Malaysia, Kenya, Saudi sukuk and venture capital

EONCap Islamic Bank, the Islamic banking subsidiary of EON Bank Bhd, wants to expand into partnership-based Islamic investment banking. The acting CEO, Abdul Jamel Pawanteh commented "We hope to expand our products by taking advantage of various contracts under Islamic banking … moving towards entrepreneur-based ties rather than debtor-creditor relationships".

HSBC Holdings Plc plans to start a stand-alone Islamic bank based in Malaysia to serve Muslim customers across Asia. They hope to receive approval to offer weath management, mutual funds and retirement products in countries like Brunei, Indonesia and Bangladesh from Malaysia. HSBC Amanah, the Islamic banking arm of HSBC Holdings is based in Kuala Lumpur.

The first Islamic commercial bank in Kenya received a license to operate. The bank will be called the First Community Bank Limited. Barclays Bank Kenya and Kenya Commercial Bank both operate Islamic windows and the Gulf African Bank was due to open in April.

The first Saudi sukuk was listed on the Dubai International Financial Exchange (DIFC). There are now six sukuk listed on the exchange with a combined value of $8.98 billion. The most recently added sukuk was a $600 million issue by Dar Al Arkan Real Estate Development Company.

The managing partner of Bahrain-based venture capital firm Stratum, Marwan K. Tabbara, urged Islamic financial institutions to move into venture capital and human capital based businesses rather than just fixed assets.

Khazakhstan, Ratings for takaful and the IDB and book review

Emirates Bank and Bank TuranAlem, the second largest bank in Kazakhstan, are moving forward towards opening an Islamic bank in the country. The process started back in May when the two firms signed a Memorandum of Understanding

Moody's , the ratings company, explained how takaful companies are rated. The report, "Moody's Approach to Analysing Takaful Companies" discusses the significant differences takaful companies have compared with conventional insurers and mutual insurers.

A review of a new book on Islamic Banking: "Islamic Banking, Finance and Insurance: A Global Overview," by Saluhuddin Ahmed.

The Islamic Development Bank received an Aaa/Prime-1 issuer rating from Moody's in its recent annual report.

New sukuk markets, Islamic real estate

CIMB Group will expand its work on sukuk to countries within the region like Thailand and Vietnam. The group already operates in Singapore, Malaysia and Indonesia with a stockbroking business in Thailand. Nazir Razak, CEO of CIMB Group, said that "it will be logical for CIMB to evolve into a banking franchise in Thailand in the future".

While KFH (Malaysia) Bhd still interested in acquiring a stake in RHB Capital, it has delayed any plans to do so and instead concentrate on organic growth in Malaysia.

Islamic Real Estate Funds (IREF) are a growing alternative investment in the Gulf Cooperation Council (GCC).

Innovation, Integration and Growth of Islamic Finance

Two finance experts from Masraf Al Rayan, the Gulf-based Islamic Investment and Commercial Bank, spoke at the 3rd Annual World Capital Markets and Islamic Funds Conference occuring in Bahrain from May 26-28.

Links between the Gulf Cooperation Council states and Asia have increased the demand for Shari'ah-compliant products. Islamic financial products could also serve as a catalyst to further deepening trade flows between East and west. Intra-Muslim-majority country links to promote education, the growth of human capital and increased availability of capital could increase entrepreneurship and development in majority Muslim countries.

Growth of the Islamic finance industry in Malaysia will be vertical compared to the growth in the number of firms in the Gulf Region, says KFH (Malaysia) Bhd chief economist Baljeet Kaur Grewal.

Greater innovation needed to continue the excitement generated by Islamic finance into the future, says Bahrain Islamic Bank chairman Khalid Abdulla Al Bassam.

The Dubai International Financial Centre (DIFC) plans to issue $1 billion in Islamic bonds (sukuk) according to Bishar Barzawi. No information of what use the funds would be for except 'general corporate purposes' and no details on the structure of the sukuk issuance which are typically backed by assets in most sukuk issues.

The Bank of Nova Scotia and the Toronto-Dominion Bank, the second and third largest banks by market capitalization in Canada plan to reconsider whether to begin offering Shari'ah-compliant financial products to attract business from Muslim customers who belive conventional products violate the prohibition of riba.

Malaysia's state owned holding company Khazanah Nasional Bhd may issue a Shari'ah-compliant exchangeable bond later this year. The company issued one last year convertable into shares of Telekom Malaysia.

ihiBlog

I usually try to update this blog every weekday, but unfortunately I had a bicycle accident on Thursday evening which landed me in the hospital for two nights. I'm recovering, but the blogging may be slow for a couple of weeks because I fractured my clavicle and seven spinous processes.

Using Islamic venture capital to attract foreign investment

MNRB Holdings Bhd, parent company of Malaysian Re, Takaful Ikhlas Sdn Bhd and MNRB Retakaful Bhd, will be expanding its takaful business outside of Malaysia. It recently opened an office in Dubai to expand both its conventional & takaful products in the Middle East.

At a conference in Kuala Lumpur, Securities Commission chairman Zarinah Anwar discussed the possibility of drawing Shari'ah-compliant venture capital funds to the country. She asked "The question, therefore, is, how can Malaysia distinguish itself in the emerging market venture capital pool? Our belief is that Islamic venture capital provides that distinguishing factor". The full text of her speech is available from the Securities Commission website. Zarinah described how "venture capital is fundamentally consistent with core Islamic economic principles of active partnerships and risk taking," something Muhammad Saleem, a critic of current practices in Islamic finance has argued.

Malaysian Islamic banking is more advanced than Hong Kong and Singapore despite not being as large a financial center, says Parliamentary Secretary to the Finance Ministry Dr. Hilmi Yahaya.

$100 billion in sukuk are coming within the next five years say financial experts meeting in Bahrain next week.

Another article about the Islamic Finance World North America conference in Toronto which ends today. The article provides a description of some of the work that Anchor Finance Group does.

Canadian Islamic mortgages, Standardization

At the Islamic Finance World North America conference organized in Canada on Islamic finance, participants discussed the requirements needed to fit Islamic financing, particularly home financing, into the regulatory environment of Canada which restricts financial institutions' holdings of real estate. Because Islamic home financing is less common in Canada than the U.S., the products are significantly more expensive in Canada where they are 100 to 300 basis points more expensive compared to 40 to 100 basis points higher in the U.S.

The Central Bank of Bahrain will issue standardized Islamic financial products by the end of this year.

Ernst & Young will launch the 1st annual "Islamic Funds & Investments Report" soon.

Dubai Islamic Investments Managing Director Marwan Al Khatib believes that the Malaysian government's active encouragement and participation in the development of the country's Islamic financial industry was important for its success.

Philippine Banco de Oro may be interested in bidding on Al-Amanah Islamic Investment Bank of the Phillipines which the government is trying to privatize.

Financial Times section on Islamic finance

FT REPORT - ISLAMIC FINANCE

"Backwater sector moves into global mainstream"

"'Most of it is a question of structuring,' says [Cyrus] Ardalan [head of emerging markets at Barclays Capital]. 'And now people are taking a more flexible approach [as to what is Sharia-compliant].' Yet it is precisely this flexibility that creates frustration among devotees to the industry and feeds scepticism about the sector. The question that is raised is whether mirroring existing products and returns through financial engineering is a sound basis on which the industry should develop."

Innovation:"Frenzied race to develop new ideas"

"A few devout Muslims argue that these innovations [derivatives and structured finance products] increasingly contravene the spirit of Islamic finance - even if they might match its letter. Concepts such as derivatives and hedge funds, for example, are considered particularly controversial, given the Koran's ban on gharar (speculation)."

Opinion: Mahmoud El-Gamal: "Incoherent pietism and Sharia arbitrage"

"If all interest is forbidden, then, in principle, the solution is to build all financial intermediation on equity-based profit sharing. The practical solution - which I call "Sharia arbitrage" - is to use legal devices to restructure interest-bearing debt, collecting interest in the form of rent or price mark-up. Designing such instruments and their certification as "interest free" constitutes the bulk of Islamic finance."

• On his blog, Dr. El-Gamal adds a couple of points that were not included in the final article.

Products: "No interest - but big deposits of ingenuity"

"Commodity murabaha replicate short-term money market deposits, usually taken out for fixed terms between one week and one year, and medium-term syndicated loans. A commodity murabaha is a contract between a bank and its client for the sale of goods at a price plus an agreed profit margin for the bank. As the bank is making profits rather than earning interest, this is considered Sharia-compliant. Profits are allowed under Islamic law. The instrument is called a commodity murabaha because the profits are made on the buying and selling of a commodity, usually metal, such as copper, aluminium or lead."

Insurance: "Putting a premium on a foothold in the market"

"Despite the expected growth of takaful insurance and re-takaful, they are likely to remain facets of the overall insurance market, particularly in areas outside the Muslim world, where consumers face a barrage of insurance products competing largely on price."

Supervision & regulation: "Experts see need for a common approach"

"Although everyone agrees on the need for harmony in accounting and on the merits of more uniform Shariah standards, there is a debate in the industry over whether Islamic institutions should have separate licensing regimes, as is the case in Kuwait, for example. Some analysts argue that the sector requires clear and specific regulations while others say this would shield Islamic institutions from competition and promote complacency."

Investment banks: "Wide array of new names join the party"

"The pattern [of Western banks entering the Islamic financial industry] also reflects a distinctive point about the way that Islamic finance operates: namely, that the religious "brand" of any product typically rests not in the reputation of the institution that has produced it - but with the religious scholars who have approved it. Thus, western banks have entered this field by engaging the service of esteemed religious scholars who can rule on the Islamic merits of products."

Profile: "HSBC: Islamic business is part of the global fabric"

"HSBC Amanah believes that there are now plenty more frontiers to explore. It is trying to widen the pool of investors and issuers engaged in Islamic finance. It is also looking to apply a host of techniques developed in traditional western financial markets to deal with factors such as inflation risk or currency risk in a way complies with Islam."

Profile: "Saudi Arabia: Demand leads to dominance"

"Saudi Arabia may be the most conservative of Muslim states, but its banking sector has been dominated by conventional banks, with, until recently, only one fully Islamic bank, al-Rajhi Bank."

Profile: "Malaysia: Experience and regulation bring strength in depth"

"[Malaysia] faces a difficult challenge convincing overseas Muslims, especially those in the Middle East, of the credibility of its code of Islamic Sharia law. Unlike the Middle East, which has a more diverse set of interpretations through the work of different scholars, Malaysia has tried to follow a more uniform code."

Historical contextx: "Principles from the past guide usage in modern world"

"Since the dawn of Islam, devout Muslims seeking to follow religious tenets more than 1400 years old have relied on verses from the Koran, the Islamic holy book, to press their case in favour of following only those financial principles which are permitted by religion."

Profile: "Bahrain: New battleground to reassert credentials"

"A broader attempt to cement Bahrain's role in Islamic finance, however, comes from the multilateral institutions hosted by the islands. These include the Accounting and Auditing Organisation for Islamic Financial Institutions, the Liquidity Management Centre which contributes to the sukuk market, and the Islamic International Rating Agency."

London: "Capital takes a leading role"

"David Testa, an executive director at West LB, believes London will remain unchallenged as the western hub for Islamic finance. 'London has established itself as a leading centre and the government is determined to keep it that way, as the sukuk summit clearly shows,' he says."

Asian Islamic Financial Centers

BusinessWeek has an article about the growing ties between the Middle East and Asia with a section on Islamic finance and banking in Singapore and Malaysia.

"For Southeast Asian financial centers such as Malaysia's Kuala Lumpur and Singapore, the evolution of Islamic finance from a novelty to a mass market phenomenon in the Muslim world is a huge opportunity, too. Islamic financial services now comprise a roughly $1 trillion market worldwide, according to credit rating agency Standard & Poor's. [...] Islamic banking assets already account for 12.2% of total banking assets in Malaysia. The government has said it aims to have 20% of all banking assets in Malaysia under Islamic banks by 2010."

IsDB Poverty Reduction Fund, Islamic financial innovation & Canadian Islamic finance

Shaikh Mohamed bin Jassem Al Thani, the Chairman of CORECAP, which launched an Islamic private equity fund yesterday, estimated that the Islamic financial industry is currently at $800 billion in size and growing 15-20 percent per year.

The Islamic Development Bank fund for development (the 'Islamic Solidarity Fund for Development') will be launched at the annual meeting in Dakar, Senegal on May 29-30.

• This conference is listed on the IHI conference listing page.

Soud Ba'alawy, Executive Chairman of Dubai Group, speaking in a panel on Islamic finanace in the World Economic Forum at the Dead Sea, Jordan, said that Islamic finance needs to see further development of new innovative products in order to become mainstream. He described that innovation could be achieved by converting conventional structures to Shari'ah-compliant products.

At the launch of the "Regulation and Supervision of Islamic Banks" course, the development of Islamic finance in Brunei is described. The new course is jointly offered by the Islamic Research & Training Institute and the South East Asian Central Banks (SEACEN) Research & Training Centre.

• September 29, 1991: First Islamic financial institute opened, the Perbadanan Tabung Amanah Islam Brunei (TAIM) or Brunei Islamic Trust Fund

• January 13, 1993: International Bank of Brunei Berhad converted into an Islamic bank and renamed the Islamic Bank of Brunei Berhad

• July 2000: Another government bank, the Development Bank of Brunei is converted into the Islamic Development Bank of Brunei Berhad

• 2006: Two banks merge to become the Bank Islam Brunei Darussalam (BIBD)

• 2006: Brunei begins issuing 91-day sukuk al-ijarah. Six have been issued with a cumulative size of $730 million.

• January 17, 2006: Syariah Financial Supervisory Board Order launched

Ittihad Capital is hosting a dinner before the Islamic Finance World North America to try and attract more Islamic financial firms to the country.

Malaysian Islamic Index, American Public Radio program on U.K. government Islamic bonds, other news

Bursa Malaysia Bhd and the FTSE Group launched a new Shair'ah-compliant index of 30 Malaysian stocks. The index is called by FTSE Bursa Malaysia Hijrah Shariah Index.

Citibank Bhd, the Malaysian subsidiary of the global financial firm has no plans to launch an Islamic banking subsidiary this year.

CORECAP lauched a $150 million CORECAP Islamic Private Equity Fund to invest in "Sharia-compliant Private Equity investments in the Middle East and North Africa region, via equity participation and via a Sharia-compliant mezzanine structure".

The American Public Radio program had a segment on the U.K. featuring a woman from the Lawyers Christian Guild who oppose the bonds for reasons which seem unlikely to be relevant based on previous sukuk issues.

The Phillipine government failed again to privatize majority state-owned Al-Amanah Islamic Bank.

South African-based bank Absa Islamic Bank has plans to expand in Africa.

Moroccan banks will be able to offer Islamic banking but will not be able to call them 'Islamic'.

Islamic banks in Kuwait are not currently able to issue sukuk to fund their activities although conventional banks are able to because there is no regulation in place to allow it.

The S&P Brazil, Russia, India & China (BRIC) Index will add four Indian firms. It is "the first time that an international rating agency has developed an index to help Muslim investors across the globe invest in specific Indian companies in an Islamically compliant way".

Islamic finance in Singapore & University Bank financial results

The managing director of the Monetary Authority of Singapore, Teo Swee Lian, said that the city-state is encouraging Islamic finance to develop by adapting its laws & regulations to make it easier for Islamic financial institutions to operate. However, the direction of the development will be left to companies operating in the sector. Currently, Singapore has $1.32 billion in Shari'ah-compliant property funds and $500 million of Islamic insurance funds (takaful).

"It will be difficult for us to do anything big in terms of retail [Islamic banking], because we don't have a very large critical mass of consumers who require it, unlike Malaysia, for instance. It will probably be more wholesale banking, for institutions, for fund management, for capital markets."

University Bank the parent company of the only Islamic bank in the U.S., University Islamic Financial Corp. released Q1 results. Community and Islamic banking reported a net loss of $19,000 in the first quarter of 2007 (compared with a net loss of $36,000 in the same period last year).

Pakistani Islamic finance growing rapidly, Al Salam expanding to Europe & international commodity murabaha

Pakistan's Islamic financial services industry started later than in other countries but has been able to grow rapidly and will continue to grow over the near term. This is the message from Dr. Shamshad Akhtar, the governor of the State Bank of Pakistan and the deputy chairperson of the Islamic Financial Services Board, speaking with the Khaleej Times. Islamic financing currently makes up 3 percent of assets and deposits of the country's banking system and Dr. Akhtar expects that it could grow to 10 or 15 percent in relatively few years if the sector continues to grow at its current rapid pace. Currently there are six stand-alone Islamic banks and ten Islamic 'windows' at conventional banks. Dr. Akhtar also emphasized the ability to bring more people into the financial system who currently abstain because of their religious beliefs and, if microfinancing is used, could play an important role in the empowerment of women who make up the majority of microfinancing loans.

Al Salam Bank, headquartered in Bahrain with licenses to operate in Sudan and Algeria is eying Asia and Europe for expansion. Speaking to Reuters, Yousif Taqi, Al Salam's cheif executive, predicted that the bank would enter the European market, possibly Britain, in the next two years.

Short term funds using palm-oil murabaha will be exchanged between the Saudi Hollandi Bank and Malaysia's central bank, Bank Negara Malaysia.

IFSB Summit in Dubai

The UAE central bank governor Sultan bin Naser Al Suwaidi, speaking at the opening session of the Islamic Financial Services Board (IFSB) Summit in Dubai. In addition to finding more Shari'ah-compliant financial instruments to manage Islamic bank's short-term liquidity managment, he also urged Islamic banks "to find a more transparent way to differentiate between the dividend paid to shareholders and investors (or depositors)". He also reiterated the common call for more harmonization of Shari'ah boards' opinions on Islamic banking and financial products.

• The IFSB press release on the conference is available from the IFSB website.

Shaikh Hamdan Bin Rashid Al Maktoum, deputy ruler of Dubai and Minister of Finance and Industry, said he believes the market demand for Islamic financial services will set the number of Islamic banks. While Tamweel and Amlak Finance have applications for approval to enter the Islamic banking market, the UAE central bank has said it will not issue any more licenses in the near term.

The Secretary General of the IFSB, Rifaat Ahmed Abdul Karim noted that:

"Institutions offering Islamic financial services are growing fast and are emerging as an integral part of the international financial system. Thus it is important to have a coordination of supervisory efforts in banking, the securities market and insurance to safeguard the stability of the global financial system."

This sentiment was supported the governor of the Central Bank of Bahrain

Al Salam Bank Bahrain officially opened its regional hub in Bahrain today.

Qatar Islamic Bank plans to open an Islamic bank in the U.K.

President Gayoom of the Maldives discussed the possibility of an Islamic bank in the country with the Islamic Development Bank

Another article about Islamic banking coming to Kazakhstan

KFH Malaysia new Islamic economic research office, SIB promote women in Islamic banking

Kuwait Finance House Group launched an Islamic banking research office yesterday. The research office will be based in Malaysia and called 'Islamic Banking Economics and Investment Research'. Salman Younis, the managing director of KFH (Malaysia) Bhd describes their goals for the office, "We aim to provide cutting-edge research material which capitalises on economic and Islamic financial research and provides clients with an added value to their investment decisions".

Sharjah Islamic Bank in the UAE wants to increase the number of female employees, particularly those in higher up positions. The manager of Sheikha Jawaher bint Mohammed Al Qasimi, who supported the program, was quoted, "With the growing demand for Islamic finance in the world, and the growing number of women working in the field, this organisation is the next natural stage in a world which demands quality and excellence regardless of sex or background,"

The governor of the Malaysian central bank, Bank Negara Malaysia, Dr. Zeti Akhtar Aziz said there needs to be greater focus on arriving upon a 'common vision' for Islamic financial services.

U.K. Islamic bonds, Islamic banking in Kazakhstan, Malaysia and the GCC

Financial Times writer Farhan Bokhari editorializes on the benefit of a U.K. government sukuk. He argues:

"Muslim investors could use their newly found presence in a country such as Britain to promote the concept of Islamic finance to a more global audience. In spite of its spectacular growth, the concept remains misunderstood in many circles. Developing partnerships with academic institutions and mainstream professional bodies to promote sukuk and other Islamic finance concepts would help to address this lack of understanding."

This goal of creating understanding of Islamic finance is one of the primary goals of the Institute of Halal Investing.

There are a couple more details about the expansion of Islamic banking into Kazakhstan.

The second finance minister of Malaysia says that Bahrain, Qatar and the U.A.E. want to learn from Malaysia in implementing such a banking system.

Shari'ah Capital, an Islamic hedge fund, received a license to operate on the Dubai International Financial Centre (DIFC).

A conference will be held in Colombo, Sri Lanka on the "Fundamentals of Islamic Banking & Finance".

• This conference has been added to the IHI conference listing page.

WIEF & Canadian Islamic financial services potential

The 3rd World Islamic Economic Forum (WIEF) will be held in Kuala Lumpur, Malaysia from May 27-29, 2007. Featured speakers include Prime Minister Abdullah Badawi of Malaysia and President Susilo Bambang Yudhoyono of Indonesia.

• This conference has been included on the IHI conference listing page.

Islamic financial services potential in Canada.

KL branch of the ITFC, takaful to grow, new sukuk

The Malaysian government will open a branch of the International Islamic Trade Finance Corporation (ITFC) in Kuala Lumpur. The ITFC is a part of the Islamic Development Bank Group. IsDB members own 51% of the ITFC, while Organization of the Islamic Conference member states own the remaining shares.

Takaful expected to expand into the U.S. and Europe, predicts Ashraf Bseisu, the general manager of Solidarity, a Bahrain-based takaful company.

Kuwait-based International Investment Group announced it will sell 5-year convertible sukuk to finance "future expansion plans". No other details were given.

Pakistan state-run Water & Power Development Authority (WAPDA) will issue Rp. 8 billion or more in 10-year sukuk next month to fund projects. The sukuk will "be priced at 25 basis points below the six-month KIBOR (Karachi Interbank Offered Rate) per annum". Part of the reason the sukuk will be issued is to provide investments for Islamic banks and takaful companies to meet their statutory liquidity reserves (SLR) using Shari'ah-compliant investments, which have been in short supply.

Two U.K. Islamic financial institutions are involved in a commercial real estate sale. The two IFIs are European Islamic Investment Bank and the ABC International Bank. It is one of the first Shari'ah-compliant real estate transactions involving two Islamic financial institutions both within in the U.K.

IsDB Poverty Reduction Fund, Kazakh Islamic banking

IsDB to launch $10 billion Poverty Reduction Fund

The Islamic Development Bank will launch the Poverty Reduction Fund at the annual meeting of the board of governors of the IsDB in Dakar, Senegal on May 29-30, 2007.

• This conference is listed on the IHI conference listing page.

Emirates Islamic Bank to enter Kazakhstan

Emirates Islamic Bank, a subsidiary of Dubai-based Emirates Banking Group will cooperate with JSC Bank TuranAlem in developing Islamic financial products for the Kazakh market. Kazakhstan estimates that Islamic banking could make up 5 to 7 percent of the country's banking market. Kazakhstan is 47% Muslim.

Other News

Gulf Daily News: "Central Bank of Bahrain Governor Rasheed Al Maraj yesterday received a Philippines Central Bank delegation led by Corazon J Guerrero and briefed them on Bahrain's control mechanisms and Islamic banking supervisory procedures."

Arabian Business: "Al Seyassah, Kuwait: Islamic lender Kuwait Finance House plans to set up a unit in Algeria."

Khaleej Times: "Dubai-based Islamic mortgage lender Tamweel TAML.DU said on Tuesday its first-quarter net profit surged almost five-fold as its home loan business grew."

The Edge Daily: "ING Funds Bhd expects a 10% to 12% annualised average return from its newly launched fund, the ING Baraka Capital Protected, which provides investors with 100% capital protection and potential capital appreciation over a three-year period.">

A U.K. Regional Development Agency will offer £2 million of loans for small business and not-for-profit social enterprises to be matched by private funding. The fund will include Shari'ah-compliant funding for businesses in the Manchester area.

Investment firm receives QFC license, MoU between NBP and JBIC

Q INVEST became the first firm to receive a license to operate as an Islamic investment firm from the Qatar Financial Centre Regulatory Agency (QFCRA).

The Japan Bank for International Cooperation signed a Memorandum of Understanding with the National Bank of Pakistan. The MoU includes plans to work together on Islamic finance in the future. JBIC announced previously that it plans to issue sukuk.

DBS launches Islamic Bank of Asia, Islamic banking as ethical banking

DBS launches Islamic Bank of Asia

DBS Group Holdings Ltd., the largest bank in Singapore by assets, launched the Islamic Bank of Asia (IB Asia). It received the first license for Islamic banking in Singapore back in March. The Shari'ah board will be made up of Sh. Nizam Mohammad Saleh Yaqouby, Sh. Dr. Mohamed Ali Elgari, Dr. Abdul Sattar Abdul Kareem Abu Ghuddah and Dr. Mohd Daud Bakar. DBS received a license for Islamic banking in Dubai last year.

Islamic banking - a new mode of ethical finance

I have highlighted several times on this blog the similarities between Islamic banking/finance/investment and ethical/socially responsible banking/finance/investment. An article in ArabianBusiness.com quotes the manager of strategic planning at Dubai Bank, Kafil Bader: ""Islamic banking has two edges to it - it is Islamic banking, but it is also ethical banking, which has been in the West for a long time now [...] If you look at some of our Western counterparts they have offshoots or subsidiaries in ethical banking, and they don't invest in some of the arms areas or the defence industry. Islamic banking undoubtedly has the same sort of value sets." Afaq Khan, the global CEO for Islamic banking at Standard Chartered agrees with this and elaborates: "The non-Muslims who are looking at the Islamic solution are saying that because it is belief-based, it must be more equitable to them, because there is a third party, the Sharia board, looking at it [...] Because it is based on a religion, they consider that there must be equity in this contract."

Other News

Islamic banking is also growing in Canada.

Demand for Islamic mortgages rising in the U.K.

The Muslim market in the U.S. estimated at $170 billion.

Shortage of scholars & lawyers in Islamic finance industry

Islamic finance faces a shortage of skilled Shari'ah scholars & lawyers

There is an interesting article focusing on the shortage of lawyers who understand Islamic finance well enough to put together the large deals which have emerged recently. The end of the article highlights the even more pressing problem of a shortage of Shari'ah scholars and issue of different interpretations of what is Shari'ah-compliant between the Middle East and Malaysia (and steps to produce agreement on the most basic Islamic financial products.

Other News

Sharjah Islamic Bank announces the opening of a real estate subsidiary, ANAS Real Estate.

RHB Capital unaware of moves by Kuwait Finance House to acquire a stake in RHB's Islamic banking business.

Islamic Finance Project 2007 will be held in Dubai, UAE from June 24 - 25, 2007.

• This conference has been added to the Institute of Halal Investing conference listings.

The Bahrain Financial Harbour opened today in a bid to be a new Gulf financial center.

New Islamic finance company in Dubai

Further details are released about the Aldar Properties & First Gulf Bank joint venture finance company Aseel Finance including that it will offer "a range of Islamic finance activities, except retail activities, as per the Central Bank's guidelines for Islamic finance companies operating in the UAE".

Growth in Islamic finance, education

Halal finance growing

Recent years have seen growth in halal finance both in predominately Muslim countries and Western countries like the U.K. and Germany. However, the growth in Islamic finance coupled with the length of time to training Shari'ah scholars have created a shortage of qualified Shari'ah scholars thus driving the price of their services up to $200-500 per hour for the most sought after scholars like Nizam Yaquby who sits on Shari'ah boards for over 40 institutions.

INCEIF to open branches in London & Dubai

INCEIF announced plans today to open offices in London and Dubai, possibly by the end of the year. The International Center for Education in Islamic Finance (INCEIF) was established in Malaysia with a RM500 million ($146 million) endowment from Bank Negara Malaysia to build human capital for the Islamic financial industry, which is chronically short of enough qualified human capital. INCEIF will use it Certified Islamic Financial Planner (CIFP) certification as the core of its program.

Other News

First Gulf Bank and Aldar Properties plan on starting an Islamic finance company, Aseel Finance.

Dubai Islamic Bank received approval to open an Islamic bank in Syria.

Dr. Shariq Nisar believes that a Shari'ah-compliant index in India would induce significant investment in the country.

Miscellany

There is an article about a recent trend of increased advertising to Muslim-Americans in the United States. The Times writes describe how other advertising growth was able to change attitudes of the general public: "Ads in the 1960s [featuring] Jewish products like Levy’s rye bread, which [...] helped bring that group more into mainstream advertising".

Tamani Hotels & Resorts will offer Shari'ah-compliant hotels.