BANKING - REGULATIONS - Gold under the mattress

www.bne.eu - News that Turkey's banking regulator BDDK has drafted regulations that will allow banks to sell all kinds of gold has been greeted with anger by Turkey's jewellers, who have until now held a near monopoly on the trade, and with surprise by those unfamiliar with the "unorthodox" monetary policy being implemented by the Turkish central bank.

While the draft regulation allowing banks to sell gold is new, it is a natural extension of existing regulations brought in last year that allow banks to buy gold. This sudden move to allow Turkish banks to trade in what many would regard as a luxury item having no relation to the business of banking reflects the twin realities of Turkey's still developing financial services sector and the central bank's ongoing "unorthodox" monetary policy.   (source)

CAPITAL MARKETS - Turkey to unlock Islamic funding with $1bn debut sukuk sovereign bond

www.bne.eu - Ankara is finally set to help open the way for Turkish banks and companies to access Islamic funding by issuing a debut sukuk sovereign bond, according to reports. The move is partly motivated by recent difficulties investors have met in raising funds to take part in infrastructure projects and privatisations.

According to Reuters, which cites unnamed banking sources speaking on July 5, Turkey is set to mandate HSBC, Citi and Deutsche Bank to manage the sale of its first sukuk. The issue would set a benchmark for Turkish borrowers looking to tap a global sukuk market estimated at more than $100bn, allowing the Muslim, but secular, economy to diversify its fixed income investor base.  (source)