WORLD - Tunis Financial Harbour signs strategic agreement with Turkish DEMTAS Group

www.bi-me.com - TUNISIA. Tunis Financial Harbour (TFH), the flag ship project of the Bahraini based Islamic investment bank Gulf Finance House (GFH), announced today that it has signed a strategic partnership agreement with DEMTAS Group, a leading Turkish developer, to commence the infrastructure and construction work on the project upon receiving the final approvals from the Tunisian government.

The development’s masterplan has already been approved by the Tunisian Government, and final go ahead on the infrastructure design, which were submitted at an earlier stage, is now pending.(source)

WORLD - PUBLICATIONS - Ernst and Young - World Islamic Banking Competitiveness Report 2011-2012

Source

WORLD - OIC - Islamic Development Bank Approves Record $4.2 Billion of Loans - launching gateway office in Turkey

The Islamic Development Bank, a Jeddah-based multilateral lender, said it approved a record $4.2 billion in financing for projects around the world this year.

Funding included $105 million for a power-generation, transmission and distribution program in Mauritania’s capital, Nouakchott, $53 million for the Saudi Arabian SME Fund and $11 million to support the second phase of a road project in Morocco, the lender said in an e-mailed statement today.

“As part of IDB’s vision to become a world-class organization by 2020, the board of directors has also approved the launching of five IDB pilot gateway offices in Egypt, Turkey, Indonesia, Bangladesh and Nigeria to follow up on the implementation of IDB projects,” President Ahmed Mohamed Ali said in the statement. “If after three years the progress of these offices is positive, similar offices could be opened in the future.”  (source)

OPINION - EDUCATION / HR - Building a knowledge economy - in the OIC Malaysia, Turkey, Iran and Indonesia scoring well

sananews.net - In this knowledge-driven world, those countries that have invested massively in education, science, engineering and innovation have progressed rapidly. The divide between the rich and the poor today is simply a “knowledge divide” – those countries that have acquired knowledge in cutting-edge fields and used it to invent new products and processes, and other countries which are simply importers of technology. (source)

WORLD - FINANCE - Thomson Reuters Launches World's First Islamic Interbank Rate

Thomson Reuters works with leading Islamic finance institutions and banks to provide objective and dedicated benchmark for Shariah-compliant short-term interbank funding in Islamic finance industry

New York, London, Bahrain — Thomson Reuters today launched the world's first Islamic finance benchmark rate, designed to provide an objective and dedicated indicator for the average expected return on Shariah-compliant short-term interbank funding. The Islamic Interbank Benchmark Rate (IIBR), announced at the 18th Annual World Islamic Banking Conference in Bahrain, uses the contributed rates of 16 Islamic banks and the Islamic sections of conventional banks to provide a reliable and much-needed alternative for pricing Islamic instruments to the conventional interest-based benchmarks used for mainstream finance. (source)

WORLD - Islamic banking assets could reach $1.8 trillion by end of 2016

JEDDAH: Islamic banks may be bolstered by a nearly doubling of assets within five years, as borrowers seek alternative methods of financing due to a cutback in lending at European and US banks, according to a report by Deutsche Bank.

The bank expects that mortgage financing, particularly in Saudi Arabia, could provide $100 billion in assets to the overall industry. (source)

RATINGS - Fitch afrms Islamic Development Bank at 'AAA'/'F1+'

Nov 16- Fitch Ratings has affirmed the Islamic Development Bank's (IDB) Long-term Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook and Short-term IDR at 'F1+'.

The ratings primarily reflect IDB's strong capitalisation. The bank is one of the most highly capitalised multilateral development banks (MDBs) rated by Fitch. The equity to assets ratio has remained above 65% since inception (70.7% at end-1431H, equivalent to 6 December 2010 in the Gregorian calendar). The IDB also maintains comfortable liquidity and compliance with Sharia'h principles induces extremely low leverage (21.3% at end-1431H). (source)

OPINION - Highs and lows of 2011 and a wish list for 2012

“GOD gave you a gift of 86,400 seconds today. Have you used one to say ‘thank you’?” — Author unknown

I want to thank NST. Islamic Finance 2.0 is one year old.

In reflecting back and looking forward, there were exciting highs and disappointing lows.

The lows included:

# Early death of deputy governor Datuk Mohd Razif Abdul Kadir

# EIIB, one of five FSA approved banks in the UK, significantly downsizing operations, following the heels of Islamic Bank of Britain (IBB) parental rescue capital injection. (source)

TAKAFUL - ICIEC set to launch sukuk policy to facilitate credit enhancement

The idea of a third party sukuk guarantee fund is still being considered by the Islamic Corporation for the Insurance of Export Credits and Investment (ICIEC), the standalone export credit agency of the Islamic Development Bank (IDB) Group. However, according to Abdel Rahman Taha, the chief executive officer of ICIEC, the corporation "has initiated work internally to design a new sukuk policy which can be offered as a means to enhance the credit structure and appeal of sukuk. It is expected that this new policy will be able to provide the much needed respite to the sukuk market." (source)

WORLD - Ernst & Young: The growth of Islamic assets Funds 7.6% in 2010

234next.com - Ernst & Young said on Monday that the assets held by Islamic funds around the world, jumped 7.6 percent in 2010 to 58 billion dollars, which is due to new cash flows and the strength in fixed income, commodities and alternative investments.

Compared to the origins of Islamic funds $ 53.9 billion in 2009 and 4.51 billion dollars in 2008. (source)

WORLD - PUBLICATIONS - Have Islamic banks been more resilient than conventional banks to the 2007-2008 financial crisis ? (Aug 2011)

The recent global financial crisis has induced a series of failures of many conventional banks and led to a renewal of Minsky’s (1986) critics about the inherent instability of the fractional-reserve banking. In this context, many economists advocate for the return to narrow banking and/or for favoring the development of Islamic banking, supposedly more resilient to the financial crises.

This paper attempts to answer empirically the following two questions: i) Have Islamic banks (IBs) been more resistant than their conventional peers (CBs) to the 2007-2008 financial crisis? ii) Could the presence of Islamic banks enhance the stability of conventional banks? 

These are the main findings. Before the financial crisis, IBs were more profitable than CBs. Then, in 2007-2008, only the large IBs remained more profitable than the large CBs. However, IBs became less profitable in 2009 when the crisis’s pass-through to the real economy had sufficiently increased.

Moreover, we show that CBs were more resistant to the crisis than IBs. Hence, IBs illustrated a degree of resilience and stability during the first (financial) wave of the crisis. However, they have been impacted during the second (real) wave because of their higher exposure to real estate and their limited reliance on risk sharing instruments. Nevertheless, we find a positive externality of large IBs on the soundness of large CBs, which could be justified by their asynchronous reactions to the crisis. (source)

WORLD - OPINION - Strong Outlook for Turkish Islamic Banks

IRAN DAILY - International credit rating agency Standard and Poor’s (S&P) asserted in a report published last week that Turkey’s participation (Islamic) banks could continue their recent strong growth if they can cultivate stronger ties with their international owners and create a sustainable brand image.

Turkey’s Islamic finance market is as old as the one in Malaysia and others in the Persian Gulf Cooperation Council (PGCC) countries, Arab News wrote. (source)

WORLD - OPINION - Money politics and political freedom - Islamic finance hubs : corruption and freedom (Turkey)

KARL Kraus said: “Corruption is worse than prostitution. The latter might endanger the morals of an individual, the former invariably endangers the morals of the entire country.” I was recently asked to give a speech on political freedom and corruption in Muslim countries. Both areas have a direct impact on capital flight and market formation, brain drain and economic development, portfolio investors and direct investments, including Islamic finance. (source)

WORLD - CAPITAL MARKETS - Third party guarantees for sukuk set to take off

One of the positive outcomes of the 36th annual board of governors meeting held in Jeddah last month was the approval by the Board of Directors of the Islamic Corporation for the Insurance of Export Credit and Investment (ICIEC), the standalone export credit and political risk insurance agency of the IDB Group, of the corporation's capital from the current $240 million to $640 million. (source)

OIC - WORLD - TRADE - Inter-Islamic countries trades booming

International Islamic Trade Finance Corporation (ITFC) inter-Islamic countries trade has risen to 17 pc.

Members of the Organization of the Islamic Cooperation (OIC) are aimed at increasing the trade to 20 pc by 2015, reported Taqrib News Agency (TNA).

Latest surveys announced by the Center for International Islamic Trade Development, affiliated to the Islamic Development Bank (IDB) shows that the trade between Islamic countries has risen to 17pc while the members of OIC are aimed at increasing the number to 20 pc. (source)