• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Islamic finance news
 

Islamic finance news

on

  • 1,970 views

 

Statistics

Views

Total Views
1,970
Views on SlideShare
1,969
Embed Views
1

Actions

Likes
1
Downloads
51
Comments
0

1 Embed 1

http://www.slideshare.net 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Islamic finance news Islamic finance news Document Transcript

    • Vol 7 Issue 23 9th June 2010 The World’s Global Islamic Finance News Provider AL ER TS Register now - It’s free The right approach is key In this issue IFN Rapid ..................................................... 2The New Muslim Consumer is a new Mutanaqisah in particular are explored in a Islamic Finance News ................................ 3phenomenon that the world is becoming two part series that focuses on the solicitor. It Takaful News ................. .............................7aware of and coming to grips with as a covers an introduction to the facility and thepowerful and untapped market audience. In a differing expecactions that the banks and the Rating News ................................................ 8pioneering research done by communications customer expects of the solicitor. IFN Report:group Ogilvy & Mather in collaboration with First US fund manager.............................. 9market research specialist TNS, the New Private equity and venture capital have the Eager for Islamic investors..................... 9Muslim Consumer is defined as young, proud potential to be key growth engines for theof their religion and with substantial spending Islamic finance industry. Shariah compliant Articles:power. private equity and seems plausible if the right Thai SEC To Permit Sukuk Issuance — First Deals Likely To Follow .............. 10 human capital is deployed, that can combineTheir profile debunks the many myths and not only advance finance skills but also solid The Role of Venture Capital Model instereotypes that surround Muslim consumer knowledge of Shariah. an Islamic Economic System ..............12attitudes towards brands and their marketing Private Equity — Its Relevance forcommunications. The role of venture capital in an Islamic Islamic Finance Today ..........................14 economic system seems likely only if the Ogilvy Noor Targets the New MuslimMore importantly, the study highlights the government facilitates it. The critical issues Consumer ............................................... 16risks that exist once Muslim consumers include an adequate legal framework, and Musharakah Mutanaqisah Financingare alienated, and provides guidelines for Facilities Legal Issues and Challenges easy entry and exit mechanism and potentialcompanies on how to avoid a mistaken (Part I) .....................................................18 entrepreneurs. It seems ideal for Islamicapproach in their marketing communications. Takaful Surplus Distribution: finance through the participatory financing A Controversy ......................................... 21 modes with the Mudarabah concept beingThe study serves as a platform for the the most common.launch of Ogilvy Noor, a joint venture of Forum .........................................................23Ogilvy & Mather and TNS, which aims to be Meet the Head .......................................... 24 The Thai Securities Commission is currentlya multidisciplinary global Islamic branding Yeo Wico, Partner of Allen & Gledhill in the process of issuing a new regulation bypractice that aims to help brands better July this year that permits both domestic and Termsheet ..................................................25engage with Muslim consumers worldwide. MTD Infraperdana Islamic Dual Tranches Medium international issuances of Sukuk certificates. Term NotesA mistaken approach is often taken by Takaful Moves .........................................................26marketers when wooing customers. There The country’s ministry of finance has alsois a misconception that Takaful is basically prepared a draft regulation to exempt the Deal Tracker .............................................. 27insurance with surplus distribution. This originator from land transfer taxes and Islamic Funds Tables ................................28image does not do justice to Takaful operators, registration fees, which is up for cabinet approval. S&P Shariah Indexes ...............................29as surplus distribution overshadows theconcept of Tabarru, or risk sharing, which is Dow Jones Shariah Indexes ....................30at the very heart of Takaful. So we put surplus In the coming months, there is talk that Islamic League Tables ............................. 31distribution under scrutiny as it applies to the the Bank of Thailand plans to issue a Baht denominated Sukuk with an issue size of Thomson Reuters League Tables ...........34Wakalah and Mudarabah models, and studyit for appropriateness and viability. approximately THB5 Billion (US$153 million). Events Diary............................................... 37 Given this situation, Allen & Overy Thailand Company Index .........................................38The legal issues and challenges in the takes us through the first few deals likely tocontract of Musharakah, and Musharakah follow. Subscription Form ....................................38
    • A round-up of all this week’s news IFN RAPID www.islamicfinancenews.com •NEWS • Gulf African Bank reaps maiden • Brunei can build halal sector via Sukuk • Early purchase for Takaful and insurance vital, says expert profits after launch in 2008 • Absa Islamic Bank launches new • Islamic Finance news to host IFN Roadshow at Grand Hyatt Istanbul in Turkey RATINGS • RAM reaffirms AEON Credit Service’s Islamic product enhanced long-term rating of ‘AA1’ • Bank of London and the Middle East • ApexAfrica Capital is set to launch a sets up Reval software • RAM revises Senai-Desaru Shariah compliant unit trust Expressway’s rating to ‘BBB3’ • Russia and the Commonwealth of • Islamic Finance news hosts roadshow Independent States offer room for • RAM reaffirms Esso’s Islamic papers at the American University in Cairo Islamic finance growth at ‘P1’ • S&P has affirmed the ratings of • The North Jersey Federal • Kuwait Turkish American International Assurance Credit Union offers Islamic Participation Bank plans for Company banking Islamic bonds • S&P assigns ‘A-’ on Malaysia’s global Sukuk • Fortis battles Khazanah Nasional in • Islamic finance faces a challenge in • RAM reaffirms Public Islamic Bank’s bid for Parkway Healthcare corporate governance long- and short-term financial • Al Rajhi Bank to use Trasset treasury • Shariah scholars to define application institution ratings management solution of riba • RAM affirms National Bank of Abu • The Monetary Authority of Singapore • Qatar issues local currency-based Dhabi at ‘AAA’ and ‘P1’ will relax its regulations to expand Sukuk • S&P revises The Saudi Investment Islamic finance • Dubai government to keep investors Bank’s outlook to stable • Malaysia’s Islamic banking sector informed on developments • Fitch rates Mumtalakat Holding close to reaching targeted market • Gulf Bank to be sales agent for two Company at ‘A’ with a stable outlook share GCC funds • Moody’s downgrades Dubai Bank to • The Malaysian International Islamic • Sharjah Islamic Bank unveils ‘Baa2’/Prime-3 from ‘A3’/’Prime-2’ Financial Centre, Bank Negara ‘Employee Payment’ program and the Securities Commission launch global search for outstanding individual in Islamic finance • National Bank of Kuwait unveils MOVES • Omar Merican steps down as Bursa Thahabi Ijara Fund VI Malaysia’s chief operating officer • Merger plan to proceed, despite • The International Sharia takeover plans by Dubai Islamic • Macquarie Capital hires Steve Research Academy for Bank Baldwin as its managing director and head of UK corporate broking. Islamic Finance to work on • HSBC Amanah to open Islamic Islamic pricing next year banking branch in Doha • GE Capital appoints Alan Austin as regional director • Ahmed Salem Bugshan Group to • Pakistan to double its Islamic raise US$100 million Sukuk • HSBC appoints Mohammad Al banking services in three years Tuwaijri as new MENA head • Capitas Group International releases • Bank Negara Malaysia says no to whitepaper • Barclays appoints Aaron Gurwitz as Affin Holdings’s takeover discussion CEO • Abu Dhabi Islamic Bank unveils new • ICB Islamic Bank to change hands brand identity • Matthew Moran joins BNP Paribas as director in global execution services • AmIslamic Bank inks pact to be TAKAFUL group financier and facility agent • Hong Kong Monetary Authority • Islamic finance to provide alternative • Metropolitan Life Insurance unveils appoints Mu Huaipeng as senior source of funding for Australian banks insurance for Muslims advisor • The Kerala High Court adjourns • Malaysian consumer group wants • Trowers & Hamlins recruits four new petition against the formation motor insurance policy plan to be lawyers of Al Baraka Financial Services shelved Corporation • Vince Niblett is Deloitte Touche • Prudential quits American Tohmatsu’s new global leader for • CIMB Standard has been rebranded International Group’s deal due to a audit to CapAsia price disagreement © Page 2 9th June 2010
    • NEWS www.islamicfinancenews.comAFRICA discussions. REDmoney Group is the organizer for this roadshow. financial cooperative that serves 30,000 members.Rural banking growthKENYA: Gulf African Bank has recorded agross profit of KES25 million (US$312,000) AMERICAS ASIAin the first quarter of 2010, the first time Meeting Shariah needs Vying for controlsince its launch in 2008. US: The North Jersey Federal Credit Union SINGAPORE: India-based Fortis HealthcareDuring this period, customer deposits has created an Islamic banking division to is up against Khazanah Nasional to gainhave doubled to reach estimated levels of cater to the needs of its Muslim members. a controlling stake in healthcare group,KES16.4 billion (US$204.6 million), which Parkway Holdings.will propel its anticipated financing program According to the credit union, New Jersey isat ease. home to the second largest percentage of Fortis increased its stake in Parkway Muslims in the country. by 0.03% through the purchase ofThe Gulf African Bank was launched with 350,000 shares on the market just prioran investment of KES1.75 billion (US$21.8 Founded in 1936, the North Jersey Federal to Khazanah’s offer of SG$1.18 billionmillion). It was formed to provide banking Credit Union is a member-owned, non-profit continued...services to Muslim communities andthose neglected by mainstream financialinstitutions.Banking for all SONG BIRDSSOUTH AFRICA: Absa Islamic Bank andAbsa Private Bank have launched an Islamicprivate banking solution.The product will provide equal bankingopportunity for Muslims in the country.Absa Islamic Bank and Absa Private Bankare the subsidiaries of Absa Bank.Pioneer Islamic unit trustKENYA: ApexAfrica Capital is set to launcha Shariah compliant unit trust. It is the firstIslamic equity product to make its presencein East Africa.The unit trust is available with a minimum of A language we are most fluent in.KES25, 000 (US$304).Law firm Hamilton Harrison & Mathews willadvise ApexAfrica Capital on this issuance.Staying informedEGYPT: Islamic Finance news will host an IFNRoadshow at the American University in Cairoon the 9th June.The one-day only roadshow aims to exploreand analyze the latest developments in theEgyptian Islamic financial market.The Egyptian General Authority forInvestment chairman Osama Salleh willdeliver the key-note luncheon presentation,and 20 key industry practitioners willparticipate in a series of round-table © Page 3 9th June 2010
    • NEWS www.islamicfinancenews.comcontinued... The selection process will be based on an Traders, Alliance Holdings, Summit Alliance independent international jury, chaired by Port and Shore Cap Holdings.(US$835 million) through its subsidiary, World Islamic Economic Forum chairman TunIntegrated Healthcare. Musa Hitam. The decision is due to growing concerns on high bad debt provisioning. The changeKhazanah may have plans to issue up to of hands is expected to be completed bySG$500 million (US$ 354 million) in Islamic Viability study September 2010 based on regulatorybonds to finance the deal, which would be approval.Khazanah’s first bond issue in Singaporean MALAYSIA: The International Shariadollars. Research Academy for Islamic Finance (ISRA) ICB Banking Group acquired 50.1% of the will complete its study into the viability of an issued share capital of Oriental Bank inFortis bought into Parkway in March and Islamic benchmark pricing rate in 2011. 2006 when Bank Bangladesh dissolvedcurrently holds a 25.37% stake, while the latter on grounds of mismanagement.Khazanah owns 23.2% of the company. The study will incorporate industry feedback Oriental Bank was subsequently renamed as including the concern on the difficulty of ICB Islamic Bank. running two policy rates within one bankingNew software system.MALAYSIA: Al Rajhi Bank will start using Double rolesthe Trasset software solution developed in ISRA proposed that Malaysian Islamic banks MALAYSIA: AmIslamic Bank signed aHungary for treasury management. use industry specific benchmark pricing rates MoU with state education loan provider that are derived from underlying assets. Perbadanan Tabung Pendidikan TinggiThe new software which replaces Thompson Nasional (PTPTN) to become a financierReuters’ Kondor+ has a wide range of Doubling services and facility agent for a 10-year RM1.5solutions including Sukuk management,Mudarabah-based wealth management and continued... PAKISTAN: The country plans to double itsIslamic financing. Islamic banking services in the next three years to meet rising demand and interest forRoom for growth investments that comply with Muslim tenets, according to the central bank.SINGAPORE: The Monetary Authority ofSingapore (MAS) will relax regulations onbusiness related or complementary to core State Bank of Pakistan director of Islamic banking Salim Ullah said the growth will I = INDEPENDENTfinancial business. be driven by domestic factors, and also by increased global interest in Islamic finance. F = FACTUALThe new consultation paper issued by MAShas identified the need to adopt a case The central bank has given prior approval to N = NEUTRALby case approach in allowing financial establish two new Islamic banks, bringinginstitutions to develop new businesses that the total to eight Islamic banks.are related or complementary to the bank’smain functions, which may not be clearlyfinancial. Islamic finance is among the key No to takeover talksareas covered in these new guidelines. MALAYSIA: Bank Negara Malaysia has rejected Affin Holdings’ request to start talksOn the right path with EON Capital for a possible takeover.MALAYSIA: The country’s Islamic bankingsystem is well on track to achieve the goal of The central bank’s decision now leaves Hongthe Islamic Financial Services Master Plan Leong Bank as the sole bidder for EON’s banking assets. DON’T YOUof 20% of total banking market share by theend of 2010. Hong Leong Islamic Bank is a subsidiary of THINK YOUCurrently, the market share of Islamic bank-ing in the total banking sector is 19.6%. Hong Leong Bank. SHOULD BE New owners SUBSCRIBING?Global award BANGLADESH: ICB Banking Group, theGLOBAL: The Malaysian International Islamic majority shareholder of ICB Islamic Bank hasFinancial Centre (MIFC), Bank Negara and signed an agreement with a local consortiumthe Securities Commission have launched to sell its controlling stake.a global search to recognize and honor For more information, visitoutstanding contributions of an individual in The new owners are Summit Industrial www.islamicfinancenews.comthe Islamic finance industry. and Mercantile Corporation, Cosmopolitan © Page 4 9th June 2010
    • NEWS www.islamicfinancenews.comcontinued... Group and South Africa-based Standard Bank in-house software application for fair-value Group. It specializes in middle level capital hedging of its large portfolio of Sukuk andbillion (US$451 million) Bai Al Inah term infrastructure investments in Southeast Asia for cash-flow hedging of its portfolio offinancing. and Central Asia. deposits.The proceeds of the facility will be utilized CapAsia currently manages about US$460 Reval is a risk management and hedgeto provide Shariah compliant education million worth of infrastructure investment accounting solutions provider.financing for PTPTN. funds around the region. The bulk of it is in Malaysia and Indonesia. Shariah investments toBright prospects It currently manages three main funds — the expand South East Asian Strategic Assets Fund,AUSTRALIA: The development of Islamic RUSSIA: Russia and the Commonwealth Islamic Infrastructure Fund, and the Asiafinance in the country could provide banks of Independent States (CIS) has been Infrastructure Fund.with an alternative source of wholesale identified as a promising destination for thefunding and draw Islamic banks to set up introduction of Shariah compliant bankingoperations in the country. Industry booster and finance.In addition, assistant treasurer Nick Sherry BRUNEI: The country can build the halal According to Dubai-based Amanie Islamicsaid that it would also attract investment in sector via Islamic finance by raising capital Finance Consultancy and EducationAustralian assets from Shariah investors, through the issuance of Sukuk. executive director Mark Smyth, Russia beingoffer new funding routes through Sukuk and the 8th largest economy in the world housesallow the establishment of Shariah compliant Thomson Reuters global head of Islamic 20 million Muslims.investment products. finance and OIC countries Rushdi Siddiqui said that increased investment in the form “Russia has managed to maintain its perSherry attributes this to the excess liquidity of Sukuk will develop more Shariah based capita income levels at US$15,100 despitegenerated from oil revenues in the Middle companies as opposed to Shariah compliant the global recession and lower oil prices.East and the increase in economic growth companies. The untapped markets in the CIS shouldin countries with huge Muslim populations, be the key focus for Shariah compliantsuch as Indonesia, India and Pakistan. He said that the investments would create investments,” he said. the necessary environment to establishThe government has recently pledged to Shariah based companies which need not beamend tax laws to win a slice of Islamic screened, enabling Brunei to be a leader in Sukuk in the pipelinefinance market. this area. TURKEY: Kuwait Turkish Participation Bank will launch a US$100 million Sukuk in thePetition postponed EUROPE next two to three months.INDIA: The Kerala High Court has adjourned The bank plans to raise the funds fromthe petition challenging the establishment Staying up-to-date GCC investors, as there is a little liquidity inof Al Baraka Financial Services Corporation Europe. It also plans to conduct roadshowsunder the Islamic banking system in Kerala TURKEY: Islamic Finance news will host an IFN Roadshow at Grand Hyatt Istanbul on the in Dubai and Saudi Arabia to attract potentialto the 7th September. 11th June. investors for the Sukuk.A division bench adjourned the petition on This one-day only roadshow aims to generate According to its Dubai’s branch seniorthe formation of Al Baraka with 11% stake ideas, explore and analyze the latest executive officer Rahim Albayrak, thefor Kerala State Industrial Development developments in the Turkish participation proceeds will be used to boost the bank’sCorporation (KSIDC), based on a request of financial market. capital and fuel expansion plans.Reserve Bank of India seeking more time.The KSIDC had proposed the first state- Central Bank of the Republic of Turkey’s boardaided Islamic Bank in Kochi in 2009, withplans to register the bank as a non-banking member Professor Turalay Kenc, will deliver the key-note address, followed by a series of GLOBALfinance company and later transform it into a round-table discussions with 21 key industry Conflicting interestShariah compliant bank. practitioners from around the region. GLOBAL: Islamic finance faces a challenge REDmoney Group is the organizer for this in corporate governance in aligning theNew name event. ideas of the Shariah board with those of the management of institutions, according to aMALAYSIA: CIMB Standard has been scholar.rebranded to CapAsia. Hedging technology According to the University of BahrainCIMB Standard is a joint venture private equity UK: Bank of London and the Middle East scholar and National Corporate Governancefund manager between Malaysia-based CIMB has deployed Reval in place of its original continued... © Page 5 9th June 2010
    • NEWS www.islamicfinancenews.comcontinued... in Islamic financing. The entire issuance was of the proposed merger between Tamweel to raise US$6.5 billion last year. and Amlak Finance.committee member Dr Jasim Al-Ajmi, thischallenge involved whom the board reportsto, level of transparency and the amount Deal closed Islamic branchof information disclosed by the Shariah KUWAIT: Global Investment House and Gulf QATAR: HSBC has decided to open a fullysupervisory board. Bank have signed a MoU where the bank will fledged Islamic banking branch in the act as a sales agent for selected investment country. The establishment of more branchesAl-Ajmi added that conflict will always arise funds managed by the former. is to follow based on an assessmentbetween Shariah and performance because conducted to identify demand in the sector.compliance could be regarded as a cost by The agreement will see Gulf Bank offeringthe management. its priority banking clients the opportunity to The new HSBC Amanah branch will be invest in the Global GCC Large Cap Fund and opened in Doha and will cater to all theRiba defined Global GCC Islamic Fund. Shariah compliant financial requirements of its customers.GLOBAL: Shariah scholars have agreed onthe importance of setting up a committee to New in the marketcharacterize the definition of riba and when UAE: Sharjah Islamic Bank launched a new Sukuk financingit is allowed. Shariah-based ‘Employee Payment’ program, SAUDI ARABIA: Ahmed Salem Bugshan targeting companies and employees. Group (ASB Group) is preparing to raise anThis was concluded during a recent Islamic Ijarah-based US$100 million through theworkshop where different schools of thought The product provides salary transfer issuance of Sukuk.highlighted that riba, though prohibited in services, which is based on the country’sgeneral in Islamic finance, can be allowed in The Sukuk is being structured with a five payment protection laws.some cases. year-term maturing in 2016 and offering a semi-annual return of 125 basis points over New Shariah fund the US dollar, six- month London InterbankMIDDLE EAST KUWAIT: The National Bank of Kuwait Offered Rate. launched the US dollar-denominated Thahabi Proceeds from the Sukuk will be used toGoing local Ijara Fund VI. fund the expansion of its existing projectsQATAR: The country has issued QAR10 billion including a mega-steel plant and a real(US$2.8 billion) in local bonds made up of The fund will invest all of its assets in the estate project.conventional and Ijarah-based Sukuk with a purchase of equipment or portfolios of6.5% coupon rate. equipment, and lease this equipment to a diverse range of tenants. Whitepaper on mortgageThe riyal-based bonds provide a channel to This fund comes with a four-week subscription SAUDI ARABIA: Shariah compliant Capitaspool excess liquidity in the banking sector period, which started on the 6th June. Group International, an affiliate of the Islamicand diversify its funding away from dollars. Corporation for the Development of theTo date, government debt issues have been Private Sector has released a whitepaper —predominantly US dollar-denominated. No change “Expanding the Saudi Mortgage Market: TheThe eight-year issue is evenly split with five Path to Homeownership.” UAE: Islamic mortgage finance firm Tamweellocal conventional banks getting QAR1 billion continues to work on a restructuring plan(US$275 million) each, while four Islamic The whitepaper highlights the key stages with Amlak Finance, led by a steering of development in the mortgage industry,banks share the rest. committee, which is appointed by the federal examines the role that mortgage liquidity government. centers have played in other emergingSituation report Tamweel’s statement comes in response markets, and outlines solutions for Saudi Arabia.UAE: The Dubai government will meet to Dubai Islamic Bank’s announcementwith European investors to update them last week that it was evaluating a potentialon current economic developments in the increasing in its stake in the mortage New changescountry. company. UAE: Abu Dhabi Islamic Bank has unveiledDubai’s department of finance said the The restructuring scenario that had been its new brand identity and introduced a newmeeting will not be used to promote bonds discussed until recently was the merger of slogan.but will be a continuation of the investor the two firms to establish an Islamic bankupdate program launched last year. that would receive the financial support of The new brand identity brings to the fore the government. its core values. These values are — simpleAs part of its debt restructuring plans, the and sensible, transparency, mutual benefit,Emirates was successful in raising US$4 bil- According to analysts, the new developments hospitality and tolerance and Shariahlion using Islamic bonds and US$2.5 billion added to the ambiguity surrounding the fate inspired. © Page 6 9th June 2010
    • TAKAFUL NEWS www.islamicfinancenews.comAFRICA The central bank had recently proposed to restructure the policy in line with the vote on the 7th June, unless the price was renegotiated. government’s aim of ensuring access forNew kid on the block motorists to the mandatory Third-Party Bodily Prudential and Bank Simpanan NasionalGHANA: Metropolitan Life Insurance Injury and Death insurance coverage. jointly own the Prudential BSN Takaful firm inlaunched a life insurance and investment Malaysia.scheme, Labaika, targeting the Muslim At the end of 2009, there were 10.8 millioncommunity. It is the first of its kind on the motor insurance and Takaful policies issuedGhanaian market. by insurers and Takaful operators. GLOBALThe insurance holders are entitled to receive Be more prudenta fixed sum should death occur during theterm of the insurance. EUROPE GLOBAL: The GCC’s real estate and mortgage industries need to consider their Pulling the plug Takaful or other insurance-related optionsASIA UK: Prudential had decided to abandon an agreement to buy American International at the earliest stage possible as their future survival depends on it. Group’s (AIG) Asian business after theMore time needed latter’s board voted against cutting the Solidarity General Takaful CompanyMALAYSIA: The Consumers Association of purchase price from US$35.5 billion. general manager Gopi Rao said TakafulSubang and Shah Alam, Selangor has urged and insurance-related buying decisionsthe government to order Bank Negara to The deal came to an end after Prudential’s in this region are mostly made as anpostpone its proposal to restructure the investors signaled that they would not afterthought, which can expose participantsmotor insurance policy. support the AIA purchase in an impending to unnecessary risk. Islamic Finance: Opportunities for Tomorrow 25th - 28th October 2010, Kuala Lumpur The Global Islamic Finance Forum (GIFF) 2010, themed “Islamic Finance: Opportunities for Tomorrow”, is a high-level multi- track event that brings together regulators, scholars and financial industry players who are key drivers in shaping Islamic finance globally. The multi-track events of GIFF 2010 includes a Global Business Leaders Dialogue, Public Lecture, Regulators Forum, Media Engagement Programme, the IFN Issuers and Investors Asia Forum 2010 by REDmoney, International Shari’ah Scholars Forum by ISRA, Global Islamic Liquidity Management Workshop by AIBIM and The Takaful Rendezvous by MTA. Sponsors for IFN Asia Forum 2010 Lead Sponsors Associate Sponsors UK Pavilion Sponsors Research Partner Technology Partner Booth Sponsors Takaful Associate For further information on GIFF 2010 or to register, please visit www.GIFF2010.com © Page 7 9th June 2010
    • RATING NEWS www.islamicfinancenews.comASIA The ratings were attributed to the announcement that its holding company, Good financials American International Group has terminated SAUDI ARABIA: S&P hasTriple strength its agreement with Prudential to acquire the revised its outlook on The Saudi AIA Group. Investment Bank to stable from MALAYSIA: RAM Rating negative. Services (RAM) has reaffirmed the enhanced AIA owns a Takaful subsidiary in Malaysia. At the same time, S&P has affirmed the ‘A- long-term rating of ‘AA1’ /A-2’ long and short-term counterparty creditfor AEON Credit Service’s RM400 million(US$122 million) conventional and Islamic Stellar performance ratings on the bank. The outlook is attributed to the bank’s resilient financial profile.Commercial Papers/Medium-Term Notes MALAYSIA: Standard & Poor’s(CP/MTN) Program, with a stable outlook. Ratings Services (S&P) has The Saudi Investment Bank provides Islamic assigned a long-term foreign banking products.The rating is attributed to the strength of currency issue rating of ‘A-’ onthe guarantee extended by a consortium of Malaysia’s US$1.25 billion globalthree banks — The Bank of Tokyo-Mitsubishi Sukuk trust certificates. Strong bondUFJ, Mizuho Corporate Bank, and MalayanBanking. The rating is based on the final offering BAHRAIN: Fitch Ratings agreement dated the 27th May 2010, and (Fitch) has assigned a long- the various agreements, undertakings term foreign currency IssuerImproved rating and the declaration of trust the 31st May Default Rating (IDR) of ‘A’ 2010. on Mumtalakat Holding Company, with a MALAYSIA: RAM has revised stable outlook. the rating of Senai-Desaru Expressway’s RM1.46 million Brilliant performance Fitch has also assigned Mumtalakat’s senior (US$445,000) Bai Bithaman Ajil unsecured ratings of ‘A’ and a short-term IDR Islamic Debt Securities (BaIDS) to MALAYSIA: RAM has of ‘F1’. The firm’s ratings are aligned with‘BBB3’ (Negative Rating Watch). reaffirmed Public Islamic Bahrain’s (‘A’/Stable/’F1’), reflecting the Bank’s respective long- strong relationship between the two.At present, Senai-Desaru Expressway is and short-term financialworking on restructuring the BaIDS, with institution ratings at ‘AAA’ and ‘P1’. The long-its appointed financial advisor, Maybank term rating has a stable outlook. Double slideInvestment Bank. RAM has also reaffirmed its parent — Public UAE: Moody’s Investors Services Bank’s long- and short-term financial has downgraded the local andParental support institution ratings at ‘AAA’ and ‘P1’ foreign currency deposit ratings respectively. of Dubai Bank to ‘Baa2’/’Prime-3’ MALAYSIA: RAM Rating from ‘A3’/’Prime-2’. Services (RAM) has The Public Islamic Bank ratings are reaffirmed the ‘P1’ rating attributed to the bank’s credit profile, which At the same time, Moody’s has downgraded of Esso Malaysia’s RM300 mirrors that of its parent — Public Bank. Dubai Bank’s bank financial strength ratingmillion (US$90 million) Islamic Commercial to ‘E+’ from ‘D’. The ratings carry a negativePapers Issuance Facility Program. outlook.The rating is supported by the strong MIDDLE EAST The downgrade hinges on the materialfinancial flexibility of its parent company — weakening in Dubai Bank’s standaloneExxon Mobil Corporation. Standing firm strength as a result of the ongoing credit issues UAE: RAM has assigned surrounding the Dubai corporate sector. respective long- and short-In tip-top condition term financial institution HONG KONG: S&P has ratings of ‘AAA’ and ‘P1’ to affirmed its ‘A+’ local National Bank of Abu Dhabi (NBAD). currency counterparty Too many pieces At the same time, the bank’s proposed credit and insurer financialstrength ratings on American International US$916 million of Senior Unsecured Islamic/ in the puzzle?Assurance Company (AIA) and American conventional Medium-Term Notes programInternational Assurance Company has been assigned a long-term issue rating Let IFN put it together for you…(Bermuda). of ‘AAA’. All the long-term ratings have a stable outlook. SUBSCRIBE TOS&P had also removed them from The ‘AAA’ ratings are attributed to the bank’s IFN TODAYCreditWatch, where they were placed withdeveloping implications. The outlooks are solid shareholder support and NBAD’s strong www.IslamicFinanceNews.comdeveloping. franchise in its domestic financial market. © Page 8 9th June 2010
    • IFN REPORT www.islamicfinancenews.comFirst US fund manager Eager for Islamic investorsMALAYSIA: US fund manager Saturna Capital Corporation was granted KAZAKHSTAN: The financial crisis that hit Kazakhstan’s banks hasan Islamic fund management license by the Securities Commission made the nation look for alternative models of finance and economic(SC) in May, setting a precedent in two ways. First, a US fund manager growth. Four of the nation’s 38 banks are currently working towardswas granted an Islamic fund management license in Malaysia. restructuring about US$20 billion of debt. Of its 16.5 million people,Secondly, the method entailed an existing asset management 60% are Muslim and are slowly rediscovering their roots after a longcompany being converted into an Islamic one for the first time. period of religious suppression under the Soviet regime.Saturna in fact bought over Alpha Asset Management which was not Kazakhstan is rich with fossil fuel reserves, minerals, metals, a largeIslamic, but it held a conventional fund management license. Saturna agricultural sector featuring livestock and grain. Its industrial sectorthen converted Alpha’s conventional assets into Shariah compliant rests on the extraction and processing of these natural resourcesportfolios. The venture was then renamed Saturna. and the country is now engaged in a drive to woo Shariah compliant investments to develop the agriculture, oil and gas, metallurgy,“Alpha Asset Management held a conventional fund management mining, energy and industrial sectors.license at the time Saturna acquired control. Upon acquisition weimmediately contacted existing clients to notify them of our intention The minister of industry and trade and the deputy prime ministerto operate under an Islamic fund management license, and offered of Kazakhstan Aset Issekeshev told Islamic Finance news that thethem the option to continue using our services under an Islamic government has already assured state support for Shariah financialmandate,” said Saturna chief investment officer Bryce Fegley. investments. They have identified the urgency to resurrect these dormant industries with fresh investments sourced using ethical“The focus of our business going forward will be management financing.of individually structured investment portfolios. To that end, theconversion process for our existing clients entailed the restructuring The country began exploring the potential of Islamic finance in 2007.of their individual portfolios to ensure they were Shariah compliant,” The adoption of its maiden laws on Islamic banking and finance inFegley continued. April 2009 followed very quickly with the formation of Fattah Finance in March, the country’s first brokerage specializing in Islamic finance,Affin Fund Management CEO Mohamad Ayob Abu Hassan confirms and Kausar consulting, the first Islamic finance consultancy. Thisthat it is a cumbersome process to convert conventional investments year itself, the much awaited launch of Al Hilal Bank, a joint ventureinto Islamic finance instruments. “The conversion needs investor’s between the government and its UAE counterpart took place. Theapproval regardless of the status — whether they are private country’s first Islamic bank opened two branches in Almaty andplacements or unit trust. Failing such approval, the only available Astana, with another two in the pipeline by the end of the year.option is to refund the respective conventional investments,” he said. “Islamic finance is crucial for economic development and innovations.Approving the Saturna’s move, Al Rajhi Bank vice-president for It has weathered financial crises and is proven for its quality, reliabilityinvestment banking Mabel Lee said: “Internationally the fund markets and the transparency. Having understood the vital role it can play toare volatile and this could prevail for some time. Fund managers attract investments from the Islamic nations, the government hasneed to be opportunistic in this turbulent market condition. So, they extended the state patronage by amending the laws. We are confidentconsider the Asian region as room for growth. However, the Malaysian that Islamic finance will lead the way to attract investments especiallyfund market is relatively small in size but stable. This feature attracts from the GCC and the other Muslim countries to develop all thesenew investments as well as market players to Malaysia.” sectors,” said Issekeshev.Explaining the market dynamics instrumental for its new subsidiary, IFI Consulting Company deputy general manager Sabry KozhakhmetovFegley told Islamic Finance news, that the promising long-term optimistic about Islamic and finance how it could help to attracteconomic fundamentals prevailing in Asia were the deciding factor. investment said: “People waited a long time for the opening of an Islamic bank in Kazakhstan. Now the Shariah based financial system“We source opportunities for making investments both for our clients’ has started to progress in the country. There are a considerableportfolios as well as investing in our own future growth. Malaysia number of Islamic investors willing to invest here. We have workedserves us as a regional hub in terms of Islamic finance due to its closely with the regulators and are confident of the fundamentals.convenient geographical positioning and its relatively liberalized However, it will take time to smooth out the differences and minormarkets and the economy. The country’s strong investor protection transitional issues.”mechanisms and state patronage are additional advantages,” saidFegley. Promoting the available investment opportunities in this 9th largest country in the world, Visor Capital managing director Jose Luiz GaviaoIn addition to asset management, Saturna conducts international said: “In general terms, the economy has survived difficult periodsequity research, investment advisory services, sales and marketing. quite well, with most of the debt restructuring of its financial systemsThrough its subsidiary Saturna, Saturna Capital Corporation plans to already concluded. That was achieved without denting its sovereigntap into Malaysia’s Islamic financial growth and to reap benefits from ratings or imposing heavy toll on local tax payers. The country isthe prevailing investment friendly environment. known for its very conservative approach in terms of fiscal policy, which coupled with better than expected oil prices.”With a strong track record in managing Shariah compliant portfoliosand other international equities, Saturna enjoys 100% market Reports by Arfah Hani Abdullah and Ashwin Hemmathagamaleadership in Islamic fund management in the US. © Page 9 9th June 2010
    • COUNTRY REPORT www.islamicfinancenews.com Thai SEC To Permit Sukuk Issuance — First Deals Likely To Follow By Stephen Jaggs, Siripen Kaodara and Matthew WaudbyThe Thai Securities and Exchange Commission (SEC) is currently apply for SEC approval by submitting to the SEC an application form,in the process of issuing a new regulation to permit both domestic together with the required corporate documents. The SEC will informand international issuances of Sukuk certificates in accordance with the applicant of the result within seven business days of receiving theIslamic financing principles (the Sukuk Regulation). We have been complete and accurate application form and supporting documents.informed that the new regulation is likely to be issued in around Julythis year. In addition, to facilitate Sukuk issuance, the Thai Ministry This is effectively an application for the approval of the issuer and, onceof Finance (MOF) has prepared a draft regulation to exempt the the SEC grants its approval, the issuer will be considered to have beenoriginator from land transfer taxes and registration fees which is due “shelved” as an issuer with the SEC. As a shelved issuer it may issueto be submitted for cabinet approval shortly. as many series of Sukuk certificates of unlimited value within two years from the date of the SEC approval. However, prior to each issuance,Previously there had been no laws in place to accommodate Sukuk issu- the approved issuer must disclose features of the Sukuk certificatesance in Thailand and no deals had taken place. However, according to and submit certain documentation to the SEC (including transactionalpress reports, the Islamic Bank of Thailand plans to issue Thailand’s first documentation and board of directors’ or shareholders’ approval).Sukuk certificates this year once the new regulations are issued. With aMuslim population of approximately nine million, market sentiment per- Filing requirement: In addition the issuer must file a registrationmitting, there are hopes that the new regulations will enable Thailand statement and draft prospectus with the SEC prior to each issuance.to take the first steps towards developing into an Islamic finance hub, The Issuer and a financial advisor must jointly prepare and certifyenabling it to draw capital from the Middle East and elsewhere. the accuracy of information in the registration statement and draft prospectus, except where (i) the issuer is a listed company or a legalBased on a draft summary of the Sukuk Regulation previously entity established by special legislation, or (ii) the Sukuk certificatescirculated by the SEC in late 2009 and other publicly available are short-term certificates. An offer can only be made after the filinginformation, this article seeks to assess the general legal framework becomes effective, which is 14 days after the date the SEC receives thefor Sukuk issuance in Thailand by analyzing the likely key provisions complete registration statement and draft prospectus. Except whereof the Sukuk Regulation and related laws. Please note however that (i) the issuer is a listed company or a legal entity established by specialthe final version of the Sukuk Regulation may well feature certain legislation, or (ii) the Sukuk certificates are short-term certificates.amendments to the previously circulated draft summary. It is possiblethat the details summarized below may be subject to change as may Rating requirement: The Sukuk certificates must be rated. If thethe timing of issue of the finalized regulation. certificates are short-term with a maturity period of 270 days or less, the SEC may permit the issuer to use an additional issuer rating.Sukuk RegulationThe Sukuk Regulation will essentially seek to set out what Sukuk Trustees: For each issuance of Sukuk certificates, the SEC requiresstructures are permitted, together with the applicable SEC approval the appointment of: (i) an asset trustee, which will hold the underlyingand filing requirements. The latter will essentially dictate which entities assets and issue the Sukuk certificates; and (ii) a Sukuk trustee, whichcan issue Sukuk certificates and in what circumstances. will be appointed to represent the investors. The trustees must be separate entities to ensure that there are no conflicts of interest.Permissible Sukuk structuresInitially, the SEC will permit the issuance of Sukuk certificates under • Asset Trustee: The asset trustee may be the originator orfive popular types of structure, namely: Ijarah (leasing), Istisna (custom a subsidiary of the originator. The asset trustee will bemanufacturing), Mudarabah (cost-plus financing), Musharakah responsible for issuing Sukuk certificates, buying, holding(partnership) and Wakalah (agency). The Sukuk certificates must be and selling the underlying assets. The asset trustee mustunsecured, unsubordinated, with a definite term such as not perpetual receive permission from the SEC to act as an asset trustee.certificates and must not be convertible. To ensure that Sukuk The asset trustee may only look after assets relating to thecertificates are issued in accordance with Shariah principles, the SEC Sukuk certificates which it issues.requires the structure to be reviewed by a Shariah advisor. • Sukuk Trustee: The Sukuk trustee performs a role similarApproval and filing requirements to that of a bondholders trustee and has a fiduciary duty toIt is anticipated that the Sukuk Regulation will permit both public the investors. The Sukuk trustee must be a licensed trusteeofferings and private placements of Sukuk certificates. Generally, the pursuant to the Trust Act.applicable approval and filing requirements are likely to be similar tothose of the SEC for conventional bonds with the key requirements for Underwriter: Subject to certain exceptions, the issuer must appoint andomestic offerings being as follows: underwriter. (a) Public offerings Listing requirement: The issuer must list the Sukuk certificates withApproval requirement: To be able to go ahead with an issuance, the the Thai Bond Market Association.issuer and, if they are not the same entity, the originator must jointly continued... © Page 10 9th June 2010
    • COUNTRY REPORT www.islamicfinancenews.com Thai SEC To Permit Sukuk Issuance — First Deals Likely To Follow (continued)Eligible applicants: Importantly, the issuer and originator must be Listing requirement: No listing requirements exist for privateeither a company incorporated in Thailand (which would include a placements except for Sukuk certificates offered to institutionalspecial purpose vehicle (SPV)), a foreign bank with a full branch in investors or high net worth investors which must be listed with theThailand or a legal entity established in Thailand by special legislation. Thai Bond Market Association.The SEC’s requirement that any SPV issuer be incorporated in Thailandmeans that foreign investors will be unable to seek to reduce their Eligible applicants: Eligible applicants for private placements are thecountry exposure through the use of an offshore SPV issuer. Though same as for public offerings.typically one may expect the issuer to be an SPV, the Sukuk Regulationalso contemplates that the issuer may be either the originator or an International versus Domestic IssuancesSPV. The above summary is drafted from the perspective of domestic issuances. The main difference for an issue to offshore investors is (b) Private Placements likely to be that there will be no filing requirement (the issuer wouldUnder the Sukuk Regulation it is anticipated that a private placement merely have to apply for SEC approval and the criteria for approval arewill be defined as: likely to be less stringent than for domestic issuances). In addition the general approach is likely to be that domestic deals would need to be • an offer to institutional investors or high net worth investors denominated in Thai Baht, whereas foreign deals would need to be of unlimited value, denominated in a foreign currency. • an offer to not more than 10 specific investors during any four- Other Key Thai Laws month period, or Proposed tax and registration fee exemptions Potential market participants have previously commented that the Thai • an offer for which special waiver is granted by the SEC. tax code has hindered the development of Islamic finance in Thailand, pointing out that: (i) returns from Sukuk investments are classified asInstitutional investors are usually defined by the SEC as commercial rental revenues subject to a property tax; and (ii) transfers of land orbanks, finance companies, securities companies, credit foncier property assets to a SPV are taxed as a land transaction. In this regardcompanies, insurance companies, state enterprises, governmentalagencies, legal entities incorporated by specific legislation, the Bank the exemption from land transfer taxes and registration fees proposedof Thailand, international financial institutions, the Financial Institution by the MOF may further facilitate transactions.Development Fund, the Government Pension Fund, the ProvidentFund, mutual funds and similar types of foreign investors. A high net The Trust Actworth investor is likely to be defined as an individual having assets The other key Thai law that will combine with the Sukuk Regulation toworth THB40 million (US$1.22 million) or more (excluding debts) or a facilitate Sukuk issuance in Thailand is the Act on Trusts for Capitallegal entity having assets worth THB200 million (US$6.12 million) or Market Transactions (the Trust Act). This was enacted in 2007 andmore according to its most recent audited financial statements. crucially allows for the concept of an asset trustee and a Sukuk trustee in a civil law system which previously had no ‘trust’ concept.Approval requirement: The issuer and the originator will not be requiredto submit an application for approval but will instead likely be deemed Conclusionsto have received SEC approval once the issuer: (i) registers the transfer The anticipated SEC permission to issue Sukuk certificates, togetherrestriction applicable to an issuance with the SEC; and (ii) submits to with the MOF’s proposed exemptions from land transfer taxes andthe SEC the draft terms and conditions and trustee agreement. Note registration fees, are likely to be very encouraging. By removing keythat prior to each issuance, the approved issuer must disclose features impediments, they may well enable Thailand to take its first steps intoof the Sukuk certificates and submit certain documents to the SEC. the vast Islamic finance market. Indeed press reports suggest that in the coming months the Islamic Bank of Thailand plans to issue a BahtFiling requirement: There is no filing requirement for private denominated Sukuk adopting a Wakalah structure with an issue sizeplacements other than for offerings to institutional investors or high in the region of THB5 billion (US$153 million).net worth investors, in which case the issuer must file with the SECa certified registration statement and draft prospectus. The filing Stephen Jaggseffective date is five business days after the date the SEC receives the Partnercomplete registration statement and draft prospectus. Allen & Overy (Thailand) Email: Stephen.Jaggs@bangkok.allenovery.comRating requirement: There is no rating requirement for privateplacements except for offers to institutional investors or high net worth Siripen Kaodarainvestors, in which case, either the Sukuk certificates or the issuer Senior associatemust be rated. Allen & Overy (Thailand) Email: Siripen.Kaodara@bangkok.allenovery.comTrustees: The same principles apply in respect of trustees as for publicofferings. Matthew Waudby Senior associateUnderwriter: An underwriter is not required to be appointed for private Allen & Overy (Thailand)placements. Email: matthew.waudby@bangkok.allenovery.com © Page 11 9th June 2010
    • SECTOR REPORT www.islamicfinancenews.com The Role of Venture Capital Model in an Islamic Economic System By Kashif NisarSince their inception, Islamic banks have been criticized for not falls on the shoulders of leading Islamic banks to take the lead andusing participatory (profit and loss sharing) modes of financing such promote participatory financing modes wherever possible.as Musharakah and Mudarabah. Generally, scholars argue thatparticipatory financing is the key to achieve the main goal of equitable Overall, the combination of the ‘trust’ factor of depositors, ‘return’distribution of wealth in society. There has been little progress in this expectation from shareholders and strict regulatory control make itarea and Islamic banks still heavily rely on less risky financing modes difficult for the management of an Islamic commercial bank to have asuch as Murabahah and Ijarah. Hence there is a need to revisit the large portfolio based on participatory modes. This is exactly where thewhole process to find out whether the criticism of Islamic banks venture capital model scores.is justified and whether the ‘current commercial Islamic bankingmodel’ can alone achieve an equitable distribution of wealth. “There is a need to revisitAny person would feel reluctant before handing over his life savingsand expensive belongings to another individual for safe keeping. The the whole process to find outreason for such reluctance is the ‘trust’ factor as it is possible thatthe person responsible for safekeeping may not return the belongings whether the criticism of Islamicback to the actual owner. But when we talk about the commercialbanking model, the same owner would readily deposit his funds and banks is justified and whetherkeep his belongings in lockers with a bank and would feel very secureafter doing so. The commercial banking model exists on the basis the ‘current commercial Islamicof ‘trust’. A depositor may have opened an account to avail certainbanking services or to earn periodical profit on his funds. But in either banking model’ can alonecase, he trusts the bank to prudently manage his funds and ensure achieve an equitable distributionthat his principal funds remain intact. Imagine a depositor entering inan Islamic bank branch to withdraw part of his funds. He is, however, of wealth”informed at the cash counter that out of the total PKR500,000(US$6,000) deposited by him only PKR300,000 (US$3,512) were Venture capital is a type of private equity capital mainly providedavailable in the account due to the default of a corporate client, with for early-stage, high-potential, growth companies in the interest ofwhom the Islamic bank had entered into a Musharakah transaction. generating a return through an eventual realization event such as buy out or initial public offering. In such a model, there is an inherent riskIn spite of signing the Mudarabah contract at the time of account of losing one’s entire investment in a startup company. In other words,opening and knowing about the possibility of loss in Mudarabah, it the investor in venture capital may accept failure of six out of sevenis much likely that the depositor may not accept such loss. He may transactions. But the depositors and shareholders of an Islamic bankquestion the prudence and risk management exercised by the Islamic have a limited risk appetite.bank while investing his funds. He may even doubt the integrity of thatIslamic bank and feel that the bank is deceiving him. Once the trust Venture capital can be used as a tool for economic development inlevel is shaken, the existence of that Islamic bank may be in jeopardy developing regions. It contributes to the economy as follows:as other depositors may also approach the bank for withdrawal of their • Venture capital is most attractive for new companies with limitedfunds. operating history that are too small to raise capital in the public markets and have not reached the point where they are able toSimilarly, the shareholders would generally expect the bank to perform avail financing from banks;better or at least at par with other competitor banks. They would have a • Technology advancement;certain expected return in mind as they have invested large amounts of • Increase in job creation and innovation in an economy. We havefunds and may also look towards alternative investment opportunities examples of highly successful companies originated by Venturein case the Islamic banks fail to provide the desired return. So there is capitalists such as Google, Amazon, Apple Computer, Intel, FedExa dilemma for the Islamic banks. The fund providers (depositors and and Microsoft.equity holders) are generally risk averse, whereas, other stakeholdersexpect Islamic banks to deploy funds in participatory modes of finance It was initially in the US that venture capital originated as an industry.which are riskier in nature. Accordingly the US venture capital companies have been the major participants in venture investments. Venture capital investments laterTherefore, the criticism that Islamic banks are not investing the increased in other regions such as Europe, Canada, China, Malaysia,majority of their funds in participatory modes seems unfair. But, as is India, Thailand and such.always the case, any extreme position taken is wrong. On one hand, itis unrealistic to expect an Islamic bank to base the majority of its asset The venture capital model works in a region when there are someportfolio on participatory modes. On the other hand, it is disappointing initial success stories. For example, in the case of China, the ventureto see that, apart from a few players, there have been no visible efforts capital industry started in the 1980s. Initial efforts failed due to lack ofto utilize these modes even in a gradual manner. Major responsibility continued... © Page 12 9th June 2010
    • SECTOR REPORT www.islamicfinancenews.com The Role of Venture Capital Model in an Islamic Economic System (continued)experience in this area. However, due to continuous support from the financing whereas the manager/entrepreneur will propose a businessChinese government as well as from the private sector, the industry venture and will be responsible for the management and work. As pertook off from 1999 onwards. the Mudarabah principles, the parties will have to agree in the contract on the proportion of the actual profit arising from the business venture.As with China, the venture capital industry in Pakistan has witnessed Loss in the venture will have to be borne by the investors unlesssluggish development. One of the venture capitals, Pakistan Venture the loss is caused due to the negligence or violation of the contractCapital, had to shift from the venture capital model due to portfolio terms by the entrepreneur. In the Islamic venture capital company,issues and problems created by the local loan recovery procedures. a Shariah Advisor should be appointed who will provide guidance onIn 2000, the government launched a US$50 million venture capital conformance to the Shariah principles in all matters and will ensurefund for technology development in Pakistan, but no notable progress that the proposed investment contract and instrument structures arewas achieved and the initiative soon fizzled out. Steady support from Shariah compliant.the government and private sector is required to make the venturecapital model a success since many high-potential projects in different The Malaysian government is playing a major role in this area and issectors such as energy, agricultural and health remain untapped due encouraging Islamic venture capital firms to establish bases in theto lack of funding. The government needs to facilitate the venture country. In this regard, the Securities Commission of Malaysia hascapital industry through different measures to ensure its success. The already introduced a set of guidelines and best practices to promotecritical issues include development of an adequate legal framework, the adoption of appropriate standards for the development of thean easy entry and exit mechanism, necessary relaxations in the Islamic venture capital industry. It is expected that other regions,regulatory framework and promoting innovative ideas and potential specifically where Islamic banking is growing rapidly, will follow suitentrepreneurs. The government can also play a major role by creating and promote the Islamic venture capital industry. The Islamic ventureits own venture capital fund. capital model can provide ideal support to Islamic banks in achieving the vision of equitable distribution of wealth in the economy.Venture capital is a mode of investing that seems ideal for Islamicfinance through the application of participatory financing modes Kashif Nisarwith the Mudarabah concept being the most common. In the Islamic Section head, product and business developmentventure capital model, Mudarabah financing will involve a partnership BankIslami Pakistan Limitedcontract under which the investor (or ‘Rab-ul-maal’) will provide Email: kashif.nisar@bankislami.com.pk To participate in this prestigious event contact: sophie@megaevents.net | t:+971 4 343 1200 | f:+971 4 343 6003 | P.O. Box 72045, Dubai | www.megaevents.net/islamic_banking Islamic Financial Services Associate ETF Partner 1st Annual Innovation Partner Knowledge Partner Fund Management Partner Investment Management Partner 14 & 15 June 2010, Swissôtel The Stamford, Singapore Index Partner Dispute Resolution Partner Keynote Speakers at WIBC 2010: Asia Summit Technology Partner & Conference Shari’ah Advisory Partner Luncheon Host Day 2 H.E. Lim Hng Kiang H.E. Rasheed M. Al Maraj H.E. Sultan Bin Nasser Al Suwaidi Minister for Trade and Industry, Singapore Governor Governor Gold Strategic Partners Silver Strategic Partners & Deputy Chairman Central Bank of Bahrain Central Bank of the UAE Monetary Authority of Singapore Seeking New Growth Horizons WIBC 2010: Asia Summit Supported by Associate Exhibitors Platinum Strategic Partner Leadership Partner & Platinum Strategic Partners & Gala Dinner Host Conference Luncheon Host Corporate Exhibitors Bronze Partner Lanyard Sponsor WIBC Asia is a MEGA Brand MEGA Brands. MEGA Clients. Market Leaders. Shaping the Future of the Islamic Finance Industry Since 1993 Official Islamic Publication To participate in this prestigious event contact: sophie@megaevents.net | t:+971 4 343 1200 | f:+971 4 343 6003 | P.O. Box 72045, Dubai | www.megaevents.net/islamic_banking © Page 13 9th June 2010
    • SECTOR REPORT www.islamicfinancenews.com Private Equity — Its Relevance for Islamic Finance Today By Harun KapetanovicA symbiosis between Islamic finance and private equity is practices. The reason for this debate lies in the fact that Islamicacknowledged, but not necessarily properly understood, as a natural banking looks and feels very much like conventional banking.fit. Islamic contracts of, principally, Musharakah and Mudarabah thatunderpin Islamic private equity transactions or relationships between An analysis of the impact of the global crisis on Islamic banks showsgeneral partnerships and limited partnerships, as well as private that unlike their conventional counterparts, Islamic banks were notequity firms and investee companies are well known too. affected outright by the issues of toxic debt instruments. The reason being that culprit CDOs (Collateralized Debt Obligations) are conflictingHowever, the growth of Shariah compliant private equity is lower than with the fundamentals prescribed by Shariah principles, and hencethat of Sukuk and Islamic banking assets globally. Given such a strong no Islamic bank was allowed to have direct exposure. While this isprivate equity link with the real economy and productive activities it certainly a testimony that IFIs are Shariah based, this aspect aloneis somewhat a surprise to see weak private equity markets within may not be sufficient to move to the next phase of development.the Islamic finance realm. In order to properly harness the potential Abstaining from obvious prohibitions is needed but not sufficientof private equity one needs to understand the evolutionary nature of enough to leap to the next phase of growth and harness the upsideIslamic finance as an industry, the state of local markets as well as the potential of Islamic finance.direction that Islamic finance needs to take. Islamic finance and private equityIslamic finance today Private equity structures promote strong alignment of interest of allThe recent and ongoing global financial crisis of tectonic proportions stakeholders. It appeals to those who want to make a difference in thehas forced academicians and practitioners alike to start re-thinking economies they operate in. Hence, private equity is one of the majorthe global economic order. Coincidentally, the global financial crisis contributors to the number of new jobs created in any economy. Thewas preceded by issues surrounding Sukuk structures and the level of intricacies of corporate governance mechanisms and profit sharingits adherence to the spirit of Shariah principles. Hence, Islamic finance structures may not be that intuitive, as they have evolved in responseas we know it today is subject to many debates at the practical and to complex transactions. But it is clear that private equity is the riskiestconceptual levels. In relation to the global financial crisis, there are, asset class, and also the one reaping the greatest rewards.however, some attempts to look into the causes of the crisis to identifypolicy responses offered by Islamic finance and Islamic economics. When discussing Islamic private equity one must not disassociate it from the conventional private equity and factors affecting its growth.One such effort is led by the Islamic Development Bank (IDB) and its The successful and growing private equity industry is underpinned byGlobal Task Force on Islamic Finance and Global Financial Stability. a vibrant economy and robust SME sector providing ample investmentThe current debate, nonetheless, is whether Islamic banks should opportunities. Furthermore, there needs to be in place a rule of law withprogress from being Shariah compliant to being Shariah based strong company and commercial legislation that contains multiple exitinstitutions. While the issue may appear to be more of semantics, mechanisms as well as supporting infrastructure in terms of variousthe real implication is whether Islamic financial institutions (IFIs) as professional advisers and consultants. Clearly, with the exception ofwe know them today are Shariah compliant and based on Shariah a few notable markets, OIC countries cannot take pride as being theprinciples or, Shariah compliant but actually based on conventional ideal destination for private equity. continued...Financial depth across regions 100% US$214.4 US$83.2 US$61.5 US$21.9 US$5.5 US$2.2 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% World European Union North America Emerging Asia Latin America Middle East Bank Asset Total Debt Securities Stock Market CapitalizationSource: IMF Global Financial Stability Report, Oct 2009 © Page 14 9th June 2010
    • SECTOR REPORT www.islamicfinancenews.com Private Equity — Its Relevance for Islamic Finance Today (continued)The chart below comprehensively depicts the state of financial equity lagged behind their conventional counterparts in tapping intomarkets by region. It indicates that the Middle East and emerging available opportunities. While the same macro factors apply, amongAsia still have a long way to go to catch up with developed markets, in the key limiting factors that restrict the growth of Islamic private equityterms of total size as well as composition of the markets. This also may in particular is the shortage of qualified people.reflect the level of market sophistication. Private equity requires highdegrees of sophistication not only at the pre-investment stage but also The right human capital, ideally, would be able to combine not onlysubsequently at the investment management as well as exit stages. It advanced finance skills but also solid knowledge of Shariah. Moreover,comes as no surprise that private equity as a recent phenomena in our the importance of the character of the Islamic banker/financier mustmarkets still needs to wait until this level strongly picks up. not be neglected. After all, we are discussing an industry that is faith based and hence decision makers need to make sure that authenticityA look into the future is never compromised. There are obviously other factors, but thePrivate equity prospects are bright. Take for example, the GCC which shortage of human capital is probably the single most important andis increasingly becoming not only a source of funds but also a target overarching issue.destination for private equity acquisitions. The table below portrayssuch growth and importance of emerging equity markets in relation Acknowledging the factors above, the Islamic finance industry,to global and developed markets. The last couple of years have also including regulators and planners, need to make a conscientiouswitnessed an emergence of a number of private equity players, either effort to invest in human capital while developing their asset/funddedicated institutions or asset management arms of existing financial management capabilities. This also will require sovereigns to look toinstitutions, who have made their mark both locally and globally. developing a scope for private equity firms in terms of creating andGrowing economies, the emergence of new players and improvements nurturing investment opportunities.in an enabling environment, all set a good background for the creationof a viable industry. Leadership in Islamic finance An overriding feature of Islamic finance is lack of leadership. Clearly,Private equity will be a key growth engine for the Islamic finance industry. the leadership is closely related to human capital issues.Factors contributing to the growth of Islamic private equity, and a wideracceptance of Islamic finance, are directly linked to the macro aspect of Investing in human capital to develop the right set of financial skillslocal economies and the advancements in local financial markets. and knowledge of Islamic finance principles and practice is the industry’s top priority. Simultaneously, pursuing private equity as aAmong the key factors that contribute toward stronger private equity mechanism will certainly go a long way in closing the gap between aincluding Islamic private equity are: Shariah compliant and a Shariah based financial system. • IFIs increasing in size and sophistication. They will work on their internal diversification and natural consequence is Today Islamic finance needs a commitment in the form of bold and diversification to private equity. decisive steps or even leaps forward. Challenges are certainly different • Local markets are fast developing and with the trend of bank today. Boldness in the financial world always comes down to simply disintermediation, private equity will play a more prominent role. putting your money at risk. Similarly, a way forward for Islamic finance is • GCC wealth and SWF are adding to excess liquidity that will to prudently put its own money at risk utilizing private equity practices. look to private equity firms for returns and diversification. Where conducive environment and supporting infrastructure are not • Following challenging times, existing private equity firms are developed, immediate action needs to be taken. emerging as stronger and smarter players. • Local, regional and global investors’ attention and focus on Private equity resting on Shariah principles will ensure not only that Commonwealth of Independent States, the Middle East and its investors are earning halal returns, but will contribute to the North Africa, South Africa, South East Asia (principally OIC development of the Islamic financial industry and more sustainable countries) is stronger. Cross-border investments are less of economies. an exception and prospects for regional integrations is on the increase. Harun Kapetanovic Economic AdvisorHowever, Islamic financial institutions should lead this growth Department of Economic Development, Government of Dubaiand not lag behind. Hence, the question is why has Islamic private Email: harun.kapetanovic@dubaided.gov.ae 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (E) World Market Cap 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% US 46% 47% 50% 47% 45% 43% 39% 36% 31% 33% 28% Rest of Development 46% 45% 41% 42% 44% 44% 44% 44% 41% 41% 41% Emerging Markets 8% 8% 9% 11% 12% 13% 16% 20% 28% 26% 32% BRIC 2% 3% 3% 3% 4% 4% 6% 9% 17% 15% 19% Rest of Emerging 6% 5% 6% 7% 7% 9% 11% 10% 11% 11% 13% of which GCC 0.30% 0.30% 0.40% 0.90% 0.90% 1.30% 2.50% 1.30% 1.70% 1.60% 1.20% Source: S&P © Page 15 9th June 2010
    • CASE STUDY www.islamicfinancenews.com Ogilvy Noor Targets the New Muslim Consumer By Zayn KhanIt’s not surprising that many brands believe the area of marketing The Ogilvy Noor report reveals that the new Muslim consumer isto Muslim consumers is fraught with risk. Brands that get it wrong fundamentally different because of a strong reliance on faith. A veryare commonly boycotted. Brands that engage effectively, though, high proportion of these respondents, for example, agreed with theare able to develop long-lasting relationships with a global Muslim statement: ‘I am proud to be a Muslim’.community that is almost 1.8 billion-strong and are some of the mostloyal consumers in the world today. A large percentage of this new generation believe that ‘religion should be adapted to suit individual lifestyles’ – but crucially, they’re finding“We didn’t really have much thought of Denmark, until they started their own ways of doing so, with many agreeing that ‘protecting Islamicthe photos that depict Prophet Mohammed when we started to boycott values from Western lifestyle and media influence’ is important tothem”. (Respondent, Egypt) them. They feel that Muslims have been misrepresented by the global media, by politicians and by educators, and they are keen to redressAccording to estimates, Danish exports of about US$2.6 billion a year that balance.disappeared with that particular boycott. The move towards conservatism should not be mistaken for a rejectionA pioneering research study by Ogilvy & Mather, in partnership with of high-tech lifestyle products. Instead, new Muslim consumers areTNS, has revealed the emergence of the ‘New Muslim Consumer’. often highly technically literate. At the same time, they do not believeThey are young, proud of their religion and symbolic of the remarkable in an automatic acceptance of Western technology, particularly if theyspending power embodied by the world’s fastest-growing religion. reject the underlying ideas and values. They believe in crafting ways forward out of their own faith, believing that religion and progress, farThe ‘Brands, Islam and the New Muslim Consumers’ Report from being mutually exclusive, are practically inseparable. They wantserves as the launch pad for Ogilvy Noor (www.ogilvynoor.com), a to stand up, be heard and make an impact – ‘I want to be a usefulmultidisciplinary global Islamic branding practice that aims to help person for my society and prove my presence’, said a Saudi Arabianbrands better engage with Muslim consumers worldwide. The Muslim female respondent.market is viewed as a critically important playground for marketers,with the halal segment alone worth US$2.1 trillion and growing by The new Muslim consumer is highly interested in the authority andUS$500 billion annually. origin of brands and the companies behind them. They are more educated, more questioning, more challenging and more discerning.Polling consumers in four key Muslim markets – Malaysia, Egypt, “We need to look at the halal logo, yes, but also at the ingredients”,Saudi Arabia and Pakistan – the research study has identified the new said a young respondent in Malaysia. “And we need to know where theMuslim consumer as a critically important development for brands profits go,” agreed her friend.hoping to build successful relationships with the Islamic world. Indoing so, the report debunks many of the stereotypes that surround While their trust is difficult to win, once achieved it is deeper andMuslim consumer attitudes towards brands and their marketing longer-lasting.communications. For example, halal stickers, while important toshowcase certification, are no longer sufficient to persuade the new The new Muslim consumer and Islamic bankingMuslim consumer of a brand’s belief in Islamic values. Despite the massive sums spent by financial services brands on Shariah compliant banking services – the Ogilvy Noor study revealsThe study highlights the risks that exist once Muslim consumers that the vast majority of new Muslim consumers view this categoryare alienated. Despite the evident economic potential, for example, as the least effective in terms of Shariah-compliance. There remainsMuslims are often neglected or misunderstood by global brands. deep-rooted doubt and skepticism that anything in the world of bankingThe report cites examples of brands that have deployed a mistaken and finance can ever be fully Shariah-compliant, due to the nature ofapproach, and provides guidelines on how to avoid the same fate. It the category itself. “How can a bank survive if it doesn’t make profit?also explains how brands should react when affected by forces outside And if it makes profit it is haram.” (respondent, Malaysia).of their hands. There is a great deal of confusion and mistrust around insuranceThe new Muslim consumer and loans. It is sometimes seen as relating to gambling one’s ownBy 2050, more than half of the world’s population will be Muslim. life, and one is not supposed to pay for anything one cannot see,Significantly, 52% of the Muslim community is under 24 years old, which is what insurance is. The perception that global brands have ofpointing to the enormous cultural influence that Muslims will wield Shariah banking is possibly one of tokenism. This may be dangerousin the years to come. Young Muslims are already starting to stamp as the credibility of the brand comes into question if the bank is nottheir influence on the consumption habits of the wider global Muslim run entirely on Shariah principles. There is a fear that the money paidcommunity - the Ummah. into the pool of a bank’s overall brand will be tainted with the overall practice of charging interest.The portrait of the new Muslim consumer explodes the common lazystereotypes of the Muslim. Modern Muslims are undergoing a major Noor Brand Indexreassessment of their relationships with religious structures, cultural The groundbreaking Noor Brand Index benchmarks the appealassumptions, authority, consumption and technology. This can be of specific brands to Muslim consumers, by ranking consumerquite confusing for observers who are not familiar with these trends. continued... © Page 16 9th June 2010
    • CASE STUDY www.islamicfinancenews.com Ogilvy Noor Targets the New Muslim Consumer (continued)perceptions of their Shariah-compliance. Chief among its findings The report reveals that branding success is less about originare that global brands can forge highly successful relationships with or provenance, and is instead based on whether brands canMuslim consumers if they approach the task in a sensitive, honest fundamentally empathize with the needs of the new Muslim consumer,fashion that is consistent with the core values of Islamic branding. through tailored offerings and communications.The first Noor Global Brand Index throws up some fascinating Good business practicequestions. Why do Nestlé, Lipton and Kraft all appear among the top The Ogilvy Noor Report has enabled Ogilvy Noor to formulate anfive ranked brands? And why is Emirates, the flagship airline and pride effective definition for Islamic branding: ‘Branding that is empatheticand joy of the United Arab Emirates, in the bottom ten? to Shariah values in order to appeal to the Muslim consumer, ranging from basic Shariah friendliness to full Shariah compliance in all The Noor Global Brand Index 2010 aspects of the brand’s identity, behavior and communications.’ Brand Noor Index Score* The ‘Brand, Islam and the New Muslim Consumer’ report provides Lipton 131 invaluable insight into Shariah values, from the perspective of Nestle 130 consumers and marketers, clearly explaining how businesses should Nescafe 122 navigate this area. Significantly, it finds that Shariah practices are Nido 118 closely aligned with the existing universal ideals of good business practice. Kraft 117 Maggi 117 This has become particularly important for global business given the Mirinda 110 massive erosion of trust in bodies of authority, including corporations, Pringles 110 in recent years. Shariah values can offer brands a roadmap back to the kind of practices that build credibility with all consumers. Many Lay’s 110 Muslim consumers agree that ‘respect’ and ‘responsibility’ are still the 7 Up 109 fundamentals of a good brand. Colgate 108 Lux 108 Islamic values, in fact, can champion the cause of corporate social responsibility in both the Muslim and Western worlds. Values such Sunsilk 105 as transparency, discipline, humility and purity are universal in their Close Up 103 appeal. Dove 103 The report has further distilled its research on Shariah values, and Pantene 102 how consumers want to see them lived by brands, into a toolkit for Rexona 102 branding success. The toolkit focuses on the following eight factors, Head & Shoulders 101 and provides an invaluable list of do’s and don’ts. Heinz 101 (1) A brand’s role in the community: including all aspects of a Nivea 98 company’s corporate citizenship Fair & Lovely 97 (2) Product: including the range of offering, ingredients and Pepsi 95 manufacturing processes Coca Cola 94 (3) The brand story and its PR strategy: focusing on the tactics brands can employ when talking about themselves, to better Air Arabia 91 appeal to the New Muslin Consumer Loreal 90 (4) Corporate business practice: every aspect of how the business Axe 88 is run internally Emirates 85 (5) Visual Identity: the specific needs of the Muslim consumer when it comes to visual information and appeal Red Bull 78 (6) Brand communication: a success guide built on decades of Etihad Airways 77 Ogilvy experience in Muslim markets Singapore Airlines 63 (7) External endorsement: who to partner with and who to avoid Cathay Pacific 62 (8) Customer service and delivery: why getting this right is so important and how to do so. Citibank 59 Standard Chartered 54 Zayn Khan HSBC 51 Regional Business Strategy Director, South & SE Asia RBS 47 Ogilvy & Mather Email: zayn.khan@ogilvy.comThe study also provides the Noor Brand Index of multinational andlocal brands operating in Malaysia, Egypt, Saudi Arabia and Pakistan. © Page 17 9th June 2010
    • FOCUS www.islamicfinancenews.com Musharakah Mutanaqisah Financing Facilities Legal Issues and Challenges (Part I) By Mohd Zakhiri Md NorThis paper takes a look at Musharakah, in particular Musharakah to the other partner(s) throughout the agreed period. At the end of theMutanaqisah (MM) or diminishing partnership, and the challenges agreed period, the shareholding of that earlier partner will be zeroed,facing the facility today. It covers an introduction to MM, the bank’s and the shareholding of the latter partner will be 100%.and customer’s expectations of the solicitor, the process of MM frominception to completion and other issues of the MM facility. According to the terms of the MM financing, the bank and the customer participates in the partnership to carry out a specified Musharakah1. Musharakah business venture (acquisition of specified asset, carrying out ofMusharakah (partnership) is when two or more partners join in capital specified project and such) In consideration of the bank agreeingto carry out a Musharakah business venture with the view to earn to enter into the MM with the customer, the customer promises toprofit. The Musharakah could be through the formation of a special gradually acquire the bank’s shares in the partnership (constitutes thepurpose vehicle (SPV) or an unincorporated partnership. It gains amount of financing) throughout the financing tenor for 20 or 25 yearsrecognition from all Islamic scholars, though they may differ in theiropinion as to the operational mechanisms of Musharakah. In terms of In addition, the bank leases its portion in the asset to the customer,capital contribution in the Musharakah, it is required that each partner and in turn, the customer pays a periodic rental to the bank under themust contribute. The contribution is not necessarily equal like 90:10, Islamic contract of Ijarah (constitutes the Bank’s profits).75:25, 50:50 or such. Hence, the following constitutes the payment by the customer to theIf any partner does not contribute capital, it could no longer be bank throughout the financing tenor:regarded as Musharakah, instead it would be Mudarabah (contractof entrepreneurship). It is however not the case for the management Financing amount (Gradual purchase of the Bank’s shares inof the Musharakah business, as it may be undertaken by all, or the MM)some or any one. In other words, in a Musharakah, sleeping partners + Bank’s profits (Rental payments for the Bank’s portion inare allowed. Most importantly, the Musharakah business must be the asset)permissible by Shariah. Payment by the CustomerIn terms of the distribution of profits, a majority of Shariah scholarsagree that profits must be distributed according to a pre-agreed At the end of the tenor, the bank’s shares will be zeroed while theratio between the partners. As for the bearing of losses, all scholars customer will own 100% shares in the asset and becomes sole owner.agree that losses are to be borne according to the ratio of capitalcontribution, that is, the holding of shares at that time. However, there 2.2 MM and other financial productsis a proviso to this general rule: if such a loss is due to the negligence In MM, the underlying contract is Musharakah Mutanaqisah, whereof the managing partner, he will bear the loss solely. the bank and the customer joins their capital (as partners) to invest in the business with the view of getting profit. The relationship between1.1 Example of Musharakah the bank and the customer is as partners. The ‘repayment’ (as termed in the contemporary financial system) by the customer is the gradual purchase of the bank’s shares + periodic rental payments. Partner A Partner B 70% 30% Under conventional loans, the underlying contract is a loan, where the Musharakah bank (as creditor) extends a loan to the customer and the customer 100% (as debtor) borrows from the bank. The relationship between the bank and the customer is creditor-debtor. The repayment by the customer to the bank is then: principal loan + interest. BBA is the most popular Islamic financing product in Malaysia, despite negative feedbacks and issues concerning its legality and Musharakah business compliance. At the Kuala Lumpur High Court alone, 90% of the 3,200 Muamalat cases registered between 2003 to 2009 concerns BBA. Now, BBA consists of two tiers of transaction. At the 1st tier, the bank purchases the property from the seller/customer (via the property2. Musharakah Mutanaqisah purchase agreement) and at the 2nd tier, the bank sells the propertyMusharakah Mutanaqisah (MM) consists of two words, bearing the to the customer (via the property sale agreement). The relationshipmeaning ‘partnership that diminishes’. For the avoidance of doubt, between the bank at both tiers is seller-buyer. The ‘repayment’ byit does not mean that the partnership itself diminishes, instead, the the customer to the bank is in the form of payment of sale price (inshareholding of one of the partners will diminish as the partnership installments).goes on. ‘Diminish’ here means that the shares is gradually transferred continued... © Page 18 9th June 2010
    • FOCUS www.islamicfinancenews.com Musharakah Mutanaqisah Financing Facilities Legal Issues and Challenges (Part I) (continued)Another popular Islamic product is Ijarah, which also consists of two 4. The solicitor is also expected to know which MM documenttiers of transaction. At the 1st tier, the bank purchases the property to be executed (different document for properties with andfrom the seller/customer (via a Property Purchase Agreement, or by without title, landed property and strata, completed andappointing the customer as its agent to purchase from the seller). At uncompleted, individual customer or company), what kind ofthe 2nd tier, the bank leases out the property to the customer (via a security is required (such as lodgment of Trust Deed or fixedIjarah lease agreement). The relationship between the bank and the legal charge), how to enforce the security and such.customer is landlord-tenant. The ‘repayment’ by the customer to thebank is in the form of periodic rental payments. 5. Obviously, the solicitor is expected to transpire the bank’s intentions into legal documentation. The bank will issue3. Bank’s expectations of the solicitor instructions to the solicitor and such. “We hereby appoint youThe following are expected by the bank: as the solicitor for this MM financing for so and so (customer) for the amount of …. Kindly get the customer to execute the 1. The solicitor is expected to know the basic structure of MM. security documents within seven working days.” Obviously, one should not begin drafting unless he/she is clear of what to draft in the first place. Hence, it is the duty of the solicitor to transpire the bank’s intentions into legal documentation, especially on the terms 2. The solicitor is expected to know how MM works such as what is and conditions of MM plus boilerplate clauses plus other terms required, consideration legality of capital, asset and business and conditions required by the bank. 3. Most importantly, the solicitor is expected to know the bank’s It is advisable to adhere to what is instructed by the bank, product inside out. There are many banks offering MM follow the term sheet given to you by the bank and also the financing today such as Kuwait Finance House Malaysia (KFH), product development as approved by BNM, incorporate all Maybank, HSBC and such. Now, different banks may have terms and agreements into the legal documentation and such. different operational mechanisms. For example, KFH requires the property to be registered in the bank’s name as trustee to 6. The solicitor is expected to liaise with third parties on behalf of the MM pursuant to the Trust Deed between the bank and the the bank, for instance the customer, the Land Office, the CCM, customer. This is actually how it gets registered onto the issue the FIC (if applicable), the developer, the seller and such. document of titles, such as in the bank’s name as trustee. Hence, there is no issue of registering a fixed legal charge on the 7. The solicitor is also expected to perfect the securities required property, as it is already in the bank’s name. On the contrary, by the bank, and this will be evidenced in the advise letter for Maybank requires the property to be registered in the name of disbursement, as the solicitor is required to confirm that all the the customer, and to secure its interest, the bank requires the securities have been perfected and all conditions precedent registration of a fixed legal charge on the property. There are have been met, in addition that all the legal documents are in other instances of differences of operational mechanisms, and order and fully enforceable as against the customer in favor of the drafting solicitor acting for the bank is expected to know the bank. the same. continued...2.1 Example of MM Financing Bank 70% Customer 30% Musharakah 100% Musharakah business (e.g. acquisition of asset, rental by Customer) Bank sells its Customer purchases shares to the Bank’s shares and Customer and ends up100% end up 0% © Page 19 9th June 2010
    • FOCUS www.islamicfinancenews.com Musharakah Mutanaqisah Financing Facilities Legal Issues and Challenges (Part I) (continued) What happens if there is non-compliance by the solicitor in pay attention to the type of customer (individual and/or company), the meeting the expectations of the bank? It may lead to legal type of property (completed or uncompleted, with or without title) and liability for breach of duty on part of the solicitor. the purpose of the financing (acquisition of assets or project financing) as the bank might have different sets for different situations.4. Customer’s expectations of the solicitorThe following are expected by the customer: If the bank does not have standard forms and documents, you would need to start drafting from scratch. Most importantly, you would need 1. The solicitor is expected to explain the bank’s product briefly. to incorporate all the bank’s intentions into the legal documents. You Essentially, the customer does not expect to know the entire may want to be careful to avoid usage of terms not allowed in Islamic process and procedure, because all he/she wishes is to get finance interest for default payment, penalty interest., and also be the financing amount disbursed soonest possible. However, careful to use terms specific for MM bank’s shares, customer’s shares, it is your duty to explain to the customer, and since MM is MM business venture, and such. relatively a new product, the customer might not be familiar with it, as opposed to BBA and Ijarah. It is appreciated that you familiarize yourself with the bank’s products, and then follow accordingly the guidelines set by the bank, searches 2. The solicitor is expected to provide a copy of the bill as early at CCM, Land office, Official Assignee’s office, FIC and such. Try to as possible. This is because he/she will make the payment of meet the timelines set by the bank if any, while at the same time fees and disbursements. Following the fact that MM bills might set an appointment for the execution of the legal documents at the be quite different from other financing products, it is always customer’s convenience. advisable and practical for you to provide a copy of the bill soonest possible so that you get the funds before you actually The final part (Part II) will appear next week, in Issue 24 of Islamic begin the process. Finance news. 3. The solicitor is also expected to guide him/her throughout the Mohd Zakhiri Md Nor documentation process up to full release of the MM Facility PhD Researcher amount. International Center for Education in Islamic Finance (INCEIF) Email: mohdzakhiri@gmail.com 4. Last but not least, the solicitor is expected to be truthful when reporting the progress of the file to the customer, whether it is pending payment of fees, pending submission to the land EXPANDI G T HE R EALMS O F IS AM FINANCE EXPANDING THE REALMS OF ISLAMIC F INANC E XP AND G THE REA M OF IS AM FINANCE XPANDING THE R ALM O ISLAMIC FI A NC XPAND ANDING TH REALMS AN ALM A M MS SL FINA AN A office, pending registration of charge and such. Register to secure your FREE seat now!If there is non-compliance, it may lead to legal liability formisrepresentation, misstatement and such. Most importantly, you THAILAND Grand Millennium Sukhumvit Hotelwould need to differentiate between your duty to inform the customer 22nd June 2010and the customer’s right to know. After all, you are solicitors of thebank, acting for the bank and not the customers (this is assumed as Keynote Speaker:you would be the solicitors drafting the financing documents). If you Kesara Manchusree – Group Head Markets, Stock Exchange of Thailandever get a fussy customer who demands to know every detail of the Our panel of key speakers include:progress of the matter, you may wish to advise him/her to appoint their Dheerasak Suwannayos – President, Islamic bank of Thailandown lawyer, because it is outside of your duty. Dr. Subhak Siwaraksa – President & CEO, CIMB Thai Bank Madzlan Hussain – Partner, Zaid Ibrahim & Co Raja Teh Maimunah – Global head Islamic Markets, Bursa Malaysia5. The process – Inception of the MM Sulaiman Alireza HSBCWell, now we come to the stage that you’ve been waiting for. The Key topics for discussion:process for preparing legal documentation starts from your receiptof instructions from the bank. It is usually in form of a letter of measure up against the standards of other regional centers Discussing local and regional developments in Islamic markets, includingappointment as solicitors for a specified financing facility approved toa specified customer. As soon as you get instructions from the bank,you may proceed to open a new file and read through the instructions. the regional marketsNormally, the bank would also enclose a copy of the Letter of Offer investments and market trends in Thailand and the regionduly accepted by the customer. Note the date of the acceptance by Financial marketsthe customer, and prepare for its nominal stamping (RM10 (US$3) ifwithin 30 days of acceptance by the customer).Banks normally have their standard documents and guidelineswhen it comes to MM financing, so you would need to be careful tochoose which one of the standard documents apply to that particular REGISTER NOW at www.IFNroadshow.comfinancing facility, and familiarize yourself with them. You would need to © Page 20 9th June 2010
    • TAKAFUL REPORT www.islamicfinancenews.com Takaful Surplus Distribution: A Controversy By Delil KhairatTakaful is an alternative risk management tool offered by Islamic fiqh Mudarabah is an ancient form of financing practised by the Arabsto replace unacceptable conventional insurance. It is based on risk since long before the advent of Islam. When Muhammad (peace besharing and sincere acts of helping fellow human beings. However the upon him) began his prophetic mission, he did not interfere and the letholy concept is clouded by short term tactics of surplus distribution. Arabs continue practicing it. This was because Mudarabah does not involve the denial of the existence or the uniqueness of the one GodConventional insurance operates on a platform of risk transfer, where (Allah) or associate anything or anyone with Him or was against anyan insured simply transfers a part or all of their risk to an insurance command of God.company (insurer) and pays a certain amount of money, called apremium. It is basically a contract of buying and selling. The insured Mudarabah is defined as a contract between two parties, where onebuys insurance protection sold by the insurer, and pays a premium as party gives money to another for investing it in a commercial enterprise.the price. By doing so, the insured is replacing his ‘uncertainty’ to an The first party is called ‘rab-ul-maal’, while the management and workamount of ‘certainty’ as much as the premium paid. is an exclusive responsibility of the other, who is called ‘Mudarib’. When it applies to Takaful, participants are ‘rab-ul-maal’ and TakafulUnfortunately, the risk transfer mechanism of conventional insurance is operator acts as ‘Mudharib’.not acceptable to most Islamic scholars. Transferring risk (uncertainty)to other parties in return for a premium is challenged because it Mudarabah is a commercial contract, so the provision or condition onbrings at least two forbidden elements to the contract, namely gharar profit is a main pillar. It is necessary for the validity of Mudarabah(uncertainty) and maisir (speculation). that the parties agree, right at the beginning, on a definite proportion of the actual profit to which each one of them is entitled. There is noUnder Islamic law, any contract of sale involving gharar is prohibited. Mudarabah without profit sharing. If a business incurs loss in someRisk itself is a kind of gharar in nature, so managing it under a transactions and gains profit in others, the profit will be used to offsetcontract of sale is prohibited. Furthermore, the insurance company the loss at the first instance. The remainder, if any, shall be distributedwho receives the premium and agrees to bear the risk is committing between the parties according to the agreed ratio.a maisir (speculation), as its fortune depends on the chance that aloss may or may not occur. On the other hand, riba (usury) especially When Mudarabah is deployed in a Takaful contract, profit sharing hasin investment activities, is the other element that makes conventional to be embedded; otherwise the contract will be invalid. However, theinsurance unacceptable. non-profit nature of the Takaful concept has brought hesitation on the use of the word ‘profit’. Hence, the word ‘surplus’ is used. And surplusHence, Takaful has emerged as an alternative mechanism to replace distribution is introduced to replace profit sharing.the prohibited conventional insurance. Surplus distribution under Wakalah modelUnder Takaful mechanism, risk is not transferred to the insurance As the Takaful concept became more advanced, many raisedcompany, but shared among all owners of a similar risk. First of all, objections on the application of Mudarabah to the Takaful contract.someone who has a risk joins with others who have similar risks and Most people view that running a Tabarru’ (non-profit) scheme with athey all form a group, community or pool. The members then agree to commercial contract is a contradiction. Some further challenge thatmake a contribution that must be commensurate to each risk brought distributing a surplus is against the very basic aim of pooling the fund.into the pool. The contribution/fund is pooled and used to indemnify Participants contribute to the fund at the outset with the pure intentioncertain members who suffer a predefined loss. to help fellow participants when a predefined misfortune occurs, not expecting any return. No economic motive is involved.Under the Takaful concept, the company is not a risk taker, but merelyacts as a third party who is employed by members to manage the pool At the same time, a new model of Wakalah emerged and rapidlyand to ensure the scheme of ‘helping each other’ runs effectively gained its popularity. Wakalah is an Arabic word for delegation orand fairly. That is why insurance companies now call themselves representation. Wakalah is a contract when a person appoints a‘Operator’, instead of ‘Insurer’ and members are called ‘Participant’, representative to undertake transactions on his/her behalf.not ‘Insured’. Similar to Mudarabah, the relationship among participants remainsCertainly, as a commercial entity, an insurance company is not going under Tabarru’ (donation/non-profit) principle. The difference liesto do all those things for free. They deserve a certain amount of fee on the relationship between participants and the Takaful operator.for the expertise, competence and resources deployed in managing Under the Wakalah model, the Takaful operator acts as an agent ofthe portfolio. How this fee would be calculated or when the operator participants to conduct certain tasks for a certain fee.receives it is very much determined by type of Aqad (contract) betweenoperator and participants. Mudarabah and Wakalah are the two most It is important to note that in its original form under Islamic fiqh ofpopular contracts used to operate Takaful. Muamalat, the Wakalah contract does not have any element of profit sharing or surplus distribution.Surplus distribution under Mudarabah modelIn the earlier days of Takaful, when the first Malaysian Takaful operator Interestingly however, surplus distribution does not suddenly disappearintroduced their product, Mudarabah was the first operational model. when Takaful operators migrate from Mudarabah to Wakalah. It continued... © Page 21 9th June 2010
    • TAKAFUL REPORT www.islamicfinancenews.com Takaful Surplus Distribution: A Controversy (continued)remains as part of many Takaful products. The Takaful industry has not all surpluses are declared, part or even all of it must stay in theobtained legitimacy for surplus distribution under the Wakalah model. pool. It is not unusual if a risk portfolio is running in deficit the first fewThe argument behind it is that funds in the pool are collectively owned years of its establishment simply because of the necessity of buildingby participants (although this thesis can be challenged too), so it is their high reserves, not because the claim exceeds the premium.right to decide how to treat any surplus, should it exist. A statementin the proposal form or policy schedule that state participants give Only after a certain period of time, when reserves in the pool istheir permission to the operator to distribute surplus is as good as actuarially considered as abundant (more than enough), it can beauthorization. released and declared as surplus. In many cases, this abundance of reserve may never come true due to the volatility of results from timeFurthermore, Takaful operators also found justification for them to to time. Imposing a mechanism of surplus distribution into this kind ofreceive a portion of surplus distribution by treating it as performance portfolio is certainly an unsustainable measure.fee for excellent management of risk portfolio. This makes surplusdistribution identical in both Wakalah and Mudarabah. Another important aspect to consider is pressure from the regulators that is becoming more rigorous in order to protect the interest ofTakaful is Insurance with Surplus distribution insureds/participants and the national/regional economy in general.Since it was first introduced under Mudarabah, surplus distribution has Regulators recently tend to review their solvency requirements and putbecome a major selling point of Takaful, irrespective of the operational more pressure on capital.model used. Marketers began to tell their customers that Takaful isbetter than conventional insurance because at the end of the period, The draft of IFSB on Takaful solvency has shown this phenomenon.they will get their money back. Slowly but surely, misunderstanding Once this draft is a published standard and is adopted by regulators,developed among the general public that Takaful is basically insurance the Takaful industry shall feel the impact of a stricter solvencywith surplus distribution. Surplus distribution simply overshadows the regulation. Always bear in mind that to ensure the same level ofholy concept of Tabarru’ or risk sharing which should be at the very security, Takaful undertakings have to be subject to the samecentre of Takaful. vigilant solvency requirements and other aspects of regulation as its conventional counterpart.The incorrect idea that Takaful must have surplus distribution hasforced Takaful operators to attach it to all products. Otherwise they will All these factors will force Takaful operators to put aside more reservesfeel unable to compete in the market. This less than ideal situation of on their pool. They also have to have high capital to support the pool andhaving surplus distribution under a Wakalah contract is not because prepare to inject Qard Hasan into the pool. Furthermore, competitionTakaful operators do not understand the principle of Islamic fiqh of among operators in the market will never relax. And, last but not least,Muamalat. Let’s not forget that each and every Takaful entity must the Takaful industry is still struggling with limited scale and lack ofhave scholars sitting on their Shariah supervisory board. availability of Shariah compliant investments. With all this pressure, it is hard to see any insurance or Takaful company producing high profit or surplus from their operations. Hence, surplus distribution will notIs Surplus distribution technically viable? be a viable and sustainable proposition.From a technical point of view, surplus distribution may not beappropriate for a majority of Takaful products. It is interesting to see that surplus distribution is spread to re-Takaful, even though surplus distribution is even more implausible under it. Re-If we are talking about family Takaful products with a saving element, Takaful mainly deals with high risk in terms of value and volatility. Oneprofit sharing under Mudarabah will perfectly fit, but only the saving/ of the main purposes of any Takaful or insurance company to take outinvestment part. However, when we turn to a range of general Takaful re-Takaful is to transfer a large part of the volatility within their portfolioproducts, none has such a saving or investment element. The only to retakaful or reinsurers and leaving them with more homogeneouspool managed by a Takaful operator is the risk pool, to anticipate any and stable retained portfolios to manage. Unfortunately, we havemisfortune that may bring monetary loss to the eligible participants. seen some re-Takaful contracts contain the clause to accommodate surplus distribution, although no information so far suggests whetherIf the product is a mass product with relatively homogeneous nature any company has successfully done it.of risk and value within the portfolio, there may be a relatively fairto high potential of the pool resulting in surplus, mainly because it is It is now time for the whole industry to review this misconception andless volatile and easier to predict and manage. But, again, it is not a begin efforts to re-educate the market and the public, especially tosufficient reason to distribute surplus to participants and/or operators. promote the real value of Takaful such as pooling resources to help each other without expecting any profit in return. It is very importantUnfortunately, the business of insurance or Takaful is not as simple to clarify that surplus distribution is not an integral part of the Takafulas running a local store where profit can be defined with minimum scheme. Absence of it will not make Takaful invalid as far as Shariahuncertainty as turnover less purchasing cost and other expenses. compliance is concerned. Even schemes without surplus distribution should be technically more sensible, robust and provide better securityIn insurance or Takaful, the ‘commodity’ managed in the pool is risk, to the participants and economy in general.the certainty itself. Obtaining good results in any particular year isnot a guarantee for the same in the next year. In fact it can be very Delil Khairatdifferent. This volatility forces Takaful operators to build reserves Re-Takaful practitioner of a global reinsurance groupduring good times to anticipate bad ones in the future. In other words, Email: delil.khairat@gmail.com © Page 22 9th June 2010
    • FORUM www.islamicfinancenews.com Corporate governance has always met with strong resistance from shareholders, what is the best way to slowly introduce it without compromising its effectiveness? Sound corporate governance should be welcomed rather than resisted by shareholders of Islamic financial institutions as it ensures their rights are protected. In particular the board of directors is directly accountable to the shareholders, and not to the management. Having non-executive directors on the board of directors provides assurance to shareholders. In Islamic banks the investment Mudarabah depositors and the Shariah board are also important stakeholder groups.Again it is the responsibility of the board of directors to ensure that the Mudarabah depositors receive full information about how their profit sharesare calculated, and that there is disclosure of the funds within the profit equalization reserve. The board also has a responsibility for the contractsgoverning Shariah board members and to ensure that there are adequate resources available for the Shariah board to undertake their work.The IFSB Guiding Principles on Corporate Governance for Islamic banks, collective investment schemes and Takaful are an obvious startingpoint for any Islamic financial institution seeking to improve its corporate governance arrangements. These can be freely downloaded from theIFSB website. PROFESSOR RODNEY WILSON: Director of postgraduate studies, Durham University Corporate governance has become increasingly important as businesses grow and management and ownership become increasingly separated. Management acts as an agent to run the corporation on behalf of BANK OF LONDON AND THE MIDDLE EAST its owners (the shareholders), which leads to what is known as the ‘principal-agent’ problem that occurs due to the fact that the interests of these parties are not necessarily aligned. There are multiple ways to incentivizethe agent to act in the best interest of the owner such as contracts, monetary compensation and, most importantly, good corporate governance.The Organisation for Economic Co-operation and Development (OECD) has recognized that integrity of business and markets is vital to thestability of economies, and provides the following definition of corporate governance (2004):“...the rules and practices that govern the relationship between managers and shareholders of corporations, as well as stakeholders likeemployees and creditors.”This definition is accompanied by a set of principles that are regarded to be the international benchmark for corporate governance. Theseprinciples cover, among others, the rights of shareholders and key ownership functions, equitable treatment of shareholders, the responsibilitiesof the board and how these parties cooperate and disseminate information. Hence, good corporate governance is certainly advantageous forboth managers and shareholders and they would do well to remember that these rules are in place to protect their interests. DR NATALIE SCHOON: Head of product research, Bank of London and the Middle East Next Forum Question The maiden Shariah compliant unit trust issuance in Kenya is poised for launch. Do you think this is timely and what sort of impact do you forsee for the African region? If you would like to air your views on the next Islamic Finance Forum Question, please email your response of between 50 and 300 words to Christina Morgan, Forum Editor, at: Christina.Morgan@REDmoneygroup.com before Monday, 21st June 2010. NEW SERVICE We’re not just a Weekly but also a Daily news provider Register now for RSS Feeds on www.islamicfinancenews.com © Page 23 9th June 2010
    • MEET THE HEAD www.islamicfinancenews.com Islamic Finance news talks to leading players in the industry Name: Yeo Wico What are the factors contributing to the success of Position: Partner your company? The most important factor is our clients. We value their trust above all. Company: Allen & Gledhill This governs what we do and how we act. The current stage of our Islamic finance practice would not have been Based: Singapore possible without the legislative and regulatory changes in Singapore since 2005 that were introduced to facilitate Islamic finance. For Age: 43 instance, before the tax changes, corporations had to bear the onerous tax burden of double or triple stamp duty for Islamic finance transactions involving sale and buyback of real estate. This burden Nationality: Singaporean was lifted by changes to the tax regime to equalize tax treatment of certain Islamic financing structures with their conventional financing equivalents. New laws and regulations were also put in place to allow Could you provide a brief journey of how you arrived banks to carry on Islamic financing activities. where you are today?My practice in Islamic finance started in 2001 when I worked on the What are the obstacles faced in running yourfirst Sukuk transaction in Singapore. In those early days, we did not business today?have, as we do now, laws or regulations in Singapore designed tofacilitate Islamic finance. It was a challenge putting together a Sukuk Our primary obstacle is the relative small size of Islamic financeissue which complies with both Shariah principles and conventional which at the same time represents, to us, a reservoir of untappedlaws and regulations. And when we succeeded, it was exhilarating. opportunities.After that experience, I developed a keen interest in developing andpromoting Islamic finance in Singapore. What does your role involve? “I see Islamic finance becomingIn our firm, we are fortunate to have Eugene, Teong Sit and Suhaimi more accepted and growing inwho have a deep passion for Islamic finance. My role is to join handswith my colleagues and work as a team. stature” What is your greatest achievement to date? Where do you see the Islamic finance industry in, say,It is heartening to see the Sukuk market growing roots in Singapore. the next five years or so?Currently, this market centers around two pioneering Sukuk programs I see Islamic finance becoming more accepted and growing in stature.that we had structured and documented. Since their establishment, Our world is getting more inter-connected. Islamic finance is far toowe have seen continuing issues of Sukuk and we are hopeful that important.more will follow.These two programs have also won awards from and gained honorable Name one thing you would like to see change in themention in leading legal publications, including the first ever Singapore world of Islamic finance.Deal of the Year award by Islamic Finance news. In time to come, I hope to see Islamic finance structures or products which are not benchmarked to conventional equivalents. This will lead Which of your products/services deliver the best to the next stage of development when Islamic finance creates its own results? unique structures and products and value proposition.At this early stage of growth of Islamic finance in Singapore, weare focusing on building up our core practice in Murabahah andSukuk transactions, while developing emerging areas such as Featured WorkshopShariah compliant funds, Tahawwut Master Agreement and Istisnatransactions. Structuring and Documenting Commodity Murabahah Transactions 29th June 2010, Kuala Lumpur What are the strengths of your business? This 1-day only “Structuring & Documenting Commodity Murabahah transactions” will be led by key industry practitioners such as Dato Sri’ Zukri Samat, Raja Teh Maimunah, and Megat Hizaini Hassan to name a few. KeyOur key strength is harnessing the breadth and depth of specialized topics featured in this conference are key transactions in Commodity Murabahah & Tawarruq; Salient Features of Commodity Murabahah; Legal and Documentary Issues Facing Commodity Murabahah; Commodity Murabahahexpertise available in Allen & Gledhill to carve out sectors of leadership. Concerns, Challenges and Market Appetite; and a Case-Study by Bursa MalaysiaWe possess the resources and more importantly, the mindset to Contact details:navigate uncharted territory. Tel: +603 2162 7800 Email : info@islamicfinancetraining.com www.islamicfinancetraining.com © Page 24 9th June 2010
    • TERMSHEET www.islamicfinancenews.com SUMMARY OF TERMS & CONDITIONS Obligor/Issuer MTD Infraperdana MTD Infraperdana Islamic Dual Tenor 1) 7.5 years 2) 8 years Tranches Medium Term Notes 1) 5.5 % p.a. Return 2) 5.6% p.a. Payment Installment RM100 million (US$30.3 million) 1) 26th October 2017 Maturity Date 2) 26th April 2018 Arranger/Dealer CIMB Investment Bank Trustee AmTrustee Legal Counsel Lee Hishammuddin Allen & Gledhill Governing Law Laws of Malaysia Purpose of issuance Working capital requirements Principal activities Investment holding 26 April 2010 th Rating AAID Shariah Advisors CIMB Investment BankThe Q&A was conducted with MTD Group: 1. Why did you use this particular Islamic structure? What other structures were considered? We were attracted by attractive pricing and to diversify from conventional bank borrowing 2. What will this capital be used for? Not for capital raising 3. What were the challenges faced and how were they resolved? The lengthy process with the rating agency. We were assisted by the arranger and solicitor to explain the business model and process. 4. Geographically speaking, where did the investors come from? It was underwritten Are you using your subscription to its full ability? What are you missing out on? Call now and request a live online demonstration Contact subs@islamicfinancenews.com or call +603 2162 7800 © Page 25 9th June 2010
    • MOVES www.islamicfinancenews.comBURSA MALAYSIA Gardiner as its head of global investment DELOITTE TOUCHE TOHMATSU strategy.MALAYSIA: Omar Merican has resigned as UK: Vince Niblett has been appointed theBursa Malaysia’s chief operating officer, a Gurwitz joined the firm in 2008 and was new global leader of business advisorypost he has held since the 16th November previously from PIM financial services and group Deloitte Touche Tohmatsu’s audit and2005. Goldman Sachs. enterprise risk services practice.He was the founder and CEO of Merican and Gardiner joined last year as head of EMEA His current position as Deloitte UK’s headPartners Asset Management from 1997 to investment strategy, and was previously of audit will not be affected. Niblett replaces2004. HSBC global head of equity strategy. Alain Pons, who will become CEO of Deloitte France.Prior to that, he was attached to severalfinancial service institutions, includingSolomon Brothers, James Capel and BNP PARIBAS Deloitte has an Islamic finance practice in the UK.O’Connor Associates. FRANCE: BNP Paribas has recently appointed Matthew Moran as the new director and senior equities sales-trader for its global execution services group. LONDON STOCK EXCHANGEMACQUARIE CAPITAL UK: The London Stock Exchange hasUK: Macquarie Capital has appointed Steve He will be covering institutional and hedge appointed Gay Huey Evans and Paul HeidenBaldwin as its managing director and head of fund clients while working closely with the as non-executive directors and RaffaeleUK corporate broking. derivatives and prime brokerage groups. Jerusalmi as executive director.Baldwin joins the firm from JP Morgan Moran has worked for ICAP, looking after the Evans is the vice-chairman of investmentCazenove, where he spent 10 years as a asset managers and hedge funds in the US banking and investment management atcorporate broker and advisor. and international equities. Before that he Barclays. was with Morgan Stanley for 20 years.Macquarie Capital is a subsidiary of the Heiden is executive chairman of TalarisAustralia-based Macquarie Group, which is Topco and a non-executive at United Utilities,involved in Islamic finance. HONG KONG MONETARY while Jerusalmi is director of capital markets at the LSE and CEO of Borsa Italiana. AUTHORITYGE CAPITAL HONG KONG: The Hong Kong Monetary Authority (HKMA) has appointed MuUK: GE Capital has appointed Alan Austin as Huaipeng as senior advisor. MORGAN STANLEYa regional director for London and the South. UAE: Morgan Stanley has appointed GabrielHe will be responsible for the firm’s asset Mu will provide advice and assistance in Aractingi to its private wealth managementbased financing business. the areas of financial cooperation between division as managing director and head of Hong Kong and China, further expansion of sales for the Middle East, based in Dubai.Austin previously worked at KBC Business the renminbi business in Hong Kong, andCapital, Landbanki, Enterprise Finance the development of opportunities for Hong Aractingi was previously executive vice-Europe and Lloyds TSB. Kong’s financial services industry in China. president and head of Middle East at Lombard Odier, and the chief executive of He was previously the director general of the asset management at Ernst & Young.HSBC financial market department at the People’s Bank of China, prior to being seconded to theSAUDI ARABIA: HSBC has appointed HKMA.Mohammad Al Tuwaijri as the new globalbanking head for the Middle East and North HSBCAfrica region. UAE: HSBC has named Nicholas Levitt as its TROWERS & HAMLINS new head of commercial banking.Al Tuwaijri was previously managing director BAHRAIN: Trowers & Hamlins has hired Rizaland head of Saudi Arabia for JP Morgan. Prior Mansor, Timothy Goh, Niall McMorrow and Levitt succeeds James Binns, who willto that, he was treasurer at Saudi British Peter Hawkes for its office in Bahrain. become head of commercial banking inBank, HSBC’s affiliate in the kingdom. Taiwan. Rizal and Goh joins the corporate division, McMorrow in the banking group while He has been with the bank since MarchBARCLAYS Hawkes is in the real estate team. 1993. He joined the UAE office in December 2009 as regional head of business banking.UK: Wealth manager Barclays has appointed Trowers & Hamlins has been involved inAaron Gurwitz as its new CEO and head of Islamic finance since the 1990s. HSBC Amanah is the subsidiary of HSBC.research, economics and strategy and Kevin © Page 26 9th June 2010
    • DEAL TRACKER www.islamicfinancenews.com Islamic Finance news Advisory Board: Keeping you abreast of the world’s upcoming Shariah compliant deals Mr Daud Abdullah (David Vicary) Global Leader Another Islamic Finance news exclusive Global Islamic Finance Group, DeloitteISSUER SIZE INSTRUMENT Prof Dr Mohd Masum BillahFinance ministry, Indonesia TBA Global Sukuk Group Executive Chairman Middle Eastern BusinessBank Negara Malaysia RM2.5 billion Sukuk World Group of CompaniesAhmed Salem Bugshan Group US$100 million Sukuk Dr Humayon DarKuwait Turkish Participation US$100 million Sukuk Chief Executive OfficerBank (Kuwait Turk) BMB IslamicFinance Ministry of Qatar QAR5 billion Sovereign SukukKhazanah Nasional, Malaysia Between SG$300 Sukuk Mr Badlisyah Abdul Ghani million and SG$500 Chief Executive Officer CIMB Islamic millionSaudi Electricity Company TBA Global Sukuk Ms Baljeet Kaur GrewalCagamas US$3 billion Sukuk Managing Director/Vice Chairman Head, Global ResearchBahrain TBA Sukuk KFH Research LimitedMalaysia Airports Holdings US$301 million Sukuk Mr Sohail Jaffer PartnerQatar Islamic Bank US$750 million Sukuk International Business DevelopmentStandard Chartered, UAE US$4 billion Sukuk FWU InternationalUS Firm US$250 million Sukuk Dr Monzer KahfGE Capital, US TBA Sukuk Consultant/Trainer/Lecturer Private PracticeQatari Diar Real Estate, Qatar US$1.5 billion SukukSwedish Export Credit TBA Sukuk Mr Mohamed Ridza AbdullahCorporation Managing Partner Mohamed Ridza & CoAsian Development Bank, TBA SukukPhilippines Prof Bala ShanmugamCentral Bank of Kenya TBA Sukuk Director of Banking & Finance Monash University MalaysiaGovernment of UK TBA London Olympic Sukuk Mr Muhammad Nejatullah SiddiqiKencana Petroleum, Malaysia RM250 million Sukuk Author, Scholar, Speaker, TrainerFirst Investment Company, KWD45 million Sukuk Mr Rushdi SiddiquiKuwait Head of Islamic FinanceVTB Bank, Russia RUB5.8 billion Sukuk Thomson ReutersSudan, Africa TBA Sukuk Mr Dawood TaylorBank Muamalat, Indonesia TBA Sukuk Regional Senior Executive-Middle EastSaudi Electricity Company SAR5 billion Sukuk Prudential PLCQatar Islamic Bank US$500 million Sukuk Mr Abdulkader Thomas President & CEOBank Asya, Turkey US$250 million Sukuk SHAPE – Financial CorpPakistan PKR100 billion Sukuk Mr Paul WoutersNakheel, UAE TBA Sukuk Partner BenerWaha Capital, UAE US$272 million Sukuk and conventional bonds Prof Rodney Wilson Director of Postgraduate StudiesNakheel, UAE TBA Sukuk Durham UniversityWaha Capital, UAE US$272 million Sukuk Mr Sohail Zubairi Chief Executive Officer For more details and the full list of deals visit Dar Al Sharia Legal & Financial Consultancy www.islamicfinancenews.com© Page 27 9th June 2010
    • ISLAMIC FUNDS TABLES www.islamicfinancenews.comEurekahedge North America Islamic Fund Index 120 110 100 Index Values 90 80 70 60 50 12/1/99 12/1/00 4/1/01 8/1/01 12/1/01 12/1/02 12/1/03 12/1/04 12/1/05 12/1/06 12/1/07 12/1/08 12/1/09 4/1/00 8/1/00 4/1/02 8/1/02 4/1/03 8/1/03 4/1/04 8/1/04 4/1/05 8/1/05 4/1/06 8/1/06 4/1/07 8/1/07 4/1/08 8/1/08 4/1/09 8/1/09 4/1/10 Annualized returns for ALL funds (as of the 8th June 2010) FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE1 Mega Dana Syariah Mega Capital Indonesia 14.83 Indonesia2 Amana Growth Saturna Capital 9.85 US3 Mega Dana Obligasi Syariah Mega Capital Indonesia 9.74 Indonesia4 SWIP Islamic Global Equity - Class A Scottish Widows Investment Partnership 8.74 UK5 Intrinsic Crescent Ethical MDA Intrinsic Investment Management 8.61 Australia6 CIMB Islamic Equity CIMB-Principal Asset Management 7.58 Malaysia7 Amana Income Saturna Capital 6.74 US8 Al Dar Money Market ADAM 5.90 Kuwait9 DWS Noor Precious Metals Securities - Class A DWS Noor Islamic 5.17 Ireland10 CIMB Islamic Global Emerging Markets Equity CIMB-Principal Asset Management 4.07 Malaysia Eurekahedge Islamic Fund Index* 1.77 Annualized Standard Deviation for ALL funds (as of the 8th June 2010) FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE1 CIMB Islamic Money Market CIMB-Principal Asset Management 0.17 Malaysia2 Watani USD Money Market National Bank of Kuwait 0.39 Cayman Islands3 Watani KD Money Market National Bank of Kuwait 0.51 Cayman Islands4 Al Dar Money Market ADAM 0.73 Kuwait5 CIMB Islamic Commodities Structured 1 CIMB-Principal Asset Management 1.56 Malaysia6 CIMB Islamic Sukuk CIMB-Principal Asset Management 2.31 Malaysia7 CIMB Islamic Structured Growth CIMB-Principal Asset Management 2.84 Malaysia BLME Umbrella Fund Sicav - SIF - Shariaa Bank of London and The Middle East 4.12 Luxembourg8 $Income - Class B9 CIMB Islamic Enhanced Sukuk CIMB-Principal Asset Management 5.77 Malaysia10 AMB Dana Arif Amanah Mutual 6.07 Malaysia Eurekahedge Islamic Fund Index* 9.30 Contact Eurekahedge To list your fund or update your fund information: islamicfunds@eurekahedge.com For further details on Eurekahedge: information@eurekahedge.com Tel: +65 6212 0900DisclaimerCopyright Eurekahedge 2007, All Rights Reserved. You, the user, may freely use the data for internal purposes and may reproduce the index data provided that reference to Eurekahedge is providedin your dissemination and/or reproduction. The information is provided on an “as is” basis and you assume and will bear all risk or associated costs in its use, and neither Islamic Finance news,Eurekahedge nor its affiliates provide any express or implied warranty or representations as to originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for any © Page 28 9th June 2010
    • SHARIAH INDEXES www.islamicfinancenews.com S&P Shariah Indices Price Index Levels 1300 1180 1060 940 820 700 S&P 500 Shariah S&P Europe 350 Shariah 580 S&P Japan 500 Shariah 460 340 220 100 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09Index Code Index Name 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09SPSHX S&P 500 Shariah 931.589 962.089 1053.05 1041.681 995.08 968.978 1011.317SPSHEU S&P Europe 350 Shariah 1011.875 1042.504 1185.474 1222.354 1156.441 1174.161 1223.984SPSHJU S&P Japan 500 Shariah 926.659 942.416 1035.333 1041.497 983.363 993.055 989.581 1300 1180 1060 940 820 700 580 S&P Pan Asia Shariah S&P GCC Composite 460 S&P Pan Arab Shariah 340 S&P BRIC Shariah 220 100 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09Index Code Index Name 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09SPSHAS S&P Pan Asia Shariah 895.328 921.335 1010.90 979.563 919.609 918.391 967.112SPSHG S&P GCC Composite Shariah 667.054 672.795 750.159 753.479 712.179 670.074 676.445SPSHPA S&P Pan Arab Shariah 114.182 115.358 128.364 128.302 121.503 115.703 116.267SPSHBR S&P BRIC Shariah 1041.529 1069.475 1183.561 1182.207 1117.929 1087.775 1173.998 1200 1080 S&P Global Property Shariah 960 S&P Global Infrastructure Shariah 840 720 600 480 360 240 120 0 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09Index Code Index Name 7/06/10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09SPSHGU S&P Global Property Shariah 588.019 608.951 667.560 684.290 646.637 612.470 670.976SPSHIF S&P Global Infrastructure Shariah 76.570 77.86 86.827 85.743 82.828 95.596 98.914 The S&P Shariah Indices. Creating opportunity for Islamic investors. To learn more, contact index_services@standardandpoors.com.© Page 29 9th June 2010
    • SHARIAH INDEXES www.islamicfinancenews.com Data as of the 7th June 2010 PERFORMANCE OF DJ INDEXES DJIM World DJIM US DJIM Europe DJIM GCC DJIM ASEAN 20 15 10PRICE RETURN (%) 5 0 -5 -10 -15 -20 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTDINDEX 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTDDJIM World -3.29 -1.50 -6.59 -5.18 -10.23 -8.85 7.37 -9.99DJIM US -3.22 -2.13 -7.45 -5.30 -9.07 -6.61 9.13 -7.87DJIM Europe -3.42 -0.95 -5.53 -4.56 -16.28 -17.36 0.23 -17.80DJIM GCC -1.20 -3.09 -7.08 -10.22 -8.68 -3.26 -2.82 -2.34DJIM ASEAN -2.39 0.99 -5.59 -4.53 -2.79 -0.53 15.93 -2.38*all performance is cumulative, based on price return and US$DESCRIPTIVE STATISTICS Market Capitalization (US$ billion) Component Weight (%) Component FloatINDEX Full Mean Median Largest Smallest Large Small number adjustedDJIM World 2397 13686.93 10777.01 4.50 0.93 281.51 0.01 2.61 0.00DJIM US 586 6026.65 5657.88 9.66 2.48 281.51 0.17 4.98 0.00DJIM Europe 272 2403.39 1922.99 7.07 1.68 117.06 0.12 6.09 0.01DJIM GCC 116 201.56 85.33 0.74 0.28 10.64 0.03 12.46 0.03DJIM MENA 161 343.38 96.33 0.60 0.17 12.58 0.02 13.06 0.02DJIM ASEAN 195 361.25 145.71 0.75 0.17 13.77 0.00 9.45 0.00DJIM Titans 100 100 5982.66 5291.53 52.92 34.80 281.51 11.45 5.32 0.22DJIM Asia/Pacific Titans 25 25 912.33 589.13 23.57 17.81 62.05 11.45 10.53 1.94For more information, please visit www.djislamicmarkets.com or contactAnthony Yeung Ariff Sultan Tariq al-RifaiRegional Director Business Development Director DirectorHong Kong, China, Taiwan, Korea, Malaysia, Singapore, Indonesia, India, Islamic Market IndexesJapan, Australia & New Zealand Thailand, Pakistan, Sri Lanka & Bangladesh Tel: +971 4374 8045Tel: +852 2831 2580 Tel: +65 6415 4262 tariq.alrifai@dowjones.comAnthony.yeung@dowjones.com ariff.sultan@dowjones.com© Page 30 9th June 2010
    • ISLAMIC LEAGUE TABLES www.islamicfinancenews.comTOP 30 ISSUERS OF ISLAMIC BONDS 12 Months Issuer Nationality Instrument Market Amt US$ Iss % Managers1 Saudi Electricity Saudi Arabia Sukuk Istithmar Domestic market 3,733,000,000 2 20.6 HSBC, Samba Financial Group public issue2 Government of Dubai UAE Sukuk Euro market public 1,931,000,000 1 10.7 Standard Chartered, UBS, National issue Bank of Abu Dhabi, Dubai Islamic Bank, Bahrain Islamic Bank, Mitsubishi UFJ Financial Group, Emirates NBD, Al Hilal Bank3 Petronas Global Sukuk Malaysia Sukuk Ijarah Euro market public 1,498,000,000 1 8.3 Morgan Stanley, CIMB, Citigroup issue4 Malaysia Malaysia Sukuk Ijarah Euro market public 1,250,000,000 1 6.9 HSBC, Barclays Capital, CIMB issue5 TDIC Sukuk UAE Sukuk Ijarah Euro market public 1,000,000,000 1 5.5 Standard Chartered, HSBC, Abu Dhabi issue Commercial Bank6 Cagamas Malaysia Sukuk Domestic market 969,000,000 8 5.4 HSBC, CIMB, RHB Capital, Maybank public issue; Investment Bank, Cagamas, Domestic market AmInvestment private placement7 Islamic Development Bank Saudi Arabia Sukuk Wakalah Euro market public 850,000,000 1 4.7 Deutsche Bank, BNP Paribas, HSBC, issue CIMB8 Kingdom of Bahrain Bahrain Sukuk Ijarah Euro market public 750,000,000 1 4.2 Deutsche Bank, HSBC, Credit Agricole issue CIB9 Danga Capital Malaysia Sukuk Musharakah Domestic market 612,000,000 1 3.4 Standard Chartered, HSBC, OCBC, RHB public issue Capital, CIMB10 Sime Darby Malaysia Sukuk Musharakah Domestic market 590,000,000 1 3.3 Public Bank, CIMB, Maybank public issue Investment Bank11 Syarikat Prasarana Negara Malaysia Sukuk Ijarah Domestic market 573,000,000 1 3.2 CIMB, Maybank Investment Bank private placement12 GE Capital Sukuk US Sukuk Euro market public 498,000,000 1 2.8 Goldman Sachs, KFH National Bank of issue Abu Dhabi, Citigroup13 Dar Al-Arkan International Saudi Arabia Sukuk Euro market public 446,000,000 1 2.5 Goldman Sachs, Deutsche Bank, Sukuk issue Unicorn Investment Bank14 Khazanah Nasional Malaysia Sukuk Musharakah Domestic market 442,000,000 2 2.4 CIMB, Standard Charterered private placement15 Government of Ras Al UAE Sukuk Euro market public 407,000,000 1 2.3 Standard Chartered, BNP Paribas Khaimah issue16 MISC Malaysia Sukuk Domestic market 368,000,000 2 2.0 HSBC, CIMB, AmInvestment public issue17 Pengurusan Aset Air Malaysia Sukuk Ijarah Domestic market 341,000,000 1 1.9 CIMB private placement18 Projek Lebuhraya Utara Malaysia Sukuk Musharakah Domestic market 301,000,000 1 1.7 CIMB Selatan private placement19 Saudi Hollandi Bank Saudi Arabia Sukuk Domestic market 193,000,000 1 1.1 Saudi Hollandi Bank Riyad Bank public issue20 Islamic Republic of Pakistan Sukuk Domestic 174,000,000 1 1.0 Standard Chartered Pakistan government debt21 Penerbangan Malaysia Malaysia Sukuk Domestic market 148,000,000 2 0.8 Bank Muamalat Malaysia, CIMB, public issue HSBC, AmInvestment22 UMW Holdings Malaysia Sukuk Musharakah Domestic market 141,000,000 1 0.8 Maybank Investment Bank private placement23 International Finance US Sukuk Euro market public 100,000,000 1 0.6 HSBC, KFH Dubai Islamic Bank, issue Liquidity Management Centre24 Gamuda Malaysia Sukuk Musharakah Domestic market 97,000,000 1 0.5 CIMB private placement25 CIMB Islamic Bank Malaysia Sukuk Musharakah Domestic market 86,000,000 1 0.5 CIMB public issue26 Citydev Nahdah Singapore Sukuk Ijarah Domestic market 72,000,000 2 0.4 CIMB private placement27 Syarikat Borcos Shipping Malaysia Sukuk Ijarah Domestic market 48,000,000 1 0.3 Bank Muamalat Malaysia private placement28 Talam Malaysia Sukuk Domestic market 38,000,000 1 0.2 RHB Capital public issue29 Projek Lintasan Shah Alam Malaysia Sukuk Ijarah Domestic market 37,000,000 1 0.2 RHB Capital private placement30 Toyota Capital Malaysia Japan Sukuk Musharakah Domestic market 36,000,000 1 0.2 Mitsubishi UFJ Financial Group, CIMB private placement Total 18,088,000,000 65 100 © Page 31 9th June 2010
    • ISLAMIC LEAGUE TABLES www.islamicfinancenews.com20 MOST RECENT GLOBAL ISLAMIC BONDSPriced Issuer Nationality Instrument Market Value US$ Managers27th May 2010 Malaysia Malaysia Sukuk Ijarah Euro market public issue 1,250,000,000 HSBC, Barclays Capital, CIMB24th May 2010 Projek Lebuhraya Utara Malaysia Sukuk Musharakah Domestic market private placement 301,000,000 CIMB Selatan10th May 2010 Saudi Electricity Saudi Arabia Sukuk Domestic market public issue 1,866,000,000 HSBC, Samba Financial Group22nd Apr 2010 Cagamas Malaysia Sukuk Domestic market private placement 156,000,000 Cagamas, HSBC, CIMB, Maybank Investment Bank31st Mar 2010 Danga Capital Malaysia Sukuk Musharakah Domestic market public issue 612,000,000 Standard Chartered, HSBC, OCBC, RHB Capital, CIMB10th Mar 2010 Khazanah Nasional Malaysia Sukuk Musharakah Domestic market private placement 359,000,000 Standard Chartered, CIMB11th Feb 2010 Dar Al-Arkan International Saudi Arabia Sukuk Euro market public issue 450,000,000 Goldman Sachs Deutsche Sukuk Bank, Unicorn Investment Bank6th Jan 2010 Saudi Hollandi Bank Saudi Arabia Sukuk Domestic market public issue 193,000,000 Saudi Hollandi Bank Riyad Bank21st Dec 2009 Cagamas Malaysia Sukuk Domestic market private placement 148,000,000 Cagamas19th Nov 2009 GE Capital Sukuk US Sukuk Euro market public issue 500,000,000 Goldman Sachs, KFH National Bank of Abu Dhabi, Citigroup16th Nov 2009 Cagamas Malaysia Sukuk Domestic market private placement 142,000,000 CIMB, Maybank Investment Bank28th Oct 2009 Government of Dubai UAE Sukuk Euro market public issue 1,931,000,000 Standard Chartered, UBS, National Bank of Abu Dhabi, Dubai Islamic Bank, Bahrain Islamic Bank, Mitsubishi UFJ Financial Group, Emirates, Al Hilal Bank22nd Oct 2009 Pengurusan Aset Air Malaysia Sukuk Domestic market private placement 741,000,000 CIMB14th Oct 2009 Sime Darby Malaysia Sukuk Musharakah Domestic market public issue 590,000,000 Public Bank, CIMB, Group Maybank Investment Bank13th Oct 2009 TDIC Sukuk UAE Sukuk Ijarah Euro market public issue 1,000,000,000 Standard Chartered, HSBC, Abu Dhabi Commercial Bank16th Sep 2009 Islamic Republic of Pakistan Pakistan Sukuk Domestic government debt 174,000,000 Standard Chartered11th Sep 2009 UMW Holdings Malaysia Sukuk Musharakah Domestic market private placement 141,000,000 Maybank Investment Bank11th Sep 2009 Syarikat Prasarana Negara Malaysia Sukuk Ijarah Domestic market private placement 573,000,000 CIMB, Maybank Investment Bank11th Sep 2009 MISC Malaysia Suku Murabahah Domestic market public issue 286,000,000 HSBC, CIMB9 Sep 2009 th Islamic Development Bank Saudi Arabia Sukuk Wakalah Euro market public issue 850,000,000 Deutsche Bank, BNP Paribas, HSBC, CIMBGLOBAL ISLAMIC BOND VOLUME BY MONTH GLOBAL ISLAMIC BOND VOLUME BY QUARTER © Page 32 9th June 2010
    • ISLAMIC LEAGUE TABLES www.islamicfinancenews.comTOP 30 MANAGERS OF ISLAMIC BONDS 12 Months ISLAMIC BOND VOLUME BY CURRENCY US$ (BILLION) Manager Amt US$ Iss % US dollar 8.01 CIMB 3,612,000,000 32 20.02 HSBC 3,568,000,000 15 19.7 Malaysian ringgit 5.03 Samba Financial Group 1,866,000,000 2 10.3 Saudi riyal 3.94 Standard Chartered 1,274,000,000 9 7.05 Maybank Investment Bank 795,000,000 7 4.4 UAE dirham 0.76 Deutsche Bank 611,000,000 3 3.4 Pakistan rupee 0.27 Citigroup 599,000,000 2 3.38 Morgan Stanley 499,000,000 1 2.89 Barclays Capital 417,000,000 1 2.3 ISLAMIC BOND VOLUME BY ISSUER NATION US$ (BILLION) - 12 Months10 BNP Paribas 416,000,000 2 2.311 Abu Dhabi Commercial Bank 333,000,000 1 1.8 Malaysia 7.712 Dubai Islamic Bank 331,000,000 2 1.813 Mitsubishi UFJ Financial Group 324,000,000 2 1.8 Saudi Arabia 5.214 UBS 306,000,000 1 1.7 UAE 3.314 Emirates NBD 306,000,000 1 1.716 RHB Capital 262,000,000 4 1.5 Bahrain 0.817 Credit Agricole CIB 250,000,000 1 1.418 Goldman Sachs 248,000,000 2 1.4 US 0.619 Cagamas 231,000,000 3 1.320 KFH 224,000,000 2 1.221 Bahrain Islamic Bank 208,000,000 1 1.2 GLOBAL ISLAMIC BOND VOLUME BY SECTOR - 12 Months22 National Bank of Abu Dhabi 197,000,000 2 1.123 Public Bank 197,000,000 1 1.1 16%24 Unicorn Investment Bank 149,000,000 1 0.825 AmInvestment 144,000,000 5 0.8 34% Government 8% Finance26 OCBC 137,000,000 2 0.8 Utility & Energy27 Al Hilal Bank 97,000,000 1 0.5 9% Oil & Gas Real Estate/Property28 Saudi Hollandi Bank 97,000,000 1 0.5 Other28 Riyad Bank 97,000,000 1 0.5 12% 21%30 Bank Muamalat Malaysia 85,000,000 2 0.5 Total 18,088,000,000 65 100GLOBAL ISLAMIC BOND VOLUME - US$ ANALYSIS GLOBAL ISLAMIC LOANS - YEARS TO MATURITY (YTD Comparison) 2010 2009 2008 2007 2006 2005 2004 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 to 3 years 3 to 5 years 5 to 7 years 7 to 10 years 10+years © Page 33 9th June 2010
    • LEAGUE TABLES www.islamicfinancenews.comALL DATA AS OF THE 7th JUNE 2010SUKUK MANAGERS (12 months) MAY 2009 – MAY 2010 SUKUK MANAGERS (3 months) FEB 2010 - MAY 2010 Manager Commitment Market Manager Commitment Market Manager Issues Manager Issues (in US$) Share % (in US$) Share % 1 Malaysia (Government) 20,412,148,600 91 49.8 1 Malaysia (Government) 5,635,749,900 27 57.1 2 CIMB 4,774,595,274 77 11.6 2 CIMB 1,658,004,817 17 16.8 3 HSBC Banking Group 2,192,003,002 48 5.3 3 HSBC Banking Group 552,718,100 6 5.6 4 Malayan Banking 1,324,477,188 93 3.2 4 AMMB Holdings 439,466,718 13 4.5 5 Citigroup 1,276,560,949 7 3.1 5 Barclays Bank 412,500,000 1 4.2 6 Morgan Stanley 1,215,000,000 5 3.0 6 Malayan Banking 237,047,963 20 2.4 7 RHB Banking Group 1,062,809,121 33 2.6 7= RHB Banking Group 234,907,485 5 2.4 8 Malaysian Industrial Development 987,951,510 234 2.4 7= Malaysian Industrial Development 233,261,147 48 2.4 Finance Finance 9 Samba Financial Group 933,261,000 1 2.3 9 Cagamas 140,218,100 5 1.4 10 AMMB Holdings 894,732,227 67 2.2 10 Affin Holdings 72,027,955 6 0.7 11 Standard Chartered 740,695,346 15 1.8 11 EON Capital 49,963,711 16 0.5 12 Dubai Islamic Bank 602,646,875 3 1.5 12 Bukhary Capital 48,062,090 3 0.5 13= Mitsubishi UFJ Financial Group 482,646,875 2 1.2 13 OCBC Bank 45,136,560 4 0.5 13= UBS 482,646,875 2 1.2 14 OSK Holdings 40,213,959 5 0.4 15 Cagamas 432,887,481 36 1.1 15 United Overseas Bank 28,753,072 5 0.3 16 Barclays Bank 412,500,000 1 1.0 16 Standard Chartered 14,586,988 2 0.1 17 Indonesia (Government) 244,383,617 14 0.6 17 Hong Leong Financial Group 10,911,915 1 0.1 18 Affin Holdings 215,967,680 21 0.5 18 Indo Premier Securities 10,822,500 1 0.1 19 OCBC Bank 186,581,940 27 0.5 20 OSK Holdings 180,818,654 26 0.4 19 Public Bank 7,758,210 2 0.1SUKUK ISSUERS (12 months) MAY 2009 – MAY 2010 SUKUK ISSUERS (3 months) FEB 2010 - MAY 2010 Issuer Commitment Market Issuer Commitment Market Issuer Issues Issuer Issues (in US$) Share % (in US$) Share % 1 BNM Sukuk 10,506,578,100 52 23.6 1 BNM Sukuk 3,877,653,900 19 39.4 2 Malaysia (Government) 7,820,788,300 26 17.6 2 Malaysia (Government) 1,490,354,200 8 15.1 3 Bank Indonesia 3,772,448,630 49 8.5 3 Danga Capital 621,408,000 1 6.3 4 Petronas Global Sukuk 3,000,000,000 2 6.7 4 Cagamas 558,743,400 5 5.7 5 Perusahaan Penerbit SBSN Indonesia 2,027,529,170 11 4.6 5 Perusahaan Penerbit SBSN 512,148,570 3 5.2 Indonesia 6 Dubai DOF Sukuk 1,930,587,500 2 4.3 6 Bank Indonesia 502,688,588 9 5.1 7 Saudi Electricity 1,866,522,000 1 4.2 7 Khazanah Nasional 367,252,800 1 3.7 8 Cagamas 1,572,719,680 36 3.5 8 Projek Lebuhraya Utara-Selatan 303,767,000 1 3.1 9 Khazanah Nasional 1,073,562,800 3 2.4 9 ESSO Malaysia 230,390,100 4 2.3 10 TDIC Sukuk 1,000,000,000 1 2.2 10 Pengurusan Air SPV 210,853,040 1 2.1 11 Pengurusan Air SPV 950,718,040 4 2.1 11 Malakoff 155,642,000 1 1.6 12 ESSO Malaysia 792,908,700 11 1.8 12 Gamuda 99,324,800 1 1.0 13 Sime Darby 636,963,100 4 1.4 13 Hytex Integrated 82,921,503 9 0.8 14 Danga Capital 621,408,000 1 1.4 14 Toyota Capital Malaysia 82,646,655 2 0.8 15 Syarikat Prasarana Negara 577,872,000 2 1.3 15 Hubline 72,027,955 6 0.7 16 MISC 572,905,000 6 1.3 16 Haluan Gigih 55,870,200 5 0.6 17 Bank Negara Malaysia 566,262,000 10 1.3 17 Syarikat Borcos Shipping 48,062,090 3 0.5 18 Dar Al-Arkan International Sukuk 450,000,000 1 1.0 18 MM Vitaoils 41,479,852 15 0.4 19 Malakoff 331,466,000 2 0.7 19 Muhibbah Engineering (M) 40,466,920 2 0.4 20 Projek Lebuhraya Utara-Selatan 303,767,000 1 0.7 20 Citydev Nahdah 35,971,600 1 0.4 Islamic Sukuk league tables reflect Shariah compliant bonds showing evidence of ownership of assets or their earnings. These results include (but are not limited to) the following securities/assets: Sukuk Salam, Sukuk Mudarabah, Sukuk Ijarah, Sukuk Murabahah, Sukuk Istisna and Sukuk Musharakah. For more information please contact: Aimee Webster Telephone: +1-646-223-6816 Email: aimee.webster@thomsonreuters.com © Page 34 9th June 2010
    • LEAGUE TABLES www.islamicfinancenews.comALL DATA AS OF THE 7th JUNE 2010LOAN MANDATED LEAD ARRANGERS (12 Months) MAY 2009 – MAY 2010 LOAN BOOKRUNNERS (12 Months) MAY 2009 – MAY 2010 Market Pro Rata Full Credit Market Lender Pro Rata (US$) Full Credit (US$) Deals Lender Share % (US$) (US$) Deals Share % 1 HSBC 1,530,319,392.23 5,645,789,333.62 6 14.5 1= Al Rajhi Banking & 1,249,900,000.00 2,499,800,000.00 1 27.0 Investment 2 Standard 1,203,669,229.53 4,251,106,140.19 8 11.4 Chartered 1= Credit Agricole 1,249,900,000.00 2,499,800,000.00 1 27.0 3 Qatar Islamic 1,098,538,943.20 1,098,538,943.20 1 10.4 Corporate & Bank Investment Bank 4 Samba Financial 921,188,778.30 3,169,622,223.41 3 8.7 3 Qatar Islamic Bank 1,098,538,943.20 1,098,538,943.20 1 23.8 Group 5 Credit Agricole 835,322,058.82 4,520,800,000.00 4 7.9 4 WestLB 291,161,570.19 291,161,570.19 3 6.3 Corporate & Investment Bank 5= Standard Chartered 159,648,190.00 478,944,570.00 2 3.5 6 National 821,191,444.89 2,769,632,889.79 2 7.8 Commercial Bank 5= Noor Islamic Bank 159,648,190.00 478,944,570.00 2 3.5 7 Al Rajhi Banking & 791,722,058.82 4,302,800,000.00 3 7.5 Investment 7 Citigroup 130,500,000.00 130,500,000.00 3 2.8 8 Arab Bank 492,447,058.82 2,242,800,000.00 3 4.7 8 Arab Banking 84,648,190.00 253,944,570.00 1 1.8 9 Noor Islamic Bank 318,518,806.42 796,685,802.85 3 3.0 10 WestLB 235,879,372.86 591,161,570.19 4 2.2 11= Alinma Bank 187,875,000.00 1,503,000,000.00 1 1.8 9 Royal Bank of 75,000,000.00 225,000,000.00 1 1.6 Scotland 11= Bank of China 187,875,000.00 1,503,000,000.00 1 1.8 10= BNP Paribas 41,666,666.67 125,000,000.00 1 0.9 13 Al Hilal Bank 172,870,616.42 359,741,232.85 2 1.6 10= Gatehouse Bank 41,666,666.67 125,000,000.00 1 0.9 14= Standard Bank 155,000,000.00 775,000,000.00 1 1.5 14= National Bank of 155,000,000.00 775,000,000.00 1 1.5 10= Liquidity 41,666,666.67 125,000,000.00 1 0.9 Kuwait Management House 14= Gulf Bank of 155,000,000.00 775,000,000.00 1 1.5 for Investment Kuwait 17 Citigroup 130,500,000.00 130,500,000.00 3 1.2 18 Riyad Bank 117,644,392.23 699,989,333.62 2 1.1 ISLAMIC LOANS RAISED (12 Months) MAY 2009 – MAY 2010 19 National Bank 99,997,333.40 399,989,333.62 1 0.9 Borrower Country Islamic Loan Amount (US$) 20 Arab Banking 84,648,190.00 253,944,570.00 1 0.8 21 Royal Bank of 75,000,000.00 225,000,000.00 1 0.7 1 Zain Saudi Arabia 2,499,800,000 Scotland 2 Rabigh Independent Power Saudi Arabia 1,503,000,000 22 Development 67,222,222.22 400,000,000.00 3 0.6 Project Bank of Singapore 3 Qatari Diar Real Estate Qatar 1,500,000,000 23 Societe Generale 61,247,058.82 518,000,000.00 2 0.6 Investment 24 BNP Paribas 56,647,058.82 467,000,000.00 3 0.5 4 Saudi Binladen Group Saudi Arabia 1,266,632,890 25 Mitsubishi UFJ 42,647,058.82 400,000,000.00 2 0.4 5 Qatari Diar Real Estate Qatar 1,098,538,943 Financial Investment 26 Liquidity 40,555,555.56 265,000,000.00 2 0.4 6 Etihad Etisalat Saudi Arabia 399,989,334 Management 7 International Petroleum UAE 317,741,233 House for Investment Investment 8 Al Dur Power & Water Bahrain 300,000,000 27 Kuwait Finance 33,787,869.59 231,161,570.19 2 0.3 House 9 Asya Katilim Bankasi Turkey 253,944,570 28= Bank Islam 26,666,666.67 160,000,000.00 1 0.3 10 Dubai International Capital UAE 225,000,000 Malaysia 11 Dolphin Energy UAE 218,000,000 28= Malayan Banking 26,666,666.67 160,000,000.00 1 0.3 12 Qatar Airways Qatar 160,000,000 28= Masraf Al Rayan 26,666,666.67 160,000,000.00 1 0.3 13 Bahrain Mumtalakat Holding Bahrain 140,000,000 28= Sumitomo Mitsui 26,666,666.67 160,000,000.00 1 0.3 Financial Group 14 Burgan Co for Well Drilling Kuwait 125,000,000 Trading & Maintenance 32= Ahli United Bank 25,000,000.00 125,000,000.00 1 0.2 15 Emirates Trading Agency UAE 100,000,000 32= Gatehouse Bank 25,000,000.00 125,000,000.00 1 0.2 32= Bumiputra- 25,000,000.00 100,000,000.00 1 0.2 16 Gulf Finance House Bahrain 100,000,000 Commerce 17 Olam International Singapore 100,000,000 Holdings 32= Boubyan Bank 25,000,000.00 125,000,000.00 1 0.2 18 Global Investment House Kuwait 91,161,570 © Page 35 9th June 2010
    • LEAGUE TABLES www.islamicfinancenews.comALL DATA AS OF THE 7th JUNE 2010SUKUK BY COUNTRY (12 Months) MAY 2009 – MAY 2010 LOANS BY COUNTRY (12 Months) MAY 2009 – MAY 2010 Country Volume Issued Volume Outstanding Country Volume (US$) Market Share (%) Malaysia 29,447,388,946 19,452,188,027 Saudi Arabia 5,669,422,223 53.6 Indonesia 5,965,116,539 2,278,648,239 Eurobond 4,555,587,500 4,555,587,500 Qatar 2,758,538,943 26.1 Saudi Arabia 2,059,850,500 2,059,850,500 UAE 902,741,233 8.5 US 2,075,000,000 2,075,000,000 Pakistan 174,265,020 174,265,020 Bahrain 540,000,000 5.1 Singapore 92,728,884 92,728,884 Turkey 306,944,570 2.9 Bahrain 76,622,780 26,521,700 Cayman Islands - - Kuwait 293,661,570 2.8 UAE - - Singapore 100,000,000 0.9 Jersey - -SUKUK BY INDUSTRY (12 Months) MAY 2009 – MAY 2010 LOANS BY INDUSTRY (12 Months) MAY 2009 – MAY 2010Industry Volume Issued Volume Outstanding Industry Volume (US$) Market Share(%) Other financial 21,554,971,455 14,152,621,117 Telecommunications 2,977,289,334 28.2 Sovereign 12,333,763,949 8,163,260,695 Real estate 2,598,538,943 24.6 Agency 3,220,902,950 3,084,328,245 Utilities 1,803,000,000 17.1 Electric power 2,230,183,097 2,054,359,097 Manufacturing 2,064,158,024 1,286,862,214 Construction 1,366,632,890 12.9 Transportation 1,448,700,290 1,281,712,820 Financial services 810,106,140 7.7 Energy company 864,879,035 123,501,170 Oil and gas 343,000,000 3.2 Service company 310,963,558 158,550,202 Chemicals, plastics and rubber 330,741,233 3.1 Banks 280,009,300 280,009,300 Consumer goods 116,830,910 108,387,410 Transportation 160,000,000 1.5 Telephone 21,197,600 21,197,600 Wholesale 100,000,000 0.9 GLOBAL ISLAMIC VOLUME SUKUK/LOANS (US$ IN MILLIONS) 18,000 16,000 Sukuk 14,000 Loan 12,000 10,000 8,000 6,000 4,000 2,000 0 1Q - 07 2Q - 07 3Q - 07 4Q - 07 1Q - 08 2Q - 08 3Q - 08 4Q - 08 1Q - 09 2Q - 09 3Q - 09 TD 4Q - 09 TD 1Q - 10 TD For more information please contact: Aimee Webster Telephone: +1-646-223-6816 Email: aimee.webster@thomsonreuters.com © Page 36 9th June 2010
    • EVENTS DIARY www.islamicfinancenews.com EVENTS DIARY Islamic Finance news team Published By: 21/F, Menara Park, 12, Jalan Yap Kwan SengDATE EVENT VENUE ORGANIZER 50450 Kuala Lumpur, Malaysia Tel: +603 2162 7800 Fax: +603 2162 7810June EDITORIAL TEAM10th London 2010 Sukuk Summit London ICG Events Editor Arfah Hani Abdullah Hani.Abdullah@REDmoneyGroup.com11th IFN Roadshow Turkey Turkey REDmoney events Deputy Editor Ashwin Hemmathagama Ashwin@REDmoneyGroup.com14 – 15 th th 1 World Islamic Bank Conference st Singapore MEGA Events Copy Editor Jothi Jeyasingam Jothi.Jeyasingam@REDmoneyGroup.com22nd IFN Roadshow Thailand Thailand REDmoney events Writer Lai Pei Yee Peiyee.Lai@REDmoneyGroup.com27th – 29th 2nd International Islamic Business and Finance Russia IBFD Fund Summit (KAZANSUMMIT 2010 Staff Writer Nazneen Abdul Halim Nazneen.Halim@REDmoneyGroup.comJuly Correspondents Kamal Bairamov, Shirene Shan Features Editor Shabnam Mokhtar5th – 7th Asia Islamic Banking Conference Kuala Lumpur Fleming Gulf Shabnam.Mokhtar@REDmoneyGroup.com Forum Editor Christina Morgan12th – 15th ETF Investments 2010 Singapore Kavaq Events Christina.Morgan@REDmoneyGroup.com Publications Sasikala Thiagaraja14 – 15 th th The International Takaful Summit UK Afkar Consulting Manager Sasikala@REDmoneyGroup.com14th – 15th World Takaful Conference Kuala Lumpur MEGA Events Production Hasnani Aspari Manager Hasnani.Aspari@REDmoneyGroup.com22nd – 24th 1st World Dinar Conference 2010 – The Global Kuala Lumpur Qafilah Qey Production Mohd Hanif Mat Nor Economic Crisis: An Islamic Response Executives Hanif.Nor@REDmoneyGroup.com Muhammad Najib Abdul RahimAugust Najib.AbdulRahim@REDmoneyGroup.com2nd – 5th 7th Kuala Lumpur Islamic Finance Forum Kuala Lumpur CERT Yazid Yahya Yazid.Yahya@REDmoneyGroup.com3rd IFN Roadshow India India REDmoney events SALES TEAM Group Sales Paul Hue5th IFN Roadshow Pakistan Pakistan REDmoney events Director Paul.Hue@REDmoneyGroup.com Tel: +603 2162 7800 x 20September New Business Charles Philip Manager Charles.Philip@REDmoneyGroup.com20 – 22 th nd Indonesia Sukuk Forum 2010 Jakarta IQPC Worldwide Tel: +603 2162 7800 x 13 Head of Musfaizal Mustafa IFN Roadshow Japan Japan REDmoney events Subscriptions Musfaizal.Mustafa@REDmoneyGroup.com Tel: +603 2162 7800 x 24 IFN Roadshow Korea Korea REDmoney events Subscriptions Jamuna Raja Sales Executives Jamuna.Raja@REDmoneyGroup.comOctober Tel: +603 2162 7800 x 29 Nadjmuddean Mohd Ris4th – 7th Islamic Finance World Africa 2010 Johannesburg Terrappin Mohammed.Nadjmuddean@REDmoneyGroup.com Tel: +603 2162 7800 x 386th IFN Roadshow Saudi Arabia Saudi Arabia REDmoney events MARKETING TEAM18th – 22nd 25th East Asian Insurance Congress Bali, Indonesia EAIC Organizing Head of Shanice Leong Committee Marketing Shanice.Leong@REDmoneyGroup.com Administration & Dhana Dorasamy25th – 28th Global Islamic Finance Forum 2010 (GIFF 2010) Kuala Lumpur REDmoney Marketing Dhana@REDmoneyGroup.com Assistant26th – 28th IFN Issuers & Investors Asia Forum 2010 Kuala Lumpur REDmoney events Financial Faizah HassanNovember Controller Faizah.Hassan@REDmoneyGroup.com10th – 11th Middle East Life & Family Takaful Summit Dubai Asia Insurance Deputy Publisher Geraldine Chan & Director Geraldine.Chan@REDmoneyGroup.com Review Managing Director Andrew Tebbutt18th IFN Roadshow Canada Canada REDmoney events Andrew.Tebbutt@REDmoneyGroup.com22 – 24 nd th The World Islamic Banking Conference Bahrain MEGA Events Managing Director Andrew Morgan & Publisher Andrew.Morgan@REDmoneyGroup.com23rd IFN Roadshow UK UK REDmoney events Individual Subscription Rate: US$695/Year25 th IFN Roadshow France France REDmoney events Company-Wide Subscription Rate: US$3,075/Year DISCLAIMERDecember All rights reserved. No part of this publication may be reproduced, duplicated or copied by any means without the prior consent of the holder of the copyright, requests for which should1st – 2nd Annual Conference on Islamic Banking & Finance Manama AAOIFI be addressed to the publisher. While every care is taken in the preparation of this publication, no responsibility can be accepted13th IFN Roadshow Brunei Brunei REDmoney events for any errors, however caused. © Page 37 9th June 2010
    • Company IndexCompany Page Company Page Company PageAbsa Bank 3 Emirates 17 National Bank of Kuwait 6Absa Islamic Bank 3 EON Capital 4 Nestle 17Absa Private Bank 3 Esso Malaysia 8 North Jersey Federal Credit Union 3Abu Dhabi Islamic Bank 6 Exxon Mobil Corporation 8 Ogilvy & Mather 16, 17AEON Credit Service 8 Fattah Finance 9 Ogilvy Noor 16Affin Holdings 4 Fitch 8 OIC 5, 14Ahmed Salem Bugshan Group 6 Fortis Healthcare 3 Oriental Bank 4Al Baraka Financial Services Corporation 5 GE Capital 26 Pakistan Venture Capital 13Al Hilal Bank 9 Global Investment House 6 Parkway Holdings 3Al Rajhi Bank 4 Gulf African Bank 3 Perbadanan Tabung Pendidikan Tinggi Nasional 4Allen & Gledhill 24 Gulf Bank 6 Prudential 7, 8Allen & Overy (Thailand) 11 Hamilton Harrison & Mathews 3 Prudential BSN Takaful 7Alliance Holdings 4 Hong Kong Monetary Authority 26 Public Bank 8Alpha Asset Management 9 Hong Leong Bank 4 Public Islamic Bank 8Amanie Islamic Finance Consultancy and Education Hong Leong Islamic Bank 4 RAM 8 5 HSBC 6, 26 REDmoney Group 3, 5American International Assurance Company 8 HSBC Amanah 6 Reserve Bank of India 5American International Assurance Company (Bermuda) ICB Banking Group 4 Reval 5 8 ICB Islamic Bank 4 S&P 8American International Group 7, 8 ICD 6 Saturna 9American University in Cairo 3 IDB 14 Saturna Capital Corporation 9AmIslamic Bank 4 IFI Consulting Company 9 Securities Commission of Malaysia 4,13Amlak Finance 6 INCEIF 20 Senai-Desaru Expressway 8AmTrustee 25 Integrated Healthcare 4 Shore Cap Holdings 4ApexAfrica Capital 3 Islamic Bank of Thailand 10, 11 Solidarity General Takaful Company 7Bank Negara Malaysia 4, 7 ISRA 4 Standard Bank Group 5Bank of Bangladesh 4 Kausar Consulting 9 State Bank of Pakistan 4Bank of London and the Middle East 5, 23 Kerala State Industrial Development Corporation 5 Summit Alliance Port 4Bank Simpanan Nasional 7 Khazanah Nasional 3 Summit Industrial and Mercantile Corporation 4BankIslami Pakistan 15 Kuwait Turkish Participation Bank 5 Tamweel 6Barclays 26 Lee Hishammuddin Allen & Gledhill 25 Thai Bond Market Association 10, 11BNP Paribas 26 London Stock Exchange 26 Thai Securities and Exchange Commission 10Bursa Malaysia 26 Macquarie Group 26 The Bank of Thailand 11CapAsia 5 Maybank 8 The Bank of Tokyo-Mitsubishi UFJ 8Capitas Group International 6 Maybank Investment Bank 8 The Consumers Association of Subang and Shah AlamCentral Bank of the Republic of Turkey 5 Metropolitan Life Insurance 7 7CIMB Group 5 MIFC 4 The Saudi Investment Bank 8CIMB Investment Bank 25 Mizuho Corporate Bank 8 Thompson Reuters 4CIMB Standard 5 Monetary Authority of Singapore 4 TNS 16Cosmopolitan Traders 4 Moody’s 8 Trowers & Hamlin 26Deloitte Touche Tohmatsu 26 Morgan Stanley 26 University of Bahrain 5Dubai Bank 8 MTD Group 25 Visor Capital 9Dubai Islamic Bank 6 MTD Infraperdana 25 World Islamic Economic Forum 4Durham University 23 Mumtalakat Holding Company 8Egyptian General Authority for Investment 3 National Bank of Abu Dhabi 8 HOW TO SUBSCRIBE +603 2162 7800 +603 2162 7810Yes! I would like to subscribe to: Subs@IslamicFinanceNews.comINDIVIDUAL SUBSCRIPTION COMPANY WIDE SUBSCRIPTION 1 Year at US$695 nett 1 Year at US$3,075 nett 21/F, Menara Park, 12, Jalan Yap Kwan Seng 2 Years at US$1,250 nett 2 Years at US$5,350 nett 50450 Kuala Lumpur, Malaysia (Max: 10 Individual Subscriptions) YOUR DETAILS Full Name(First Name) (Surname)Company Name Job Title Address Postal/Zip CountryWork Email Telephone Fax The information you provide will be safeguarded by REDmoney, whose subsidiaries may use it to keep you informed of relevant products & services. TO INITIATE YOUR SUBSCRIPTION, RETURN FAX TO +603 2162 7810 P c US R E c c c v Credit Card 0 I cF c news v v Check D Exc v c c Telegraphic Transfer (T/T) U cc c v Please send your T/T advice with your subscription form to us either by post or fax. A confirmation will be A , N IFN R ch) sent once payment is received. Please note that subscription is not confirmed until payment has been made in full. NE-IFN07/23