Bahrain names lead managers for Islamic bond issue

Bahrain’s central bank confirmed on Wednesday it has appointed Deutsche Bank, HSBC Bank and Calyon - the investment banking arm of Credit Agricole - as lead managers for its upcoming sale of sovereign Islamic bonds.The country plans to sell $500 million of five-year bonds compliant with Islamic law from May 27, central bank spokeswoman Nayla Ali Al Khalifa said last month.
It will also issue three-year debt in local currency to raise a further 250 million Bahraini dinars ($662 million), according to news agency Bloomberg.
The sale of sukuks will be the first from the region this year after demand for Islamic debt slumped last year as the global credit crunch intensified.
Last month, Simon Eedle, managing director of Global Islamic Banking at Calyon, told the Reuters Islamic Banking and Finance Summit in Bahrain that he does not expect the sukuk market to pick up again this year.
"I'd be surprised if there were many big deals done this year, it's more waiting to see where the market is going, but everything is taking a lot longer than we thought," he said.
However, he added that foreign investors would be issuing sukuk to tap the Gulf Arab region's ample liquidity compared with other markets.
"Once we get the market functioning ... there is going to be a huge opportunity for the right sectors and the right names to ... tap that Islamic wealth," he said.

Islamic Economics Can Solve World Problems

Islamic economics presents viable solutions to many problems facing the world, says Abdul Rahman al-Jeraisy, a leading businessman and chairman of the Riyadh Chamber of Commerce and Industry. “There are a number of successful experiments in the field of Islamic economics,” al-Jeraisy said, emphasizing the importance of applying Islamic methodology in utilizing and managing material resources.
In a statement on the occasion of the seventh Islamic Economic Conference, which opens at King Abdul Aziz University (KAU) in Jeddah on April 1, he said the conference would shed more light on the growing significance of Islamic economics. “[Sharia] has given utmost importance to economic matters and warned against financial dealings that would have dangerous consequences on the Ummah [the broader Islamic nation] and moral values,” said al-Jeraisy.
He underlined the importance of the conference as it comes at a time when many Muslims have drifted away from Islamic teachings in dealing with their economic and financial matters.
“The conference also offers a good opportunity for interested people to become aware of new research in the field of Islamic economics,” he said. Jeraisy Group is one of the conference’s main sponsors.
The three-day conference will examine the findings of numerous studies in Islamic economics to counter challenges posed by the modern world and help poor Muslim countries develop their economies. Dr. Abdullah Muhammad Bafel, vice-president for higher studies and scientific research at KAU, said the conference would formulate a futuristic economic vision from an Islamic perspective.
The conference will bring together economists, business leaders, entrepreneurs, thinkers and journalists. It will be a forum for Islamic economists, bankers and financiers to discuss the intricacies of Islamic finance and examine the dynamic nature of Islamic economies. “It is vital to examine why the vibrant principles of Islamic economics have not been implemented over the past few years and no viable method has evolved to invest the wealth of rich Muslim countries in poorer Muslim countries,” Bafel said.
Participants will also discuss the development of natural resources in Muslim countries in light of the challenges and opportunities posed by globalization. The conference will also help develop strategies to create a better understanding of business opportunities in emerging markets.
The conference will discuss as many as 50 research papers on various topics presented by experts from different parts of the world. Dr. Abdullah al-Musleh, secretary-general of the International Organization for Scientific Miracles in the Holy Qur’an and Sunnah, will present a paper on “Miraculous Economic Teachings in the Qur’an.”
Al-Musleh will focus on the economic problems being caused by the interest-based banking and financial system that obstructs investment, causes inflation and expands the divide between rich and poor. “Zakah encourages investment, controls inflation and contributes to solving unemployment problems,” he added.
[The Qur’an requires a Muslim to donate five percent of his income in the form of zakah or zakat (alms) for the benefit of the poor.
The author does not explain how zakat could encourage investment, control inflation and contribute to solving the unemployment problem. After all, in the case of the capital-surplus countries in the Gulf, the excessive liquidity is the main source of inflation. Unemployment is more a social and cultural issue than an economic one, as it has to do with the reluctance of Gulf citizens to engage in non-white color jobs. Moreover, the unemployment of women in Saudi Arabia, for example, is not an issue caused by lack of investment.]

Al Amal Microfinance Bank wins Islamic Microfinance Challenge 2010

Al Amal Microfinance Bank of Yemen has been awarded $104,000 under the Islamic Microfinance Challenge 2010, a partnership launched to encourage the reach of Islamic financial services to micro-entrepreneurs.


CGAP, Deutsche Bank, Grameen-Jameel Pan Arab Microfinance, and Islamic Development Bank partnered to sponsor this global competition in order to uncover viable business models that provide microfinance products compatible with Shari’ah.

Sponsors received over 130 applications from 43 countries for this competition, thus underlining the growing global prominence of Islamic financing options. Applicants included Islamic and conventional microfinance institutions (MFIs), multi-sector non-governmental organisations (NGOs), consultants, and academics.

A significant portion of the 2.7 billion people without access to finance often refuse financial products that do not conform to Islamic law, and are therefore at an even greater disadvantage than other low-income individuals seeking financing to fund their micro-businesses.

"The response to the Islamic Microfinance Challenge has been astonishing," said Julia Assaad, General Manager of Grameen-Jameel Pan Arab Microfinance. "There is great demand for Islamic financing and a lot of enthusiasm among financial groups globally in meeting this demand. We are heartened by both the commitment and innovation we saw from applicants. We hope to see Islamic microfinance flourish in reaching low-income households".

Al Amal Microfinance Bank is the first microfinance bank in the Arab world to offer only Shari’ah-compliant products. Operating for just over two years, the bank has 15,000 active borrowers and 20,000 savers, and has already captured over 25 per cent of the Yemeni microfinance market. The bank's menu of Islamic microfinance services include group and individual financing, project, corporate, and investment financing, savings, investment funds, and insurance.

Al Amal's proposal for the competition was to pilot an Islamic leasing product. The bank plans to self-fund its leasing product by relying on its Islamic investment funds product. It expects to reach operational and financial sustainability by 2012. Al Amal will be recognised and awarded its $104,000 prize funds during the annual Sanabel Conference in June.

"In its short life, Al Amal Microfinance Bank has already distinguished itself as a pioneering institution of Islamic microfinance," said Henry Azzam, Deutsche Bank's Chairman for the Middle East and North Africa. "Al Amal has found creative solutions to self-finance its banking activities and has demonstrated that micro-entrepreneurs can be reached with diverse Islamic finance tools on a large scale."

The judges also named four runners-up, Tameer Microfinance Bank (Pakistan), Tanzania ecoVolunteerism (Tanzania), Bina Insan Sejahtera Mandiri-BISMA (Indonesia), and Center for Women's Cooperative Development-CWCD (Pakistan). "Congratulations to these runners-up for submitting business ideas which strongly meet the combined criteria of sustainability, scalability, and innovation," says Rabih Mattar, Microfinance Team Leader at the Islamic Development Bank. "These applicants have developed interesting ideas to cater to their local markets while remaining committed to Shariah principles. We look forward to hearing about their future pursuits."

Sponsors of the Islamic Microfinance Challenge hope this competition serves as an impetus for deeper exploration of ways to serve the market. "Ultimately," says Mohammed Khaled, the Middle East and North Africa representative at CGAP, "the conclusion of the Challenge marks not the end, but the beginning of a collaborative process to build this sector – as we develop business models, it is also critical that we develop training tools, performance ratios, and reporting standards for common use. Practitioners need to have an honest exchange of ideas on what works and what does not, while donors must encourage innovation by investing in new pilot projects."

Bloomberg Releases Comprehensive Islamic Finance Platform

Bloomberg also announced, in cooperation with the Association of Islamic Banking Institutions Malaysia (AIBIM), the launch of a Malaysian Ringgit (MYR) sukuk index to provide a benchmark for MYR sovereign sukuk investments.
“The Islamic marketplace is growing rapidly and there is high demand for a wide range of resources,” Dan Doctoroff, President of Bloomberg L.P, said from Kuala Lumpur. “Bloomberg is delighted to increase its commitment to serve this dynamic market, where we have nearly 20 years of experience in reporting on Islamic financial news, in all regions and across multiple asset classes.”
Gerard Francis, Bloomberg’s Global Head of Emerging Markets and Islamic Finance, said: “Bloomberg’s Islamic Finance Platform provides the most complete, customizable and innovative solution available today. ISLM has the broadest set of Islamic finance data, analytics and proprietary news, significantly increasing market transparency. ISLM will give investment professionals the edge they need to make informed decisions and meet the increasing demands of investors and regulators.”
The new Bloomberg ISLM platform has extensive resources for investing in fixed income, equities and money markets that comply with Shariah including:
-Sukuk- News coverage, analytics and search tools of more than 1,500 Islamic bond issues globally including fatwa endorsements and structured diagrams of the financial instruments. It also includes credit ratings and searchable data on Islamic loans globally.
-Equities & Funds - Screening of over 35,000 Shariah-compliant stocks by prominent screening agencies. Database of more than 500 Islamic funds with ability to research and monitor debt, commodities, equities and exchange traded funds (ETFs).
-Islamic Community Database - Providing full transparency into more than 250 Shariah scholars with details on which sukuk they have rated, boards they represent and their fatwa endorsements. Also included is a listing of more than 70 Islamic banks and profiles on all prominent Islamic institutions and regulators.
-Regional specific content - Carrying the Malaysia International Islamic Financial Centre (MIFC) initiative’s content, developed in collaboration with Bank Negara Malaysia and other MIFC community members; providing insights on Shariah, MIFC business opportunities and key developments; and listing the more than 90 community members for business connections.
The platform is integrated with the Bloomberg Professional® service. It supports Bloomberg’s leading Order Management System (OMS) and Asset and Investment Management system (AIM).
The Bloomberg AIBIM Bursa Malaysia Sovereign Shariah Index (BMSSI) developed together with The Association of Islamic Banking Institutions Malaysia (AIBIM), provides a benchmark of performance for investors seeking exposure to Shariah-compliant Malaysian Ringgit-denominated Sovereign Issuances. The BMSSI will set a standard for increased transparency and provide performance measures for Islamic markets.
“The MYR sukuk index developed with Bloomberg will become the Islamic benchmark of choice for the Malaysian sukuk market and help stimulate the growth, competitiveness and sustainability of Islamic financial services,” says Dato’ Mohd Redza Shah Abdul Wahid, President, AIBIM. “With strategic partnerships and collaborative efforts, we can build an extensive and innovative leading-edge Islamic financial community that will succeed globally and enhance international presence for Islamic products and services.”
Sheikh Dr. Mohd Daud Bakar, Managing Director, Amanie Islamic Finance Consultancy and Education, said: “Islamic finance represents important growth opportunities, and through the full range of institutions and products available, contributes to the expansion and intensity of the financial markets. Islamic products and services present feasible and competitive alternatives to conventional methods of investment. They are increasingly popular as financing and investment tools.”
“We are delighted to provide a unique solution for our customers. Our product and service should not only benefit the existing Islamic finance community, but potential new players in this rapidly growing market,” says UAE-based Max Linnington, Regional Head Middle East and Africa, Bloomberg.
The announcement was made at Bloomberg client event in Kuala Lumpur, where leading financial executives attended presentations and panel discussion with Shariah Scholars, Bloomberg Islamic Finance experts and Central Bank representatives.

About Bloomberg

Bloomberg is the world’s most trusted source of information for financial professionals and businesses. Bloomberg combines innovative technology with unmatched analytic, data, news, research, display and distribution capabilities, to deliver critical information via the Bloomberg Professional® service and multimedia platforms. Bloomberg’s media properties span television, radio, digital and print, making up one of the world’s largest news organizations with more than 2,300 news and multimedia professionals at 146 bureaus in 72 countries. For more information go to www.bloomberg.com

About AIBIM

The Association of Islamic Banking Institutions Malaysia (AIBIM) was established in 1995. AIBIM’s objectives, among others are to foster the establishment and the conduct of sound Islamic banking system and practices in Malaysia in cooperation and consultation with Bank Negara Malaysia or other domestic regulatory bodies, to promote and represent the interests of members, to promote Islamic banking related education and training programmes and to work in collaboration with other similar associations worldwide.