German bond auction failure could not be 'cured' with sukuk

An Arab News article from Mushtak Parker begins:

"Sovereign Germany might be disappointed that its recent Eurobond offering was not fully subscribed. Perhaps in hindsight, had it instead opted to issue a debut Eurosukuk for the same amount, the story might well have been different.

Sukuk issuers, whether conventional entities such as HSBC Middle East or Goldman Sachs (both of which tapped the sukuk market in 2011, or Islamic banks, agree that market conditions in the sukuk space is more favorable than in the conventional space. And this confidence and appetite for Sukuk is backed by rising demand from big institutional investors in the Middle East and Asia.

Despite a difficult global financial climate and the continuing euro zone sovereign debt crisis, sukuk issuance has shown a remarkable resilience over the last year or so, with origination - both sovereign and corporate - gaining a second wind over the last few months if not weeks. Investors in sukuk in general are proving to be all-weather friends with their healthy appetite for such instruments, rather than their fair weather counterparts in the conventional bond market."

The story of Germany's 2 billion euro auction, where 35% of the issue was not subscribed would not have been  any different if it had been a euro-sukuk.  There is nothing special about Islamic finance or sukuk that make it more likely for investors to buy a sukuk from an issuer than they would a conventional bond because, when the economic structure of the transactions are examined, there is not much difference between sukuk and conventional bonds.  The only caveat to this statement is that some investors are constrained to only invest in Shari'ah-compliant instruments, but those buyers make up a relatively small portion of the total funds available to purchase in the primary markets.

The idea that Islamic finance can run to the rescue where conventional finance 'fails' is just as silly an idea as the idea that was all too common 3 or 4 years ago when people asserted without justification, that Islamic finance was 'immune' to the crisis.  This proved false, and it is equally as false to say that if Germany had gone with a sukuk instead of conventional debt it would have filled the full offering of its bonds.

Right now, Islamic finance does not offer a different product, it just is in a different form.  Sukuk are economically identical in most cases to conventional bonds, in order to re-structure the bond into a trade-based form.  This is not a value judgment on sukuk; they are in demand and are giving some companies new capital markets they can tap, but they do not change the underlying economics of the transaction.  In Germany's case, the bond issue failure was not a question of demand for German debt--if it were, the yields on bunds would have spiked (they haven't).  It was likely an isolated incident reflecting general debt market stress within the Eurozone.

Bringing a sukuk instead of a bond does not change the underlying situation in Europe and, if anything, would probably lead to lower demand for the bonds because of the difficulty of educating investors on how sukuk work.  Regardless of the issuer, however, it is unlikely that an issuer of any kind could bring a 10-year, 2 billion euro ($2.7 billion) sukuk to market.

The resilience of the sukuk markets during the eurozone crisis has more to do with the relative absence of direct exposure to Europe, where there are very few issuers, and is a reflection of the continued strengths of the GCC and other emerging and frontier markets where the economies are still (for the moment) strong.  In addition, a high oil price keeps the liquidity flowing in these regions giving investors the capital needed to invest in sukuk.  If the oil price slips because of the euro crisis and developed markets' economies (and/or China) slip, it is highly unlikely that the sukuk train will keep on rolling.

We have seen the connections in the global financial markets and how financial market disturbances in markets disconnected from Islamic finance can spill over into Islamic finance through slower economic growth.  This was the story in 2007/08 when the subprime mortgage crisis in the US led to financial markets freezing up and a widespread economic downturn leading to a near-collapse in the sukuk markets.  It is a waste of time to try and promote the idea that Islamic finance is somehow a panacea to all the financial market ills.

How can Islamic finance in the West grow?

One of the key drivers for Islamic finance in the West has been the immigration of Muslims into those countries. As these immigrants have moved in, the domestic banks have tried to develop products that cater to their needs. However, the process has been slower than one might expect, particularly in some countries like France and Germany which have relatively large shares of Muslim residents compared to their populations. The first Islamic bank branch in Germany, a branch of Kuveyt Turk, opened earlier this year in Mannheim. Al Baraka Bank says it plans on opening an Islamic bank in France in 2011, something it has planned for several years.

An article recently described the growth of multicultural banking in Canada and alluded to the relative shortage of Islamic banking in the country despite the growing Muslim population, that is growing in large part because of immigrants to the country. The country has had Islamic home finance co-operatives for decades and in the last several years, UM Financial has offered Islamic mortgages (as well as a pre-paid Shari'ah-compliant debit card and some work on forthcoming sukuk). The larger banks, including Bank of Montreal and Scotiabank are considering whether to enter the market while RBC offered Islamic mortgages, before dropping the product due to low volumes. In Canada, it appears that the large banks entering the market have been hamstrung by difficulties entering the Muslim marketplace, while the smaller institutions have been set back by shortage of capital for new originations. In the United States, the shortage of capital has been eased with the entrance of Freddie Mac, which provides the financing for Shari'ah-compliant mortgages. There is not a similar institution in Canada, so the best way forward may be for the large banks to work through the smaller providers to combine the former to benefit from the latter's better exposure within the Muslim community and the latter to benefit from the former's access to capital. Were this to happen, it would open up the possibility of the larger banks securitizing Islamic mortgages, which could then be sold to fund managers to allow them the investment possibilities they need to offer retail Shari'ah-compliant fixed income investment products to the Muslim marketplace where fixed income is always a challenge (and very often limited or absent from the market).

Why are sukuk in the GCC issued with short maturities?

Mubadala, the Abu Dhabi sovereign wealth fund says that there needs to be a better developed secondary bond market for longer-term bonds to come to market. It also pointed to the need for a 'strong local bid'. Given that the GCC is the source of a large share of the sukuk issuance, and most sukuk outside of Malaysia are of maturities of 5 years or less, this poses a question of whether the Islamic financial industry can step in to fill the gap.

The sukuk secondary markets are notoriously illiquid, although there has been an improvement in this area as the number of new issues has declined in the past year or two. With a shortage of new issues, there has been an uptick in the trading of outstanding sukuk in the secondary markets. There has also been the nascent steps towards provide more opportunities for secondary market trading with the launch of bond and sukuk trading on the Saudi exachange Tadawul. However, even with these steps, there are few listed sukuk, with most trading on either NASDAQ Dubai (formerly the Dubai International Financial Exchange) or the Bahrain Stock Exchange.

As I have described before, the secondary market for sukuk has been caught in a chicken-or-egg problem (which came first?). During the boom times, there were a number of new issues, most of which were heavily oversubscribed. A decent proportion of these sukuk were listed on secondary markets theoretically giving investors who were not able to subscribe in the offering the chance to pick them up in the secondary markets. However, there wasn't much activity in the secondary markets.

This can be ascribed to two things. First, the secondary markets weren't active because the secondary markets weren't active. Although a tautological argument, it was true. If you subscribe to a sukuk and receive an allocation, then sell it on the secondary market, you would generally hope to be able to take the proceeds and purchase a new sukuk to replace it. In an illiquid secondary market, for one you could probably not receive what you perceive to be the fair value, but also, you would likely have to overpay for a replacement. Without the benefit of a market maker in the sukuk, the gap between bids and offers in the market perpetuated the illiquidity.

Second, the continuing stream of new issues made it less beneficial to chase the offer in the secondary market if there was a chance of getting in on a newly issued sukuk. Why pay up if there is a chance that another similar sukuk might come along that you might be able to receive an allocation at par?

However, this equation changed after the financial crisis when credit was generally scarce and expensive and there were few companies willing to issue new sukuk. In addition, the outstanding issuers were affected by the growing economic crisis so that their ability to repay came into question (in some cases, they defaulted on their sukuk). The investors in these sukuk, either through concern over the sukuk or their own need for cash, became more willing to participate in the secondary markets.

This created some market turmoil, with many sukuk trading far below par and yielding higher than may have been justified by the fundamentals of the companies and sukuk. However, it also created an opportunity for a few sukuk funds which launched over the past year to step in on the buy side of the market and create additional liquidity by narrowing the spread between the bid and ask of listed sukuk.

No sukuk exemplifies this transformation perhaps more than the Nakheel sukuk which matures in December. In an illiquid market, with concerns about Nakheel's ability to repay, the bond traded down to nearly 60% of its par value even though the payment on maturity, if made, would be nearly 115% of par. Since reaching this point, the sukuk has become more actively traded and has rebounded in the trading price to greater than par. Some of this rebound was due to the fundamental ability of Nakheel to pay, albeit with support from the Dubai government, but some could be chalked up to the greater liquidity and the entrance of bidders for the sukuk.

To be clear, the sukuk market remains illiquid in many listed sukuk names, but there has been a greater level of activity in secondary markets as of late. Returning to the initial point of what is needed for longer-term maturities, it is generally the case (even in US Treasuries, some of the most liquid bonds in the world) that longer maturity products are less liquid and more volatile in price than shorter-dated bonds. Without a liquid secondary market for shorter maturity bonds and sukuk, it is unlikely that investors would purchase longer-dated sukuk.

Mubadala's point is well taken and the sukuk market, largely as a result of external events, has begun to liquify. This is a necessary, but probably not sufficient, precondition for the introduction of longer maturity sukuk. The resolution of sukuk through cases of default will also go a long way towards reassuring investors that they will not be trappen in a 10-year or longer sukuk regardless of what happens. To see a possible future, the experience of Malaysia is instructive. The Malaysian secondary markets are active and there have been numerous resolutions of sukuk defaults. Consequently, there have been several longer-dated sukuk--for example, the Cagamas residential mortgage-backed securities which have maturity dates of over 10-years, something that has not happened in the GCC...yet.

Other News

• The performance of the Dow Jones Islamic Market Indexes for October are now available.
  
• The IFC sukuk was priced at 25 basis points over mid-swaps, which is the tightest pricing yet for a sukuk, although the sukuk received a higher pricing (by 10 basis points) over what conventional debt issued by the IFC would be priced at.
  
• Germany's financial regulator jumps into the mix of European countries wanting to attract Islamic finance shortly after France passed laws defining the rules for Islamic financial products, but far behind the U.K., which has so far led the EU in its accommodation of Islamic finance.
  

Sukuk markets recovering, IFC sukuk listed in Dubai and London, Islamic asset management faces a 'chicken-or-egg' problem

The sukuk market is expected to recover following signs that Nakheel will avoid default and GE Capital Corporation, which has a joint venture with Abu Dhabi-based Mubadala, was reported to be considering issuing a sukuk. The recovery in Nakheel's sukuk have come following the $10 billion in bonds issued by Dubai and the prospect for the Emirate to issue $6.5 billion in bonds and sukuk. The sukuk-reported to be $2.5 billion of this amount-are reported to be priced near 6%. The funds from the bond and sukuk issuance are expected to be administered by the Dubai Financial Support fund, which has provided some assistance to Nakheel.

With the listing of the World Bank Group's IFC sukuk, NASDAQ Dubai expects the sukuk and bond markets to pick up before the IPO market. The sukuk will be listed on both NASDAQ Dubai and the London Stock Exchange and is rated Aaa by Moody's.

The Islamic asset management industry faces a 'chicken-or-egg' problem as the industry has a shortage of investments to choose from, particularly in the fixed income area, while there are few investments available because of questions about the strength of demand. The increasing involvement by governments is a double-edged sword, notes an article from Reuters. Governments can provide a source of issuers willing and able to issue sukuk, but could crowd out other issuers, particularly lower-rated issuers. So far this year, roughly 80% of sukuk have come from government issuers and many of the others were issued by high-grade corporate issuers.

Emirates Business 24/7 has an interesting article about the debate over standardization in Islamic finance. There are many views on how standardization should happen, whether it should be a goal at all and what aspects of the industry should be standardized.

Other News

• The International Swaps and Derivatives Association (ISDA) is expected to release guidelines on Islamic derivatives, and these could come by December. The standardized agreement, being jointly developed by the ISDA and the International Islamic Finance Market (IIFM), would provide a standardized contract for Shari'ah-compliant hedging products.
  
• The opening of the country's first Islamic bank led German paper Das Spiegel to write a good article that provides an overview of the industry's development.
  
• Tamweel, the troubled Dubai-based Islamic mortgage company, made a periodic payment on its sukuk due in 2013.
  
• The Irish Revenue Service has clarified its rules on the taxation of Islamic finance products and a summary is available from Arab News.
  
• The CIO of CIMB-Principal Islamic Asset Management Dr. Zeid Ayer believes that Brunei should open its sukuk up to international investors to broaden the base of investors. The sultanate issues sukuk despite large oil reserves and little need to raise financing as a way to promote the growth of its Islamic finance industry.
  
• The results of an Islamic Finance Perceptions survey are summarized in an article.
  
• As Malaysia issues RM3 billion ($888 million) in sukuk, it has also extended the tax exemption on Islamic financial products to 2015 that have helped the industry grow rapidly in the country.
  

Ijara sukuk; Islamic finance hurt by falling asset prices; KFH-Turkey to open branch in Germany; GCC banks convert gov't deposits into capital

The announcement that ijara sukuk were the most common form of sukuk in 2008 came from a Moody's report that attributed its popularity to the AAOIFI ruling in February that criticized the Shari'ah-compliance of other forms of sukuk. Although I have argued that the AAOIFI ruling did not cause much of the overall reduction in sukuk issuance in 2008 (the evidence suggests it had more to do with the credit crisis), the shift in types of sukuk is more likely to be affected by AAOIFI rulings. Placing AAOIFI in the center of the decision around which types of sukuk are optimal is the right thing to do. There are many types of sukuk approved by AAOIFI and it benefits the industry for AAOIFI to direct which forms of sukuk are optimal from a Shari'ah-compliance perspective. However, more transparency from the organization reduce the uncertainty that contributed to significant confusion about which forms of sukuk were preferred by Shari'ah scholars that prevailed between Sheikh Usmani's comments in November 2007 and the AAOIFI clarification in February 2008.

An article that provides an introductory look at the Islamic financial industry provides a few good points that are not frequently expressed explicitly about the susceptibility of the Islamic finance industry to falling asset prices.

"However, in spite of these facts, following Islamic principles is not enough for banks to get the total protection from the financial crisis. Islamic finance is so intertwined with the global financial system that they also can’t avoid problems.

Many Islamic banks have invested their funds in equity. When the prices for real estate go down, their portfolios also go down. Countries involved in computer and electronics manufacturing (such as Malaysia) have been hit by competitive devaluation and reduce of export.

So even though Islamic countries have not suffered from the credit crunch, they have suffered from asset valuations and its financial effect.

Kuwait Turkish Participation Bank (KFH-Turkey) received approval to open a branch in Germany. The entrance into the European Union through Germany is a first. Prior to this announcement, Islamic banks wanting to enter into the EU started in the UK because of the FSA's accommodative stance towards Islamic financial institutions and the legal and regulatory changes which places Islamic finance on equal footing with conventional financial institutions.

Many Islamic banks in the GCC are converting government deposits into Tier 2 capital in order to strengthen their capital position. The two most recent banks to convert are Emirates Islamic and Abu Dhabi Commercial Bank.

Other News

• Russian bank VTB may become the first Russian company to raise funds using a sukuk.
  
• There is an interview with the CEO of the only Islamic bank in South Africa.
  
• A Russian mufti calls for increased use of Islamic finance.
  
• An article describes how the new Shari'ah-compliant gold ETC is monitored from a Shari'ah-compliance perspective, including unannounced reviews.
  
• The decision about whether or not to merge Amlak and Tamweel, Dubai's struggling Shari'ah-compliant mortgage providers is in the final stages and liquidation of the two institutions is not being considered. Tamweel announced that it had not seen an increase in the numbers of foreclosures despite deteriorating economic conditions.
  
• The IFSB summit that will be held in Singapore will focus on whether the current structure of the Islamic financial services industry will need to change as the industry matures and grows.
  
• Zawya Dow Jones interviewed the CEO of the Asian Finance Bank.
  
• The president of the Islamic Development Bank is interviewed before a conference in Kazakhstan. The president, in a different interview, said that the bank is planning to issue a $500 million sukuk in the next few months.
  
• The head of Kuwait Finance House (Malaysia) says that assets in Islamic funds will decline in the near term but grow over the longer term. He also said that the global economic crisis will lead to more local currency sukuk instead of being issued in dollars.
  
• Global Investment House released a report on Bahrain's Islamic finance industry and said it expects the industry to rebound in 2009. During 2008, the volume of sukuk issuance fell to $700 million from $1 billion in 2007.
  

Islamic finance in France, Dow Jones Islamic Market Indexes, QIB

An article today expands on the news yesterday about France's efforts to attract Islamic finance. The new facets of the article deal with the size of France's Muslim population in a country without anything comparable to the Islamic Bank of Britain in the UK as well as the potential roadblock for Islamic finance within France's staunch official secularism.

Dow Jones reports the preliminary results in December for the several Islamic market indexes and their conventional benchmarks. Qatar Islamic Bank, quoting Standard & Poor's, says that Islamic finance could become a $4 trillion industry in the next five years. The bank also plans to expand into Europe and Asia, already being licensed to open the European Finance House in the UK. Expansion is planned into France, Germany, Singapore, Indonesia and Brunei. Both were announced in their new in-house magazine Al Masraf.

Sukuk: past and present; UK cancels plans for sovereign sukuk

Andy Jobst, Heiko Hesse and Juan Sole wrote an article looking at both the startlingly high growth rate of sukuk through 2007 and the significant fall off so far this year which is expected to continue well into 2009.

Seera Investment Bank has a white paper (pdf) on Shari'ah-compliant private equity.

News continues to emerge that the Islamic finance industry may not fully escape the global recession caused by the credit crisis because of its dependence on real estate to back sukuk. This creates problems in diversifying against a fall in prices in that sector. There should be several mergers along the lines of Amlak and Tamweel.

Germany lags behind the U.K. in facilitating Islamic finance. The U.S. has flip-flopped in the Treasury Department's public engagement educating its staff about Islamic finance. Meanwhile, the Islamic finance industry has grown across the country. Although it has led the way in placing Islamic finance on a level playing field with conventional finance, it recently cancelled plans to issue a sovereign sukuk, although it still is working with its Islamic Finance Working Group. Hong Kong is still wants to encourage Islamic finance and Singapore continues to plan for a sukuk issuance.

Shari'ah scholars don't want standardization; U.K. still plans to issue sukuk

A meeting of Shari'ah scholars at an AAOIFI meeting argued against standardization saying it would make Islamic finance more vulnerable to risks and challenge the concept of ijtihad (judicial reasoning). Although there should remain considerable flexibility for scholars to interpret the Qur'an and Hadith in judging the Shari'ah-compliance of Islamic financial products, there are more compelling reasons to provide some standardization. The most pressing is that there is a shortage of Shari'ah scholars well enough recognized to be selected as members of the Shari'ah boards of the Islamic banks providing the most Islamic financial service. If scholars are in demand to aid a rapidly growing industry but spend a great deal of time reviewing relatively uncontroversial products, there is an inefficiency that could reduce the amount of innovation. Top scholars should spend most of their time working on new innovative products that differentiate Islamic finance from conventional finance, not reviewing 100 murabaha contracts.

Despite a shrinking financial market in the U.K., Islamic banks are still expanding according to the International Financial Services London (IFSL). One reason that the Islamic banks are growing is because they have little or no exposure to many of the most troubled assets because of both Shari'ah rules and their young age. Most were started within the last year or two and therefore were not accumulating their assets throughout the property boom that started in 2002.

The U.K. remains committed to issuing a sovereign sukuk despite the turmoil running through the bond and sukuk markets.

A conference in Germany discussed the potential for that country to eclipse the U.K. in the size of the market for Islamic finance if legislative and regulatory changes are made to put Islamic finance on a level playing field with conventional finance. India is still working on changing regulations and legislation to allow Islamic finance to operate in the country.

IBB moves into continental Europe, Islamic wealth management

The Islamic Bank of Britain plans to open branches in Sweden and Germany. The branch in Sweden would be the country's first Islamic bank, although not the first 'interest-free' one. JAK Members Bank, a co-operative that began operating in 1970 and received a banking license in 1997, provides interest-free credit to its members with administrative costs paid for by annual membership fees. Currently the bank has 53,000 members and the total savings of € 97 million and borrowings of € 86 million as of 2008.

Douglas Johnson, CEO of Calyx Financial, discussed the need for more strategic work, particularly involving research into new products and approaches for Islamic wealth management to become more widely available. An edited version of his speech, given at the World Islamic Funds Conference in Dubai, is available online.

The Financial Times describes Islamic bank Gulf Finance House.

A story on the first Shari'ah-compliant car insurance company in the U.K., Salaam Insurance, includes a concise description of how takaful works.

The Islamic Development Bank has begun a sukuk issuance in Malaysia to fund the IsDB's work in the country.

India could emerge as a large market for Islamic finance if regulations are changed to allow Islamic banking. The Muslim population of India is estimated at 150 million. Islamic banking has been successful in Thailand, particularly in the southern region, which has a significant Muslim population. The Islamic Bank of Thailand is the country's main bank.

Malta's Financial Services Authority ended its consultation period on Islamic financial products and plans to issue guidelines for sukuk by the end of 2008 and for takaful in early 2009.

Islamic finance in the West, new products may attract criticism within the industry

An editorial in Middle East Times by an Indonesian journalist, Wahyuana, describes the growth of Islamic finance in Indonesia, which has been rather subdued and less visible than growth elsewhere in the world like the GCC, Malaysia and the U.K. In something that is not as frequently mentioned is that the prohibition of interest-based finance is contained not just in the Qur'an (2:275, 278-279) but also the New Testament (Luke 6:34-35 - "And if ye lend to them of whom ye hope to receive, what thank have ye? for sinners also lend to sinners, to receive as much again. But love ye your enemies, and do good, and lend, hoping for nothing again; and your reward shall be great, and ye shall be the children of the Highest: for he is kind unto the unthankful and to the evil.") and the Torah (Exodus 22:25 - "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.")

The Investment Dar, the Kuwaiti investment firm, is considering an investment in European or American telecom companies, which could include a 3 percent stake in SprintNextel. The Investment Dar also plans on opening an Islamic bank in the U.K. The familiarity of financial regulators with Islamic banking in the U.K. have made the country a gateway into the European market. Countries like France and Germany have minimal Islamic financial services available and Muslim populations between 5 and 10 percent of the population. European Finance House, the U.K. subsidiary of the Qatar Islamic Bank, received FSA approval to begin banking in the U.K. Initially, the bank will focus on commercial and investment banking, but has authorization to operate personal banking as well.

In the wake of comments about Shari'ah law made by the Archbishop of Canterbury, a paper in North East England describes how Islamic finance has become widely accepted and available in the country, even outside of London. The BBC has a general Q&A about Shari'ah law. There is also a thoughtful editorial in the Guardian by Asim Siddiqui.

Reuters describes the challenges facing Islamic finance in the United States, including differing state banking regulations, concentrations of Muslims in a few areas of the country and the lack of national financial institutions offering Islamic financial products, issues I have addressed in two articles I have written for Islamic Business & Finance magazine.

Sukuk growth in the GCC (largely issued in US dollars) has been led by the UAE but the majority are still coming from Malaysia, denominated in Ringgit. Credit Suisse says that the Islamic financial sector has been largely insulated from the credit crisis, despite several sukuk being delayed in the last few quarters of 2007. One of the challenges to Islamic financial growth is Islamic banks liquidity management, something I will discuss in the forthcoming issue of the Institute of Halal Investing newsletter. To be added to the mailing list, please email me at blake@investhalal.org.

The International Islamic Financial Market (IIFM) is planning to initiate greater research about sukuk, the fastest growing area of Islamic finance. The organization is also working with the International Swaps & Derivatives Association on developing a framework for Shari'ah-compliant derivatives. A key challenge is how to ensure that any derivatives are used for hedging purposes and not speculation. In addition, Islamic financial institutions are using real estate investments as an alternative to long-term bonds since long-maturity sukuk are not yet common. Deutsche Bank sees future growth in Islamic hedge funds, still seen as controversial by many people within the Islamic finance industry.

Morgan Stanley plans to be the first multi-national corporation to issue a sukuk. Given that most of the company's business is in conventional finance, there could be question about whether financing a conventional financial institution with an Islamic bond, whether or not the deal is structured to be Shari'ah compliant.

The Kuwait central bank governor Sheikh Salem Abdul Aziz Al-Sabah says Islamic banks need greater liquidity management tools. The Islamic Development Bank Solidarity Fund to fight poverty is continuing to receive contributions towards the $10 billion target. The fund has raised $1.6 billion so far.

Weekly news update, December 15, 2007

The U.K. faces a significant challenge from Dubai, Bahrain and Kuala Lumpur to become the sukuk capital of the world. However, the U.K. is looked to as the model for developing Shari'ah-compliant banking from other countries in Europe, like France and Germany, where the Muslim population make up a larger percentage than in the U.K. I discussed this in one of the articles in the recent Institute of Halal Investing newsletter, available in pdf (there is also a link along the right side of the blog).

The ETF issuing company iShares announced the issuance of three Shari'ah-compliant ETFs. The three ETFs track the MSCI World Islamic, MSCI Emerging Markets Islamic and MSCI U.S. Islamic indexes.

GCC-based Islamic investment banks are expanding outside of the GCC-area, as Gulf Finance House's projects in India and Tunisia demonstrate.

--------
I have not been able to blog daily the last couple weeks. I hope to be able to more often next year, but for the rest of the month, the weekly updates may be all I have time for.
--------