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Archive for September 2008

Abu Dhabi Islamic Bank Postpones Personal Customer Installments During Ramadan

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Points of Essence:

  • Abu Dhabi Islamic Bank recently announced that it will defer installments for its Murabahah customers as a goodwill gesture to provide them relief in meeting their other liabilities during Ramadhan and Eid al Fitr festivals. A tradition observed since the last 10 years, it is not known whether the other UAE based banks will follow suit.

Abu Dhabi Islamic Bank (ADIB) has confirmed that it will postpone installments for Murabahah customers during the Holy Month of Ramadan, waiving its rights to profits generated through the purchase of a number of its banking services.

The move, which has been designed to help customers save money during a month that may prove one of the most costly this year for many, has been agreed as a goodwill gesture on behalf of the Bank as part of its ongoing Ramadan and Eid Al Fitr celebrations.

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Written by Suapi Shaffaii

September 28, 2008 at 4:24 pm

Islamic finance shows banks the way forward

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Points of Essence:

  • Being an industry based on principles of equity and financial justice, Islamic finance imposes strict principles which limit the use of derivatives and prohibit short-selling. Pure speculation and gambling are also forbidden besides require certainty and clarity in transaction agreements, thus we cannot sell something which we do not own. This had saved the IFIs in the aftermath of the financial disaster engulfing prominent US financial institutions.

By Nadeem Haq

THE spectacular collapse of Lehman’s, the problems at AIG and the takeover of HBoS by Lloyds TSB have led to central banks injecting liquidity into the markets and governments bailing out certain institutions, often at taxpayers’ expense.

The question is: are taxpayers and governments subsidising flawed institutions or indeed propping up an inherently flawed financial system which survives merely on the basis of confidence?

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Written by Suapi Shaffaii

September 26, 2008 at 10:46 pm

Islamic finance and banking will win

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Points of Essence:

  • The US financial turmoil has stimulated more interest for Islamic products in Europe as investors shifted for a  more conservative approach to financing, where the risks are shared with the investor, much like the private equity model and where the risk profile of IFIs is lower as the institutions do not use leverage.

Stoy Hayward says financial turmoil puts Islamic products in strong position.With the financial markets in the most volatile state since the 1930s, and the London Stock Exchange experiencing more highs and lows than a rollercoaster ride, increasing numbers of individuals and corporations will now invest in Islamic banking and Sharia compliant products than ever before, predicts accountants and financial advisers BDO Stoy Hayward.

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Written by Suapi Shaffaii

September 26, 2008 at 9:51 pm

Morocco develops Islamic financing

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Points of Essence:

  • Dismissing criticisms on a clampdown of Islamic financial services in Morocco, the Moroccan financial authorities have now upped the ante on developing a more conducive platform for Islamic finance in the country.
  • Currently, Morocco does not allow full fledged Islamic institutions and only conventional banks are permitted to offer Islamic financial services products, albeit, with a higher tax than conventional banking products. This will change soon.

Morocco financial authorities, criticised by powerful Islamist opposition for the slow start of Islamic banking, are determined to develop Islamic financial services, Morocco’s central bank chief on Thursday.

“We have begun the experience of Islamic finance. We are assessing the result and will build on that to expand further Islamic banking services,” Abdellatif Jouahri told a news conference. Last year, Morocco authorised segments of Islamic finance partly to lure investment inflows from Gulf Arab states on which on their fast-growing tourism and real estate sectors depend.

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Written by Suapi Shaffaii

September 26, 2008 at 8:16 pm

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Thailand to offer Islamic insurance and Islamic bonds

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Points of Essence:

  • Islamic Bank of Thailand appears to have geared itself to introducing comprehensive Islamic financial services products in the country. Started with a Shariah compliant banking services, now the Bank teamed up with Muang Thai Group to offer insurance services to Thailand’s Muslim population as well as planning to issue Islamic bonds to fund the Government’s infrastructure projects.

By Darana Chudasari

The Muang Thai Group has teamed up with the Islamic Bank to offer insurance services to Thailand’s over eight million Muslims.

Eight types of Muang Thai Takaful life insurance policies will be promoted by the group’s sales agents and through all 28 branches of the Islamic Bank.

According to Muang Thai Life Assurance president Sara Lamsam, the group also plans to launch Islamic non-life insurance products under Muang Thai Insurance.

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Written by Suapi Shaffaii

September 26, 2008 at 2:45 pm

Deutsche Bank to launch sharia hedge fund range

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Points of Essence:

  • Deutsche Bank AG is poised to launch an advisory unit on shariah compliant hedge funds which will offer techniques for existing hedge funds to adopt Islamic investment rules alongside their current investments.  This is following the launch of the similar platforms by Barclays Capital’s Al Safi and Newedge, the broker joint venture of Credit Agricole’s Calyon and Societe Generale.
Deutsche Bank's headquarters in Franfurt. (Getty Images)
BANK’S FORT: Deutsche Bank’s headquarters in Franfurt. (Getty Images)

By Cecilia Valente

Deutsche Bank AG’s prime brokerage business is preparing to launch a sharia-compliant hedge fund platform within the next month, as part of its Middle East expansion plans, a senior official said.

Deutsche Bank will expand an existing service on a selective basis, regional head for Middle East Structuring Geert Bossuyt told newswire Reuters, and the platform – or range of financial products – will offer techniques for hedge funds to adjust to Islamic investment rules.

“It is a bit like the case of the chicken and the egg, you will never have demand if there is no offer. So Deutsche Bank, and others, offer product,” he said.

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Written by Suapi Shaffaii

September 26, 2008 at 12:54 am

More Islamic finance firms in Kuwait than conventional ones

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Points of Essence:

  • The latest report data released by the Central Bank of Kuwait showed 3 significant developments:
  1. There are 48 Sharia-compliant finance companies and 45 conventional companies in Kuwait;
  2. The volume of assets managed by Islamic companies still much lesser than of conventional companies as it stood at $39.8 billion at the end of July 2008 compared to $29.7 billion held by the IFIs;
  3. There was a noticeable growth in assets of Islamic investment companies since January this year by 18.7 % compared to the 14 % growth rate registered by conventional companies during the same period.

Dubai, Sep 25 (IANS) There are more Islamic finance-compliant investment companies in Kuwait than conventional institutions, new figures have revealed.Analysis of data released by the Central Bank of Kuwait showed that there are 48 Sharia-compliant finance companies and 45 conventional companies in that Gulf city-state, the official Kuwait News Agency (KUNA) reported.

However, the volume of assets managed by Islamic companies still remained less than that run by conventional companies.

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Written by Suapi Shaffaii

September 25, 2008 at 11:51 pm