It has been reported that the Kingdom of Saudi Arabia are
nearing the issuance of their 2012 debut sukuk but whether the
sovereign Saudi Arabia is any nearer to issuing a debut sukuk in
early 2012 as market speculation suggests must remain a moot
point. The Kingdom has the potential to become the world leader
in sukuk issuance but the lack of government policy support;
regulatory inertia to facilitate origination; untried and
untested court procedure especially relating to sukuk default
and the rights of sukuk certificate holders over other
creditors; and the near absence of secondary trading of sukuk
despite the fact that the Saudi Stock Exchange (Tadawul) did
launch a trading platform in 2009, all conspire to hold back the
systemic and holistic development of a Saudi sukuk market.
It has been reported that a leader of the ruling Congress Party
of India has emphasized the need to introduce an interest-free
Islamic banking and financial system in the country in order to
improve the economic condition of its poor through microfinance
and mobilize funds required for the country's infrastructure
projects. "If we are able to make Islamic finance available it
would bring great benefits for our country and people," said M.
M. Hassan, who is also a former state minister of overseas
Indians' affairs.
It has been reported that the Students of the College of
Commerce and Economics at the Sultan Qaboos University (SQU) who
participated in the first Islamic economic forum. The two-day
forum, which was organised by Amjaad Development, brought
together international experts in Islamic finance to discuss the
best practices in the industry, and the way forward for Oman,
where Islamic banking and finance has recently been introduced.
Bangladesh Bank is going to introduce the Islamic money market
by this month to facilitate liquidity management of the Shariah-based
Islamic banks, a top official at the central bank said. The
decision was taken at a meeting with chief executive officers
and managing directors of seven Islamic banks held at the
central bank with Bangladesh Bank (BB) Executive Director SK Sur
Chowdhury in the chair.Besides, a member of Shariah boards from
each bank was also present at the meeting.
It has been reported that the Malaysian Prime Minister Najib
Razak unveiled fresh plans to liberalise the country’s financial
sector in a bid to develop it as an international Islamic hub.
"The financial system will have a key role in spurring new areas
of growth, and facilitating our economic transformation," he
said in remarks contained in a report by Bank Negara.
As new market participants enter the scene, Shariah banking
continues to grow despite the threat of a global recession. But
is the industry also progressing in terms of unity and
transparency? When bankers from East and West gathered in Manama
at the 18th Annual World Islamic Banking Conference in November
2011, one topic was prevalent at nearly all discussion rounds:
standardization. But while Islamic Finance is expanding to new
frontiers such as Uganda, France, Egypt, South Korea and Oman,
the objective to make Shariah-compliant financial products more
standardized appears more and more like a far-fetched daydream.
KUALA LUMPUR: Despite the global financial crisis, Islamic
banking and finance is expected to continue expanding next year,
with Malaysia-based players ready to lead the pack regionally
and internationally. The flaws in conventional finance have
created great interest in the Islamic financial model, and this
provides the basis for the industry to sustain a period of
strong growth for the rest of this decade.
TRIPOLI: Libyan central bank may finalise Islamic finance
regulations by March, in what would be the first major step
towards introducing sharia-compliant banking in the country. The
bank's deputy governor, Ali Mohammed Salem, also told Reuters in
an interview on Tuesday the exchange rate of the Libyan dinar
would be fixed for up to three years, pegged to the IMF's
special drawing right currency basket.
DHAKA: The Islamic money market began its journey from Thursday
aiming to facilitate liquidity management of the Shariah-based
Islamic banks and financial institutions, officials said
Wednesday. "We've already completed all preparations to start
the operation of Islamic Inter-bank Fund Market (IIFM) for the
first time in Bangladesh from Thursday, the last working day of
this month," a senior official of the Bangladesh Bank (BB) told
the FE. On December 21, the central bank took decision at a
meeting with the chief executive officers and the managing
directors of seven Islamic banks to introduce the Islamic money
market by the end of this month.
Even in retirement he remains the most popular politician to the
Muslim "man-and-woman-in-the-street". Now as an elder statesman,
Mahathir Mohamed, the former Malaysian prime minister, continues
to give advice whether on the global financial crisis, on the
future of the Islamic banking industry, on the Islamic gold
dinar, on the future of US dollar as an international trading
currency, and on his celebrated spat with arch speculator and
fund manager, George Soros, in the aftermath of the Asian
financial crisis in 1998. In an exclusive interview, Mahathir,
albeit a bit more frail now, was his usual outspoken self, and
he had a clear and present message for the Islamic banking
industry - learn from the mistakes of conventional banking if
the industry is to avoid the same fate. There definitely is a
future for Islamic finance. It would not be spectacular; it
would not be the cause of booms and busts.
At first glance there is no direct mention of the role of
Islamic banking and finance in the Kingdom's economy in the 2012
Saudi national budget announced last week in Riyadh. But reading
between the lines and judging by some of the initiatives
launched by various agencies, banks and corporates in the
Kingdom leading up to the budget announcement, it is clear that
the Islamic finance industry is expected to contribute its fair
share in crucial areas such as the financing of
small-and-medium-sized enterprises (SMEs) primarily to generate
employment especially for the youth; the provision of mortgage
or housing finance and housing development finance; funding
infrastructure and projects including through PFI (Public
Private Financing); and helping Saudi corporates to diversify
sources of funding away from bank finance to raising finance
through the capital markets, predominantly through sukuk
origination, which is expected to go viral in 2012 and beyond.
In these volatile times managing global political risks is a
major challenge for investors and financiers alike. As the
global economic and financial crisis and its impact on markets
the world over; the euro zone sovereign debt crisis; and the
fallout of the Arab Spring continue to fester, demand for
investment, political risk and sovereign risk insurance is
soaring as part of risk management and mitigation strategies. In
the MENA countries, demand for Shariah-compliant PRI has
increased significantly, according to various providers. A the
launch of the World Bank's Multilateral Investment Guarantee
Agency (MIGA's) 2011 World Investment and Political Risk report
in London last Thursday, Ravi Vish, director and chief economist
of MIGA, indeed confirmed that demand for political risk
insurance (PRI) has increased to unprecedented levels, with PRI
supply by members of the Berne Union remaining robust and
pricing reflecting a buyer's market.
The winds of change in Islamic finance are really blowing across
the southern tip of the African continent - South Africa to be
precise. At close of business on Dec. 21 the deadline for
financial institutions to submit proposals for advising the
South African government on the structuring and issuance of its
debut sovereign Sukuk will expire. Shortlisted bidders will be
informed by Jan. 20, 2012, which means that the global mandate
may take a few more months to be issued. Taking into
consideration the structuring of the issuance, the documentation
and the investor road shows, realistically, the South African
debut benchmark issuance may only see the light of day by the
middle of 2012. Unless of course the South African National
Treasury in Pretoria, fast tracks the process.
Doha, Qatar - 2nd January, 2012: Qatar Islamic Bank (QIB) - the
largest Islamic bank in Qatar and one of the leading Islamic
banks worldwide has today become the first bank in Qatar to
achieve the benchmark ISO 27001 Information Security Management
System certification for its alternative channels. ISO 27001 is
an internationally-recognised standard which sets out the
requirements for an information security management system
(ISMS). The certificate outlines the rules for implementing,
operating, and improving ISMS within the context of an
organization's overall business risks.
Governors of central banks and monetary authorities of the
Organization of Islamic Cooperation (OIC) member countries,
meeting at Sasana Kijang in Kuala Lumpur in November under the
aegis of the Statistical, Economic and Social Research and
Training Centre for Islamic Countries (SESTRIC) and hosted by
Bank Negara Malaysia (BNM), could be excused for being
pre-occupied with matters pertaining to the euro zone sovereign
debt crisis and its impact on member countries. The two keynote
addresses - one by Shaukat Aziz, former prime minister of
Pakistan, who spoke on 'Accelerating Financial Sector
Development for Economic Growth: Distilling Global Lessons for
OIC Member Countries" - and the other by Martin Redrado, former
governor of the central bank of Argentina, on “Central Banking
in the 21st Century: Implications of Economic and Financial
Globalization” are revealing.
The Kuala Lumpur-based International Shariah Research Academy
for Islamic Finance (ISRA), the Shariah research entity of Bank
Negara Malaysia, the central bank, has embarked on an ambitious
strategic plan for 2012 which focuses on strengthening its
global reach, further enhancing the quality of its activities
and increasing its connectivity with market players and industry
stakeholders. Since its establishment in 2008 with the vision of
becoming "the Premier Shariah Research Centre in Islamic
Finance", ISRA has lived in the shadows of its sister
organization INCEIF (the International Centre for Education in
Islamic Finance), the Islamic finance education arm of Bank
Negara Malaysia, which has assumed a much higher and aggressive
profile. ISRA even shares the same e-mail domain address as
INCEIF.
KFH Shariah Research Unit issued a Shariah report that compares
among Sukuk, shares, and bonds, where it highlights similarities
and differences from a Shariah perspective. It also explains
that dealing with those instruments has increased the demand for
them during the last period, which makes it pivotal to shed
light on differences in a simplified manner that shows common
investors the advantages of each instrument from a Shariah
perspective; especially that a large segment of investors are
interested in Islamic banking.
Manama, Bahrain - 12th December, 2011: The Bahrain Financial
Exchange (BFX), the first multi-asset exchange in the Middle
East and North Africa (MENA) region, is pleased to announce that
The Arab Banking Corporation (ABC), an international Universal
bank, has become a Trading Member of the BFX. ABC is a leader in
trade finance, treasury, project & structured finance,
syndications, corporate & institutional banking as well as
Islamic banking, hence the membership of the BFX will enable the
bank to maximise on its trading opportunities and utilise the
Exchange to manage risk and facilitate investments in a secure
environment with central counterparty clearing.
