Global View
Reuters reported that Bahrain-based Islamic lender Al Baraka is in talks to buy a stake in Malaysia's Bank Muamalat, according to Al Baraka Chief Executive Adnan Yousif. Another source said it could buy up to 49% in Bank Muamalat. Yousif said that earlier talks about Al Baraka buying a stake in Muamalat had been put on hold due to the global financial crisis.
Italys largest insurance firm, Assicurazioni Generali, plans to enter into a takaful joint venture with Qatar Islamic Bank (QIB). The collaboration could create -a leading player for the takaful business in the Middle East with the possibility of expanding operations across Europe and Asia, said Generali Chief Executive Sergio Balbinot. The venture would also utilise QIBs takaful provider subsidiary Beema.
The Korean Embassy to Malaysia and the International Shari'ah Research Academy for Islamic Finance (ISRA) have signed a research agreement, -Malaysian Islamic Finance and Methods for Introducing Islamic Finance into the Korean Financial Market. The research project, performed by ISRA staff members over the next three month, will cover the historical development of the Malaysian Islamic financial market, its current status and future prospects and the legal and regulatory framework necessary for the effective functioning of Islamic finance. The research is aimed at providing input to the Korean government on developing the necessary infrastructure for the Islamic financial market.
The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB), said it was committed to ensuring that its plan to set up an Islamic bank in the Maldives in partnership with the government of the island would become a reality soon. Khaled Al-Aboodi, CEO & GM of ICD, said this in a statement in response to numerous inquiries it received from various parties in the Maldives regarding the status of the bank project.
Global Shari'ah Shipping Fund, jointly sponsored by Cyprus-listed SFS Group and Kuwait Finance House (Malaysia) and Global Shipping Investments Management Ltd (equally owned company by SFS and KFHAM), is being launched with the aim of raising $150 million for the acquisition of offshore vessels and other types of ships. The fund will invest directly in shipping assets (with a preference for offshore ships), whilst all vessels will be chartered out on a longterm basis. The term of the fund will be seven years, with up to three additional one-year extensions to allow for orderly liquidation of the funds assets.
The British government will seek to smooth the path for Islamic bonds with a measure to regulate sukuk as bonds rather than investment vehicles, Reuters reported. Islamic finance professionals in the UK were optimistic that if Parliament votes in favour of the measure this month, it would encourage the growth of the market. If passed, the measure could save issuers of Islamic bonds up to 10,000 pounds ($16,320) a year, a spokesman for the Treasury said. Sukuk are seen as bonds because of their fixed income characteristics, but their structure has equitylike qualities, leading to uncertainty over how they are treated from a regulatory point of view.
Kuwait Finance House-Turkey (KFH-Turkey) Chairman Mohammed Al-Omar announced that the German Federal Financial Supervisory Authority (BaFin) has accepted the license application of KFH-Turkey in Germany to establish a financial services branch. This license will allow KFH-Turkey to introduce Shari'ah-compliant banking services to the German banking system. The new branch in Mannheim aims to cover the financial requirements of a wide customer base in the German market, especially since there is a growing demand for Islamic services and products. Al-Omar added in a press statement that this license is a significant step in its geographical expansion strategy of KFH-Turkey. He stated that KFHTurkey is planning to open more branches in other German cities, and will apply for licenses to open banks in new European countries.
The Turkish Export Promotion Centre (IGEME) was declared the winner of the 1430H Islamic Solidarity Prize for the Promotion of Trade among OIC Member States. The prize, given by the Islamic Development Bank (IDB), will be awarded to the winners during the Annual COMCEC Session in November. IDB established the prize with the aim of recognising, appreciating and encouraging activities and efforts contributing to the promotion and increase of trade among member countries.
Bahrain-based Islamic investment house Tharawat said it plans to raise $100 million by the end of the year for a sukuk fund it recently launched to focus on bargains on the secondary market, according to Reuters. The open-ended fund is targeting individual and institutional investors and Tharawat expects to raise $200 million over the next two years. Tharawat Chief Executive Arif Mohammad Al Alawi said large financial institutions have exited the sukuk market to free up liquidity and sukuk could be bought on the secondary market at discounts of 20% to 40%.
The first Islamic finance institution with active government involvement will probably start up in Kochi next year. The Kerala State Industrial Development Corporation (KSIDC), along with private partners, will set up the proposed company, with the state government holding an 11% stake. Most likely, the venture will be registered as a nonbanking finance company (NBFC) in the beginning and later become a full-fledged Shari'ah-compliant bank. Media reports says the firm will offer Islamic leasing initially and housing finance later. Registration formalities should be finished this year, with the company becoming operational in 2010.
The Kuwaiti Cabinet has approved a draft decree establishing a new Islamic bank, with 76% of its shares offered free to the more than 1 million Kuwaiti citizens, according to the KUNA news agency. The Warba Bank will have a capital of 100 million dinars. The remaining 24% of the shares will be owned by state-run Kuwait Investment Authority, the sovereign wealth fund. The Cabinets decision on the establishment of Warba Bank is effective and does not need the approval of the National Assembly, said Commerce and Industry Minister Ahmad Al-Haroun.
The Hong Kong Monetary Authority (HKMA) and Bank Negara Malaysia (BNM) jointly announced the signing of a memorandum of understanding (MoU) on co-operation in the development of the financial services industry, particularly in the area of Islamic finance. Aiming towards a long-term strategic partnership under the MoU, both parties agreed to further strengthen co-operation in a number of key areas.
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