Scotland perfectly positioned to cash in on Islamic financial products

Scotland's proud tradition of investment management makes it ideally placed to cash in on the multi-billion pound potential in the growing demand for Islamic financial products, a conference will be told next month.

Scotland's first-ever Islamic investment conference, to take place in Edinburgh, is a joint initiative between Scottish Financial Enterprise (SFE) and the Glasgow-based Islamic Finance Council (IFC). It will aim to outline how to offer investment products that comply with the principles of Islam.

Speaking exclusively to the Sunday Herald from Dubai, Omar Shaikh of the IFC said that Scotland's distinguished fund management heritage, coupled with the mutual roots of many of its largest life companies, means it is a short step for local firms to tap into growing demand for Islamic investments.
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"The reality of today's market is that people are coming back to ethics and values, and Islamic finance is fundamentally ethical finance." said Shaikh. "It is a set of principles on how you do business, which companies you fund and how you conduct yourself. These transcend any culture and nation."

Islamic banking escaping crisis shows strength

The Indonesian vice president, Jusuf Kalla, says Islamic banking has proved its strength by escaping relatively unscathed from the global economic crisis.

Speaking at a conference ahead of the World Islamic Economic Forum in the Indonesian capital, Jakarta, Mr Kalla says the one trillion US dollar Islamic banking and finance system had proved its strength by escaping the crisis.

Islamic banking prohibits speculation and high levels of debt, or the payment and collection of interest which is seen as a form of gambling.

Mr Kalla said the crisis had shown the global economic system - based on unreal transactions - is easily ruined.

Thousands of delegates from 30 countries are expected to attend the four-day Islamic economic forum, which will likely focus on the financial crisis and food and energy security.

Decision makers seek new growth map for Islamic insurance at takaful conference

The 4th Annual World Takaful Conference (WTC 2009), the world's largest gathering of Islamic insurance leaders, builds on 4 years of successfully meeting industry needs. At this critical juncture in the international financial markets, WTC 2009 is bringing together more than 300 global industry leaders representing key international Takaful operators, insurance institutions, Re-Takaful and Re-Insurance players, Captive insurance firms, underwriters, major brokers, and leading legal and advisory firms to debate how business models will change in the Shari'ah-compliant insurance industry in the context of the global economic crisis.

The World Takaful Conference (WTC 2009) is again held in strategic partnership with DIFC (Dubai International Financial Centre). HSBC Amanah, SALAMA Islamic Arab Insurance, Noor Takaful, and Takaful Re have already confirmed their participation in the conference as platinum sponsors. With new record level participation being achieved, WTC 2009 has set the stage for its most important industry gathering since its inception 4 years ago. Other leading sponsors at WTC 2009 include: ACR Re Takaful, Allianz Takaful Co., MNRB Takaful, Abu Dhabi National Takaful Co, t'azur, Munich Re Retakaful, enaya AIG Takaful, Ernst & Young, A.M. Best, Norton Rose, Hannover Re, and GIC Re.

Malaysia's Bank Negara, UKTI to cooperate on Islamic finance

Another sign of the UK's intention of becoming an international hub for Islamic finance is the signing on Wednesday of a memorandum of understanding (MoU) between Bank Negara Malaysia (central bank of Malaysia) and the UK Trade and Investment (UKTI), to establish a collaborative framework to promote mutual cooperation in the area of Islamic finance.

At the signing in London by Zeti Akhtar Aziz, governor of Bank Negara, and Sir Andrew Cahn, the chief executive officer of UKTI, there was some surprise that the MoU was between the Malaysian regulator and the UK trade promotion entity, and not with the equivalent UK financial services regulator, the Financial Services Authority (FSA). This ambivalence in the UK Islamic finance policy and the reluctance of the FSA to be seen to be encouraging the facilitation of Islamic finance in the UK is puzzling to many market players in the sector especially from the Middle East and Southeast Asia.

The agreement, according to Bank Negara, will pave the way for Malaysia and the UK to strengthen cooperation in the development of talent and expertise, business linkages and infrastructure support in Islamic finance. It will also facilitate the exchange of resources in the development of human capital and promote mutual recognition of common standards in Islamic finance transactions.

Al-Jasser may usher in new banking era

LONDON: The appointment of Muhammad Al-Jasser last month as the new governor of the Saudi Arabian Monetary Agency (SAMA) has been widely welcomed by regulatory officials and bankers both in the Kingdom and abroad.

Al-Jasser up to now served as the vice-governor of SAMA. He succeeds Hamad Al-Sayari, the former SAMA governor. Al-Jasser’s appointment was announced by Custodian of the Two Holy Mosques King Abdullah. The governorship of SAMA carries the rank of minister, which means that Al-Jasser will also sit in the Saudi Cabinet.

The differences in style and personality between Al-Sayari and Al-Jasser could not be more stark. The former, according to bankers, is an introvert — quiet, cautious and bureaucratic. The latter is more proactive, outspoken and approachable. As such, foreign regulatory officials and bankers expect a much more proactive policy approach from the new governor. Others expect SAMA under Al-Jasser to open up to Islamic banking in particular and to show leadership in this field in the light of the growing globalization of the industry.

Taurus Mutual Fund launches Shariah Compliant Taurus Ethical Fund

Taurus Mutual Fund has launched a new open-ended equity oriented scheme Taurus Ethical Fund. Taurus Ethical Fund will actively manage investment in companies which are in compliance with the Shariah norms. The scheme will primarily invest in Equity and Equity related instruments.

The New Fund Offer opens on 19th February 2009 and closes on 20th March 2009.

The scheme re-opens for redemption and continues offer at a date not later than 30 days from the date of close of New Fund Offer. The New Fund Offer is priced at Rs 10 per unit + applicable load.

The Minimum Application Amount during NFO is Rs 5000 and in multiple of Rs 1 there of.

The entry load is 2.25% and exit load is 1% upto 6 months. The exit load will be 0.50% from 6 months to 1 year and no exit load after 1 year. Under SIP, there is no entry load. But, there is an exit load of 2.25% if redeemed within 1 year from the date of allotment - applicable to each allotment.

The scheme offers different choices of investment like Growth, Dividend Option - Dividend Payout & Dividend Re-investment option, Bonus option.

The Benchmark for the scheme will be S&P CNX 500 Shariah Index.

Islamic finance body rules on capital, investments

An Islamic finance industry body announced on Friday regulations relating to collective investment schemes and the capital of sharia institutions to improve investor protection.

The Kuala Lumpur-based Islamic Financial Services Board (IFSB), an umbrella group for Islamic financial regulators, said it had adopted guidelines to promote transparency for investors of collective investment schemes.

It also released rules on capital requirements for Islamic institutions involved in Islamic bond issuance and real estate investments.

IFSB's regulations are not binding on the sector and compliance is voluntary, as is the case with those issued by other Islamic finance industry bodies.

As at January 2009, IFSB had 178 members including the International Monetary Fund, World Bank, Bank for International Settlements and Islamic Development Bank.

UK institute CIMA offers course in Islamic finance

UK-based Chartered Institute of Management Accountants (CIMA) would be offering self-study course in Islamic finance, thus becoming the first internationally recognised professional body to offer such a qualification.

“CIMA Certificate in Islamic finance is aimed at producing competent staff, who would be conversant in all areas of Islamic finance at both theoretical and practical levels. The course is targeted at diverse range of participants, including employers and employees currently operating in the sector and those wishing to move into it,” said Arati Porwal, chief India representative of CIMA.

The course comprises four modules: Islamic commercial law, Islamic banking and takaful (insurance), Islamic capital markets and instruments, and accounting and analysis of Islamic financial institutions.

Meanwhile, a diploma-level qualification —international Islamic finance: governance and analysis — would be available at a later date. This will be a written exam based on case studies. The complete package (including two attempts at each assessment) costs £1,500. Further re-sits of the exams after the two attempts would cost an additional £60.

“We estimate that it would take students between two and six months to reach a stage where they can sit for all the final exams, depending on prior knowledge and experience. All assessments will be delivered online,” Porwal added.

On the prospects of Islamic financing, Porwal noted the Islamic financing industry is now estimated to be worth between £150- 250 billion, compared with £100 billion two years ago, and its current annual growth rate is estimated at between 15-20 per cent.

“Interest in the area is anticipated to grow with an ever increasing proportion of Muslims and non-Muslims worldwide seeking out Islamic financial products. While demand for the products has increased dramatically, the supply of suitably qualified staff has not kept pace and this course is aimed at bridging the gap,” she added.

Islamic banking rising but impact is minimal

Although Islamic banking business in Malaysia is expected to remain on the uptrend, its contribution will have minimal impact on the total income of local banks, analysts said.

TA Securities noted that while prospects were still good for Islamic banking in the country, it contributed only 10% to 11% on average to the total income of the country’s nine listed banks in the third quarter ended Sept 30, and 9% in the second quarter.

However, for the third quarter of 2008, Islamic banking income for these banks grew 3.7% versus the second quarter despite a 15.7% drop in the banks’ total income.

“We expect the Islamic banking business to contribute an average of 10% to banks’ total income for the current earnings reporting season (the three months ended Dec 31 to be released latest by end February),” said Wong Li Hsia, a banking analyst with TA Securities. “Going forward, we expect the Islamic banking business to slow down a little in line with the rest of the banking industry.”

AMMB Holdings Bhd, which recently announced its third quarter results, recorded a net income of RM143.8mil from Islamic banking or a 16.2% contribution to its total income.

24 Malaysian Islamic banks at MSE 2009

Institutions and investors looking at viable and stable alternatives to conventional financial systems and tools will have an opportunity to gain valuable insights into Islamic finance at the Malaysia Services Exhibition (MSE 2009) held at the Dubai Airport Expo from March 17 to 19.

MSE 2009 is organised by Malaysia External Trade Development Corporation (Matrade), the national trade promotion organisation of Malaysia, which has 39 offices around the world including in Dubai and Jeddah.

The exhibition will showcase over 200 service providers from 13 industry clusters where its broad range of services can meet the growing needs of the markets in the Middle East, North Africa and Commonwealth of Independent States (CIS).

The Financial Services cluster of the event will feature 15 leading institutions that pioneered Islamic finance in Malaysia and lead the country's evolution into the premier platform for Islamic finance activities. Together, these institutions will showcase a diverse range of Islamic products and support systems required to make Islamic finance a sustainable economic model. To date, there are over 11 Islamic banks and 13 other banks participating in Islamic banking schemes in Malaysia with total of 1,281 branches operating throughout the country.

Malaysia holds the distinction of being the world's first country to have a full-fledged Islamic financial system operating in parallel to the conventional banking system. The country also places a strong emphasis on developing the human capital required to promote growth of Islamic finance locally and globally.

Islamic Economics, Banking and Finance: Historical Perspective and Future Prospects

Islamic banking and finance had its major beginnings in the year 1975 with the establishment of the Islamic Development Bank. Islamic banking has flourished in various countries since then with Malaysia, Indonesia, UAE, Pakistan and Saudi Arabia being in the forefront. Islamic banking has also recently done rather well in non-Muslim countries with the reported size of UK Islamic banking overtaking that of majority Muslim countries like Pakistan. Islamic banking assets are thought to be anywhere from 700 billion dollars to 900 billion dollars as of 2009. The credit crunch that has affected much of the western world has not taken its toll on the Islamic Banks, mainly because of the nature of the underlying transactions which admonish Riba and encourage instead a partnership based approach. The result is that the actual profit or loss is shared with the shareholders rather than an arbitrary number called Riba or "interest" which they have to come up with to please the investors regardless of the market situation. In this way, Islamic Banking also helps in depicting the true state of the economy.

Islamic indices historically have also been outperforming the other indices with the Dow Jones Islamic Developed World Index outperforming the MSCI World Index consistently over the past few years. Growth in Islamic banking has also been stellar and it has been growing at a healthy rate of 15-20% per year according to estimates. Moody´s has projected that Islamic banking would expand to a total value of $4 trillion dollars in another five years. The reason to this growth can also be attributed to the western banks taking interest in the Islamic banking instruments. Lloyd´s bank in the UK spread Islamic instruments to all of its two thousand branches in 2006 from five branches a year earlier. HSBC, Standard Chartered and Citigroup are some of the conventional western banks which have invested in Islamic banking.

New plans all around, will they work?

Ahem… wow been really working my --- off for the past few days. Well anyways a lot of things have happened between that time. 

For instance Pakistan planned to open 230 new Islamic finance outlets. There has been a growth in demand for Shariah compliant loans and the already existing 500 branches. Smaller enterprises are thriving and trying to expand in this depressed economy and farmers it seems are not effected by what's going on around them. So the demand is probably going to come from those sectors. 

While in Pakistan the Islamic banking branch of the Bank of Khyber (BOK) was formally inaugurated in Rawalpindi. BOK Managing Director Bilal Mustafa speaking on the occasion said BOK was stable despite economic crisis, which shows the confidence of depositors on the bank (I did not know that, now that makes one wonder). 

At the same time two KSA companies have planned to establish a new Sharia compliant real estate finance company. The partnership is between Al-Khabeer Merchant Finance Corporation and Al Mutajra. Dari Home Loans as it will be called will become one of the first real estate financing companies in the Kingdom to specifically cater to the middle income sector. Saudi's real estate finance segment is still in the early stages of development and has been collaborating with the public and private sectors in the development of rules and regulations governing this industry. Did you know 70 per cent of Saudis under the age of 30 do not have a home? (I thought everybody there lives in Palaces).

In Nigeria a bank called The Kwara Commercial Micro Finance Bank is to offer interested customers Shari'ah compliant services. According the mission statement of the bank "KCMB works with its customers in a view of profit sharing (mudharabah), safekeeping (wudiah), leasing (ijarah), joint venture (musharakah) and capital venture (mudaraba)." Features of these financial services include "include no interest and guaranteed return." (Now that's really interesting).

All was not hunky dory and Turkey's launch of bonds designed to appeal to Islamic investors fell flat, raising only a quarter of the $1.16bn the Treasury had hoped for.

Paradigm to distribute Sharia-compliant products

Paradigm Mortgage Services has teamed up with the Islamic Bank of Britain (IBB) to be the distributor for its Sharia-compliant products.

Paradigm members will now have access to IBB's complete range of products, which are suitable for both Muslim and non-Muslim customers and cover both personal and business customers. 

Personal products include current and savings accounts, personal finance and IBB's Sharia-compliant mortgage alternative, the Home Purchase Plan. Business products also include current and savings accounts, plus business and commercial property finance options.

Bob Hunt, chief executive of Paradigm, said: "We are delighted to announce this formal link-up between Paradigm and IBB which will provide our members with access to the products IBB currently offers."

Ex DLA Islamic finance head launches new firm

DLA Piper’s former global head of Islamic finance Oliver Agha has set up a firm in the United Arab Emirates, establishing a non-exclusive relationship with Pillsbury.

Agha has formed the Agha & Shamsi law firm in Abu Dhabi with Emirati lawyer Dr Al-Shamsi. The practice will initially employ six lawyers focusing on Islamic finance, energy, restructuring and project finance and marks the first Gulf affiliation for US firm Pillsbury.

Agha said: “The idea is to create a high quality firm and provide Islamic finance, UAE and Saudi law advice [through an alliance with a Saudi firm]. I was in talks with quite a few firms and the cultural fit with Pillsbury was best.”

Pillsbury’s trade finance partner and head of the worldwide finance practice Michael Schumaecker said: “Part of what we’ve been doing for a year is speaking to a number of firms. We wanted something very small and focused in the Middle East and began to speak to Oliver Agha in the summer. Oliver must have met over 50 Pillsbury partners. He needed to feel comfortable with our culture and our intellectual approach to Islamic finance. We don’t see it as just another way of structuring a deal. Islamic finance is not a technique, it’s a philosophy.”

Biggest Islamic bank in Bahrain next June

Manama, Bahrain: The biggest Islamic bank in the world will establish in Bahrain by the Islamic bank for development and other investors next June with a prepaid capital of 11 billion dollars in order to enhance development in the Islamic nations, said the general council of Islamic financial firms. 

Head of union of Arab banks and chief executive of Al Baraka banking group Adnan Yousif told Bahraini daily '' Al Watan'' that the bank aimed at financing development projects that serve the society. Yousif expected that Bahrain's share in the bank would be 10 or 15 percent and other shares of Arab and Islamic countries would be decided at the foundation meeting of the bank.

HSBC launches Amanah India Shariah Portfolio

MUMBAI: The portfolio management services division of HSBC Asset Management has launched HSBC Amanah India Shariah Portfolio and is now open for subscription.

The scheme is an actively managed, open-ended equity offering wherein investors can contribute their funds for investment in conformity with Islamic Shariah principles. This is one of the first Shariah compliant offerings in the Indian market and will provide investors with an opportunity to benefit from returns through Shariah-compliant equity investment in Indian companies. 

HSBC Amanah, the global Islamic financial services division of the HSBC Group, is the advisor to the HSBC Amanah India Shariah Portfolio. The portfolio will be benchmarked against the Dow Jones Islamic Market India Index and the BSE 500. 

"We are pleased to be one of the first players to bring a Shariah-compliant product offering to the Indian market. With our local investment knowledge and the global expertise of HSBC Amanah in managing Islamic funds, we aim to make investing a rewarding experience for our investors," said HSBC Asset Management CEO Vikramaaditya. 

Sharia'a-compliant private bank launched in the UK

Bank of London and The Middle East is launching a fully Sharia'a compliant private bank, as the latest bank to move into this sector.

BLME Private Banking will provide Islamic finance solutions to high net worth individuals and entrepreneurs in the UK, Europe and Middle East

Adrian Gayler will head the business; he joins from Merrill Lynch International Bank. He will report to Humphrey Percy, chief executive officer at BLME.

The new private banking offices will be based in Mayfair along with the already established wealth management team.

Humphrey Percy said: "Despite difficult financial market conditions we see this as an opportune time to launch a private banking business. High net worth individuals are increasingly concerned about preserving their wealth and will be looking for counsel and best-of-breed services and solutions, which BLME will offer to clients."

College launches Islamic finance degree

STRASBOURG - A French business school launched a degree in Islamic finance yesterday, as more European Muslims seek careers in a fast-growing sector run under the precepts of Sharia law.

Strasbourg University's School of Management has now recruited 36 students from France, Algeria, Germany, Luxembourg, Switzerland and Tunisia to France's first 11-month postgraduate masters-level course in the subject

Australia-MLA Halal accredited brand.

HALAL BRAND.

The global expansion of the MLA's Halal Brand, is an important step towards expanding markets for Australian red meat, according to Ian Ross the Middle East regional manager for the MLA.

Ross said "with 28% of the worlds population being Moslem and with most of these people living in countries with growing economies, its vital the Australian red meat industry positions itself in the best possible way to supply these important markets".The world has over 2 billion Moslems and the market for Halal products, exceeds US$500 billion.

The major problems in getting Moslem nations to take meat, as opposed to live animals are two fold, one they prefer fresh meat and secondly mistrust of the Halal slaughter procedures, in countries such as Australia and the South American countries.The Australian MLA brand for certified Halal meat, goes a long way towards removing half of the problem.

In Argentina, the Council of Mosques organizes all the Halal slaughter, through a private company, that provides the service at the meat plants www.halalcatering.com.ar .

Palermo Buenos Aires, boasts the largest Mosque in the whole of the America's north and south.

Europlace wants to promote Islamic banks in Paris

DOHA: Paris Europlace (the Paris Financial Centre) said it welcomes sukuk issuers on NYSE Euronext and the setting up of Islamic banks in Paris.

"The regulations that have been recently adopted to facilitate Islamic finance in France are intended to make Paris a hub for Islamic finance and now we have all the tools to accommodate Islamic finance," Arnaud de Bresson, Managing Director of Paris Europlace told a news conference here yesterday. He said Paris Europlace has exerted great efforts for the last three years to promote Islamic finance and the opportunities it has to offer and ultimately submitted proposals for reforms to develop Islamic Finance in France.

As a result, both the French Ministry of Economy, Industry and Employment and the Autorite des Marches Financiers (AMF), the French financial markets regulatory authority, announced late last year significant tax and regulatory changes aimed at boosting Islamic finance in France.

Arnaud de Bresson together with Christian Noye, Governor of Banque de France accompanied by a large delegation is currently visiting Doha as part of a Gulf tour which also includes Bahrain and the UAE.

KL seeks global standards on Islamic banking

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

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

"We had asked that more attention be given to Islamic banking, considering its acceptance in the world now. The first meeting would be held among experts from countries that have Islamic banking sectors."

Abdullah said that with a global standard, problems that arose could be solved with a common approach and that it would also eliminate confusion.

Moody's is voted Best Rating Agency for Islamic Finance

Moody's Investors Service has been voted 'BestIslamic Rating Agency' that is, best rating agency for Islamic finance ratings by the readers of Islamic Finance News in the publication's annual 2008 Awards poll.

The award recognises Moody's superior ratings coverage of Islamic financial institutions and Sukuk transactions during 2008. 

Indeed, Moody's rates and publishes in-depth research on most of the banks that were voted 'Best Islamic Bank' in their respective country by 

the readers of Islamic Finance News. 

'Moody's is pleased to receive recognition for its credit analyses of Shari'ah-compliant banks and its close surveillance of Islamic capital markets,' said Anouar Hassoune, Vice President, Senior Credit Officer who has spearheaded Moody's 

research on Islamic Financial Institutions. 'Moody's maintains its view that the Islamic finance industry has a bright future,' added Mr Hassoune. 

Moreover, in terms of Islamic securitisations, Moody's rated high-profile deals in 2008, such as the Tamweel Sukuk, which was voted 'Sukuk of the 

year', as well as the Sorouh/Sun Finance deal, which was voted 'Structured Finance Deal of the Year' by the readers of Islamic Finance News. 'The Sorouh/Sun Finance securitisation was a landmark in Sukuk markets, which are increasingly interested in 'true' asset-backed financings. 

Growth seen for shariah-compliant hotels

Hotel accomodations that comply with Islamic dietary and other religious laws are expected to grow in Muslim regions and elsewhere despite economic woes.

Shariah compliant hotels, one of the fastest growing hospitality segments is expected to boost the region's revenue source over the coming years and during global economic turbulence. 

"Muslims, particularly GCC travellers represent a vital market segment. Not only are they one of the most lucrative, with over $12 billion spent on leisure travel alone, but they are also consciously-driven," commented CEO, MKG Hospitality, Vanguelis Panayotis. 

An increase in intra-regional travel and their growing purchasing power has created a significant demand for a product that reflects the lifestyle, culture, history and expectations of the region. This segment will prove to be crucial to the regions' tourism industry over the coming years. 

"Shariah hotels however are not just a niche market for Middle Easterners. They can and should cater for other segments, such as Muslims living in Europe, the US, North Africa and Asia, as well as non-Islamic markets. 

Dubai sees the launch of a dedicated Islamic finance media house

Dubai sees the launch of a dedicated Islamic finance media house

Multi-award winning Shariah consultancy Yasaar Limited has today announced the launch of a dedicated Islamic finance media entity called Yasaar Media.

The founders of Yasaar Media recognise that there is a serious need for an information provider in the Islamic finance space that produces in-depth reports and studies on specific market niches, asset classes and countries. These reports are designed to be market-defining works that will become the benchmark in their field.

The people behind Yasaar Media are Paul McNamara and Majid Dawood.

Mr. McNamara is one of the best known Islamic finance journalists in the world and was co-founder of CPI Financial, a Dubai-based media company. He has launched Islamic finance publications in the UK, the UAE, and Australia. Mr. Dawood has been a key individual in the establishment of Yasaar Limited, the first Shari'ah compliance services company, based in the Dubai International Financial Centre.

Singapore launches first Islamic bond program

SINGAPORE -- The Monetary Authority of Singapore (MAS) announced on Monday its first Islamic bond program worth 200 million dollars (about 134 million U.S. dollars).

The bond program, also named sukuk, is the Sharia-compliant equivalent of Singapore Government Securities (SGS), and will help Islamic banks and other investors in Singapore manage their liquidity and investment portfolio. The sukuk will be issued on a reverse-enquiry basis, based on the demand of financial institutions operating in Singapore.

"This sukuk issuance facility underscores our strong commitment to the development of Islamic finance in Singapore. We invite eligible financial institutions to approach MAS to register their interest," said Heng Swee Keat, Managing Director of the MAS.

The MAS said it will continue to work closely with the industry to ensure that the regulatory and tax framework, and other necessary infrastructure and conditions are in place to foster good risk management and the further growth of Islamic finance in Singapore.

AMU to start 'Islamic Banking' course

LUCKNOW: In what is being touted as a first of its kind in the country, Aligarh Muslim University (AMU) will launch a one-year post graduate diploma course in 'Islamic Banking and Finance' based on tenets of Shariah. 

"The basic principle of Islamic banking based on Shariah, Islamic rules of transaction, is prohibition of Riba (interest)and is known as interest free banking system. As per the tenets of Islam earning interest on money deposit and loans in the bank is prohibited by law," Dr Mohammad Nejatullah Siddiqi, who designed the one-year diploma course, told reporters. 

The university academic council, highest body of the university, which decides on academic affairs, has approved of the introduction of the course early this month from the next academic session, he said, adding, that there would initially be 20 seats in the course. 

In this system of banking the depositor, who does not bear risk as in other banking systems, has to equally share the risk with the bank. Owner of the capital, however, is allowed to have a share in the bank's profits, Siddiqui, a retired AMU professor of Economics and Islamic Studies, said, adding that a similar system is followed by the banks while offering loans to the customers. 

Muslim scholars discuss Islamic banking

Leading Muslim scholars held a seminar on Friday to discuss emerging issues in Islamic Banking in view of new developments in the sector.

The conference held at the Nomad Hotel in Garissa, was organised by Barclays Bank of Kenya Ltd. under its Islamic Banking Division, La Riba.

Led by the Chief Kadhi, Sheikh Hammad Kassim, the scholars deliberated on Islamic banking issues. Sheikh Kassim, who sits on the Barclays Shariah Advisory Board, said the bank strives to be 100 percent Shariah-compliant in its Islamic banking products.

"In the annual reviews conducted by the board, I would like to confirm that the Barclays Islamic Banking Division is in line with the requirements of the Muslim faith,'' noted the Chief Kadhi.

Barclays Head of Islamic Banking, Omar Sheikh, gave an overview on one of the fastest-growing financial product in the market, noting that Barclays set the pace in Kenya when it pioneered the country's first Shariah-compliant financial product in 2006.

Barclays Bank Regional Managing Director, Adan Mohamed, said the bank launched La Riba in response to the needs of the bank's growing Muslim customer base.

Shariah-compliant hedge funds hit the spot

Shariah-compliant hedge funds could outperform their traditional hedge fund counterparts this year, predicts Aureliano Gentilini, global head of hedge fund research at Thomson Reuters Lipper.

Gentilini said that Shariah-compliant hedge funds stand to benefit from emerging trends in the investments industry and developments in the Gulf Cooperative Countries namely the Persian Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

"Although the economic slowdown across the world does not portray a very optimistic picture for oil prices, we believe plans by some emirates in the Gulf Cooperation Council (GCC) region to boost budget expenditure and run a budget deficit to better manage a scenario of global market recession may act as a catalyst for insulating, to some extent, stock markets in the GCC region from market disturbances." 

Gentilini added that while Dubai and Saudi Arabia have adjusted their GDP growth estimates following the global financial crisis, both states still project a robust non-oil GDP growth this year. 

Islamic finance market continues to expand

London and Luxembourg - Allen & Overy LLP has advised Deutsche Bank AG Dubai as arranger on the establishment of a programme for Shari'a compliant securities referenced to the performance of a range of potential underlying reference assets. The issuing entity is a special purpose vehicle, Al Mi'yar Capital SA, issuing under the Luxembourg Securitisation Act 2004.

This programme is unique as investors receive a profit or loss on their investment based on the performance of a wide range of independent reference assets or indices (which can include commodities, equities, funds or baskets), whilst offering the full range of structured product pay-offs.

Commenting capital markets Partner Andrew Sulston said: "This transaction represents a significant development in the fast evolving market for Shari'a compliant products and should allow investors access to a wider range of asset classes than previously available while also bringing increased liquidity to the market."

Yusuf Battiwala, an Associate specialising in Islamic finance, commented that: "It is particularly pleasing to see this programme come to market as it meets the challenge of trying to accommodate Shari'a requirements without compromising on the robustness of the structure from an English and Luxembourg law point of view."

Over 840 Islamic banks branches to be opened by 2012

KARACHI - Domestic banks in the country are expected to open more than 840 new branches throughout the country to carry out Islamic banking. At present the number of branches offering exclusively Islamic banking is 260. But by the year 2012 the total number of the Islamic bank branches would expand to over 1200.
This upcoming expansion in the Islamic banking in Pakistan had been mentioned in the Pakistan's Islamic Banking Sector Review 2003-2007.

The Future Outlook about the Islamic banking in Pakistan points out that the phenomenal expansion in the network of this sector is based on the factors like unmet demand, geographical coverage, product development, new segments and data collected by different Islamic banks.

It further estimated that total assets of Islamic banking industry would reach over one trillion rupees by the year 2012 while the deposits are expected to reach Rs.1 trillion. This in combination with the introduction of new sectors into the fold of Islamic banking

Islamic banking industry in Asia-Pacific seen reaching $450bln or 60% of total Islamic bank assets

From Komfie Manalo, Opalesque Asia: A report by Celent, a Boston-based financial research and consulting firm, sees fast growth in the Islamic banking industry in the Asia-Pacific region, second only with the phase in the Middle East.

The report adds assets of Islamic banks in the Asia-Pacific region is now estimated to reach $450bln, representing 60% of the total Islamic bank assets across the globe.

Key points of the report The economic crunch facing Western markets has resulted in emerging countries in the Asia-Pacific region that investors find more attractive. The growing Muslim population that expands at a rate of 2 percent annually, are mostly potential clients for these Islamic banks. Muslims now number around 1.7bln or 28.4% of the global population. At least 1 billion of them are in the Asia-Pacific region making it the next big market for Islamic banks.

Global assets of Islamic banks is estimated between $700 billion and $750 billion. Notably, Islamic banks are enjoying a faster growth rate and profit margins compared with their conventional counterparts. However, since the Islamic banking sector is a relatively new concept, the industry is facing challenges, particularly in areas of technology adoption, lack of Islamic banking experts, differences in tax treatment of various Islamic banking products and integration with global financial standards.

Chance for Islamic banking

KUALA LUMPUR - THE global economic crisis has handed the Islamic finance sector a 'golden opportunity' to show it is a better alternative to capitalism, Malaysia said on Monday.

Although capitalism has been pre-eminent for centuries, 'it is becoming obvious that there is now more proof of its weaknesses,' Deputy Prime Minister Najib Razak said in a speech to an Islamic economic conference.

'We Muslims should see the current situation as a golden opportunity for us to prove the power, strength and effectiveness of the Islamic banking and finance system,' he said in an opening address.

Islamic banking, a booming US$1 trillion (S$1.49 trillion) global industry that prohibits speculation and high levels of debt, has been relatively unscathed by the credit crunch.

The rules of the sector - which incorporate principles of sharia or Islamic law - prohibit many of the risky activities that triggered the crisis that is felling economies around the world.

Philippines Food and Drinks Market - Emerging Opportunities

The Philippines has emerged as one of the rapidly growing food and drinks industries in the Asian region over the recent past. The country is characterized by various factors, such as its growing young affluent population, rising disposable income and rising consumer awareness regarding health and safety concerns. With these factors, the demand for health food and drinks is surging high, says our new research report, "Philippines Food and Drinks Market: Emerging Opportunities".

The country exports foods to several countries, including the US, Europe and some Asian countries. However, the ongoing financial turmoil is forcing the country to look at alternative destinations such as the Middle East and Africa. In line with this, it is striving hard to get a share of highly lucrative global halal food industry, explains the report. 

Deutsche Bank launches revolutionary Sharia compliant issuance platform

Deutsche Bank announced today the launch of "Al Mi'yar", a first of its kind platform aimed at facilitating the issuance of Shari'a compliant securities.

"Al Mi'yar", from the Arabic "The Standard", is a Luxembourg domiciled platform, developed by Deutsche Bank, with Luxembourg Financial Group A.G. as the Shari'a investment manager and Deutsche Banks Trust & Securities Services group providing the settlement framework.

Geert Bossuyt, Deutsche Bank's Head of Structuring for the Middle East and North Africa, said "Deutsche Bank is extremely pleased to be again at the forefront of innovation in Islamic finance, as demonstrated by our ability to adapt all types of investment products and strategies to the Shari'a compliant world. Al Mi'yar will in my opinion revolutionize the issuance of securities in an Islamic manner. The platform meets all of the latest standards issued by the Accounting and Auditing Organization of Islamic Finance Institutions (AAOIFI) and hence should be globally acceptable."

Al Mi'yar will enable Islamic investors to meet their specific investment objectives by giving them exposure to different asset classes without compromising their Islamic beliefs. By comparison to other Islamic platforms, Al-Mi'yar maximizes efficiency and protection of investors' interests, while generating liquidity and returns.

Philippines Looking at World as Potential Halal Food Industry

The Philippines has been focusing its efforts to get a significant share in the global halal food industry which is growing stupendously, says RNCOS report. 

With Muslim population of 18-20 Million, the domestic market for halal food products is largely untapped in the Philippines, according to our new research "Philippines Food and Drinks Market: Emerging Opportunities". Besides the domestic consumption, the country is aggressively eying other regions with sizable Muslim population to benefit from the rapidly growing halal food industry all across the world.

The government is continuously making its efforts to develop halal food industry for domestic as well as export purposes. In line with this, the department of Trade and Industry (DTI) has laid out marketing plans, consisting of joint partnerships between the government, business and the Muslims, each supporting the other, says an analyst at RNCOS. It is also making studies on Muslim consumption patterns.

The country is also pushing for the establishment of halal food corners in all supermarkets, groceries and food-related retail outlets in the country by 2009. It is also planning more overseas trade shows, product sales and marketing, and the promotion of Halal certification among exporters to create markets overseas.

The most important markets, the report has identified, for Philippine Halal food include the Middle East and ASEAN countries, which have the largest number of Muslim population in the world. The report has also identified various areas of halal food industry, which are important from investment point of view.

New Index Covers Shariah-Compliant Commodities Hedge Funds

The Dubai government and Shariah Capital have launched an Islamic commodities hedge fund index, calling it the first of its kind.

The Dubai Shariah Hedge Fund Index includes as constituents four funds, part of the DSAM Kauthar Commodity Fund. The four funds each received US$50 million from the Dubai Multi Commodities Centre Authority—the government agency working with Shariah Capital to create the index—and are constituents of the Al Safi Trust, the shariah-compliant hedge fund platform established last year by Barclays and Shariah Capital.

The four funds will invest in gold, energy, natural resources and mining, the DMCC and Shariah Capital said.