Singapore's Islamic finance draws interest anew

SINGAPORE is well-placed to ride a new wave of interest in Islamic finance by global investors who have been badly burnt by the Western financial system. Middle Eastern Islamic finance expert Hari Bhambra said top-notch wealth management infrastructure here can be used to tap into the fast-growing industry.

Since about 2005, Singapore has stepped up efforts to develop an Islamic finance industry by drawing on its existing strengths in wealth management, trade financing and capital markets.

Ms Hari, 34, a senior partner at Dubai- based consultancy Praesidium, believes Islamic finance is set to gain momentum as investors look for safer investments and liquidity in the Middle East - the global Islamic finance centre.

Speaking at a lecture at the National University of Singapore (NUS) co-organised by the NUS Business School's Saw Centre for Financial Studies and the Securities & Investment Institute, Ms Hari predicted that the financial and economic crisis would accelerate plans by financial institutions to introduce Islamic finance products.

Crescent halal chicken lands on Wal-Mart shelves

Wal-Mart recently completed a deal with Crescent Foods, a Chicago-based Halal chicken producer, to supply products to the world's largest retail chain. Five Wal-Mart stores in the Michigan-area now stock a range of eight different Crescent chicken products, as the first deliveries were completed in November to stores in Dearborn, Sterling Heights, Rochester Hills, Chesterfield and Shelby Township.

Negotiations began in September 2008, when one of Wal-Mart's buyers approached Crescent's distributor in Colorado.

CEO Ahmad Adam talked about the importance of quality in his products. "We realized from the beginning that to succeed as a world class Halal chicken producer, we would have to meet, and even surpass, the highest standards of the mainstream food industry," said Adam. "This has always been part of our vision. Our latest round of upgrades and improvements meant that we were already in line with what was expected of us from Wal-Mart."

Crescent products currently carried at Wal-Mart include whole chicken (bagged), boneless skinless breast fillets, leg quarters, thighs, boneless skinless thighs, drumsticks and wings. The number of products and outlets could increase in the future if all goes well.

UK takes first steps towards Islamic finance rules

The UK government has launched a consultation on Islamic finance. The government hopes the joint Treasury-Financial Services Authority consultation on proposals for a legal framework for the regulation of alternative finance investment bonds, including sukuk, will support the growth of Islamic finance in the UK and to increase its position as a leading global centre in this market.

As well as the consultation, the government also published a paper, "The development of Islamic finance in the UK". The idea is to raise awareness of the growing role of Islamic finance in the UK by providing a stock take of achievements to date and examining the remaining barriers to growth.

The consultation on the regulation of alternative finance investment bonds (sukuk or Islamic bond) sets out the proposed legislative framework for the regulatory treatment of these vehicles. AFIBs refers to sukuk as well as any financial instrument with similar characteristics.

Japan moves carefully toward Islamic finance

The Japanese government has taken a small but important step toward introducing Islamic finance here amid the global financial crisis triggered by unsustainable subprime loans in the United States.

Earlier this month, the Financial Services Agency (FSA) amended financial regulations to let bank subsidiaries handle Islamic finance operations.

The Islamic finance market has become increasingly attractive for Japanese, having already grown to about $1 trillion with a potential to reach an estimated $4 trillion.

Obviously, "oil money" has been undermined by the global financial crisis. Yet the latest push forward by the FSA strongly suggests that Japan has a growing interest in Islamic finance as a competitive way to attract huge amounts of petro-funds.

Halal Investing: First Shari'ah-compliant ETF on the Way

Javelin Investment Management, a newly formed exchange-traded funds company, has filed with the Securities and Exchange Commission for the first U.S. ETF to be based on an Islamic index.

The JETS (Javelin Exchange Traded Shares) Dow Jones Islamic Market International Index Fund is the latest example of an ETF manager hoping to find success in the crowded ETF market with a first-of-its-kind portfolio.

Copycats are out, and niche strategies are in, as more managers enter the ETF space. Global X Funds has plans to launch a series of country ETFs that face no direct competition, while Northern Trust's NETS ETF family has launched a series of funds this year targeting previously untouched asset classes by U.S. ETF sponsors.

It is a fine line, though, between steering clear of the asset classes dominated by the big ETF companies, and creating portfolios so niche in nature that asset growth is a long haul.

What the JETS Dow Jones Islamic Market International Index Fund has going for it is not just the first-mover advantage with an Islamic ETF, but the overall size of the Islamic investment market. Various industry estimates put the size of Islamic investment at $700 billion currently, and project that the market is on its way to $1 trillion by 2010. It should be noted though that these estimates include a wide definition of "investment," which goes well beyond mutual funds.

UK Government working on sovereign Sukuk consultation paper

The British government is working on a consultation paper which examines the possibility of a sovereign Sukuk, which has been the subject of quite some speculation for well over a year.

The document sets out the proposed legislative framework for the regulatory treatment of what it describes as 'Alternative Finance Investment Bonds' or AFIBs. AFIBs, according to a press release on the HM Treasury website, refer to a type of financial instrument commonly known as Sukuk or Islamic bond, but can also refer to any financial instrument with similar characteristics.

The new consultation paper considers the regulatory policy options for Sukuk and is a joint consultation between HM Treasury and the Financial Services Authority (FSA). Sukuk, says Treasury and FSA, are one of the most prominent instruments used in Islamic finance. Since 2003, there have been several initiatives by the UK authorities (meaning the FSA and Treasury) to create what it frequently calls a 'level playing field' for Islamic finance. For example, the government has introduced, and has proposals to further introduce, various tax changes with respect to AFIBs, although it doesn't specify in the press release what they are.

Halal Tourism — is gaining ground in the region.

Attracting visitors and participants to the exhibitions is big business these days as the demand for Halal products is on the rise.

Halal Islamic Shariah-compliant products and services, with an estimated 1.8 billion world consumers, generating as much as $2.1 trillion annually, is gaining more popularity not only among Muslims but also among non-Muslims, regardless of their ethnic, religious and cultural backgrounds, according to industry experts who spoke to Khaleej Times.

Introducing a new concept of 'Halal Tourism', the Al Jawhara Hospitality Group (JHG) based in Dubai, brought on show the 'Pure Rooms' event, the first of its kind in the Middle East that strictly adheres to Islamic hospitality.

Hani Lashin, JHG general manager said the group was following international standards though offering totally Halal services. "No liquor is allowed within our apartments and hotels," Lashin said adding that the entire foodstuff presented is Halal and contains no pork or unlawfully slaughtered animals.

Observing that some 60 to 70 per cent of the group's customers are non-Muslims, Lashin said the company follows a strict dress code and does not tolerate allow for men and women to mingle or mix in public places, offering separate cafeterias, restaurants and swimming pools.

Malaysia Has Big Potential To Be Global Halal Product Manufacturer

Malaysia has big potential to be halal product manufacturer following the global recognition, especially from Islamic countries, International Trade and Industry Minister Tan Sri Muhyiddin Yassin said on Saturday.

He said the world has recognised Malaysia as an exemplary Islamic country and the country has the opportunity to market food and non-food products with confidence.

He was speaking to reporters after attending a marriage ceremony at the residence of former Kuala Perlis state assemblyman Bakar Saad at Kuala Perlis here.

Muhyiddin said Malaysia could also offer halal products in the services field such as banking.

"We hope our halal products can penetrate the global market and the confidence of societies worldwide in internationally certified halal standards will facilitate this," he said.

Muhyiddin said the government will always help small and medium scale entrepreneurs to market their halal products, including providing guidance and financial support.

"However, entrepreneurs should not depend completely on the government but also strive hard on their own, including finding new markets," he said.

Pak-Qatar Takaful & Almeezan Investments sign Takaful Agreement!

Pak-Qatar Family Takaful Ltd and Al Meezan Investments have signed an agreement that will provide all investors of Al Meezan Investments' Mahana Kharch Account (MMKA) with Shari'ah-Compliant Free Takaful Coverage of up to 1 million rupees. The agreement was signed by P. Ahmed CEO Pak-Qatar Family Takaful and Muhammad Shoaib CFA Chief Executive Al Meezan Investments in Karachi today.

According to this agreement, individual investors of MMKA would be entitled to get Takaful cover in case of natural death, accidental death, permanent total disability and medical expense in case of accidents.  This Takaful cover will be offered at absolutely no additional charge to the Al Meezan investors.

Muhammad Shoaib CFA said that Al Meezan Investments has always focused on coming up with Halal Riba-free and innovative investment options for its investors and this Takaful cover arrangement with PQFTL is a sign of our continuous efforts.

Islamic banks need experts

PARIS: As the world financial industry sheds jobs by the tens of thousands, the $1 trillion Islamic banking sector has a growing load of work for Shariah scholars but few candidates coming forward to do it.

Experts steeped in the Muslim scriptures are critical to Islamic finance, which requires a religious stamp of approval before a bond, mortgage contract or other financial product can be marketed as moral according to the standards of the Holy Quran.

But qualifying for this work takes much more time and effort than other jobs in finance require. Candidates must first study Islamic law or sharia for many years, and then master finance.

"Globally, and especially in Europe and America, there is a shortage of scholars familiar with both fields," said Mufti Abdul Kadir Barkatullah, an Indian-born imam in London who sits on Shariah boards for six banks including Lloyds TSB.

"A few scholars are going around the world (advising banks) and new scholars are not being trained fast enough to take their place," he said at an Islamic finance conference in Paris.

Part of the problem is linguistic. Many Middle Eastern scholars work only in Arabic, the language of Islam, but the global market needs scholars fluent both in Arabic and in languages such as English or French.

Riding The Islamic Banking Tide

Last October, Hong Kong Chief Executive, Donald Tsang, announced the island's financial hub would establish itself as an Islamic finance centre.

Last week, the Hong Kong Monetary Authority (HKMA) underlined that, despite the global financial crisis, the plan was still much on track and "considerable resources" would be devoted.

"Our priority is to push ahead with the development of an Islamic bond market. There should be no doubt about our determination to establish a platform for Islamic finance in Hong Kong," HKMA deputy chief, Eddie Yue, told an Islamic finance forum.

Hong Kong is looking beyond the current crisis which has reduced sukuk, or Islamic bond issuance, by 40 per cent in the first three quarters of the year, a development Yue called "a temporary setback."

What beckons not only Hong Kong but also conventional finance hubs like Singapore and London is the estimated Islamic assets of US$1 trillion (US$1=RM3.60) by 2010 and growing annually between 15 and 20 per cent.

Standard & Poor said in September that sukuk issuance was still expected to exceed US$20 billion this year.

More non-Muslims trying Islamic banking-OCBC

Islamic banking is gaining ground with non-Muslims worldwide due to its strict lending principles, Singapore's third-largest lender OCBC said on Monday, reflecting industry efforts to transcend religious beliefs to gain market share.

Sharia finance is a blend of Islamic economics and modern lending principles and its products can be sold to Muslims and non-Muslims.

While it was previously a small market catering to Muslims who wanted to avoid interest-based conventional banking, Islamic finance has become popular in recent years due to cash-rich Gulf Muslim investors and rising demand for ethical investing.

Non Muslim investors have also been looking for less risky alternatives since the onset of the global credit crisis over a year ago cast doubt on many Western risk management practices.

But the Islamic finance sector is still relatively small and the industry wants to grow its market share to become a global alternative to conventional banking.

Al Salam, Nordbank in Islamic finance JV

30 Nov 2008     

Dubai-based Al Salam Investment and HSH Nordbank plan to launch an Islamic finance house in 2009, as the German bank looks to tap the Islamic finance sector in the Gulf Arab region.

"We see opportunity and change in this region and this partnership will ensure we have the financial muscle and expertise to be at the forefront of the turnaround," said Pegman Haghshenas, chief executive of Al Salam Investment, in a statement on Sunday.

No details on the value of the joint venture were given.

The company will likely register on the Dubai International Financial Centre, Haghshenas said.

Sector to grow by up to 25% annually despite crisis

The Islamic banking system will continue to grow by between 20 and 25 per cent annually worldwide in the long term despite the financial crisis, says Rushdi Siddiqui, Global Director of Dow Jones Islamic Market Indexes.

He said the current slowdown in Islamic banking would continue in the short term but the sector would soon pick up momentum. It would attract conventional investors by presenting itself as a holistic financing and investment solution.

But he said the drop in oil prices would have an impact on Islamic banks in the short-to-medium term.

"There is a lesson from the decline in oil prices," Siddiqui told Emirates Business. "Islamic banks should diversify their investments to generate revenues from different areas. They must use petro-liquidity to create new investments rather than focusing on deposits and retail businesses."

Workshop on Islamic microfinance held in Delhi

New Delhi: An international training program and workshop to discuss the nuances of Islamic microfinance was recently held in New Delhi under the aegis of Islamic Business and Finance Network (IBF Net) and its Institute of Microfinance and Development in association with Islamic Relief Worldwide.

Organizers of the programme are of the view that provision of appropriate microfinance products and services to the poor in a sustained manner helps bring down poverty levels. The needs of the poor in Islamic countries are no different from that of the poor in other societies. However, the poor in Muslim societies also demand that the provision of microfinance must not violate their basic beliefs and cultures, they say and this has resulted in the birth of the Islamic or Shariah-compliant microfinance industry.

IBF Net (www.ibfnet.in) is an India-based global network with over five thousand members from academia and the Islamic financial services industry. It offers professional certification programs in the field of Islamic finance through its online academy, International Institute of Islamic Business and Finance (www.iiibf.org).

The sessions in the workshop covered major norms and models of Islamic microfinance supplemented with practical insights from case studies.

NatWest launches sharia commercial property service

NatWest Business Banking is entering the Islamic financial services market with the launch a shariah-compliant commercial property mortgage product.

The product, introduced in response to demand, will not charge interest in accordance with Islamic law.

NatWest has over 40 relationship managers specially trained to meet the needs of the Islamic community, as well as a number of specialist diversity banking teams, including one in Birmingham.

The product is the first shariah-compliant facility NatWest Business Banking has launched.

NatWest Business Banking chief executive officer Paul Lynam said: "We are committed to meeting the business needs of all customers. By introducing a shariah-compliant commercial mortgage, we are demonstrating our commitment to this community, and the broadening of our focus on this market."

Head of NatWest's diversity banking team in Birmingham Manjit Kang said: "NatWest formed the diversity banking team to support the growing demand for business advice amongst the Black, Chinese and Asian business community. Now we have the shariah-compliant commercial mortgage we can take this to a new level."

The product, sanctioned by an internationally renowned and independent board of Islamic scholars, is based on the Islamic "Murabaha" structure a widely accepted shariah-compliant financing method.

KFH Concludes US$155 Million Syndicated Murabahah Deal

KUALA LUMPUR - Liquidity Management House, a wholly-owned subsidiary of Kuwait Finance House KSC (KFH), has concluded a US$155 million (RM556.84 million) syndicated secured master murabahah facility for commercial real estate company Al Tijaria.

Al Tijaria is a listed Kuwaiti shareholding company engaged in the development of properties in Kuwait and other Gulf Cooperation Council (GCC) countries.

The murabahah deal was oversubscribed by 50 percent over the original sum offered, KFH said in a statement released from Kuwait Tuesday.

The facility will be utilised for general corporate purposes as well as funding of several prestigious ongoing property projects which Al Tijaria is engaged in, it added.

Seminar on halal industry

TO PROMOTE the involvement of Malaysian companies in the Halal industry, the Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLSCCCI) and the Klang Chinese Chamber of Commerce and Industry will co-organise a seminar on Development Prospects of Halal Industry in Malaysia and Islamic Banking Facilities from 9.30am to 1.30pm on Nov 8 at Seng Peng Hall, Wisma Chinese Chamber. For registration and enquiries, call 017-283 2929 (Peter Loo) or 03-4253 2135 (Ching/Teo/Ng), or e-mail inquiry@chinesechamber.org.my. Closing date for registration is Nov 5

Credit crunch may spur Islamic finance

The fast growing Sharia financial system may receive a further boost as an alternative to capitalism amid the credit crunch and banking crisis, Islamic academics and clerics believe.

Already said to be worth $US300 billion ($A498 billion) and expanding at 15 per cent a year, the Islamic system forbids the levying or payment of interest, preferring shared ownership and splitting of profits.

The global economic meltdown shows "the need for a radical and structural reform of the global financial system. The system based on the principles of Islam offers an alternative which could reduce risks," Hatem al-Naqrashawi, head of theological studies at Doha University, told AFP.

"Islamic banks don't buy credit but manage concrete assets which shelter them from the difficulties that American and European banks are experiencing," explained Abdel Bassat al-Shibi, managing director of Qatar International Islamic Bank.

Jadwa teams up with Malaysian firm

RIYADH: Jadwa Investment and Khazanah Nasional Berhad, the investment arm of the Malaysian government, have signed a partnership agreement. Under the terms of the agreement, Khazanah will acquire an equity stake in Jadwa worth SR284.25 million, which represents 10 percent of Jadwa's capital.

This partnership will provide Jadwa with access to investment opportunities in Southeast Asian markets, where Khazanah enjoys a strong foothold. In addition, the agreement will foster the exchange of know-how and expertise in the area of Islamic investment banking in which Malaysia is a pioneer.

Khazanah manages the strategic investments of the Malaysian government and is chaired by the prime minister of Malaysia. The company has stakes in more than 50 companies worldwide with assets under management (AUM) in excess of $20 billion, diversified over several sectors including banking, energy, IT, airport management, infrastructure, telecommunications, vehicle manufacturing and real estate development.

StanChart to launch Islamic banking soon

Standard Chartered Bank is set to launch Islamic banking services in Bahrain by the end of the year. 

The initiative will herald a new era of Islamic banking products and services, including the launch of Islamic Credit Cards, a top official at the bank said.

Jonathan Morris, the CEO of Standard Chartered Bahrain, in his first interview since his arrival in the Kingdom, said his bank would introduce the Islamic banking services in Bahrain under the bank's global brand name for Islamic products, namely Standard Chartered Saadiq.

"We are keen to launch Islamic banking products by the end of the year as a window service," he said.

Standard Chartered, being one of the oldest banks in Bahrain, expects strong demand for Islamic banking services in the Kingdom and beyond. 

OSK to offer Islamic banking

Malaysia's OSK Indochina Bank, the newest entrant into Cambodia's banking sector, hopes to tap into the Kingdom's Muslim community by offering the Kingdom's first Islamic banking services within a year, its chief operating officer and country head, Lim Loong Seng, said Wednesday. 

"We are definitely looking into this market and hope to introduce [Islamic banking] services in one year," said Lim.

Islamic banking is a banking system that conforms with the principle of Shariah law, including a prohibition on interest-based loans, and has seen growing interest in Islamic countries.

Othsman Hassan, secretary of state at the Ministry of Labour and Vocational Training, said OSK's plans would offers Muslims in Cambodia an opportunity to obtain loans and to capitalise on the Kingdom's rapid economic growth.

Australia considers adopting Islamic banking

Financial institutions and the government are considering introducing Islamic banking and its principles to the Australian financial system. 

Industry experts say Islamic banking is one of the fastest growing sectors in the global banking industry, and is worth an estimated $US200 billion worldwide.

The Asialink Islamic Banking Colloquium, held in the Australian city of Melbourne, has heard Islamic banks have largely escaped the fallout from the economic crisis by adhering to Islamic principles of prohibiting interest and sharing of profit and loss between banks and borrowers. 

Saudi Arabia sees launch of Islamic real estate

Saudi Arabia's Sumou Holding and Geneva-based Encore Management have launched the first Islamic Real Estate Investment Trust (REIT) for the Kingdom of Saudi-Arabia. This Saudi-Swiss joint-venture may change the real estate landscape in the GCC.

A Real Estate Investment Trust or REIT is a company which invests in real estate projects. 

A REIT can be a publicly listed or privately owned entity. 

Usually nine tenths of the rents of the REIT are distributed to its shareholders in the form of dividends, but the legal aspects of a REIT vary from country to country.

In the US the first REITs were launched in the1960s. In Europe, this innovative securitization has only recently been passed. The global REIT-volume is estimated at around $700bn.

UK looks to become global provider of Islamic finance

Financial service providers looking to diversify in these unique times can learn about the opportunities in Islamic finance from some of UK's leading specialists.

On Tuesday, 4 November the Association of Corporate Treasurers' (ACT) will hold a Breakfast Briefing, endorsed by UK Trade & Investment, to educate UK companies on the sector that still has scope for growth.

Andrew Cahn, UK Trade & Investment Chief Executive said:

"In these tough times, it's more important than ever that we make the most of growing sectors like Islamic finance.

"Islamic finance is currently estimated at $500 billion and is still estimated to grow 15 per cent per annum over the next few years.

"That's why it is important the UK's financial industry provides an open door and positions London as a leading western financial centre for Islamic finance."

Gulf Arab Islamic banks eye slowing real estate

With their ban on interest, the Gulf Islamic banks that managed to avoid the types of debt which proved toxic for their conventional counterparts are now praying the global crisis will bypass their property holdings.

Islamic banks, which manage an estimated $1 trillion (576.5 billion pounds) worldwide, do not have the same flexibility as conventional banks in managing balance sheet risks, bankers say. For instance, they cannot reduce exposure to the real estate market by using derivatives.

So Islamic bankers watched last week's Cityscape real estate fair in Dubai with intense scrutiny. But even the unveiling of a planned km-high tower failed to allay their fears that a boom in Gulf Arab real estate may be grinding to a halt.

The fate of Islamic banks in the region is closely tied to the property markets as they are required to underpin transactions with physical assets due to the ban on interest, which is viewed as usury under Islamic law.

A Muslim's Guide to Investing and Personal Finance

NEW YORK, Oct. 15
Today Lightbulb Press released A Muslim's Guide to Investing and Personal Finance by Virginia B. Morris in association with Monem A. Salam. The guide was developed to meet the growing need by banks, brokerages, asset managers, insurance and home finance companies, and other financial services organizations to provide Shariah-compliant products for Muslim customers who want to live their financial lives in accordance with their beliefs.

"The guide is an invaluable reference for Muslims who need to invest and make personal finance decisions while adhering to the Shariah, or Islamic law - often a challenging endeavor," according to Salam, the Deputy Portfolio Manager for Saturna Capital and recipient of the "20 Rising Stars" award from Institutional Investor News.   

A Muslim's Guide to Investing and Personal Finance describes the newest, as well as more established, Shariah-acceptable investment products and specialized financial transactions that have been developed to help Muslims navigate the financial realities of the modern world, including investing for retirement, buying a home, paying for college, and maintaining a savings account, as well as insuring personal assets.

Islamic finance needs its own efficient price indicators

Sharia compliant assets have emerged as a viable alternative asset class as part of the strategy to diversify portfolios of investors.  The outperformance of a number of global Islamic indexes in the medium-to-long term should encourage investors to consider allocating a portion of their portfolios to Islamic investment vehicles. To conform to sharia requirements, Islamic products will have to avoid elements of riba (usury), gharar (ambiguity/uncertainty/ misinformation or deceit/fraud), maisir (gambling) and zulm (oppression), among others. Although the obligation to eliminate riba may result in complex structures for Islamic financial instruments, I believe the prohibition of other elements as mentioned above in Islamic contracts and in strict adherence to sharia rules and principles, should help assuage many investor concerns.

Whatever it is, a product structuring or innovation exercise should comply with sharia requirements in substance and in spirit.  In the absence of reference price indicators specific for Islamic finance, the Islamic financial services industry still relies heavily on interest rate-based benchmarks such as the London Interbank Offered Rates (LIBORs).  Without a viable sharia compliant alternative, the industry will still have to use these quoted market rates as a basis to price Islamic financial instruments and securities. As such, it's a fallacy to think that movements in global interest rates will not have any implications for Islamic securities although the impact may be limited to those that are pegged to observed interest rates, especially LIBORs.

CIMB Islamic offers Shariah-compliant forex option

KUALA LUMPUR: CIMB Islamic Bank Bhd recently launched its Islamic foreign exchange with Shariah-compliant option features or FXOP-i, which allowed customers to hedge their forex risk.

CIMB Islamic said on Monday FXOP-i enabled customer to lock in a forex rate in advance by engaging in a Shariah-compliant financial transaction with CIMB Islamic.

It added net proceeds from this transaction -- similar to the premium paid for option instruments in conventional finance -- granted customers the right, but not the obligation, to exercise the option at the agreed rate on the maturity date.

CIMB Islamic CEO Badlisyah Abdul Ghani said with this product, customers could protect the value of their future foreign currency proceeds and also fix their hedging cost at the equivalent of the option "premium".

He said the customers could even earn a profit if the forex rates moved in their favour and with assurance that the transaction adhered to Islamic principles.

Newhaven launches Sharia-compliant firm

Dubai: Newhaven Investments House has launched Amara Holdings, a Sharia-compliant investment company which focuses on pre-IPO, private equity and private placement opportunities predominantly in China, as well as Mena and India.

A number of Gulf investors have already committed a significant amount of capital to Amara, including Khalid Al Mukairin Group, Al Sorayai Group (Saudi Arabia) and Ahmad Al Khemeiri (UAE).

"Two further GCC investors, Mohammad Al Khalil (Saudi Arabia) and Ahmad Al Omani (Kuwait) are also Amara Board members," the company said in a statement.

Amara is an offshore company pursuing an onshore listing. It has already made its first investment into China with a key strategic partner, Pan China Construction Group.

"We are looking at China, India and the Middle East and Northern Emirate's infrastructure, utility, real estate and industrial services sectors for investment," Dr Musab Jassim, executive chairman, Amara Holdings, told Gulf News.

The company has already signed a memorandum of understanding with Pan China Construction Group, to co-invest in joint ventures. The first of the joint ventures, China Infrastructure Corporation Limited (CIC), has already been formed. CIC, which is 51 per cent owned by Amara, will develop a logistics park, called Ningxia International Logistic Centre, in Ningxia province of China.

Islamic finance rides the storm

A thriving financial sector sounds like an oxymoron these days. Even Australia's banks - among the most profitable in the world - kept a fifth of this week's interest rate cut to cushion their margins. But there is one sector that has tongues wagging in the hubs of commerce: Islamic finance.

While the Western world's financial system has been imploding, this small but rapidly growing share of world capital has weathered the storm.

Sharemarkets in London and New York are a third off their peaks. Dow Jones's Islamic financials index, in contrast, rose 4.75 per cent in the most recent September quarter and lost a modest 7 per cent in the previous year.

Not only has the industry been resilient; it's also on the cusp of serious expansion. It is growing faster than any other subset of world banking, at 15 to 20 per cent a year. The Economist estimates Islamic assets under management are worth $US700 billion ($1000 billion). This figure could hit $US1 trillion - about the Australian sharemarket's current value - by 2010.

What's more, all this growth has come from a model of lending that rejects interest payments and shuns speculation and heavy borrowing.

In short, Islamic finance bans some of the excess that has brought the West's financial system to its knees, and is looking wise indeed, or at least lucky.

Shariah-compliant Investment Company Amara launches today

Newhaven Investments House announces today the launch of Amara Holdings Inc ('Amara' or 'the Company'), a Shariah-compliant investment company which focuses on pre-IPO, private equity and private placement opportunities predominantly in China, as well as MENA and India. Amara has already made its first investment into China with its key strategic partner, Pan China Construction Group.

Prominent GCC investors have already committed a significant amount of capital to Amara. These include Khalid Al-Mukairin Group (KSA), Al Sorayai Group (KSA) and Ahmed Alkhemeiri (UAE). Two further GCC investors, Mohammed Alkhalil (KSA) Ahmad Al Omani (Kuwait) are also Amara Board members.

The Company invests in sectors that are fundamental to the domestic economies and growth of the target regions such as agriculture, consumer staples, utilities, industrial, real estate and service related businesses. Key strategic partnerships are already in place with prominent Chinese, Indian and MENA partners ensuring a strong deal pipeline. This strategy will ensure that Amara will be resilient to any global downturn.

Bank Islam To Set Up 25 New Branches Within Three Years

KUALA LUMPUR - Bank Islam Malaysia Bhd plans to set up 25 new branches within the next three years, said managing director Datuk Zukri Samat Wednesday.
"The bank, which currently has 90 branches, will allocate between RM500,000 and RM600,000 for each branch, depending on the location," he told reporters after the signing of a strategic partnership agreement with Amanah Raya Bhd here Wednesday.
Under the partnership, Amanah Raya will be the will writer, custodian and executor, while the Bank Islam will sell and distribute the services.

Zukri said the bank expected to generate a revenue of RM1.5 million from will writing service by year-end and attract 1.5 million customers.

Bikini-free Islamic tourism booms in Turkey

The resorts of Turkey, a favourite among British holidaymakers, are enjoying a boom in Islamic tourism.
The beaches famous for bikini-clad Europeans and surfers are increasingly becoming popular among devout Muslims who wear head-to-toe swimsuits.
Islamic tourism is the fastest-growing part of Turkey's £10 billion industry. A new Islamic hotel recently opened in Bodrum, a resort popular with British tourists where topless bathing is common.
Although they do not drink, the Muslim guests are welcomed by hoteliers because they spend a lot of money.

Bahrain's Albaraka opens office in Indonesia

MANAMA - Bahrain-based Islamic lender Albaraka Banking Group BARKA.BH (ABG) has opened an office in Indonesia, the world's most populous Muslim nation, and plans to expand in Southeast Asia, the company said on Thursday.
The firm has more than 250 branches across 12 countries, which it says gives it the widest geographical reach of any Islamic lender.
"Indonesia ... is the home of 220 million people, and its commercial and economic links with the Arab and Islamic world are growing," Albaraka Chairman Sheikh Saleh Kamel said in a statement.
The group told Reuters last year it planned to open 74 branches in the next five years, all but two of them abroad, as it seeks to stay ahead of rivals in tapping the growing global appeal of Islamic banking.
Along with the Gulf, Malaysia is one of the world's two biggest Islamic banking hubs, and Albaraka has said it may expand there. The lender said it was also looking at China and India, and that it prefers to grow by branch expansion rather than acquisitions.
Differences in Islamic jurisprudence and a lack of qualified staff have hampered attempts for more cross-regional Islamic banking between the Gulf and Asia, bankers say.

Abu Dhabi Investment House unveils Islamic equity

Abu Dhabi Investment House (ADIH) launched Islamic equity and structured products aimed at offering rare opportunities to investors, ADIH in a statement said. In the statement the investment institution said: "Investors can participate in two new funds being launched by the firm in co-operation with its Geneva-based subsidiary." The initial offering period lasts from until July 31.

The minimum subscription amount is $100,000. ADIH Islamic Helvetic Fund-Global Islamic Equity, the new equity fund, will invest in shares of companies worldwide in accordance with the principles of Shari'a investment. The new fund's strategy aims at capital preservation while offering an appealing alternative to classical asset classes such as fixed-income and money-market investments: return objectives are set to 10 per cent per year net of fees with a volatility of 5 per cent.

Based on a multi-management approach which has been rarely available among Shari'a-compliant equity funds up to now, the fund will gradually allocate its assets between complementary investment strategies, combining sector and regional allocation as well as fundamental and quantitative models. The fund's launch is timed to exploit robust growth rates in emerging markets and possible recovery of the equity markets globally during the second half of 2008.

Pakistan's Faysal Bank to Expand Outlets, Open Islamic Division

Faysal Bank Ltd. plans to expand its domestic branch network in Pakistan and start a new Islamic division to take advantage of rising demand for Shariah-compliant products and farm loans.

The bank will increase its number of outlets to 150 by December 2009, and will start the Islamic banking unit next week, Chief Executive Officer Naved A. Khan said in an interview at his Karachi head office yesterday. The bank, Pakistan's ninth-biggest, has 107 branches across the nation and plans to add 23 this year.

Khan is seeking to keep pace with bigger rivals including Bank Alfalah Ltd. in an economy forecast to grow 5.8 percent this fiscal year. Overseas banks such as ABN Amro Holding NV and Standard Chartered Plc are expanding in Shariah-compliant finance, a market Standard & Poor's estimates is worth $500 billion and growing 10 percent annually on booming oil revenue.

RHB expanding in Asean region

KUALA LUMPUR: RHB Bank Bhd intends to expand its presence within the Asean region to countries like Vietnam and Indonesia, said group managing director Michael Joseph Barrett.

International operations were expected to contribute 10% of earnings by 2010, from 4% in fiscal year 2007, he said after the RHB Capital Bhd AGM yesterday.

“Indonesia is a vibrant market with many Malaysian companies operating there. Furthermore, its economy is driven by natural resources,” he said, adding that the bank was looking for acquisition opportunities.

The bank, which already has a presence in Thailand and Brunei, intends to widen its footprint in those countries.

Amid concerns of a global economy slowdown, Barrett believes there are opportunities to be tapped, as prices of assets are likely to come down.

Barrett said RHB Bank was expected to reduce its non-performing loans ratio to below 3% and improve return on equity and return on assets to 15% and 1% respectively by year-end.

It also intends to open eight to 10 new conventional banking offices and six to eight Islamic banking branches throughout Malaysia this year.

Despite its growth Islamic finance faces obstacles

Islamic Finance, although still exotic to many bankers, is well-known to be one of the fastest growing segments in global finance.

The figures related to this sector have become commonly known over the last few years:

• The value of global transactions is estimated to be somewhere between $500bn to $1 trillion.

• Islamic finance grows at 15% to 20% annually, doubling at least every five years.

• The market for Islamic insurances, Takaful, grows at 25% annually, but from a relatively low basis of around $4bn currently.

• There are 470 Islamic financial institutions worldwide.

Less well-known are the obstacles faced by the infant industry. These hurdles have been discussed by the speakers of the forum at the first Middle East International Banking, Financial Technology & Services Exhibition (MEFX) in Dubai.

Sanjay Vig, Managing Director at DIFC-based Alpen-Capital, says that Western regulators such as the Swiss Banking Commission failed to develop clear rules for Islamic Banking: 'The lack of initiative kept the 'the world's safe' from entering Islamic finance as intensively as banks in the UK did.'

Stanlib launches Africa-focused Sharia equity fund

Dubai: Stanlib, the $45 billion Johannesburg-based asset management operation of the Standard Bank of South Africa, has launched an Africa-focused Sharia equity fund.
The fund currently on a road show in the Gulf countries is targeting to raise $250 million. The open-ended fund registered in Ireland will invest in Sharia-compliant equities from across Africa except South Africa.
"There is a large pool of Sharia-compliant assets in Africa. As Africa is one of the last frontiers of assets with low correlation to the Western markets, it provides great opportunities for Gulf investors," said Ashraf Mohammad, portfolio manager of the fund.
The new fund targets a return of 15 to 20 per cent and will not charge a performance fee. While it offers twice monthly repurchase option, the net asset value denominated in dollars is published every day. The Fund House said yesterday that although the net asset value will be published in the dollar, the funds underlying investments would be in equities denominated in various African currencies.

Islamic finance in need of more diversity

A lack of diversity in their investments could mean Islamic asset managers lose out to conventional firms, a report published last week said.

Accounting firm Ernst & Young said Muslim investors hold $1.6 trillion in assets of all kinds, a figure forecast to rise to $2.7 trillion by 2010.

Islamic funds, which invest in accordance with Islamic law, ignore important asset classes and in Saudi Arabia, one of the world's two biggest markets for Islamic asset management, fund subscriptions have fallen since 2005, the report said.

"As demand for diversification grows, Islamic institutions will face the risk of losing significant market share to conventional institutions that can provide more comprehensive coverage," Ernst & Young said in the report.

By the end of March there were more than 500 funds globally that comply with Islamic law, Ernst & Young said in its Islamic Funds and Investments report, launched at a two-day Islamic banking conference that ended last Monday.

Some 153 Islamic funds were launched last year, and the figure is projected to rise to 1,000 funds by 2010, Ernst & Young said.

Atlas Asset to launch Islamic Income Fund

KARACHI: Atlas Asset Management Limited (AAML) will launch Atlas Islamic Income Fund (AIIF) soon. According to a company’s statement, AIIF will be AAML’s fourth open-end mutual fund and fifth overall.

It said, “the main objective of AIIF would be to offer investors Shariah compliant investment avenues, which would provide a consistent stream of income with long-term capital preservation.”

He said that the Fund would realise objectives by investing in Shariah compliant debt instruments of entities with minimum rating of A minus (A-). These debt instruments will include certificate of investments, bank deposits, placement of funds under Mudarabah, Musharikah and Murabahah Shariah-Compliant instruments, Sukuks and contracts, securities, issued by companies, organisations and establishments. staff report

Daiwa Asset Management To Launch Singapore’s First Shariah-Compliant ETF

Daiwa Asset Management (Singapore) Ltd. (Daiwa AM) and Singapore Exchange Limited (SGX) recently announced that Daiwa AM will launch Singapore’s first Shariah-compliant Exchange Traded Fund (ETF) on SGX. The Daiwa FTSE Shariah Japan 100 (DaiwaETF) will offer Islamic investors instant access to the top 100 Shariah-compliant companies in Japan by market capitalisation.

Shariah is the divine Islamic law that governs the practical aspects of a Muslim’s daily life. The DaiwaETF seeks to track the performance of the FTSE Shariah Japan 100 Index, which is designed to represent the return of the largest and most liquid listed companies in Japan that comply with Islamic legal principles.

Said Mr Michihito Higuchi, President & Chief Executive Officer of Daiwa Asset Management Co. Ltd, the parent company of Daiwa AM, “The DaiwaETF is the first Shariah-compliant ETF in Singapore and also our first ETF in Singapore. This ETF serves as an excellent proxy to the growth prospects of some of the best listed companies in Japan. Islamic investors can be assured that this ETF is in full compliance with the Shariah investment principles at all times as Yasaar Limited will be undertaking the Shariah screening at the fund level.”

Indonesia Prepares an Islamic Bonds Industry

The world’s biggest Muslim nation struggles to build its Islamic finance industry

In a bid to drive growth in the fledgling Islamic bonds industry, Indonesia’s central bank says it will relax the rules for investors who buy the bonds.

Despite being home to roughly 10 percent of the world’s estimated 1.3 billion Muslims, Indonesia has struggled to build up its Islamic finance industry, lagging well behind countries such as Malaysia, Singapore and even Pakistan.

However, the recent introduction of a new law that would allow the government to issue Sukuk, or Islamic bonds, is expected to trigger significant growth in the sector. The government announced this week it has already set aside US$2 billion in assets to back the bonds, which it expects to sell in two separate issues this August and October. Sukuk bondholders are paid income derived from assets such as rent from property because Islamic law bans lending for interest.

Mulya Siregar, Bank Indonesia’s head of Islamic finance, pledged this week that the central bank would change the rules surrounding Sukuk to boost investor interest in the securities.

As the rules stand, investors in Islamic bonds are required to hold them until maturity

AMU now offers Islamic banking and finance course

Aligarh Muslim University officials noted the presence of a number of banking enterprises working on Islamic banking principles. Looking at the employment potential, the University has decided to offer a PG diploma course in Islamic banking & finance..

THE ALIGARH Muslim University (AMU) will be offering a course on Islamic banking and finance from the next academic year onwards. Vice chancellor, professor PK Abdul Azis, recently had a detailed discussion with a team of experts consisting of Dr Mohammad Nejatullah Siddique, former AMU professor and a well known expert on Islamic banking and finance, Sayed Mohammad Beary and Dr Sariq Nasir of Bearys Amnah Investments Pvt Ltd, Bangalore, regarding the commencement of the course.

The meeting noted rapid changes taking place in the banking arena, both within India and abroad, moving towards principals that guide Islamic banking and finance management systems. The meeting noted the presence of a number of banking enterprises in India working on Islamic banking principles and the segment is poised for rapid growth. In the context of the emerging growth and employment potential, the University has decided to offer a post graduate (PG) diploma course in Islamic banking and finance from the next academic year onwards. Dr Azis said that University would also consider the possibility of establishing a new department dedicated for this branch in the Aligarh Muslim University.

The vice chancellor has constituted a high power committee consisting of Dr Mohammad Nejatullah Siddiqui (chairman), Dr Shariq Nisar (Bearys Amnah Investment Pvt Ltd, Bangalore) and Dr Javed Akhtar, chairman, department of business administration, AMU, to prepare a detailed proposal for commencing this programme. The committee is expected to submit its report within two months.

Jadwa Offers African Investment Opportunities

RIYADH — The chairman of Jadwa Investment, Prince Faisal Bin Salman, hosted South African Ambassador John Davies and a number of businessmen at an “Investor Forum” for launching the new Jadwa Africa Equity Freestyle Fund. The fund is the first Shariah-compliant Africa fund offered by any institution in the region.

The offering of the Africa Fund places Jadwa in a leading position in the investment banking industry.

Remarkably, Jadwa has launched as many as 13 investment funds since June last year.

The comprehensive range of funds offered by Jadwa ranked it at No. 6 among the Saudi banks in terms of the assets under management, which exceeded SR5 billion.

“Jadwa, since its establishment in the first quarter of 2007, has made great achievements and Jadwa Africa Equity Freestyle Fund, the first of its kind, is a new milestone in its achievements,” Ahmed Al-Khateeb, managing director and CEO of Jadwa Investment, said in his welcome speech.

“Jadwa has set itself as a leader in Shariah-compliant investments in the world through its high quality services and superior investment solutions,” he added.

The ambassador was pleased with foresight and wisdom of Jadwa Investment in seeing the brighter side of African countries and with the introduction of the Jadwa Africa Equity Freestyle Fund.

Sheikh bans alcohol at Cairo hotel

A decision by the Saudi owner of the Grand Hyatt Hotel in Cairo to ban the sale of alcohol and destroy millions of dollars worth of beverages has sparked a debate in Egypt.

The international company which runs the hotel has urged Sheikh Abdulaziz al-Brahim - a relative of the Saudi king - to revoke his decision, fearing it could drive away Western tourists and may even lead to the hotel losing its five-star rating.

The Grand Hyatt occupies one of the most expensive sites overlooking the River Nile. It is only minutes from the diplomatic quarter, where the British and American embassies are located.

Like all five-star hotels in Egypt, alcohol used to be available there - but not any more. It is unclear what prompted the owner Sheik Al Brahim to take this controversial measure.

Staff at the hotel are reluctant to talk about the whole affair. But a barman told me that they now only serve soft drinks and that he saw with his own eyes how expensive whiskey, liqueurs and fine wines were emptied down the drains of the hotel.

BBT gets new head of banking division

BBT has announced the appointment of Evan Grous as the new head of its banking, accountancy and finance division, operating out of the Dubai International Financial Centre (DIFC).

Grous, an Australian national, joins BBT from a search and recruitment company in Sydney, Australia, where he was business manager for Asia and the Middle East.

The banking, accountancy and finance division focuses on investment; local and international banking; Islamic banking; private equity; accounting into industry sectors; insurance; global resourcing and HR consultancy services.

The division opened in 2007 in response to the rapid growth in the sector within the region, with its epicentre in the DIFC, and the associated demand for world-class skills. BBT is working to attract specialists in areas such as Islamic banking and finance to Dubai, through its global network of resourcing offices.

Shariah-compliant commodity trading gathers pace in Dubai

Islamic Finance is not only dedicated to Islamic bonds (sukuk) or to funds investing in the stocks of firms which operate in a Shariah-compliant way.
It also has a prominent role to play in commodity trading. With the current boom in the commodity sector and in Islamic finance, financial institutions find themselves in a win-win-situation.
While Islamic Finance grows at an average of 20% p. a., according to Dr. David Rutledge, CEO of the Dubai Multi Commodity Centre (DMCC), the number of commodity managed funds has been growing at a compound annual rate of 98.2% in recent years.
Commodity receipt guarantees
With the Global Multi-Commodities Receipt (GMR) the DMCC offers owners of commodities a standardised system with which they can place their goods (such as gold, tea, wheat or crops) in a dedicated storage area.
By storing the goods, the owners receive a receipt, the Dubai Commodities Receipt (DCR) with which they can get a loan from a partner bank of the DMCC.
A potential purchaser who wants to acquire the assets can do so through one of the DMCC’s 16 member banks.
Since conventional loans are not permissible in Islam, Dubai-based HSBC Bank Middle East also offers the option of processing a commodity Murabaha-contract through its HSBC Amanah a long-standing player in the Islamic banking market.
Under Murabaha, the bank acquires the assets for a specific order by a customer. The bank pays for the commodities immediately at a spot price. Since interest is forbidden the financial institution then sells the entire load of goods at a deferred payment but at a higher price to the purchaser.
Reducing default risk
With the margin added to the spot price the purchase becomes permissible. The bank can reduce the default risk of the purchaser by demanding a down-payment or a letter of credit which proves the liquidity and good-standing of the customer. Murabaha is frequently used to synthesise money market transactions.
The advantage of the paperless, online-based GMR-system is 24/7-access from any place in the world. It is accessible to traders in Singapore, South Korea and Malaysia and will be soon expanding to Europe and the US.
In order to enhance Shariah-compliant commodity trading, the DMCC announced in March that it is currently setting up a separate entity called the Dubai Commodity Asset Management DCAM.
DCAM, established with an initial capital of $6.8m, entered in a joint-venture with DIFC-based Shariah Capital. The joint venture firm, Dubai Shariah Asset Management (DSAM), will be owned 51% by the DMCC and 49% by Shariah Capital.

World class hospital worth $200m on schedule to open in Al Barsha 2009

The Islamic Finance Company and Bait Al Batterjee Holding announced today that the Saudi German Hospital’s construction works have been completed.

The Saudi German Hospital - Dubai, a project undertaken by the Emirates Healthcare Development Company, is the result of a strategic joint venture between the Islamic Finance Company, that hold a 49% ownership stake and the Saudi Bait Al Batterjee Holding that hold the remaining 51% ownership stake.

Given the recent completion of the Saudi German Hospital’s infrastructure, the Emirates Healthcare Development Company is now in the process of procuring state-of-the-art medical equipment and supplies, at a cost of $40m, to prepare for the official opening of the hospital.

The Saudi German Hospital is being constructed on 90,000 square meters in Al Barsha. It will open in 2009 and will provide approximately 1500 employment opportunities. Sub-specialty departments inside the General Hospital will include; pediatrics, spinal cord surgery, open-heart surgery, a woman’s hospital, ophthalmology and an internal medicine department. The hospital aims to provide the best medical services in the U.A.E.

Hong Kong firms may sell Islamic bonds in Q4

HONG KONG - Hong Kong borrowers may issue sukuk, or Islamic bonds, in the fourth quarter of this year if credit market conditions improve, a newspaper said on Monday, quoting the head of a local capital market body. Frank Kwong See-wah, chairman of the Hong Kong Capital Market Association, said many companies in the territory were considering selling sukuk to tap a new pool of investors, the South China Morning Post reported.
Sukuk are financial instruments which adhere to the Islamic sharia principals under which interest payment is banned and the financing of certain business activities is prohibited. They are typically based on physical assets that pay rent. Kwong did not name any potential issuers.
Several countries in the region are keen to develop an Islamic finance market to attract investors from the booming Gulf economies.

Union National Bank launches first Islamic mutual fund

The minimum subscription to the Fund is AED 10,000 ($2722) and thereafter in multiples of AED 1,000. Investment in units is open to all individuals without restrictions. The subscription will start on 18 May until 11 June 2008.Union National Bank (UNB) is launching the Al Samaha Islamic Fund, a Shari’ah compliant fund which will invest mainly in the UAE, although it will have the flexibility to seek opportunities in other GCC, MENA and other emerging equity markets. The banks said that the fund will aim to invest in a balanced portfolio compliant with the Shari’ah creating a growth in the capital both in the short and long term.The fund will focus on Islamic equities in addition to other Shari’ah investment instruments that are compliant with the Shari’ah methodology. The fund is an open-ended fund with weekly liquidity.The minimum subscription to the Fund is AED 10,000 ($2722) and thereafter in multiples of AED 1,000. Investment in units is open to all individuals without restrictions. The subscription will start on 18 May until 11 June 2008. The subscription and redemption forms for the fund will be available at all UNB branches across the UAE. The fund will have weekly liquidity and its Net Asset Value (NAV) will be calculated and posted on a weekly basis.

Non-alcohol hotels grow in Dubai

Dubai: As Dubai's popularity among tourists and business people increases, there is a growing demand for Islamic, or Sharia-compliant, hotels that apply a no-alcohol policy and tailor their services to suit Muslim culture.
Some hotel chains follow a detailed set of Islamic rules for operating hotels, while others just adhere to Islam's ban on alcohol owing to local regulations or investor preference.
The first major dry hotel in Dubai was the Taj Palace Hotel, which is managed by leading Indian hotel chain Taj and opened nearly a decade ago. Since then, many local chains have emerged with exclusively Islamic-branded hotels.
Among the top names are Shaza Hotels, Tamani Hotels and Resorts, Hospitality Management Holdings (HMH), Flora Hotels, and Al Mmulla Hospitality. Shaza, Tamani and Al Mulla are planning dozens of Sharia-compliant hotels.
Seeing a market in this segment, Abu Dhabi-based Rotana has added a Sharia-compliant brand Reyhaan to its portfolio.
Several reasons underlie this trend. One reason, according to Michael Noblet, managing director of HMH, is that they are becoming fashionable.

TAIEX eyes launch of Shariah fund in H2 Reuters

Taiwan's stock exchange (TAIEX) will launch an Islamic exchange traded fund in the second half of this year to tap growing demand for Shariah-compliant investments, its chairman said yesterday. "The compilation of stocks for Taiwan's first Shariah exchange traded fund is expected to be completed in the next two to three months," Wu Rong-i told reporters on a visit to the Malaysian capital to woo investment.
"Since Malaysia is a Muslim country, we think a Shariah-compliant exchange traded fund may be marketable here."
The Taiwanese exchange has been stepping up efforts to attract oil money from the Middle East. In December, it entered into a preliminary deal to list its planned Shariah exchange traded fund in Taiwan and Abu Dhabi.

Citi launches Shariah-compliant products in UAE

Citigroup said on Monday it will be launching a series of Shariah-compliant banking products in the UAE first in order to help companies better manage their working capital needs.
The major bank said that the new banking products, which will initially be launched in the UAE before other markets, were designed for a growing number of its corporate customers who were looking for competitive Shariah-compliant alternatives to conventional products.
"The Citigroup treasury and trade Shariah-compliant services are in line with Citi's strategy to offer our clients Shariah-compliant working capital products in the UAE to be later introduced to various other markets," said Samad Sirohey, chief executive officer of Citi Islamic Investment Bank and head of Global Islamic Banking.

First International Halal Logo On Colgate Packaging Soon

KUALA LUMPUR -- The first international Malaysian halal logo issued by Halal Industry Development Corp Sdn Bhd (HDC) will be placed on Colgate-Palmolive's toothpaste and mouthwash packaging.

"Over the next few months, this much-coveted logo will be placed on our toothpaste and mouthwash packaging," said its marketing director, John Hazlin, at a press conference here, Tuesday.

Colgate-Palmolive (Thailand) Ltd, which produced the toothpaste and mouthwash, is the first company to get the halal certification from HDC.

The production is for the South-East Asian markets including Malaysia, Indonesia, Brunei and Singapore.

Until recently, only locally-manufactured products were eligible to receive the Malaysian halal logo.

Attractive Incentives To Draw Businesses To Halal Industry In Malaysia

KUALA LUMPUR - The government is offering attractive incentives to draw businesses in the halal industry in Malaysia.

They include investment tax allowances, perks for export of halal products and exemption of duties for the import of raw materials, Prime Minister Datuk Seri Abdullah Ahmad Badawi announced here, Monday.

He said there would also be goodies for halal parks and logistics operators to facilitate an optimal supply chain and infrastructure as well as pioneer status for cold room storage operations.

Elaborating, Abdullah, who is also Finance Minister, said there would investment tax allowances or exemption on statutory income from export sales for industry players in specialty processed foods, cosmetics and personal care, pharmaceuticals, halal ingredients and livestock and meat products.

"There will be exemption from import duty on raw materials as well as double deduction on expenses incurred in obtaining international quality standards," he said in the keynote address at the World Halal Forum 2008.

Toyota considers Shariah bond to help Malaysian business

Toyota is considering issuing a bond that complies with Islamic law to help its expanding business in Malaysia, a company spokeswoman said.

The Malaysian financial authorities have given UMW Toyota Capital, based in Petaling Jaya, Malaysia, permission to issue up to 1 billion Malaysian ringgit, or $312 million, in Islamic bonds.

Under Shariah, or Islamic law, interest is banned and purchasers of Islamic bonds, or sukuk, instead would receive a dividend from UMW Toyota Capital.

"We are looking to issue Islamic bonds with a view to expanding our loan and lease business in Malaysia," said Mio Sugito, an assistant manager at Toyota Financial Services. "We are considering when to issue, and could go ahead as early as this month."

The company began offering Islamic loans in Malaysia in November 2005, and it started leases in August 2007, using cash borrowed from banks under Islamic law.

Apart from reducing the dependence on bank loans, the move would make it easier for local people to take out a loan with the company, Sugito said.

This would be the first time Toyota has raised money using Islamic finance.

Dubai Islamic Bank launches new virtual training centre

The initiative will provide bank staff with advance training, experience, skills and insights to better meet the needs of the bank's clients in retail banking services. The DIB Retail Banking Services Virtual Training Centre is located at the DIB branch on Al Ittihad Road in Dubai.

The opening ceremony for the centre was attended by Khaled Kamda, DIB Group Managing Director and Chief Executive Officer, and several other senior executives from the bank. The training centre is based on a partnership with SnapShot, a leading human resources consultancy and training firm.

The training centre is one of the most sophisticated centres in the country. The centre is seen as a means for DIB to develop and improve the level of service for the banking sector throughout the region. "This initiative is a reflection of our commitment to being a financial services institution that delivers the highest level of service to its customers," said Kamda.

Harvard Islamic Studies Program Opened

Prince Alwaleed bin Talal at the inauguration ceremony of the Islamic Studies Program at Harvard on Thursday. (AN photo)

CAMBRIDGE, Mass., 10 May 2008 — Prince Alwaleed bin Talal, chairman of Kingdom Foundation, had endowed $20 million in 2005 to establish an Islamic Studies program at Harvard University. He was at Harvard University in Cambridge, Massachusetts, on Thursday to inaugurate the program. The program was named “Prince Alwaleed bin Talal Islamic Studies Program.” Roy P. Mottahedeh, professor of history in the Faculty of Arts and Sciences, had been appointed director of the program. Prince Alwaleed and the accompanying Kingdom Foundation delegation were briefed about the program. The program is building on Harvard’s strong commitment to the study of the religious traditions of the world. It is also augmenting Harvard’s existing strength by increasing the number of faculty focused on Islamic studies, providing additional support to graduate students, and making rare Islamic textual sources available in digital format.

Bangladesh: Local company signs deal to export halal meat to Malaysia

Premium Halal Abattoir, a local company, has signed a deal to export halal meat to Malaysia as local processors are eying to grab a portion of US$ 50 billion global halal meat market.

Premium Halal Abattoir, under a memorandum of understanding with Barakah Import of Malaysia, will export 50 tonnes of meat a year, with industry people demanding more government supports to explore potential market.

The government meanwhile is likely to get clearance soon from the Department of Veterinary Services of Malaysia. The certification will enable Bangladeshi companies to export processed halal meat to Malaysia.

Another meat processing company, Peninsula Abattoir, is in talks with buyers to export processed meat to Europen countries.

The pioneer in halal meat processing industry in the country, Bengal Meat Processing Industries Limited, is exporting to the UAE and Kuwait. Bengal Meat has almost trebled its export growth in a span of nine months.

Turkey Impressed With Malaysia's Promotion Of Halal Standards

KUALA LUMPUR. Turkey has complimented the efforts taken by the Malaysian government to promote halal standards, its Deputy Undersecretary for Foreign Trade, Omer Faruk Dogan said Friday.

He said the issue had become more and more important to the Muslims and that it could be another key to establishing stronger relations among the Muslim population.

He was speaking to reporters after presenting a trade briefing at the Malaysia International Halal Showcase (MIHAS) 2008 here today.

Malaysia's halal standards, set by the Department of Islamic Development Malaysia (JAKIM) previously is recognised globally. The halal certification in Malaysia is now conducted by Halal Development Corp (HDC).

Malaysia's contribution to the formulation of uniform halal standards is seen as crucial and timely as some 17 standards are being used globally for the halal industry.

Almulla, UK group in Islamic hotel chain tieup

Dubai-based Almulla Hospitality and UK-based Jasper Capital have joined hands to set up a real estate company that will develop international chain of Cliftonwood, Adham and Wings hotels.

Almulla Hospitality plans to tap into the growing Muslim travel market with a hotel chain operating under universal codes such as no alcohol and Halal food only, said a company official.

The deal with the Jasper Capital Group of the UK will help structure the financial real estate company to develop plans for an international chain of Islamic-compliant hotels with 150 properties worldwide.

The company plans to set up 90 of such hotels n the Middle East and North Africa, said Abdulla Mohamed Almulla, chairman of Almulla Hospitality.

"At the launch of Almulla Hospitality we had announced that our goal is to achieve, within five to seven years, 150 properties worldwide under management," Almulla said. "We are very pleased to assign Jasper Capital Group of the UK to structure a plan toward achieving our goal."

Maybank buys into Pakistan

After asking last month whether the media should be more positive about Pakistan – the comments on the whole seemed to suggest we should be, while not being blind to the risks– it was interesting to see that Malaysia's top lender, Malayan Banking, had no such doubts.

 Maybank said it had bought a 15 percent stake in Pakistan's largest listed lender MCB Bank for $680 million, the largest banking acquisition into Pakistan, as it bet on a bright economic future despite the recent political turbulence.  It said the acquisition would give it access to "a high-growth and under-penetrated banking market with a large population", and that it was confident about Pakistan's political outlook.

Part of this is clearly due to the booming business in Islamic banking. Reuters Bahrain correspondent Mohammed Abbas, who covered a Reuters summit on Islamic banking and finance in February, tells me it is no surprise that a Malaysian bank would invest in Pakistan.  Pakistani bankers basically run the Islamic finance industry in the Gulf and say Pakistan has done a lot to encourage Islamic finance. Since Malaysia's Islamic banking industry is one of the deepest and most developed, and since  Malaysian banks have been trying to build bridges with other Islamic lenders, Pakistan is an obvious place to go. "Given how active Pakistanis are in the industry, the fact that Malaysia is finding Pakistan fertile for expansion is logical," he says.

Dubai Holding creates global Shariah-compliant investment company

(MENAFN - Khaleej Times) Dubai Holding announced yesterday that it has consolidated its investments in Dubai Islamic Investment Group and Dubai Bank under Dubai Banking Group, to form a global Shariah-compliant investment company.

This consolidation is in line with Vision 2015, which highlights the development of the financial services sector in Dubai as a catalyst for future growth and economic diversification of the Emirate's resources.

Mohammed Al Gergawi, Chairman of Dubai Holding said: "The UAE's financial services sector is one of the fastest growing sectors in our economy. This is a tremendous opportunity for our group and we are confident that this strategic step will enhance growth and value creation in the industry and solidify Dubai's position as a leading global financial centre."

Mohammed Al Shaibani, Chairman of Dubai Bank said: "Dubai Bank has made significant progress on all fronts and across various business initiatives within retail, corporate and investment banking. I am confident that through Dubai Banking Group, we will be able to capitalise on the opportunities presented and also expand its banking and investment portfolio on a global scale."

First western Islamic insurer opens in London

The first British Islamic insurance company has been launched, with forecasts of attracting more than 200,000 policyholders over the next five years.

Principle Insurance is the first Islamic-compliant insurer in Western Europe and will allow Britain's estimated 2m Muslims to insure their car or house in line with Shariah law.

Bradley Brandon-Cross, chief executive of Principle Insurance, said London was becoming the centre of Islamic finance and predicted strong growth in Principle's business in the coming months.

He said: "This company will give Muslims in this country the opportunity to buy products in line with their beliefs. At the moment, there are half a million British Muslims who are car owners and this will benefit them."

Islamic hotels spread beyond Gulf

Shariah-compliant hotels are mushrooming throughout the Middle East and elsewhere, boosted by an increase in the number of Arab tourists. The developers of these hotels believe these establishments will appeal to Muslims and non-Muslims alike as they provide a culturally unique and relaxing atmosphere for travellers.

Demand for Shariah-compliant accommodation is on the rise and currently represents 10% of the world tourism market, according to Abdulla Almulla, chairman of Dubai-based Almulla Hospitality.

Speaking at the Arabian Hotel Investment Conference, Almulla said his firm plans to have an international chain of 150 Shariah-compliant hotels by 2015, with up to 90 of them located in the Middle East and North Africa.

High-growth market
The market for Shariah-compliant hotels is expanding in line with the growth in the number of Arab tourists. Travellers from the GCC spend over $12bn annually on leisure travel, according to the World Tourism Organisation. UAE travellers spend an average of $1,700 per vacation, which is $500 higher than the European average.

Almulla aims to establish a brand identity that Muslim travellers will recognise and trust. Some hotels categorise themselves as Islamic but are not Shariah-compliant, he noted, citing one example in which a 'dry' hotel served non-alcoholic drinks at a 'juice bar'. 'We would not call it a 'bar' because that word should not be used at a Shariah-compliant hotel,' he said.

TAMANI Hotel Marina gets business travellers approval

Since opening its doors to the public in mid-February this year, the TAMANI Hotel Marina is enjoying positive feedback and increased bookings from business and leisure travellers particularly those from Saudi Arabia and GCC.

Adapting to changing demands from both the corporate and leisure markets; the five star TAMANI Hotel Marina is bent on making its property the leading hotel choice for Dubai inbound travellers who are out to enjoy spaciousness and personalised service for those coming to Dubai on leisure or business.

Muin Serhan, General Manager of TAMANI Hotel Marina stated, "My team at TAMANI Hotel Marina are happy with the warm response we got from the travel, tour and trade sectors. We are continuously working on enhancing our guests experience at the hotel and shall continue adopting strategies that will help us face the challenges of the market demand by being innovative in our product offering."

TAMANI Hotels and Resorts is currently recognised as the first UAE branded Islamic hotel operator with no less than H.E. Khalid bin Sulayem, Director General of Dubai's Department of Tourism and Commerce Marketing announcing the landmark achievement made by TAMANI in Islamic hospitality arena in Dubai last February 2008.

Meezan Bank launches Shariah compliant fund

KARACHI: Meezan Bank in collaboration with Al Meezan Investment on Monday announced launching of first Shariah compliant Capital Protected Fund titled Meezan Capital Protected Fund.

The Initial Public Offering (IPO) of the newly issued fund is expected to commence on May 19, 2008, which would continue for three days. Chairman of the Al Meezan Investment, Arif ul Islam said Meezan Capital Protected Fund (MCPF-1) is country's first Shariah compliant Capital Protected Fund and has been jointly developed by Al Meezan Investments and Meezan Bank.

He said MCPF is an open-end mutual fund with a maturity period of three years and six weeks, as it would provide investment opportunities to investors desirous of protecting their capital.

He said protection of the total amount invested by the customer in this fund would be provided by Meezan Bank Ltd, which has a long term entity rating of A plus and a short term entity rating of A one.

Chief executive officer of Al Meezan Investments, Mohammad Shoaib said Meezan Capital Protected Fund would provide maximum protection to the investors. staff report

Dubai hotel group, Almulla Hospitality to establish Islamic hotel properties

Almulla Hospitality, Dubai-based Shariah-compliant hospitality chain, has signed an agreement to establish financial real estate company with the Jasper Capital Group, UK-based investment banking consultancy, to develop international chain of Islamic-compliant hotels with 150 properties worldwide and up to 90 in the Middle East and North Africa. The hotel chain will operate under the brand names of Cliftonwood, Adham and Wings.

Abdulla Mohamed Almulla, Chairman, Almulla Hospitality, said, ""We are very pleased to assign Jasper Capital Group of the UK to structure a plan toward achieving our goal".

Dubai's Almulla Hospitality plans to grow its property portfolio through management contracts, joint venture investments and selective acquisitions across the world using a variety of investment structures. All financial structures involved will conform to the Islamic ban on interest.

Shariah-compliant hotel sector grows

(MENAFN - Bahrain Tribune) The Islamic hospitality market, or Shariah-compliant hotels, is pegged to be one of the fastest growing hospitality segments, according to Jonathan Worsley, conference co-organiser, Arabian Hotel Investment Conference (AHIC). He said Dubai-based hospitality group Almulla Hospitality, recently launched its Shariah-compliant hotel portfolio, comprising three brand tiers.

The group has also cited plans to target development in Saudi Arabia, the United Arab Emirates, Jordan, Egypt and Malaysia in the first instance, with Thailand and Europe following closely behind. "Almulla joins other UAE-based players including Shaza Hotels from Kempinski and Tamani Hotels and Suites from KM Group among others," he said.

Rotana, too, has tickled the sector recently launching Rayhaan Hotels and Resorts with an offer-specific no-alcohol label. Almulla chairman, Abdulla Almulla said the demand for Shari'a-compliant accommodation is on the increase, representing 10 per cent of the world tourism market.

''In less than a decade Middle East leaders have transformed the landscape and created one of the world's fastest growing regions, with hospitality investment at its core,'' the chairman said. "UAE travellers alone spend more than $4.9 million on travel annually, and the Islamic hotel product will be in high demand, certainly reaching 10 per cent in the short term."

Meanwhile, Rezidor Hotel Group has estimated that the Shari'a-compliant hospitality market will grow by staggering 20 per cent per year over the next decade. Rotana agrees that there is a high demand, and Selim el Zyr, group president and chief executive officer, said this is driven by the desire for individual choice. "In this ever-changing world, individuality of choice is important to the traveller with some guests seeking to reflect the values they hold in the accommodation they choose," he explained. "We have introduced the Rayhaan brand to Rotana's hotel and resort portfolio after considering the diverse needs of our guests. Rayhaan offers world-class standards synonymous with the Rotana name while being an entirely new concept with inherent appeal, particularly to guests of Middle Eastern heritage and desires." This year's AHIC will spotlight new hospitality trends in its session dubbed "Multi-faceted future of Islamic hospitality" and will further beg the question, are Shari'a-compliant hotels the next big thing or a short-term trend?

Session moderator is Naseem Javed, president of ABC Nameback International. Alongside him, panellists include Christopher Hartley, chief executive, Shaza Hotels; Mohmood Al Koofi, CEO, Reef, and Sayed Hadi Al Alawi, chairman, Al Hayat.