Monday, December 11, 2006

IsDB loan to Gambia, CIMB Kanoo, EIIB-BIsB cooperation, Badr Al Islami offers new product, Arcapita takes over Viridian, WIBC Banker of the Year

The Gambia receives loan from Islamic Development Bank

"Gambia: Islamic Bank Loans Ratified By National Assembly", The Gambia Journal via AllAfrica.com, December 11, 2006

The Gambian National Assembly ratified two loans from the Islamic Development Bank for two loans denominated in Islamic Dinar (ID, which are linked at par with the IMF Special Drawing Rights (SDR)). The loans are for ID6.3 million and ID1.3 million (US$8.9 million and US$1.8 million, respectively) and will finance an agricultural project "designed to combat and roll back salt intrusion in the Gambia's lowland regions". [Note: the exchange rates used between ID & US$ do not match with the SDR exchange rates]. The Secretary of State for Finance and Economic Affairs, Musa Bala Gaye, is quoted describing the project:
"The Lowland Development Project consists of rural infrastructure including lowland and irrigated land development, field equipment and tools, environmental protection, input and supply, project management unit, familiarization visits, and start of workshops, technical assistance, consultancy services and audit"

If the Islamic Development Bank wanted to increase funding for projects like this, they could securitize the loans and sell them to investors. Many investors looking to invest in development would be willing to accept a lower return on their investments as long as the investment is working to assist with development. This could be a way in which Islamic finance could be expanded to appeal to both Muslims and non-Muslim in a way that focuses on the substantive ethical contribution it would provide in terms of alleviating poverty, environmental protection and promoting food security without relying entirely on the form being Shari'ah-compliant.

CIMB Islamic ventures into Bahrain

"CIMB, Kanoo Group Launch Islamic Finance Joint Venture", Bernama, December 11, 2006

CIMB Group, a large Malaysian bank with a substantial Islamic subsidiary has teamed up with Yusuf Bin Ahmed Kanoo Holdings WLL, a Bahrain-based conglomerate. The joint venture will begin operating on January 1 and will focus on debt & equity capital markets, corporate banking, asset management and treasury services. The head of CIMB's Islamic banking division, Badlisyah Abdul Ghani has elsewhere been quoted saying that the launch marks "the start of a long journey for us in the region and we look forward to growing with our customers here".

European Islamic Investment Bank Plc

"European Islamic Investment Bank Plc and Bahrain Islamic Bank sign agreement for international co-operation on Islamic finance", AMEinfo, December 10, 2006

The European Islamic Investment Bank, the first Shari'ah-compliant investment bank licensed by the Financial Services Authority in the U.K. has signed a strategic co-operation agreement with the Bahrain Islamic Bank, the first Islamic bank in Bahrain.

Financing stock trading

"Badr Al Islami launches a Shariah compliant product to finance trading in listed shares", AMEinfo, December 9, 2006

Recently launched Badr Al Islami has unveiled a Shari'ah-compliant financing for share trading. It is unclear whether this is a Shari'ah-compliant version of margin trading or a different product.

Arcapita and Viridian

"Bahrain's Arcapita completes Viridian takeover", Interactive Investor, December 10, 2006

Bahrain-based Islamic investment firm Arcapita has completed its takeover of Northern Ireland's largest electricity supplier Viridian.

Islamic Banker of the Year

"Islamic banking stalwarts honoured at key seminar", Gulf Daily News, December 11, 2006

Al Salam Bank vice-chairman and managing director Hussein Al Meeza was given the Islamic banker of the year award at the World Islamic Banking Conference which wraps up today.

Islamic finance in Malaysia & GCC

"Malaysia at forefront of Islamic finance", The Star (Malaysia), December 11, 2006

While it reads a little like an advertisement for Malaysian Islamic finance, it presents a variety of figures on the size of the Islamic financial industry in Malaysia as well as the size of the potential petrodollars in the GCC.

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