growth and expansion of the Islamic financing sector, Germany is about to follow the example of some other European countries and launch an Islamic bank. Similar plans are discussed in Ireland as well. One of the reasons for the expansion is the growing demand for a more ethical financial system. However, the question remains whether Islamic finance can offer suitable solutions which reach beyond the Muslim world. Even though it is based on Muslim religious principles, it has some advantages like the lack of speculative activities and a possibility to create a more equitable financial system.

Islamic Banking Knocks Germany’s Doors

According to plan the Turkish investment fund Kuveyt Turk will open the first Islamic bank in Germany this October. They sustain the hopes to overcome the euro crisis and to profit from successful Islamic banking. In contrast with highly speculative financial management which caused the ongoing euro crisis, the Islamic bank shall offer only transactions backed by tangible assets.

Turkish Bank to Open First Sharia-Bank in Germany, FTD Reports

Financial Times Deutschland reports that Kuveyt Tuerk will open the first sharia compliant banking branch in Germany. The bank's headquarters will be in Frankfurt. Other branches are to be opened in other cities with a high density of Muslim inhabitants, according to FTD.

Discussion Paper Islamic finance in Germany

According to a Discussion Paper by the Stresemann foundation, which in turn is sponsored by
Daniel Pipes and his Middle East Forum, Islamic finance has so far been largely unsuccessful, it is claimed.

Further it is outlined that the comparison with other European countries should suggest that this is not due to the specific legal framework of the country but to other reasons: First, Muslim immigrants have lower than average incomes, because of lacking formal education and low labour participation rates of Muslim women . Thus, their investment potential for financial products is rather marginal and focused on real estate in Turkey. Second, the system of Shariah scholars causes some trouble due to insufficient economic knowledge and conflicting legal opinions opines the author.

Deutsche Bank: “Sukuk Premium Disappeared”

Additional costs for issuing an Islamic bond no longer have to be paid - the "sukuk premium" is gone. As a senior executive at Deutsche Bank explained, this will result in a hige increase in sukuk issuance. At the same time, tenors will become longer. Until last year, the reasons of common premium payment were that issuers catered to a smaller investor base. Also, in comparison with conventional bonds, investors were little familiar with sukuk structurs. This is now not the case any more since a heavy investor demand for sukuk this year can be observed.

UCITS tapped for Islamic funds distribution

Potential for marketing Islamic funds cross-border in the Asia-Pacific and Asean is starting to be seen through the UCITS (undertakings for collective investment in transferable securities) platform. Despite the fact that it has already been used in Europe, it's the first time that it's being used in this region.
On January 16 2012 Kuala Lumpur-based CIMB declared the launch of three Islamic UCITS funds designed for cross-border distribution in Asia.
These funds will be registered and allocated in seven jurisdictions including the UK, Switzerland, Germany, Saudi Arabia, Bahrain, the United Arab Emirates and Singapore.

German banking regulator BAFIN organised 2nd Conference on Islamic Finance

On 10 May 2012 BaFin will hold its second conference on Islamic financial services in Frankfurt. The agenda includes sharia-compliant capital market products and the opportunities and challenges they present.

The presenters at the conference will be leading international representatives of financial supervisory authorities, universities and market participants. The event features a mix of panels and will be held in English.

BaFin hosted its first conference on Islamic finance in autumn 2009 and received a very positive response.

As the number of participants is limited, please fill out the expression of interest form if you would like to attend the conference. We will inform you as soon as possible whether your registration was successful.

Agenda

Time: 10 May 2012 (10 am to 6 pm)

A. Welcome and First Overview

B. Panel I: Islamic Funds
Sharia-compliant Funds
Sharia-compliant Derivatives
Sharia-compliant Share Indices

C. Panel II: Sukuk and Securitization
Key Aspects of Sukuk
Key Aspects of Securitization

D. Panel III: Special Aspects of Islamic Finance
Market Potential of Islamic Finance
Aspects and Challenges of Taxation

Malaysian global asset manager establishes first-in-class fund platform in Ireland

Ireland has conducted its first Malaysian-managed fund platform. The Central Bank of Ireland has approved the establishment of CIMB-Principal Islamic Asset Management (Ireland) Public Limited: a joint venture between Kuala Lumpur headquartered CIMB Group and Principal Global Investors.
The newly created joint venture will uphold a range of international Islamic funds on the platform from its Dublin domicile. Three equity UCITS are being registered: Islamic Global Emerging Markets Fund; Islamic Asia-Pacific ex-Japan Fund, and Islamic ASEAN Equity Fund.
Once registered the funds will be spread in the UK, Switzerland, Germany, Saudi Arabia, UAE, Bahrain and Singapore.

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.

Dubai to increase Islamic finance products to Germany

In order for firms from the UAE to enter the largest economy in Europe, a mission was launched in partnership with the German Emirati Joint Council for Industry and Commerce (AHK).
Leading firms from the UAE's sector followed this mission with the purpose to connect the participants with potential opportunities in Germany and to show he high level of expertise in the area in Dubai.

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