Monday, June 11, 2007

Shari'ah-compliant home financing, sukuk and book reviews

Shari'ah-compliant home financing in Canada is up to 600 basis points more expensive than a conventional mortgage. This compares with around a 100 basis point spread between Islamic and conventional mortgages in the United States and results from a lower amount of activity. It probably also reflects the absence of a the U.S. government sponsored organization Freddie Mac (Federal Home Loan Mortgage Corporation) which buys mortgages from lenders packages & sells them as mortgage-backed securities in the secondary markets. Freddie Mac injects greater liquidity into the mortgage markets which allows lenders to serve more customers. Several Islamic financial institutions in the U.S. sell Shari'ah-compliant home financing to Freddie Mac (University Bank, Guidance Financial, Devon Bank and American Finance House-LARIBA).

Sub. Rqd.: The Financial Times reporter Farhan Bokhari writes on Lloyd's TSB decision to offer Shari'ah-compliant business products.

International Investment Group KSCC, a Kuwaiti financing company issued $200 million in unrated convertible sukuk. Ekttatab (formerly Kazma Holding) is seeking to raise $148 million from a share issue for investment in Shari'ah-compliant IPOs. UAE-based Amlak Finance will sell $272 million of sukuk.

The emergence and evolution of sukuk.

Waqf in Guernsey.

Terence Tan writes two book reviews in The Star (Malaysia). An Introduction to Islamic Finance (by Zamir Iqbal and Abbas Mirakhor) is "the first book to introduce all of the essential topics [in Islamic finance] in one volume" while Islamic Finance: The Regulatory Challenge (by Simon Archer and Rifaat Ahmed Abdel Karim) gives a " well aligned [and] consensus view on the [regulatory] way forward"

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