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Archive for January 2009

BLME launches private banking business

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Points of Essence:

  • London based BLME has futher intensified its Islamic financial services business by setting up a fully Shariah compliant private banking business.  The new unit will serve  high net-worth individuals, entrepreneurs and their corporations in the UK, Europe and Middle East. Trade Arabia News Service has the report.

London: Tue, 27 Jan 2009

Bank of London and the Middle East (BLME), the UK Sharia’a compliant wholesale bank, has confirmed that it will be extending its wealth management division with the launch of a fully Sharia’a compliant private banking business.

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Written by Suapi Shaffaii

January 28, 2009 at 12:04 pm

Posted in General Issue

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Islamic bond issues seen dropping further

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Points of Essence:

  • Sukuk issuance is  facing a tough year ahead as the worst is not yet over with the weakening global economy and shattered confidence in the Islamic bonds throughout last year are still looming in the background. The proposed issuances by Japan, Indonesia and Thailand have been put on hold amid these uncertainties thus further painted a bleak future for the Sukuk industry. It’s still uncertain whether the recently launched Singaporean Sukuk will survive the rough tides.  The Financial Times has the report.

By John Burton in Singapore

The issuance of Islamic, or sukuk, bonds is expected to drop for a second consecutive year in 2009 because of the global credit crisis, dashing the hopes of the Islamic finance industry that problems in the western banking systems might benefit its products.

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Written by Suapi Shaffaii

January 23, 2009 at 12:34 pm

Posted in Islamic Capital Market

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Fast growing Malaysian firm grows a little more

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Points of Essence:

  • Malaysia based Azmi & Associates hires Idrus Ismail to expand its Islamic banking and finance practice. The former legal counsel will boost the firm’s profile amid intense competition from other legal firms in the region.

By Rashida Yosufzai

One of the region’s fastest growing law firms, Malaysia-based Azmi & Associates, has expanded its Islamic finance practice with a new appointment.

Idrus Ismail

The firm has recruited former in-house counsel as a senior lawyer for its Islamic Banking & Finance Practice Group as the booming practice area develops further in the region.

With over two decades of banking advisory experience, Ismail has held positions with various financial institutions including Malaysia’s second largest bank, CIMB Islamic Bank Bank Berhad.

The timely addition comes as competition for market share in the Islamic finance market heats up between Read the rest of this entry »

Written by Suapi Shaffaii

January 22, 2009 at 5:13 pm

KL seeks global standards on Islamic banking

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Points of Essence:

  • Malaysia advocates issuance of global standards for Islamic banking with a preliminary meeting to be held in Kuala Lumpur soon to discuss the initiative. The Star has the report.

DOHA (Qatar): Malaysia has proposed a meeting be held to set up global standards for Islamic banking and finance, Prime Minister Datuk Seri Abdullah Ahmad Badawi said.

Abdullah said he had discussed this with Qatar Prime Minister Sheikh Hamad Jassem Jabor Al-Thani during meetings yesterday and had proposed for the first meeting to be held in Kuala Lumpur.

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Written by Suapi Shaffaii

January 22, 2009 at 2:57 pm

Qatar Islamic Bank set for French move

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Points of Essence:

  • Qatar Islamic Bank will expand its wings to France with a licence in operating Islamic banking services is within sight. Together with another Gulf based lender, the banks will begin operation by end of 2009. Appropriate regulations are in tow to accomodate these new players in France. The Arabian Business has the report.

by: Stanley Carvalho

More Islamic banking services on the menu. (GETTY IMAGES)FRANCE: More Islamic banking services on the menu.

Qatar Islamic Bank and ‘another Gulf lender’ may be licensed to introduce Islamic banking services in France later this year, a member of a French banking delegation said on Wednesday.

“The regulations are ready and licences for at least these two banks are in an advanced stage. We expect the first Islamic bank to be set up before end of 2009,” said Gilles Saint Marc, a lawyer who was part of the delegation accompanying Christian Noyer, the head of the Bank of France, during a Gulf visit.
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Written by Suapi Shaffaii

January 22, 2009 at 11:41 am

Opportunities lurk in financial gloom

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Points of Essence:

  • Hong Kong sees every opportunity to come its way despite the worrying global financial meltdown. It sets to boost its financial hub status by going aggresively to woo Islamic finance players to the island city. Providing appropriate tax incentives to bolster growth of the newest industry, other institutional and regulatory framework will certainly guide Hong Kong to reach out to a larger Islamic financial community. The address of Hong Kong’s Chief Executive says it all.

Chief Executive Donald Tsang

Donald Tsang The Asian Financial Forum was launched in 2007, partly to celebrate the 10th anniversary of Hong Kong’s reunification with the Mainland of China, and partly to address the challenges of a rapidly changing economic environment in Asia. At that time the sub-prime lending problem in the US was beginning to take hold, but no one could have predicted how deeply rooted the problem was or how quickly things would unravel in what some people like to describe as a “flat” world.

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Written by Suapi Shaffaii

January 21, 2009 at 4:33 pm

Groups to assess the performance of Islamic financial system

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Points of Essence:

  • A Task Force has been set up in Kuala Lumpur to study the performance of the global Islamic financial system. The initiative moved by the Islamic Development Bank and driven by the Central Bank of Malaysia, the task force will deliver a report by September for proposals to enhance the resilience of the Islamic financial system. The Star has the report.

KUALA LUMPUR: The Task Force for Islamic Finance & Global Financial Stability has set up three working groups to assess the performance of the Islamic financial system amid the current financial crisis.

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Written by Suapi Shaffaii

January 21, 2009 at 2:35 pm

Posted in General Issue

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Debate over commodity murabahah

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Points of Essence:

  • It is not always rosy for Islamic financial products which  often become subjects of differing views from Islamic scholars on their Shariah compliance. The newest product adopting the concept of commodity murabahah is of no exception. Initially introduced as a money market instrument, it has expanded to other spectrum of financial products. The trade elements tied to the product structure with pre-determined profit rate completing the backbone, commodity murabahah is generally accepted, albeit with caution.
  • Even with one edict banning it claiming its similarity with with interest bearing elements and the other to condition it upon the numbers of contracting parties, this looks like the best bet we have so far as conceptual wise, it is globally accepted. Thus, until we find a better alternative, this product is here to stay. The Star has the report.

Some Islamic scholars think commodity murabahah should be avoided as much as possible, saying it closely resembles an interest-bearing transaction. Is there a better alternative financing structure?

THE concept of commodity murabahah (or tawarruq in some jurisdictions) has only recently been widely applied in Islamic finance, along with other syariah contracts such as mudarabah, musharaka and bai murabahah.

The application of this trade-related structure with a pre-determined profit rate (or pre-agreed “margin” or “mark-up”) is possible in syariah-compliant financing and deposit products as well as in liquidity management/treasury instruments and other investment products/securities.

However, resistance still exists on the ground from some critics who say that commodity murabahah-based financial products bear a striking resemblance to interest-based products.

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Written by Suapi Shaffaii

January 21, 2009 at 12:27 pm

Singapore launches first Islamic bond programme

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Points of Essence:

  • Singapore issues its first sovereign Al Ijarah Sukuk worth $134m to attract petro dollar investment to the city state. It remains to be seen whether this new issuance will jolt up the Islamic bond issuance in 2009 as the market is still reeling from the aftershock of AAOFI’s non-compliance assertion. The global economy slowdown does not help much either. Guardian has the report.

By Saeed Azhar

SINGAPORE, Jan 19 (Reuters) – Singapore launched its first islamic bond programme, worth a total of S$200 million ($134 million), to promote Islamic finance in Southeast Asia’s financial capital.

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Written by Suapi Shaffaii

January 21, 2009 at 11:04 am

Posted in General Issue

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Saudi Arabia: Alinma Bank set for launch in 2nd quarter

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Points of Essence:

  • Saudi Arabia is ready to launch its biggest bank, Alinma Bank at the end of the 2Q of 2009. Once in operation, the Shariah compliant bank will serve the entire Kingdom and leverage on the latest banking technology to reach out to its customers. Zawya.com has the report.

RIYADH: Final preparations are being made by Alinma Bank for its launch by the end of the second quarter of 2009, Abdulaziz Al-Zamil, chairman of the board of directors of the bank told newsmen here yesterday .

“At launch, the bank will operate branches in Riyadh, Jeddah, Dammam, Jubail, Hofuf, Madinah, Taif and Khamis Mushayt. Branch distribution is expected to continue through 2009 and into the early part of 2010 with location opening in cities such as Makkah, Alkhobar, Unaizah, Buraidah, Hail, Hafr Al-Batin, Arrar, Tabuk, Al-Mubarraz, Kharj and Al-Najran,” Al-Zamil said at a press conference held at the bank’s headquarters here yesterday.

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Written by Suapi Shaffaii

January 13, 2009 at 11:00 pm

Islamic Finance Looking Attractive in Korea

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Points of Essence:

  • A rather late starter, Seoul has finally found interest in Islamic finance. The hosting of  an Islamic finance event in the country was an opening chapter to a larger activity of Islamic finance.

By Yoon Ja-young
Staff Reporter

Islamic finance could be a new alternative in overcoming the global financial crisis, a top financial regulator said indicated as the country is now making efforts to attract funds from oil-rich Islamic countries.

Kim Jong-chang FSS Governor

”Reckless distribution of complicated derivative products throughout the global market, detached from the real economy, put the global financial market into crisis,” said Financial Supervisory Service (FSS) Governor Kim Jong-chang at a seminar on Islamic finance held in downtown Seoul, Tuesday.

The annual seminar, held in Japan and Hong Kong in the last two years, is now under way in Seoul, jointly hosted by the Islamic Financial Services Board (IFSB), the Financial Services Commission (FSC) and the FSS.

Kim said Islamic finance, which allows only real financial transactions, could be the answer to the trouble caused by complicated and intangible derivative products.

The hosting of the seminar in Seoul reflects the country’s growing interest in attracting the abundant liquidity of the Islamic world and participating in the expanding market.

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Written by Suapi Shaffaii

January 13, 2009 at 9:56 pm

Posted in General Issue

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Malaysia needs to extend Islamic finance leadership

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Points of Essence:

  • In view of the stiff competition and growing interest in Islamic finance worldwide, Malaysia needs to reassess its talent scouting and retaining policy. Otherwise, it will lose out to other competitive markets. Bernama has the report.

Kuala Lumpur: Malaysia needs to rethink existing paradigm to solidify its leadership in the Islamic finance industry as more countries are jumping into the bandwagon.

“The race is on (in the Islamic finance sector). There is stiff competition from other financial centres,” Bank Negara Malaysia’s assistant governor Datuk Muhammad Ibrahim said Monday.

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Written by Suapi Shaffaii

January 13, 2009 at 4:34 pm

Posted in General Issue

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Islamic bank launched in Bahrain

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Points of Essence:

  • Bahrain has recently welcome the newly launched Capinnova Investment Bank, the Shariah compliant investment arm of BBK. Focusing to serve the GCC and MENA markets, the bank which core areas of business include private equity, asset management and corporate finance, will provide Shariah compliant investment products and services. This will strengthen Bahrain’s position as one of the main global drivers of Islamic finance.

By ARTHUR MACDONALD

MANAMA: Bahrain-based BBK has announced the launch of Capinnova Investment Bank, its new Sharia-compliant investment banking arm. A wholesale Islamic investment bank, Capinnova is licensed by the Central Bank of Bahrain and capitalised at $500 million with a fully paid-up capital of $125m.

“The growth of Islamic banking industry in particular has been remarkable in recent years and it is expected to reach $4 trillion in the next five years according to a recent Standard and Poor’s rating agency report,” said BBK chief executive officer and Capinnova Investment Bank chairman A Karim Bucheery, at the launch of the bank at the Ritz-Carlton Bahrain Hotel and Spa yesterday.

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Written by Suapi Shaffaii

January 13, 2009 at 4:11 pm

Significant Events on Islamic Finance in Malaysia

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Points of Essence:

  • Harbajan Singh of the Malaysian Reserve outlines significant events affecting Islamic finance in Malaysia. Among others, a Malaysian High Court judgement on BBA and the AAOIFI ruling on Sukuk compliance. Both had sent the market players back to their drawing board to re-assessing the compliance issues. Despite the gloomy global economic outlook, Malaysia continued to attract foreign players chose to set up their Islamic units there. 3 new global and regional Islamic units had been allowed to operate in Malaysia. The establishment of International Sharia Research Academy for Islamic Finance had set a milestone in conducting leading researches on Shariah issues in Islamic finance.

Sukuk pronouncement, BBA judgement grab headlines in ’08


By Habhajan Singh
Two pronouncements – one a judgement by the Malaysian High Court and another a view expressed by a renowed international Shariah scholar – grabbed the headlines in the world of Islamic finance in 2008. These two milestones were selected by The Malaysian Reserve as the most significant events for the Islamic finance sector last year following feedback from industry players and the Islamic finance teaching fraternity.

In February, Sheikh Muhammad Taqi Usmani created a storm in the industry when he remarked that a good number of Islamic bonds, or sukuk, were not Shariah-compliant; while High Court judge Justice Datuk Abdul Wahab Patail, in a written judgment dated July 16, ruled that the application of the Al-Bai Bithaman Ajil (BBA) contracts in the Arab-Malaysian Finance Bhd vs Taman Ihsan Jaya cases were contrary to the Islamic Banking Act 1983 (IBA).

The ruling, which took local Islamic bankers by surprise, was first reported by Read the rest of this entry »

Written by Suapi Shaffaii

January 13, 2009 at 3:44 pm

Islamic Banking in 2009, industry at a crossroads

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Points of Essence:

  • Islamic finance is facing a crisis of its own. The global financial downturn may have dragged down the industry to some extent but the most challenging thing is how to package Islamic financial products in accordance to the true Islamic values. The conventional product adaptation may have to take a back seat to spur innovation in Islamic finance for the Islamic financial industry’s survival.  Ameinfo has the report.

The drop in the issuance of Sukuk proved that Islamic banks could not escape from the financial crisis. The industry might therefore have to go back to its roots in 2009.

Islamic banks may have to adopt a 'back to basics' approach in 2009

Islamic banks may have to adopt a 'back to basics' approach in 2009

Noor Investment’s press conference on the sixth of January was set up to announce the creation of Noor Takaful, the latest Islamic insurance firm.

But in fact, Noor had to two messages, with the second no less important than the first: Noor Islamic Bank (NIB) will put its planned expansion abroad on hold in order to focus more on domestic affairs.

NIB was created almost a year ago, and it was announced at the same place, in the 27th floor ballroom of the Burj Al Arab.

But twelve months ago the future was looking much brighter. Stock indices were advancing on all fronts in the GCC. Conventional banking got into trouble step by step, but Islamic Finance did not follow.

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Written by Suapi Shaffaii

January 13, 2009 at 11:15 am

Deutsche Bank launches new Shari’ah platform

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Points of Essence:

  • Deutsche Bank introduced Al Mi’yar as a Shariah compliant investment platform for investors to invest in a different class of assets. Guaranteeing maximized returns and protection to investors, the investment received a nod from AAIOFI for its global compliance. The Arabian Business has the report.

by: Rebecca Bundhun

Deutsche Bank launches a new platform to facilitate the issuance of Shari'ah compliant securities. (Getty Images)

SHARI'AH INVESTMENT: Deutsche Bank launches a new platform to facilitate the issuance of Shari'ah compliant securities.

Sunday, 11 January 2009

Deutsche Bank on Sunday announced the launch of a new platform, said to be the first of its kind, aimed at facilitating the issuance of Shari’ah compliant securities.

The Al Mi’yar platforms, which means “the standard” in Arabic, allows Islamic investors exposure to different asset classes without compromising their Islamic beliefs, the bank said.

“By comparison to other Islamic platforms, Al-Mi’yar maximises efficiency and protection of investors’ interests, while generating liquidity and returns,” Deutsche Bank said in a statement.

The platform has been developed by Deutsche Bank, with Luxembourg Read the rest of this entry »

Written by Suapi Shaffaii

January 12, 2009 at 8:18 pm