Islam allows organised tawarruq asset sales – scholar
Points of Essence
- Organized tawarruq is sought to be used as a financing and liquidity management tool despite differing views fromIslamic scholar due to its role in debt creation rather than real economic activity. It is suggested that there has to be a balance between the two necessities to leverage on this potential Shariah principle in this thriving Islamic financial industry. Under the same development, Malaysian stock exchange plans to launch tawarruq based platform to execute commodity murabaha transactions. The Arabian Business has the details.
Liau Y-Sing on Thursday, 04 June 2009
The Islamic financing structure of organised tawarruq should be allowed, a top Malaysian religious scholar said on Thursday, weighing in on an issue that has divided the $1 trillion industry.
Tawarruq is widely used as a financing and liquidity management tool but sharia jurists differ on its permissibility.
Most scholars sanction its use although some prominent jurists from the Hanbali school of thought have said it is legal trickery similar to another controversial contract which has been likened to interest-based financing.
Islamic Banking System Must Become Strong Financial Model, Says Don
Points of Essence:
- Islamic finance should find its own niche model by not emulating the conventional banking concept. This will gain the trust which has apparently been shattered by the conventional financial system meltdown. The time has come for the Islamic financial system to dictate the international financial landscape. But it must unleash its full potential to win the confidence of the financial community. Bernama has the report.
KUALA LUMPUR, April 10 (Bernama) — The Islamic banking system must emerge as a strong financial model that need not rely on conventional banking, says University of New Orleans director Prof Dr M. Kabir Hassan.
He said many of the Islamic banks in the world did not understand thoroughly the Islamic banking concept.
“To make it a financial system supported by all communities, the authorities or bank managements must find the sources and new alternatives.
Read the rest of this entry »
Three-Tier Banking Needed To Strengthen Islamic Banking
Points of Essence:
- Islamic banking is urged to operate on a three tier system. First tier is to mirror the operation of conventional bank as a deposit taking institution. The second tier is to leverage on the Mudharabah mode company where banks will act as fund providers. The third tier will be to act as a partner in Musyarakah type of transactions. The appropriate regulations will be modeled to accommodate the three tiers rather than one regulation fits all as of the conventional system. Bernama has the report.
KUALA LUMPUR, April 6 (Bernama) — A three-tier banking system is needed in Islamic banking to further strengthen the industry, an economist suggested.
Read the rest of this entry »
Malaysian court rules divisive Islamic contract valid
Points of Essence:
- The Malaysian court of appeal has finally delivered a verdict which is in favor of Bai Bithaman Ajil. The controversy surrounding this Islamic home product in the global Islamic banking arena is well known which is further exacerbated by lower court rulings holding the product contractual document invalid. However, the latest ruling by the second highest court in the court upholding the validity of the product’s contract will be at least for now set a clear direction for Islamic finance in the country. Reuters has the report.
KUALA LUMPUR, April 1 (Reuters) – A Malaysian court has ruled that a popular but controversial Islamic finance contract is valid, a move expected to boost sharia banks in Southeast Asia’s most developed Islamic financial market.
The bai bithaman ajil or deferred payment sale contract is the mainstay of Malaysia’s Islamic finance industry and is commonly used in home loans. But some religious scholars, especially in the Gulf, say it is an interest-based loan cloaked in Islamic dress.
No frills airline AirAsia turn to Islamic finance for aircraft financing
Points of Essence:
- Unperturbed by the prevailing credit crunch, Air Asia, the largest Asia’s low cost airline continues with its expansion plans. It found support in the Islamic finance as it sought US$336mil (RM1.21bil) in the form of syariah-compliant French Single Investor Ijarah facility to fund the purchase of 8 new aircraft. The Ijarah facility features RHB Islamic Bank Bhd and Bank Rakyat as two of the arrangers. The French based BNP Paribas and Natixis Transport Finance are the lead arrangers. The first of its kind deal, the Islamic French-Malaysian transaction marks the venture of Malaysian financial institutions in the business of aircraft financing which may further stimulate the promotion of Malaysia as the hub of Islamic financing. The Star has the story.
By CECILIA KOK
JUST when it seems almost impossible for airlines to obtain financing to buy aircraft these days, given the prevailing credit crunch, AirAsia Bhd has once again defied market trend.
The budget airline has announced some major financing deals that it has secured for the 2009 and 2010 deliveries of its aircraft order since late last year. These include the US$336mil (RM1.21bil) syariah-compliant French Single Investor Ijarah facility, whose lead arrangers are BNP Paribas and Natixis Transport Finance, for the purchase of up to eight new aircraft; and a deal with Barclays Capital – the investment banking division of UK-based Barclays plc – to finance the purchase of 15 new planes worth US$700mil (RM2.5bil) for delivery up to early next year.
New areas needed to boost portfolio
Points of Essence:
- The Islamic financial industry is urged to venture out for new areas of business to sustain growth in the current challenging economic climate . Islamic banks should try out foreign currency business deals via licensed ICBU vehicles as well as delve into the property development and car businesses. The Star Biz has the report.
By ELAINE ANG
KUALA LUMPUR: The Islamic finance industry must look for new areas of business to develop its current portfolio and help grow earnings in the current challenging economic environment, says the Association of Islamic Banking Institutions Malaysia (AIBIM).
Executive director Mohamed Rithuan Mohamed Shamsudin (pic) sees several areas of business that Islamic finance players can look at developing to grow their portfolio.
Malaysia: Islamic Banking Should Be Most Important Agenda For Government
Points of Essence:
- The Government is urged to tap Islamic banking as an energy capacity tool in future. With the current pool of the talents in the area, the agenda will be seamlessly carried out. But it is cautioned against the advances of other countries in promoting Islamic finance which may overshadow the Government’s existing accomplishments. Bernama has the report.
KUALA LUMPUR, March 27 (Bernama) — The government is urged to make Islamic banking as one of the most important agendas in efforts to build energy capacity in future.
The representative from the Pahang Umno Liaison Body, Amiruddin Mohd Said, who made the proposal when tabling the motion on economy at the Umno general assembly 2008, here today, said Malaysia had the expertise needed to realise the agenda.
Read the rest of this entry »
UBS appoints Dr. Armen V. Papazian as Head of Islamic Finance
Points of Essence:
- UBS announced new head for its Islamic banking unit to confirm the firm commitment as the leading Islamic financial services provider. Dr. Armen V. Papazian was previously with Dubai based DIFX. Ame Info has the report.
UBS today announces that it has appointed Dr. Armen V. Papazian as Head of Islamic Finance based in the firm’s DIFC branch in the UAE.
Dr. Armen V. Papazian.
This latest hire further reflects UBS’s long-term commitment to Islamic Finance and reiterates the bank’s ambitions to become one of the region’s leading financial services providers.
During his most recent position at the DIFX (Nasdaq Dubai), Dr. Papazian led the market development efforts of the exchange, as Senior Vice President for Innovation and Development, where he successfully launched the region’s first structured products platform with both Islamic and conventional product offerings.
Furthermore, he has overseen the listings of Sukuk and the continuous growth of Islamic initiatives at the exchange. He has made innovative contributions to the Islamic Finance field, and has a deep knowledge of regional markets and economies. Dr. Papazian earned his Ph.D. at the University of Cambridge, UK, specializing in Financial Economics.
Source: www.ameinfo.com
Malaysian bourse to launch Islamic platform in June
Points of Essence:
- Malaysia’s stock exchange created the Commodity Murabaha House system to facilitate commodity murabaha transactions by Islamic institutions. With a market worth more than $100b, the platform looks set to accommodate the structure of financing which reflects real economic activities. This is amid the reservations from scholarly institutions on its validity. The Financial24 has the report.
Posted by:mark
Malaysia’s stock exchange will launch in June a platform to allow banks to execute a popular but controversial Islamic contract with a market worth more than $100 billion.
Bursa Malaysia’s Commodity Murabaha House system will enable Islamic institutions to carry out commodity murabaha transactions which are commonly used to structure sharia bonds, financing and derivatives, said Norfadelizan Abdul Rahman, Bursas head of product development for Islamic capital market.
StanChart Saadiq ‘Best International Islamic Bank 2009′
Points of Essence:
- The Islamic financial outfit of Standard Chartered Bank, Saadiq has been named by Euromoney the best international Islamic Bank for 2009 for the significant Islamic financial deals it concluded last year. Saadiq has won numerous awards for its deals since its inception in 2007. The Edge Daily has the report.
Written by Financial Daily
KUALA LUMPUR: Standard Chartered Saadiq has been named “Best International Islamic Bank” for 2009 by Euromoney after concluding a number of significant deals throughout last year, including the first Sovereign Deal for the Government of Pakistan and a Project Finance Deal for Al Ma’aden Phosphate Company.
“The bank delivers syariah-compliant financial products and solutions seamlessly across our geographic footprint.
Qatar to prop up its banking system
Points of Essence:
- Qatari Government is on the offensive to boost a stalling financial system in the country to avert impact from the global financial crisis. The investment fund bail-out from 7 local banks has been in the pipe line to spur liquidity in the banking system and ensure solvency of the lender institutions. The International Herald Tribune has the report.
DUBAI: Qatari shares soared Monday after the government said it would buy investment funds from banks to help shield the financial system from the global credit crisis.
“Such procedures reflect the due concern of the government in the banking sector,” the government said.
Prime Minister Hamad bin Jasim bin Jaber of Qatar announced Monday that the government would buy investment funds owned by seven local banks to protect lenders after the benchmark stock index dropped 31 percent this year, ranking it among the world’s 10 worst performers with Iceland, Ukraine and Romania.
Norton Rose announces three new partners to relocate to Middle East
Points of Essence:
- Norton Rose is ready to enhance its Islamic finance legal practice in the Middle East by placing three of its key Islamic finance partners in the Dubai and Abu Dhabi offices. Ameinfo has the report.
International legal practice Norton Rose (Middle East) LLP announced that three London-based partners will move to join the Middle East offices.
Global Head of Islamic Finance, Neil D Miller will join the Dubai office and corporate finance partner, Alan Bainbridge and asset finance partner, Emma Giddings, will both move to the office in Abu Dhabi.
Britain’s First Islamic Motor Insurance
Points of Essence:
- Newest player Salam Halaal is a pioneer Islamic motor insurance company in Britain. Riding on the takaful concept, the customers may now enjoy protection to their vehicles and at the same time discounts on their next premium payments. All devoid of unethical elements as under the conventional insurance. Islamonlinenet has the report.
CAIRO – A London-based Islamic insurance firm has hit UK roads with a Shari’ah-compliant car insurance product that immediately attracted Muslim and non-Muslims for its ethical nature.
Bahrain Islamic Bank is named best in region
Points of Essence:
- Bahrain Islamic Bank won an award for the best Islamic institutional finance bank in the Gulf region from World Finance magazine. The award is for the bank’s overall performance and excellent reputation among its peers. The Gulf Daily News has the report.
MANAMA: Bahrain Islamic Bank (BisB) has been named the “Best Islamic Institutional Finance Bank in the Gulf region”, by World Finance magazine.
SBP issues ‘Guidelines on Islamic Financing for Agriculture’
Points of Essence:
- State Bank of Pakistan issues the first of its kind Guidelines on Islamic financing for agrigulture. The Guidelines will assist banks to devise shariah compliant products to cater to the agricultural needs. Riding on the most acceptable concepts of Islamic financing, the Guidelines will make it possible for Islamic finance to penetrate into the potential demand of the agriculture sector in Pakistan. Pakistan’s Online News has the report.
KARACHI: The State Bank of Pakistan today issued “Guidelines on Islamic Financing for Agriculture” to help banks develop specific Shariah compliant products in order to meet the financing needs of the farming community. These Guidelines have been developed in consultation with stakeholders while keeping in view the potential and demand for Islamic banking products in the field of agriculture.
