CAPITAL MARKETS - Turkish Parliament passes tax neutrality law for Sukuk Al-Ijara

Almost unnoticed, the Turkish National Assembly in Ankara passed the Finance Bill 2011 in February 2011 which includes tax neutrality measures for Sukuk Al-Ijara (leasing certificates) thus paving the way for a spate of corporate Sukuk issuances in the country.

Murat Haholu, head of the Surveillance Group, Corporate Finance Department, Capital Markets Board of Turkey, confirmed that the tax neutrality measures for the Sukuk Al-Ijara were published in the Official Gazette at the end of February 2011, which he stressed is an important development in the participation banking sector in the country. (source)

BANKING - ALBARAKA TURK - Turkish participation bank executive warns on Central Bank move

'The banking sector grew by 20 percent in 2010 while the credit expansion was around 35 percent,' says Albaraka Türk General Manager Fahrettin Yahşi.. Hürriyet photo

The Turkish banking sector will shrink this year if the Central Bank increases the required reserve ratio for banks in a bid to control the already-high credit expansion, said Fahrettin Yahşi, general manager of the Albaraka Türk Participation Bank, a Turkish lender operating on Islamic banking terms.

The credit expansion has one negative and one positive main effect, Yahşi said: contribution to growth and the risk of boosting the current account deficit. He spoke with the Hürriyet Daily News & Economic review after a meeting to launch the lender’s cooperation with Istanbul’s Esenler district municipality for a banking card for residents. (source)

BANKING - London, Istanbul analysts support Turkey's Central Bank governor (Albaraka Turk)

The Turkish Central Bank’s policy of cutting interest rates while raising bank deposit reserve requirements has received support from London-based Capital Economics and Istanbul-based İş Investment, with each saying its policies could be an example for other emerging market countries. (source)

FINANCE - Liquidity management - Islamic finance boost via IILM: Zeti

The establishment of the International Islamic Liquidity Management Corp (IILM) will further enhance the capacity of Islamic finance in facilitating efficient cross-border flows, Bank Negara Malaysia (BNM) Governor, Tan Sri Dr Zeti Akhtar Aziz, said today.