the world’s global islamic finance news...

In this issue

Islamic Capital Markets Briefs ................ 1

Islamic Ratings Briefs ................................ 9

IFN Reports ...............................................10

Change in Japanese View of Shariah Will Take Time ...........................................11

Shariah Compliant Securities ...............13

Malaysia to Woo Foreign Legal Experts? ..........................................15

Faisal Thrives in Switzerland ...................16

Meet the Head ..........................................18Jal Othman, Shook Lin & Bok

Term Sheet ................................................19US$40 million EIB Syndicated Musharakah

Takaful News Briefs..................................20

Takaful Report ..........................................22Amana Takaful’s Approach to Human Resource Issues

Moves .........................................................24

Deal Tracker ..............................................25

Islamic Funds Tables ................................26

Dow Jones Islamic Indexes .....................27

Malaysian Sukuk Update .........................28

Islamic League Tables .............................29

Events Diary...............................................32

Subscriptions Form ..................................33

Country Index ............................................33

Company Index .........................................33

Vol. 4, Issue 46 16th November 2007

T h e W o r l d ’ s G l o b a l I s l a m i c F i n a n c e N e w s P r o v i d e r

AFRICANew instrument backed by goldThe Central Bank of The Gambia (CBG), with consent of the Department of State for Finance and Economic Affairs, has revealed plans to introduce a new Islamic fi nancial instrument, Sukuk Al Salam.

This is a Shariah compliant government security issued by the central bank on behalf of the government. “It would operate on similar terms and conditions as the conventional treasury bills and, therefore, would have the

same maturity profi les of three, six and 12 months,” the bank stated.

The Sukuk will be backed by gold as a notional asset, and will see CBG sell and issue the Sukuk on a book entry system to participants. The title will be surrendered back to the central bank at maturity in exchange of cost plus mark-up. Minimum investment stands at GMD25,000 (US$1,217.61) and will be in multiples of GMD5,000 (US$253.52).

UKLondon losing its charm? A recent paper by law fi rm Trowers & Hamlins has stated that just 2% of Islamic investment funds are now based in the UK, while 75% are headquartered within GCC countries. Research was based on a US$25 billion sample of Islamic Investment funds from Eurekahedge.

According to the report, Islamic investment funds have declined in the UK by almost 33% over the last fi ve years. Adrian Creed, a partner at the legal fi rm, commented: “The perception is that London is doing well thanks to the boom in Islamic fi nance but these fi gures indicate that this is not the case in every aspect of the market. It is actually the

Gulf region and Malaysia that are attracting the vast bulk of Islamic investment funds.”

While Creed noted that London does, however, benefi t from foreign Islamic funds outsourcing fund management work to Europe and the US, he pointed out that fi gures will continue to decline as the GCC steps up its appeal to talent.

“These fi gures suggest that the UK government cannot afford to be complacent if it wants to increase its share of the Islamic fi nance industry,” Creed concluded.

(Also see IFN Reports on page 10)

QATARDoha Bank mulls Sukuk Doha Bank plans to sell up to US$1 billion in Sukuk come September 2008 to fi nance investments in renewable energy, confi rmed Doha Bank’s CEO R Seetharaman.

Doha Bank is looking to raise funding for projects such as setting up an exchange for trading greenhouse gas emissions permits. Seetharaman did not reveal further details.

www.islamicfi nancenews.comNEWS BRIEFS

16th November 2007©

UAENGI covers homeownersNational General Insurance Co has signed an agreement with the Commercial Bank of Dubai (CBD) that will see it providing insurance coverage to all home fi nance loans given by the bank.

The move comes as part of the bank’s commitment to support the growth of real estate in the country and follows the October launch of CBD’s home fi nance program, which provides 90% of the property cost for both primary and secondary properties.

MIDDLE EASTKFH sponsoring security forum Kuwait Finance House will sponsor the “Middle East: Homeland and Global Security Forum” this Monday. The event will discuss issues related to terrorism, smuggling, money laundering, drug traffi cking and illegal immigration.

More than 500 people, including ministers, security experts, consultants, human rights activists, top executives from leading international companies, scholars and academics are expected to attend the three-day conference.

UAEDana Gas revenue upDana Gas PJSC chartered 3Q revenues of AED276 million (US$75.16 million), at a 15% increase from 2006. Quarterly gross profi t stood at AED72 million (US$19.6 million), while net profi ts hit AED22 million (US$5.99 million).

This was after adjusting for non-cash depreciation and depletion of AED56 million (US$15.25 million) and fi nance costs of AED30 million (US$8.16 million).

MALAYSIAKFHM’s sky-high ambitionKuwait Finance House Malaysia (KFHM) will team up with a Malaysian bank to jointly develop the country’s tallest building, superseding the Petronas Twin Towers.

Salman Younis, managing director of KFHM, explained: “It will be a high-end real estate project that will stand taller than the Petronas Twin Towers.” However, Salman did not elaborate further, stating that an offi cial announcement will be made soon.

MALAYSIABursa seeks foreign investorsSelvarany Rasiah, chief legal offi cer at Bursa Malaysia, has announced the bourse’s plans to lure foreign investors with market capitalization of at least RM1 billion (US$296.76 million) for listing. The bourse is capitalizing on recent market liberalization of foreign listing requirements early this year.

QATARSalam Sukuk to launch Salam Bounian Development, a unit of Qatar’s Salam International Investment, will sell US$150 million in Sukuk to Gulf investors this month.

Arrangers Qatar Islamic Bank, Commercialbank and Qatar National Bank begin marketing the notes in Qatar on the 26th November and will then proceed to Bahrain and Dubai.

The Sukuk Musharakah will have a 10-year tenure which is redeemable after fi ve years. Procceds will go to its Gate mall project in Doha.

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MIDDLE EASTIdealRatings launches fund solutions IdealRatings Corporation, provider of Shariah fund management services, has announced the launch of IdealRatings, a unique investment service designed to deliver up-to-date information and analysis for fund managers.

The IdealRatings service features daily market data provided by the top three market data and fundamentals providers, Thomson Financial, Reuters, and Interactive Data Corporation. The data feeds are then screened using proprietary software and manual researchers to accurately classify companies’ activities according to Shariah permissibility rules. The fi ltered data is fi nally securely delivered using state-of-the-art web technology that enables users to perform in-depth research, analysis and purifi cation tasks to effectively screen for Shariah compliant funds.

IdealRatings will enable fund managers to research and monitor the market totalling more than 30,000 equities in over 65 markets covering approximately 95% of the global market capitalization.

PAKISTANPak Bank takeoverBank Muscat is leading a consortium that may sign a deal within weeks to buy a majority stake in Pakistan’s Saudi Pak Bank for as much as US$218 million.

The consortium, led by Pakistani fi nancier Shaukat Tarin, also includes Japan’s Nomura Holdings and the International Finance Corp (IFC), the World Bank’s private sector arm.



UKUpdate on housing conferenceDelegates at the recent two-day conference on Islamic housing and real estate fi nance, held recently in London, were told how Islamic fi nance is set for a major boost over the next few years largely because of real estate developments in key worldwide markets including Bahrain and the wider GCC.

Sakana Holistic Housing Solutions was the only Bahraini mortgage/real estate fi nancial institution represented at the conference. Speakers over the two-day event addressed key topics on both Islamic housing fi nance and real estate fi nance covering realty regulations, tax treatment, market demand, dynamics, product diversifi cation, affordable social housing, risk management and sustainable engineering.

IRAN/MALAYSIA/TURKEYBaby, you can ride my (Islamic) carAfter announcements of Malaysia, Iran and Turkey planning to produce “Islamic” cars, it seems that religion is becoming more of a commodity. Proton Holdings’ MD, Zainal Abidin, said the cars are expected to have Islamic features including a compass, kiblat reading and compartments for the Quran and scarves.

“What Iran wants to do is call it an Islamic car. They have identifi ed and proposed three countries: Iran, Malaysia and Turkey. Why these three countries? I think it’s because they are automotive-based,” Zainal said.

Should the project materialize, Islamic banks will be at the forefront for fi nancing. Watch this space for the latest in Islamic automobiles.

BRUNEI/MALAYSIAKFHMB’s treasury solutions Kuwait Finance House Malaysia (KFHM) recently held a one-day seminar on Islamic treasury solutions for treasury clients in Brunei. The seminar, entitled “Islamic Treasury Structures: Developments & Innovations”, brought together 40 participants from the Insurans Islam TAIB, Brunei Investment Agency, Bank Islam Brunei Darussalam, Baiduri Bank and Tabung Amanah Pekerja.

KFHMB is also the fi rst Islamic bank in Malaysia to obtain approval from Bank Negara Malaysia to launch the KFH Promissory FX Contract-I and Ijarah Rental Swap-I.

KFH Promissory FX Contract-I enables the bank’s customers to protect their stream of revenues or commitments in foreign currencies against the uncertainty and volatility of the exchange rate. It aims to benefi t customers with cross-border currency fl ows such as importers, exporters, service providers, investors and institutions involved in fund-raising activities.

SAUDI ARABIA/USUS fi rm lands Saudi job Shariah Capital has been retained as Shariah adviser by Al-Tala’a International Transportation Company (Hanco) of Saudi Arabia for its Caravan II Saudi Auto Securitization Sukuk. The Sukuk will be worth US$64 million and arranged, structured and placed by BSEC-Bemo Securitization.

Caravan II is the second Sukuk to be arranged by BSEC for Hanco and its rent-a-car and limousine operations in Saudi Arabia. Siraj Capital is also expected to play a prominent role in the transaction.

Hanco has grown its fl eet to over 8,000 vehicles, which are now available in 84 branches throughout the kingdom. Its corporate clients include Saudi Arabian Bechtel, Saudi Telecom, Saudi Basic Industries Corporation (SABIC), Saudi Electric Company and Saudi Aramco.

(Also see IFN Reports on page 10 )

MALAYSIAING Funds wants to increase units ING Funds has applied to the Securities Commission to increase the fund size of its recently launched Shariah compliant capital protected fund, the ING Baraka Commodities Capital Protected, to 450 million units. The fund had an initial approved fund size of 200 million units, which was later increased to 300 million.

BAHRAIN/UAETaib a done dealThe Securities and Investment Company (SICO) has concluded a transaction on behalf of the Dubai Financial Group to acquire a 60% stake in Bahrain’s Taib Bank.

SICO represented the group as its buy-side broker for the transaction, which took place on the Bahrain Stock Exchange. The deal was completed on the 8th November at US$162.2 million.



www.IslamicFinanceTraining.com

FOR MORE INFORMATION, contact: Andrew Tebbutt Tel: 603 2143 8100;

Email: [email protected]

CALENDAR 2007

Managing Islamic Funds20 – 21 November, DUBAI

Sukuk & Islamic Capital Market: Products & Documentation

26 – 29 November, KUALA LUMPUR

Introduction to Islamic Finance & Banking

3 – 5 December, HONG KONG

Islamic Financial Engineering and Advanced Products

9 – 12 December, DUBAI

Key Legal, Documentary and Structuring Issues for Islamic Financial Products

10 – 12 December, BAHRAIN

Islamic Financial Instruments & Structured Products

20 – 23 January 2008, CAIRO

Introduction to Islamic Finance & the Islamic Financial Services Industry

10 – 12 March 2008, MUMBAI

presents

MIDDLE EASTArab bank boostThe growth of Arab economies reached US$1.6 trillion in August this year, indicating a 20% growth from 2006, Qatar Central Bank (QCB) governor HE Sheikh Abdullah bin Saud al-Thani affi rmed.

Sheikh Abdullah said the combined GDP of the Arab countries at current prices rose 17.4% to US$1.3 trillion in 2006 due to the growing Arab economy, attributed to rising oil prices. The GDP of some Arab countries has grown 10% or more nominally, while the real GDP growth averaged 5.5%.

In Qatar, for instance, the QCB has laid the proper foundation, framed rules and procedures that ensure banks comply with all local, regional and international requirements involving risk management and capital adequacy.

In terms of Islamic banking, the QCB governor stated: “We have laid down procedures that create opportunities for Islamic banks to grow and diversify their income sources without affecting their character.”

UAEFree Zone SukukJebel Ali Free Zone, a Dubai-owned business park, is near the tail end of its Sukuk roadshow to sell up to US$1 billion in Sukuk, along with a benchmark-sized conventional bond.

The Sukuk follows a Musharakah structure, and will not be marketed to US and Asian investors. Its tenure has not been confi rmed. The conventional bond will hold a 10-year maturity, and will be sold as a private placement under the US Securities and Exchange Commission’s 144a regulations. The roadshow ends tomorrow (17th

November) in Abu Dhabi.

Both bonds were rated a provisional A1 by Moody’s Investors Service and A+ by Standard & Poor’s.

The bonds have received provisional ratings of A1 and A+ by Moody’s and S&P, and will be arranged by Lehman Brothers, Barclays, Deutsche Bank and Dubai Islamic Bank.

UAEMorgan Stanley fi nances bridgeMorgan Stanley has provided Dubai Holding with US$1.26 billion in fi nancing on a fully underwritten basis. The facility was provided as a short-term bridge loan to Dubai Holding Investments Group, the investment arm of Dubai Holding.

The loan will be used to fund its 100% owned subsidiary Dubai International Capital’s acquisition of a 9.9% stake in US alternative asset management fi rm, Och Ziff.

JORDANAB Capital launchedJordan-based Arab Bank has offi cially launched AB Capital, the investment banking arm of the Arab Bank Group, after it received a license from the Dubai Financial Services Authority to operate as a regulated entity in the Dubai International Financial Center.

UAEBadr Al Islami opens main branchBadr Al Islami, a subsidiary of Mashreq, has offi cially opened the doors on its fi rst main branch in Dubai. It offers a full range of Shariah compliant products and services, covering retail, investment and corporate banking.



GCCLacking infrastructure SukukSukuk should play a larger part in fi nancing the estimated US$1.5 trillion worth of infrastructure projects underway or announced in the GCC, said Ernst and Young’s Islamic fi nancial services group head, Sameer Abdi.

“While the spending on infrastructure is growing quickly year-on-year, Islamic fi nance’s share continues to decrease. Sukuk may offer the answer for several reasons. There is a growing awareness, interest and appetite for Sukuk among non-Muslims. Governments are supportive and Sukuk offer structural fl exibility. They offer better asset/liability management as well as refi nancing options,” Sameer said.

Sameer pointed out that although primary Sukuk issuance has shown growth, the use of Sukuk in project fi nance has been limited, as has the use of debt in capital markets in the Middle East and North Africa. He added that primary Sukuk issuance is still dominated by corporate and government borrowing.

The optimal solution, he said, is to encourage more direct access to capital markets by promoting more primary issues that will lead to increasing depth. More “true sale’ securitizations will refl ect the true default risk longer tenures will build an effective Sukuk yield curve which will enhance transparency and increase the appetite for Sukuk. There is a need to address risk weightings which will result from improved regulatory stimuli. Finally, a standardization of documentation which is already happening will reduce the time taken to market.

PAKISTANIslamic banking set to gain 12% shareChairman of Islamic Capital Partners, Khalid Rafi , is confi dent that Islamic banking in Pakistan will achieve a 12% share of the overall fi nancial sector by 2012.

Speaking at the Islamic Capital Conference last week, he said that this statement roughly translates into an additional growth of PKR900 billion (US$15 billion) in Islamic deposits over the next fi ve years.

Khalid highlighted that Islamic banks have launched an aggressive outreach campaign and added 140 branches in just 18 months. The total branch network stands close to 218, and is set to quadruple over the next four years.

PAKISTANBanks demand Sukuk Stakeholders in Pakistan’s fi nancial sector have urged the Ministry of Finance to expedite efforts for the issuance of Sukuk via Baitul Maal certifi cates to provide Islamic banks an opportunity to invest in government securities.

They said Islamic banks were facing diffi culty in managing liquidity in the absence of such instruments and Islamic banks were at a disadvantage compared to conventional banks in terms of optimizing returns on excess liquidity.

Pervez Said, head of Islamic banking at State Bank of Pakistan, however said that Islamic banks must jointly work out a future plan of action with the regulators for the issuance of Baitul Maal certifi cates.

UAEEIB’s healthcare endeavorEmirates Islamic Bank (EIB) has concluded a US$40 million Ijarah facility grant to the Emirates Healthcare Development Company (EHDC), in a bid to pave the way for sophisticated, technologically advanced and even more accessible medical facilities in the UAE.

Participating banks included Emirates Bank International, National Bank of Umm Al Quwain, Bank Muscat International-Bahrain, Khaleej Commercial Bank and Sharjah Islamic Bank.

EIB’s general manager of corporate and investment banking, Abdulla Showaiter commented: “EHDC is one of the leading private healthcare institutions in the region, and partnering in this project will signifi cantly help promote medical services in the region.”

JAPAN/UAEDFSA and Japan to cooperateThe Dubai Financial Services Authority (DFSA) has fi nalized an Exchange of Letters with the Financial Services Agency (FSA) setting out terms for information sharing and cooperation.

This follows a meeting last week of leading securities regulators at the IOSCO Technical Committee Conference hosted by the FSA.

The FSA has broad regulatory authority in Japan over the banking, insurance and securities industries and has integrated responsibility for fi nancial system planning, the inspection and supervision of fi nancial institutions.



KUWAITNBK elects advisersThe National Bank of Kuwait has formed its international advisory board (IAB), the fi rst of its kind in the Middle East, which will bring together several distinguished world fi gures in the fi elds of politics, economics and business. It will be chaired by former UK premier John Major.

IAB will focus on long-term strategic issues and developments pertaining to the region and globally.

BAHRAINBanks gain momentum The Central Bank of Bahrain has revealed that the consolidated balance sheet of Bahrain’s banks, in both retail and wholesale, had reached US$222.4 billion at the end of the third quarter, charting a 4.6%, or US$9.7 billion, increase since the second quarter. Wholesale banks accounted for almost 80% of the balance sheet.

QATARDeutsche Bank in DohaDeutsche Bank has offi cially opened its branch at the Qatar Financial Center, which offers investment banking and private wealth management services.

Mounir Husseini was also appointed chief country offi cer for Qatar, and general manager of Deutsche Bank AG Doha (QFC). Mounir was with Daimler Financial Services in Berlin, where he was managing director of the structured fi nance division.

UAEDIB branches out Dubai Islamic Bank (DIB) has opened three new branches in Sharjah and Abu Dhabi, increasing its total UAE-wide branch network to 44. The branches are located at the Clock Roundabout and Al Mowailih Area in Sharjah; and the Corniche Area in Abu Dhabi.

MALAYSIAOCBC Islamic unit approvedSingapore-based OCBC has the go-ahead from Bank Negara Malaysia to set up an Islamic banking subsidiary in the country. The unit will be allowed to carry out the full range of Shariah compliant universal banking business, including Islamic hire-purchase and Shariah compliant corporate fi nance activities.

OCBC has been involved in Islamic banking in Malaysia for the past 12 years.

UAENational Bonds’ instant millionaireLast week, Naeema Al Shaali, an Emirati woman, was adjudged the 19th National Bonds millionaire — a Shariah compliant savings scheme launched by the National Bonds Corporation. Her prize was AED1 million (US$272,301).

Two other bond holders, Saif Al Habsi, a Ras Al Khaimah resident, and Jeena Angel, a 13-year-old Australian student, were announced as winners of the second prize of AED100,000 (US$27,230) each.

UAEInternational Islamic Finance CongressAbu Dhabi Commercial Bank (ADCB) and Abu Dhabi Islamic Bank (ADIB) will sponsor the International Islamic Finance Congress this 19th to 22nd November in Abu Dhabi.

Senior representatives of both banks are set to deliver keynote presentations on the second day of the event.

INDONESIACo-managers appointedIndonesia has mandated state brokerage fi rms PT BNI Securities and PT Danareksa Sekuritas as co-managers for sovereign bonds expected to be issued in 2008.

Lehman Brothers, HSBC and Barclays have also been confi rmed as joint lead managers for the planned issue. Proceeds from the bonds are expected to plug Indonesia’s budget defi cit forecast at 1.7% of gross domestic production next year.

A source familiar with the deal has said Indonesia plans to raise about US$2 billion from the debt that may have maturities of 10 and 30 years as it seeks to reduce its reliance on bilateral and multilateral loans.

It has not been confi rmed if the bonds will be Islamic or conventional, although Indonesia has been purportedly mulling the former.



PAKISTANSBP tracks banks The State Bank of Pakistan (SBP) has directed all banks having Islamic banking branches to submit details of products to be offered via its Islamic banking windows before operations commence.

The Islamic banking division of SBP issued Circular No 06, which stated that there was now a growing trend among banks to open Islamic banking windows, and the SBP plans to strengthen the regulatory framework and maintain information on window operations.

The SBP has therefore advised banks to submit details of systems and controls in compliance with IBD Circular No 02/2004. The SBP has also asked for details of commission/fee arrangement and human resource training programs from authorized branches.

PAKISTAN

No threat here

The State Bank of Pakistan has reported 15% growth in Islamic banking in Pakistan in 1Q2007 to 3.2% in assets of the total banking sector. As at March 2007, total Islamic banking assets stood at PKR135.64 billion (US$2.23 billion).

MALAYSIA/UAE

SBP reports surge

During his recent visit to the UAE, Raja Nazrin Shah, the fi nancial ambassador for the Malaysia International Islamic Financial Center (MIFC), stated that Malaysia’s plans to become an Islamic fi nance hub should not be seen as a threat to Dubai’s aspirations, and the two countries should instead create a mutually benefi cial relationship.

“If we only have a limited number of fi nancial institutions and products, whether in Kuala Lumpur or Dubai, we risk affecting the development of the infant. By allowing the market to grow and allowing issuers and investors choice of quality, services and products, both countries will in fact be working towards a common goal.”

Among major Malaysian projects with UAE interest is the Iskandar Development Region, which Dubai World has committed to. Malaysia is growing its property and real estate sector to boost its appeal to foreign investors.

BAHRAINAl Salam Bank stock splitAl Salam Bank’s stock split will take effect on the 18th November 2007, following approval during the bank’s extraordinary general meeting in September. The split will see 10 new shares per current share, i.e. BH$1 (US$2.66) per share to 100 fi ls; increasing shares from 120 million to 1.2 billion.

UKOne step closer to SukukIt was reported earlier this week that the UK Treasury is launching a three-month consultation process to step up speed for the launch of a UK sovereign Sukuk. Kitty Ussher, treasury minister, has produced a consultation paper relating to risk associated with price and demand.

Doubts had risen recently in light of former city minister Ed Balls’ departure from the treasury in June. However, Ussher affi rmed: “There is no question of delay. If anything, there is greater demand. We have been doing an enormous amount of work.”

The UK Sukuk is expected to boost the country’s Islamic fi nance standing, and create impetus for other western companies to launch Islamic securities out of London.

MALAYSIAStandalone HSBC subsidiaryHSBC Malaysia has been awarded an Islamic banking license to set up a standalone subsidiary by Bank Negara Malaysia. The bank had applied for the license in the middle of this year, during Zair J Cama’s term as CEO and chairman.

Dubbed HSBC Amanah Malaysia, the subsidiary will establish a dedicated network of Islamic branches in line with Bank Negara Malaysia’s guidelines, and although able to service conventional banking customers, the bank will not cross-sell conventional products via its Islamic subsidiary.

UAECedar to boost Amlak’s growth Amlak Finance has appointed Cedar Management Consulting International to draw up and implement a new growth strategy for the company. Amlak, which recently expanded into Egypt and Saudi Arabia, will focus on consolidating its local competitiveness in the home fi nance industry while expanding into new markets including Qatar, Jordan and Bahrain.

Amlak and rival Tamweel had lost market share as at the 31st March this year to banks, which expanded their home loan business to meet surging demand spurred by a construction boom in the region.

SAUDI ARABIANCBC unveils new equity fundNCB Capital (NCBC) has launched a new investment product dubbed the Al-Ahli BRIC Secured Equity Fund, investing in Shariah compliant companies in Brazil, Russia, India and China (BRIC).

“These four emerging markets have one thing in common, fast growth,” said Ayman Bajsair, head of product development at NCB Capital Investment Services. “In fact, these four economies are growing so fast that they will soon become the biggest economies in the world.” Ayman attributed the countries’ growth to strong consumer and export growth, as well as substantial foreign direct investment. He also cited the abundance of natural resources in countries such as Brazil as a boost to economic growth.

“We have developed this new fund on the basis of market research, which showed that many of our clients want to invest in the BRIC countries because they are aware of the potential for fabulous returns, but are worried about losing their capital,” Ayman added.

The fund has a minimum investment amount of US$30,000 and is fully Shariah compliant. It is secured through Murabahah with capital protection. The fund is open to Saudi Arabians, expatriates and corporate clients.



MALAYSIAHalal hub commitment reiteratedMalaysian Prime Minister Abdullah Ahmad Badawi has affi rmed the country’s commitment to becoming the world’s premier Islamic fi nancial center and halal hub. “The country’s success in developing the Islamic fi nancial system, which has gained international recognition, and efforts to establish a halal industry are no less important in fulfi lling our fardu kifayah (communal obligation),” said Abdullah in his policy speech at the Umno general assembly recently.

Abdullah concluded: “With the size of the global halal market at RM2 trillion (US$600.85 billion) and more than 1.8 billion Muslims in the world, Malaysians, especially the Muslims, should not miss the opportunity of venturing into this sector.”

UAEAir Arabia to raise SukukLow-cost carrier Air Arabia has revealed plans to raise up to US$1.6 billion in conventional and Islamic loans and bonds to fi nance 80% of the total purchase of 40 short-haul aircraft.

“We’ll make an order in the next couple of days,” said Air Arabia CEO Adel Ali. Each plane is expected to cost US$50 million, amounting to a total of US$2 billion.

BAHRAINBerber Sukuk closed at US$130 millionBerber Cement Company has closed its Sukuk issuance at US$130 million. Liquidity Management Center (LMC) and Emirates Islamic Bank (EIB) were the deal’s arrangers, while Alpen Capital acted as fi nancial adviser.

Proceeds from the Sukuk, along with an additional US$70 million in equity contribution by the company’s shareholders, will be used to complete the US$200 million construction of Berber Cement’s project over the next 18 months.

The Sukuk Musharakah is based on a Wakalah Istithmar contract between Berber, acting through National Cement Company and its Sukuk holders. The bond holds a seven-year maturity with a 4.75 year average life.

The Sukuk was fully subscribed by EIB as co-arranger; Bahrain Islamic Bank, Sukuk Exchange Center (Tadawul) and LMC as senior lead managers; Boubyan Bank and Sharjah Islamic Bank as lead managers; and Khaleeji Commercial Bank and Masraf Al Rayyan as co-lead managers, and BLOM Development Bank as manager.

EGYPTFlood of FDIs According to a recent report by Standard & Poor’s (S&P), foreign direct investments (FDIs) have been pouring in since hints of economic reform in Egypt. Analyst Farouk Soussa believes FDI is a crucial source of capital and a way to encourage competition and import know-how.

Egypt’s FDI boom occurred in the context of improved economic management and renewed confi dence in investor prospects. All this has been benefi cial to economic growth, which increased to 7.1% year-on-year at end-2006/07, the highest rate in the past few years.

Efforts to improve Egypt’s business environment were also recognized in the World Bank’s Doing Business Report 2008, in which the country’s rank improved to 126 out of 178 — the most prominent improvement of all countries.

Soussa concluded: “There is still scope, though, for the sovereign credit rating to improve as rising fi scal revenues — driven in part by FDI and debt stock falling as a proportion of GDP — provide increased fi scal fl exibility.”

GCCSovereign ratings upgradedThe six member states of the Gulf Cooperation Council — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates — have enjoyed an unprecedented economic boom over the past fi ve years. Based on their enhanced creditworthiness and ability to cope with potential shocks, Moody’s recently upgraded their sovereign ratings between two and four notches since 2003.

By Moody’s comparative ratios, GCC countries now outperform Aaa-rated countries. However, Kuwait, Qatar and the UAE still do not possess ratings higher than Aa2. Moody’s attributes this to regional geopolitical vulnerabilities, the developing state of domestic institutions, and the volatility of economic performance associated with a heavy concentration on hydrocarbons.

Tristan Cooper, vice-president and senior analyst at Moody’s, said: “Measured in output per capita, the prosperity of the six GCC countries has climbed sharply in recent years — in some cases, to very high levels — on the back of soaring global oil prices and impressive progress in economic diversifi cation. Perhaps most importantly from a sovereign ratings perspective, there has been a dramatic strengthening of governments’ balance sheets over this period as fi scal and current account surpluses have widened. This is despite a strong pick-up in government expenditure and imports. Countries displaying higher levels of economic volatility have also tended to be more prone to shocks and therefore, to have a greater risk of default.”

BAHRAINADDAX and NBB get licenses The Bahrain Monetary Agency (BMA) has granted two separate licenses to ADDAX International Bank and the National Bank of Bahrain (NBB).

The Bahrain subsidiary, to be named ADDAX International Bank BSC, will have an authorized and paid-up capital of US$10 million. It will operate as an investment adviser/broker and enter into distribution agreements with third parties and will be able to provide other fi nancial advisory services. ADDAX will focus on marketing instead of managing investment products. The product range includes traditional mutual funds, guaranteed funds, savings and pension plans, and Islamic funds.

The second license to the NBB is to establish an Islamic fi nancing company in Bahrain with an authorized and paid-up capital of BH$11.4 million (US$30 million).

The BMA recently developed a new license for Islamic fi nance subsidiaries.

www.islamicfi nancenews.comRATINGS NEWS


MALAYSIACagamas securities reaffi rmedRAM Ratings has reaffi rmed the AAA rating of Cagamas MBS’s RM2.05 billion (US$699.11 million) Islamic residential mortgage-backed securities (RMBS), Sukuk Musharakah CMBS 2005-1-i. The reaffi rmation is premised on the overall performance of the collateral pool (as expected by RAM Ratings), the credit support afforded by the RMBS structure and the available collateralization ratio of 141.07% for the Sukuk as at the 31st March 2007.

KAZAKHSTANFitch reviews ratingsFitch has affi rmed Halyk Bank’s ratings at BB+ with a stable outlook, and will continue to review the ratings of Kazakhstani banks over the next month. However, Fitch has warned that banks’ individual ratings are subject to pressure with the deterioration of standalone fi nancial strength of institutions, especially if heightened credit risks bleed into asset quality problems.

The country’s six other largest banks are currently rated as such: Kazkommertsbank at BB+/outlook stable; Bank TuranAlem at BB+/outlook stable; Alliance Bank, rated BB-/outlook stable; Bank Centercredit, at BB- /outlook stable; ATF Bank at BB-/rating watch positive; and Temirbank BB-/outlook stable.

JAPANJapanese banks affi rmed Fitch Ratings has affi rmed the ratings of Chugoku Bank (Chugoku), Higo Bank Ltd (Higo) and Yamanashi Chuo Bank (Yamanashi Chuo), as follows:

Chugoku at a long-term foreign and local currency Issuer Default Ratings (IDRs) affi rmed at A+ and support rating fl oor at 2 and BBB-, Higo with IDRs affi rmed at A+ and support rating fl oor at 2 and BBB-, and Yamanashi Chuo with long-term foreign and local currency IDRs affi rmed at A- and support rating fl oor at 2 and BBB-, respectively.

All banks possess a stable outlook.

THIS TIME LAST YEAR• Millennium Finance, a unit of the Dubai Islamic Bank,

announced the launch of two US$1 billion private equity funds.

• Amlak Finance and Dallah Al Baraka set up the Amlak International Company with an investment of US$266.6 million.

• The Islamic Development Bank announced plans to set up an Islamic investment company in Azerbaijan.

• The Islamic Finance Qualifi cation, the world’s fi rst global benchmark qualifi cation for Islamic fi nance, was launched in London.

• The US$2.5 billion Nakheel Group Sukuk was launched. Dubai Islamic Bank and Barclays Capital were the joint lead underwriters and book runners.

• Unicorn Investment Bank announced strong profi ts of US$34.9 million.

• Pakistan’s second-largest gas company Sui Southern Gas Co issued PKR1 billion (US$16.6 million) fi ve-year Islamic bonds.

• A three-year US$100 million Standby Commodity Murabahah fi nancing facility was launched by Gulf Finance House.

SOUTH AFRICAFitch withdraws Old Mutual ratingsFitch Ratings has downgraded Mutual & Federal Insurance’s (M&F) National Insurer Financial Strength rating to AA- from AA, with a stable outlook. At the same time, Fitch has withdrawn the insurer’s rating.

MALAYSIA Bank Muamalat negativeRAM Ratings has revised the outlook on all Bank Muamalat’s long-term ratings from stable to negative due to the bank’s waning competitive edge compared to existing and new Islamic banks in the Malaysian market.

RAM said this has weakened both the bank’s franchise and market position. The softening of the bank’s asset quality and performance fundamentals has also dampened its long-term outlook.

RAM also reaffi rmed Bank Muamalat Malaysia’s long- and short-term fi nancial institution ratings at A2 and P1, respectively, along with its RM250 million (US$74.78 million) subordinated Sukuk at A3/P1.

UAETamweel stableMoody’s Investors Service has assigned A3/P-2 local and foreign currency issuer ratings to Tamweel PJSC, with a stable outlook.

The A3/P-2 ratings refl ect the company’s growing franchise, dominant position in the nascent mortgage fi nance market, strong fi nancial fundamentals, sustainable earnings power and imputed support from the Government of Dubai.

www.islamicfi nancenews.comIFN REPORTS


The UK has been the perennial fi nancial hub, beating out foreign competition due to diversity of talent and conducive trade environments. But the tables are apparently about to turn. In a recent report by law fi rm Trowers & Hamlins, almost 33% of Islamic investment funds have moved out of the UK, favoring instead the GCC and Malaysia.

However, the question is, will this really dampen the UK’s Islamic fi nance activities, and more pressingly, will it affect the upcoming sovereign Sukuk? International Securities and Islamic fi nance associate Aziza Atta of Norton Rose was candid when asked about the opportunities presented to Islamic bankers in the UK.

“Many of the international banks and law fi rms have Islamic fi nance departments. These organizations operate in the Gulf region as well as in the UK. There are advantages to being in both regions. From a marketing perspective, there is a wider pool of investors and entities that wish to conduct Islamic fi nance transaction in the Middle East and Far East due to the greater concentrations of Muslim population that require Shariah compliant products in these areas.”

Apart from regulatory reforms to attract Islamic funds into the UK, Aziza said local fi nancial institutions also have to be comfortable with the principles of Islamic fi nance as such atmosphere is conducive for the growth of the industry.

“Thorough legal and regulatory due diligence must be undertaken for each transaction. More analysis of the relationship between Islamic jurisprudence and secular legal requirements is needed. More education about Islamic fi nance should also be made available to the public with regards to the principles and techniques of Islamic fi nance and the fact that Islamic fi nance is an alternative form of fi nance that is available to all,” said the UK-based lawyer.

On investor demography for the 2008 sovereign Sukuk, Aziza is confi dent of global interest but admitted that the success lies in UK’s marketing prowess. “The geographical location of the investors of sovereign Sukuk would really depend on the extent to which global investors are made aware of the availability of the product. The UK has been an international fi nancial center attracting investors from all over the world for a long time. The marketing of such an initiative would really be the determining factor with regard to the kinds of investors attracted.”

However, a safe bet would be more interest from the Middle Eastern front, she added. “There is most likely to be more interest initially from investors in the Middle/Far East due to the fact that investors in these areas are more familiar with Islamic fi nance products.”

In terms of the British public’s reaction to Islamic fi nance, Aziza is optimistic that people are beginning to perceive Islamic fi nance as an alternative form of fi nance. “The ethics and rationale underlying Islamic fi nance make it a sub-set of ethical fi nance.”

Reports by Nazneen Halim

London losing its charm? UK

Eric Meyers, president/CEO of Shariah Capital, dubbed it an “impossible” feat, and attributed it to “Good ol’ American ingenuity and perseverance”. No, he wasn’t referring to the Olympics or the World Series.

Earlier this week, Shariah Capital had been retained as Shariah adviser by Al-Tala’a International Transportation Company (Hanco) of Saudi Arabia for its Caravan II Saudi Auto Securitization Sukuk worth US$64 million.

This is however, not the fi rst time an American fi rm has been chosen to advise on a Middle Eastern Sukuk. Exactly a year ago, SHAPE Financial advised on the Sanad Sukuk Fund- the world’s fi rst GCC-oriented Sukuk, which is expected to garner US$100 million.

Meyers gave Islamic Finance news some insight into the challenges Shariah Capital has been facing as an American Shariah fi rm, not domiciled in popular Muslim jurisdictions such as the Middle East and Southeast Asia.

“Many people have said that Shariah Capital is just a one-dimensional fi rm focused on Shariah compliant hedge funds. They’ve doubted whether we could break into the global Sukuk market. They’ve discounted our ambitions to become an important Shariah adviser on Sukuk in unique environments like the Kingdom of Saudi Arabia. After all, Saudis pick Saudis when it comes to the world of Islamic fi nance, right? Yes, they do — and usually that’s the end of the story,” Meyers stated.

“Our energy, ingenuity and execution capabilities won out over other Shariah advisers in the region. The Sukuk advisory business is competitive and complex, but we succeeded. Moreover, our selection is a testament to our ability to reach and retain appropriately qualifi ed and prominent Shariah scholars, complemented by our own Shariah scholar, Sheikh Yusuf Talal DeLorenzo, who’s chief Shariah offi cer,” Meyers stated confi dently.

The US$64 million Sukuk will be arranged, structured and placed by BSEC-Bemo Securitization; a Lebanese fi rm which has been actively pursuing a break in the Sukuk market. BSEC had previously earned accolades for its bold move in structuring the US’ fi rst and only Sukuk, East Cameron Gas Sukuk, which raised US$165.67 million in July 2006.

There is perhaps a pattern emerging from this, in which US companies are more comfortable with smaller, non-mainstream players unlike the Liquidity Management Center in Bahrain, and vice versa.

Meyers concluded with a resounding question, which will perhaps hint at things to come: “Could American-advised Sukuk become attractive for US institutional investors and, on the fl ip side, could US fi rms become interested in issuing Shariah compliant debt that could be placed with Saudi investors, which are now amassing liquidity with US$95 million in oil?”

Saudi capitalizes on US ingenuitySAUDI ARABIA/US

www.islamicfi nancenews.comCOUNTRY FOCUS


Since late last year, Japanese fi nance bigwigs — including Bank of Japan (BoJ) and Japan Bank for International Cooperation (JBIC) — have repeatedly voiced their interest in venturing further into the burgeoning market of Islamic fi nance.

They stressed their commitment to the growing industry, which is currently said to be worth about US$500 billion, by announcing plans to issue Sukuk or Islamic bonds. These could be launched by next March.

Japan’s involvement in Shariah compliant investments was said to be further encouraged by the launch of the FTSE Japan Shariah 100 index in June.

In an exclusive interview with Islamic Finance news, Paul Hoff (pic), FTSE managing director for Asia Pacifi c, spoke in detail about the Japan Shariah Index and how it would open the door to investors hoping to invest in the healthy and growing Japanese economy. He also shared his views on the development of Islamic fi nance. Having worked in the Japanese fi nancial markets for more than two decades prior to joining FTSE, Hoff is certainly more than qualifi ed to do so.

Among others, Hoff reveals that the FTSE Japan Shariah Index had outperformed its conventional counterpart, the FTSE Japan Index. He also explains why he thinks that it is a long journey for Islamic fi nance before it can play a major role in the everyday fi nance activities in Japan.

Below are excerpts from the interview:

How many companies get to be listed on the Japan Shariah Index?First of all, we need to clarify how the index is created. When FTSE creates the index, we take companies that are listed on the Tokyo Stock Exchange and the Osaka Stock Exchange and use a set of rules applied to the global equity index series. So, we select companies for the FTSE Japan Index — which is part of our global equity index series — based on those rules.

Then we give the FTSE Japan Index to our UK-based partner Yassar Research Inc to conduct the Islamic screening. They do that after FTSE has created the FTSE Index.

So, then you pick the best of those who pass Yassar’s Shariah compliant test?We don’t pick the best, we pick the largest. We pick the 100 largest and put them in the Japan Shariah 100 Index. FTSE Japan has 480 stocks. But in order to make an index that is tradable, we believe there should not be so many stocks listed simply because it makes it easier for the manager to run the fund.

So, we decided that 100 stocks would be representative enough. In summary, FTSE Japan is screened (by Yassar) to create an eligible universe of several hundred stocks and then we select the top 100 based on their market capitalization size.

What types of companies are listed on the index?Because it is a Shariah-compliant index, there are no banks, insurance companies nor electric power companies as these types of companies are exposed to riba or interest in many different ways.

How are the electric companies exposed to riba?The electric companies in Japan have a large amount of debts and they are paying a lot of interest to fi nance their operation. Islamic investors investing in Japan’s energy sector become exposed to gas companies but not to the electric companies.

What are the qualifi cations have to fulfi ll apart from the Shariah screening?That’s all the rules for the global equity index series. They need to pass the liquidity test and they need to pass a minimum amount of free fl oat. Those are the two key parts of the selection process.

How often are these companies reviewed?The FTSE Japan is reviewed once a year while the FTSE Shariah Japan 100 is reviewed once every quarter. All of our Shariah indices are reviewed on a quarterly basis.

What feedback have you received from fund managers and investors on the Japan 100 Index?We believe there is keen interest to see a listed Shariah product in Asia. As yet, there are no listed Shariah products in the form of exchange-traded funds (ETFs). So, this index will be used by Daiwa Asset Management to create an ETF on the Singapore Exchange.

How has the Shariah Index performed in the past 12 months compared to the conventional market?It went live in July this year. Essentially, the FTSE Shariah Japan 100 index underperformed the FTSE Japan index by 10 basis points between the launch and the 31st October, 2007 (FTSE Shariah Japan: -4.35, FTSE Japan: -4.25 and the FTSE World: 5.27).

It’s important to note that because it does not have fi nancial institutions, the Shariah indices performed quite well. I would suspect that it is because of the recent subprime crisis that the Japanese fi nancial sector has not done so well. Consequently, FTSE Shariah Japan 100 Index has outperformed (the conventional) FTSE Japan.

Change in Japanese View of Shariah Will Take TimeBy Arfa’eza A Aziz

continued...

www.islamicfi nancenews.comCOUNTRY FOCUS


Can the indices help boost Japan’s standing in the Islamic fi nance market to make it a more credible Shariah provider?One of the reasons people come to FTSE to help in making indices is that they see that the index can provide a high level of transparency in the market. So through the FTSE Shariah Japan Index and the FTSE SGX Asia Index, these products will allow Islamic investors of all kinds to have a much higher level of transparency of what is available in the various markets.

Another thing is that when the investment banking industry understands Shariah on a broad basis, they will be able to use the company that has passed the Shariah compliant test. These will be good candidates to issue Sukuk (Islamic bonds) that Islamic investors could invest in as well.

Have the indices attracted investors from Japan? Or do they only come from the Middle East?Any Shariah index will be created primarily in order to assist Islamic investors and the majority of the investors are not in Japan. They are in Asian countries like Malaysia and Indonesia. They come from a large-population country like India, or Middle Eastern countries where Islam is the dominant religion.

You said the Shariah indices have done quite well compared to the conventional indices. Surely this had caught the attention of investors from Japan and other investors from the non-Muslim countries?I think it is important to understand the investment process involving Anglo-Saxon, European, Japanese or Pan-Asian investment house or asset owners. They do not put the Islamic index at the forefront. It’s in their fi duciary responsibility to select the proper investment strategy that would involve diversifi cation, managing the risk in their portfolio, a wide variety of tools that have been put in place over the years and manage these portfolios (like) government reserve and pension, etc.

So, those people have not factored Islamic products into their analytics. This is because the products are still very, very new and (do) not (have) much of a track record. It’ll be a while before the nature of Islamic fi nance is going to be understood by the broad investment community.

So, when do you think Japan will grasp the concept of Islamic fi nance and be more receptive to Islamic fi nance products?I think it’s going to be a while. There are some sophisticated institutions like Daiwa Asset Management, which wants to be involved in this. But frankly, the Japanese government and its stock exchange have been reluctant to provide a platform for Islamic investors. So I think this (demand for such a platform) will be driven by the private sector. But until then, there is less visibility for Islamic fi nance in Japan.

But doesn’t that (the reluctance to provide the platform for Islamic investors in Japan) appear to contradict the repeated statements

from Japan’s fi nance authorities like BoJ and JBIC on taking a wider interest in Islamic fi nance? It is one thing for a high-level government offi cial to make statements. But, as in any country, for those kinds of statements to turn into policy, to be turned into programs — which would allow a wide variety of products to be created — is another factor. This will take time. The statements will have to be interpreted by the lower level of bureaucrats and the private sector must embrace that.

Only a handful of Japanese securities companies have maintained a strong connection with Islamic Middle Eastern investors over the years (because) it is an expensive proposition for someone to set up an offi ce in Dubai, Kuwait or Saudi Arabia in order to pursue this kind of business.

So, we’ll have to wait and see if their high-level statements actually translate into a broader acceptance by the Japanese companies, public fi nance of Sukuk or the fund managers to put together funds. We need to wait some time before (the Islamic fi nance market) is developed in Japan.

So, it’ll be quite a while before we see Japan accept Islamic fi nance?Yes, I have gone to the Tokyo Stock Exchange and suggested we work together to create some products but they are very hesitant. That is why Daiwa Asset Management is going to list Shariah FTSE Japan 100 Index on the Singapore Exchange and the Tokyo Stock Exchange.

You think there’s a lot more that Japan should do for it to be on par with other countries in terms of Islamic fi nance?Well, Japan doesn’t need to be on par because there is no Japanese Muslim institution like pensions or large funds that are being managed. Japanese institutions don’t need to have a fully developed Islamic fi nance market here. But Japan can provide products and (the) platform for Islamic investors to invest in Japanese companies.

So, having the list of compliant companies, having funds which are based on those companies and having innovations for Japanese companies to issue Sukuk for Islamic investors, so it’s all about investments into Japan and the Japanese investor banks or the foreign investors’ bank here will need to work with Japanese companies to create those kind of products.

I think we are still at the very early stage for markets like Japan to have these kinds of products up and running. There has been a long history of money from the Middle East, oil money etc, are being invested into the Japanese market. But now we are at the stage where the Islamic compliant proposition has been introduced. So this is a learning process on the part of the Japanese. There needs to be awareness among Islamic investors that there are available products to invest in Japan.

Change in Japanese View of Shariah Will Take Time (continued...)

Next Forum Question

When considering investing in Islamic REITs, property should be the ideal vehicle. However, Islamic REITs have been slow to catch on. Why is this so, and what needs to be changed?

If you would like to air your views on the next Islamic Finance Forum Question, please email your response of between 50 and 300 words to Christina Morgan, Forum Editor, at: [email protected] before Wednesday 21st November 2007.

www.islamicfi nancenews.comSECTOR REPORT


An important area for consideration in Islamic fi nance is equity investment in companies. This article will look at the various criteria used for the purpose of determining the issue of Shariah compliance.

In general, the Shariah permits investment in the securities of existing business vehicles and structures such as companies. Nevertheless, certain matters need to be considered in relation to permissibility from the Shariah perspective in respect of such investments, and this would appear to revolve around the operations and activities of the companies themselves.

In this regard, a number of criteria have been used in various markets and jurisdictions for the purpose of determining whether such corporations are indeed Shariah compliant in terms of business activities.

Shariah compliance mechanism for securities

i- The Dow Jones Islamic Market IndexesThe Dow Jones Islamic Market Indexes (DJIMI) is one of the more established benchmarks for Shariah compliant securities, and the Shariah compliance benchmarks for the DJIMI are determined and regulated by an independent Shariah supervisory board advising the Dow Jones Indexes in respect of Shariah compliance issues.

The Shariah compliance benchmarks of the DJIMI involve screening the particular business industry of the company in question, as well as the application of fi nancial-ratio screens on debt and interest income levels. The screening process as outlined above is reviewed on a quarterly basis. In particular, companies would need to satisfy the following Shariah compliant measures in order for their securities to be considered as being Shariah compliant securities and included in the DJIMI:

• Industry type: Excluded are companies that represent the following lines of

business:o alcoholo tobacco o pork-related productso fi nancial serviceso defense/weaponso entertainment.

• Financial ratios Excluded are companies whose

o total debt divided by trailing 12-month average market capitalization is 33% or more.

o cash plus interest-bearing securities divided by trailing 12-month average market capitalization is 33% or more.

o accounts receivables divided by 12-month average market capitalization is 33% or more.

(Dow Jones Islamic Market Indexes Methodology)

ii- SAC, Securities Commission of Malaysia

In addition, the Shariah Advisory Council (SAC) of the Securities Commission of Malaysia has laid down certain Shariah compliance benchmarks for the purpose of determining whether the securities of companies listed on Bursa Malaysia are considered Shariah compliant securities.

Similar to the DJIMI, the benchmarks employed by the SAC of the Securities Commission also focus on the business activities of the concerned companies, i.e. whether the activities are permissible or non-permissible from the Shariah perspective. In particular, such companies should not be involved in the following activities deemed as being non-permissible by the SAC:

• Financial services based on riba (interest);• Gambling; • Manufacture or sale of non-halal products or related

products; • Conventional insurance; • Entertainment activities that are non-permissible according to

Shariah;• Manufacture or sale of tobacco-based products or related

products;• Stockbroking or share trading in Shariah non-approved

securities; and • Other activities deemed non-permissible according to

Shariah.

In addition, the SAC has also provided for the possibility of companies involved in both permissible and non-permissible activities to be considered as being Shariah compliant, based on the application of certain percentage thresholds as outlined below.

For companies dealing with permissible and non-permissible activities, SAC will consider the following:

• The public perception of the image of the company should be good.

• The core activities of the company are important and considered public interest to the Muslim community, and non-permissible activities are very small and involve matters such as common plight and diffi cult to avoid custom and the right of non-Muslims which are accepted by Islam.

• In order to determine the tolerable level of contribution from non-permissible activities, the SAC has established several benchmarks based on Ijtihad. If the contribution from non-permissible activities exceeds the benchmark, the securities of the company will be classifi ed as Shariah non-approved.

The benchmarks are as follows:

• Five-percent benchmark This benchmark is used to assess the level of mixed

Shariah Compliant Securities By Megat Hizaini Hassan

continued...

www.islamicfi nancenews.comSECTOR REPORT


contributions from the activities that are clearly prohibited such as riba, gambling, liquor and pork.

• Ten per cent benchmark This benchmark is used to assess the level of mixed

contributions from the activities that involve the element of umum balwa, which is a prohibited element affecting most people and diffi cult to avoid.

A example of such a contribution is the interest income from fi xed deposits in conventional banks. This benchmark is also used for tobacco-related activities.

• Twenty-fi ve per cent benchmark This benchmark is used to assess the level of mixed

contributions from the activities that are generally permissible according to Shariah and have an element of maslahah to the public, but there are other elements that may affect the Shariah status of these activities.

The activities that belong to this benchmark include hotel and resort operations, share trading, stockbroking and others, as these activities may also involve other activities that are deemed non-permissible according to the Shariah.

(List of Shariah Compliant Securities by the Shariah Advisory Council of the Securities Commission, 25th May 2007)

The process of reviewing whether companies meet the Shariah compliance tests (as laid out above) is done on a biannual basis by the SAC. In addition, the Shariah compliance review process has been extended to include securities at pre-initial public offering stage, by way of application made by the prospective issuers to the Securities Commission of Malaysia in the prescribed form.

ConclusionThe approaches as set out above represent some examples of the current approaches used to address the issue of Shariah compliance for equity investments in companies. There are, of course, other screening methods applied in relation to investments made by Shariah compliant investment funds, which are similar to the above.

However, the ultimate arbiter of whether the securities of a particular company are considered to be Shariah compliant would be the Shariah supervisory board of the relevant market or fund concerned.

Shariah Compliant Securities (continued...)

Megat Hizaini Hassan is a partner at Zaid Ibrahim & Co. He can be contacted via email at [email protected]

In this issue

News Briefs

Capital Markets .......................................... 1Control infl ation, please

more inside...

Ratings ......................................................... 8TAQA outperforms more inside...

Malaysia: Turning the Vision into Reality................................................... 9

Interview ....................................................12John Doyle, UOB Asset Management

Ijarah Financing in Malaysia ...................14

Case Study – Dar Al-ArkanSukuk Ijarah ..............................................15

Mudarabah as a Fuel to Growth ............ 17

Key Trends in Islamic Funds, Part 2 .......18

Meet the Head ..........................................20Michael J. Zamorski, DFSA

Termsheet ..................................................21Alam Maritim Resources Sukuk Ijarah and Murabahah

Takaful News .............................................22AXA for Qatar Petroleum

more inside...Takaful Interview ......................................23Haji Syed Moheeb Syed Kamarulzaman, Takaful Ikhlas

Takaful Report ..........................................26Takaful Rating Methodology and Review Summary, Part 2

Moves ........................................................ 29

Deal Tracker NEW ........................................30

Eurekahedge .............................................31

Dowjones Islamic Indexes .......................32

Bondweb ....................................................33

Dealogic – League Tables .......................34

Events Diary...............................................37


Country Index ............................................38

Company Index .........................................38

Vol. 4, Issue 32 10th August 2007


MALAYSIACagamas hits big timeAll-round success for Cagamas MBS (CMBS) yesterday as its residential mortgage-backed securities of RM2.41 billion (US$694.72 million) nominal value attracted a book size of RM9.10 billion (US$2.6 billion) from a diverse group of domestic and offshore investors, giving an over-subscription rate of close to four times.

Approximately 51.9% of the bids came from institutional investors, with the remaining

coming from government agencies (22.6%), asset management companies (13.9%), insurance companies (11%) and corporates (0.6%) (see Islamic Finance news, Vol. 4, issue 31, page 1 for more details).

Despite market jitters in the US sub-prime debt market, investor confi dence in the domestic asset-backed securities market was seen from both local and foreign fi xed income investors.

SINGAPORETrust withdrawnArcapita Bank has withdrawn the proposed S$300 million (US$198.29 million) IPO of Ar-capita Unit Trust in Singapore. The strength-ening of private markets for wind and water assets has caused a widening of the valua-tion gap between private and public markets, thus disrupting public market expectations.

Arcapita thus believe that divesting assets via a listing would be sub-optimal at present.

The IPO had already been registered with the Monetary Authority of Singapore, and was slated to be the fi rst Shariah compliant busi-ness to list in the country.

MAURITIUSGetting down to businessThe Mauritian ministry of fi nance has passed the 2007/2008 bill on tax measures, which encompasses Islamic banking services.

Rama Sithanen, the country’s minister of fi nance, elucidated: “Mauritius has a great opportunity to diversify its fi nancial sectors and provide foreigners with new services

in the fi elds of wealth management and investment. Existing and new banks will be able to provide such services.”

Rama added that Shariah compliant institutions are now able to carry out activities under the existing regulations and legal framework for conventional banks.

GLOBALAll-time Sukuk highAccording to latest reports, the global Sukuk market is valued at US$24.5 billion as at the end of June 2007. This marks a 75% growth over last year.

The Malaysian Sukuk market experienced a

growth rate of 71.4%, while the international markets have expanded by 83.3% over the last year. Sovereign Sukuk issues also grew by 521% to US$4.4 billion, with Malaysian ringgit-denominated Sukuk accounting for 70% of the market.

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www.islamicfi nancenews.comMARKET REPORT


The Malaysian legal fraternity is again abuzz with the debate on liberalizing the sector to allow foreign law fi rms and lawyers to set up in the country. While talk on how this should take place had mostly been restricted to lawyers and the relevant government agencies, including the Attorney-General’s chambers, Islamic fi nance players recently found themselves thrown into the fray as well.

Late last year, Bank Negara Malaysia (BNM) lobbied the Malaysian Bar Council, the body that regulates the practice and legal practitioners, for support on its proposal to have foreign lawyers set up their fi rms independently in Malaysia. The council, however, expressed its strong objection to this, and instead, proposed a joint venture model that would compel foreign fi rms to hook up with local partners before they can open a fi rm — similar to the practice in neighboring Singapore.

Those who concur with BNM’s contention that a free market would churn out more opportunities. One of them is Mohamed Ridza Abdul-lah, an expert on Islamic fi nance who has advised several fi nancial institutions on drafting standard Islamic corporate, retail and trade-related dealings.

Mohamed Ridza said BNM’s view makes sense as it merely wants to attract more foreign issuers to Malaysia and understandably, they would look to their own legal team for advice. But even if BNM gets its way, will the Islamic fi nance industry be attractive enough for foreign fi rms to set up in Malaysia?

Independent versus JV modelOne skeptical lawyer from Kuala Lumpur said that even if the legal sector is liberalized in accordance with the model proposed by BNM, Malaysia will not see law fi rms coming in droves.

“Singapore has done this long before Malaysia and most of the larger law fi rms are already getting the deals here from across the strait,” he observed. “Why would they want to set up another offi ce here when they can handle things from across the border?”

This view, however, is not shared by a partner from a major interna-tional legal fi rm, who has dealings in Islamic fi nance in the region. He said that the Islamic fi nance sector in Malaysia has the potential to lure foreign investors, including legal fi rms.

“Opening up in Malaysia is something that we would like to do (if liber-alization is allowed). We do have clients in Malaysia, and have been in-volved in international transactions. We have managed deals involving cross-border, capital market, mergers and acquisitions, and fi nance with our counterpart in Malaysia,” said the senior lawyer, whose fi rm has offi ces in Europe, the Middle East and Southeast Asia. “Although we already have an offi ce in Singapore, it would be helpful to have an-other one there as we would be serving our clients more effi ciently.”

The partner is also aware of the ongoing debate on the right model for liberalization and said that he preferred the independent model, which BNM is lobbying for.“We prefer the independent model because based on experience, the JV (model) adopted in Singapore and several other countries has not been successful. I have discussed this with managing partners in JV

fi rms and a majority think that the JV model has not benefi ted interna-tional fi rms,” he told Islamic Finance news.

He said foreign fi rms lose out in many ways in a JV structure and admitted that he may have to review his intention to set up in Malaysia if the JV model is adopted. He added that his Singapore experience showed that while the local partners fl ourished, their foreign counterpart did not meet with similar success.

“The locals were able to utilize the fi rm’s good name, clients’ contacts, expertise and technology. While [foreign partners] are not allowed to compete with the locals, [local partners] are able to compete head on with us. They have offered to manage deals at a much lower cost. So, the ‘level playing fi eld’ is lopsided.

“We are hoping that the JV model can be avoided in Malaysia simply because it has been a failure in Singapore. [The JV model] would be a signifi cant deterrent for us to set up in Malaysia.”

He pointed out that the full liberalization model, as practiced in Hong Kong, China and several jurisdictions in Europe, has proved benefi cial to the local practitioners and foreign fi rms. “The freedom (in those countries) had made the legal industry more vibrant and progressive. There is no proof that full liberalization of legal practice will hurt the local lawyers. There have been many instances when local lawyers moved up the ladder and became a signifi cant part of the international fi rm.”

‘Meet halfway’The senior lawyer also agreed with the view that the presence of for-eign lawyers would spur the Islamic fi nance market even more, thus creating new opportunities.

He suggested that those with opposing views can meet halfway. “Per-haps allow the companies to set up independently and decide on a certain percentage of local partners and associates. I believe this would be the best way.”

He stressed that the local legal fraternity has no reason to worry about an infl ux of foreign lawyers should full liberalization be allowed. “There is a legitimate worry on the council’s part that lawyers will be fl ying in from the US and Europe who will put them out of business. That’s not going to happen. We have no desire to do so… simply because fees will not be attractive enough.”

Another managing partner from an international fi rm that has an of-fi ce in Singapore said Malaysia should seriously work to ensure full liberalization of the legal practice if it wants to stay ahead in Islamic fi nance.

“It has to move fast. [In] Singapore, Hong Kong and Indonesia… liber-alization has already taken place and these countries are talking to strengthen their hold on the Islamic fi nance sector.”

Asked if legal fi rms would consider uprooting their offi ces and move to Malaysia, he said: “I think it can make a good Islamic fi nance regional base for legal fi rms. With cheaper overhead costs, I don’t see why not.”

Malaysia to Woo Foreign Legal Experts?By Arfa’eza A Aziz



Last month, Geneva-based Faisal Pri-vate Bank (Switzerland) SA, or FPB, celebrated its fi rst birthday, having been granted a banking license by the Swiss Federal Banking Commission (SFBC) in October 2006. Although it has not been hogging the headlines for the past year, the pioneer of Is-lamic banking in Switzerland and Eu-rope has made signifi cant inroads in growth since then.

CEO Marco Rochat (pic) told Islamic Finance news that from a business and profi t-making perspective, the bank

has not only improved — with average savings rising to between €6 million and €7 million (US$8.8 million and US$10.26 million) — so has its working system. Additionally, it has also managed to meet the standards of a credible Islamic bank.

He said the bank’s operations are able to run smoothly primarily due to the support of SBFC, with which it shares a steady relationship. “Because of this, we are able to concentrate on the business and have managed to create a series of new products,” said Rochat in an exclu-sive interview. “What I try to do is to have coordinated growth. I don’t want to go into the market with a lot of products without strengthening my wealth management team.”

As a result, he spends a lot of time with his team working on creative and effective ways to penetrate the market and build client portfolios. “So, we are not merely product pushers. We need to understand the needs of our clients and think of ways on how to meet those needs with our products that are 100% Shariah compliant,” said Rochat, who was a managing partner with PricewaterhouseCoopers Geneva before joining FPB in 2002. (The bank operated as a conventional outfi t be-fore it got the green light to begin Islamic banking operations.)

Strength lies in realistic productsRochat said that their strength lies in coming up with products that are realistic. “Here, we are able to give clients products where the underly-ing efforts were realistic. So, the nature of our products is less risky, more stable and less volatile. So far, we have been able to give clients a stable return of between 30% and 40% on an asset that is unlikely to lose its value.”

He also ensures his clients’ investments are not too focused on one sector but on a variety instead. Rochat added that to date, the bank

has not been affected by other larger private fi nancing institutions in the conventional sector. “We are in a good position in the Swiss market because I am doing something that the others don’t do. Yes, Switzerland has big names like UBS but these banks are not doing 100% Shariah services… which means if a client wants to invest in Shariah compliant funds, he would be referred to an arranger who will then make a product just for that client. And most of the time, the product is not Shariah compliant.

“I tell my clients that since the Ithmar Group (the parent company of FPB) was established in 1982, we have only done Shariah services. To their (the investors’) eyes, I am fully Islamic, fully ethical. But we are pure. That is the big interest among Muslims… that they are deal-ing with people who have an unchanging policy on Islamic and ethical banking.”

Rochat said the bank’s activities are also closely monitored by a Sha-riah advisory team provided by their parent company.

“Our Shariah advisers have a credible reputation and they check all our products. We work together a lot. However, one of my goals for 2008 is for Faisal Private Bank to have its own Shariah advisory board as I believe that would lend us more credibility. We are also working on having the advisers issue a fatwa (religious edict) for each product.”

He said although 90% of clients are from the Middle East, he is con-fi dent that the numbers from non-Muslim countries and Europe will increase.

“I would like the bank to be globally known. Here, Shariah banking is also called ethical banking, which has attracted northern Europe investors. Their views on ethical investments are very developed. We found that investors with a strong asset base tend to be more ideal (in carrying out social responsibility). Yes, they would have profi t but not at all cost.”

Safe in SwitzerlandRochat admits that being in Switzerland gives FPB an advantage over other private banks elsewhere.

“When we started this venture fi ve years ago, we wanted to make Fais-al ‘the safe in Switzerland’ for the Middle Easterners. Switzerland’s banking is designed such that investors are protected by the control-ling authority.”

The CEO also expressed his intention to put FPB at the forefront in the investment and fi nancing of pro-environment and alternative energy projects that are based on the Kyoto protocol, which is an agreement made under the UN Framework Convention on Climate Change and aimed at reducing emission of greenhouse gasses in developed coun-tries.

“With another partner, we work on pro-environment projects including wind farms and solar energy. And these projects have provided good returns to our clients,” said Rochat, who added that the investments

Faisal Thrives in SwitzerlandBy Arfa’eza A Aziz

continued...

“We found that investors with a strong asset base tend to be more ideal (in carrying out social responsibility). Yes, they would have profi t but not at all cost.”



on carbon certifi cates (introduced through the Kyoto agreement and also known as carbon credits) are gaining popularity.

Since the number of transactions involving environment-related proj-ects is increasing, Rochat said FPB aims to set up a fund for those interested in investing in such projects.

“We are thinking of creating a fund that would have two sources of incomes: one from the selling of (alternative) energy and another, the income generated from s very powerful stream of income. But more importantly, the Kyoto treaty will survive.”

When asked the expected date of the launch, Rochat said he planned to have it up on the market by early 2008.

He also spoke passionately on FPB’s art fund, which is fast gaining attention among elite investors. “Our art fund invests in contemporary artists. We just started in May this year and it is moving along nicely. We are very careful about the products and artists we invest in — most of them already have an excellent reputation.”

The Italian-born Swiss national also revealed plans to initiate web-based investment banking that would allow small-time investors to participate in private banking.

“Faisal will not be running it but we will work with a partner. But I need at least another year to come up with something cogent on this.”

Rochat also harbored hopes of seeing FPB’s success emulated in oth-er parts of the world, stating that it is now eyeing the Southeast Asian market. He revealed that it is set to establish an offi ce in the Malaysian capital of Kuala Lumpur early next year.

“The plan is in progress with SFBC, to whom we have submitted our report. We decided on Malaysia because we believe its Islamic fi nance market is well ahead of others in the region. They are doing a lot of in-novative products and our experience with Amanah Raya showed that Malaysians are committed and proactive in their work,” he said.

When asked his opinion on the development of Islamic fi nance in Eu-rope, Rochat’s reply was a lot remains to be done before the industry can thrive there.

“In retail, for example, there’s almost nothing here yet. Islamic retail banks will be very successful. I remembered when we spoke about our activities on the radio a month ago. We received hundreds of calls from people interested in our banking services. They asked about loans — unfortunately, we don’t do loans as we’re not a retail bank — and investments. The problem is implementation. We need to fi nd a group of people capable of setting this up. In the long term, Islamic fi nance is feasible but we are not quite there yet.”

Faisal Thrives in Switzerland (continued...)

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In this issue

News Briefs

Capital Markets .......................................... 1Control infl ation, please

more inside...

Ratings ......................................................... 8TAQA outperforms more inside...

Malaysia: Turning the Vision into Reality................................................... 9

Interview ....................................................12John Doyle, UOB Asset Management

Ijarah Financing in Malaysia ...................14

Case Study – Dar Al-ArkanSukuk Ijarah ..............................................15

Mudarabah as a Fuel to Growth ............ 17

Key Trends in Islamic Funds, Part 2 .......18

Meet the Head ..........................................20Michael J. Zamorski, DFSA

Termsheet ..................................................21Alam Maritim Resources Sukuk Ijarah and Murabahah

Takaful News .............................................22AXA for Qatar Petroleum

more inside...Takaful Interview ......................................23Haji Syed Moheeb Syed Kamarulzaman, Takaful Ikhlas

Takaful Report ..........................................26Takaful Rating Methodology and Review Summary, Part 2

Moves ........................................................ 29

Deal Tracker NEW ........................................30

Eurekahedge .............................................31

Dowjones Islamic Indexes .......................32

Bondweb ....................................................33

Dealogic – League Tables .......................34

Events Diary...............................................37


Country Index ............................................38

Company Index .........................................38

Vol. 4, Issue 32 10th August 2007


MALAYSIACagamas hits big timeAll-round success for Cagamas MBS (CMBS) yesterday as its residential mortgage-backed securities of RM2.41 billion (US$694.72 million) nominal value attracted a book size of RM9.10 billion (US$2.6 billion) from a diverse group of domestic and offshore investors, giving an over-subscription rate of close to four times.

Approximately 51.9% of the bids came from institutional investors, with the remaining

coming from government agencies (22.6%), asset management companies (13.9%), insurance companies (11%) and corporates (0.6%) (see Islamic Finance news, Vol. 4, issue 31, page 1 for more details).

Despite market jitters in the US sub-prime debt market, investor confi dence in the domestic asset-backed securities market was seen from both local and foreign fi xed income investors.

SINGAPORETrust withdrawnArcapita Bank has withdrawn the proposed S$300 million (US$198.29 million) IPO of Ar-capita Unit Trust in Singapore. The strength-ening of private markets for wind and water assets has caused a widening of the valua-tion gap between private and public markets, thus disrupting public market expectations.

Arcapita thus believe that divesting assets via a listing would be sub-optimal at present.

The IPO had already been registered with the Monetary Authority of Singapore, and was slated to be the fi rst Shariah compliant busi-ness to list in the country.

MAURITIUSGetting down to businessThe Mauritian ministry of fi nance has passed the 2007/2008 bill on tax measures, which encompasses Islamic banking services.

Rama Sithanen, the country’s minister of fi nance, elucidated: “Mauritius has a great opportunity to diversify its fi nancial sectors and provide foreigners with new services

in the fi elds of wealth management and investment. Existing and new banks will be able to provide such services.”

Rama added that Shariah compliant institutions are now able to carry out activities under the existing regulations and legal framework for conventional banks.

GLOBALAll-time Sukuk highAccording to latest reports, the global Sukuk market is valued at US$24.5 billion as at the end of June 2007. This marks a 75% growth over last year.

The Malaysian Sukuk market experienced a

growth rate of 71.4%, while the international markets have expanded by 83.3% over the last year. Sovereign Sukuk issues also grew by 521% to US$4.4 billion, with Malaysian ringgit-denominated Sukuk accounting for 70% of the market.

Islamic Finance news is a weekly online newsletter focusing on the global

Islamic capital markets. All content is exclusive which you will not fi nd

anywhere else. “We decided on Malaysia because we believe its Islamic fi nance market is well ahead of others in the region”

www.islamicfi nancenews.comMEET THE HEAD


Islamic Finance news talks to leading players in the industry

Could you provide a brief journey of how you arrived where you are today?

I started my career in conventional banking. Unfortunately, I was not one of the early birds that seized the opportunity to dive into this new area when Islamic fi nance was introduced in Malaysia in 1983. However, this may have been a blessing in disguise as coming in a little later allows one to have a good view of how the game is being played.

The biggest attraction for me is the fact that in Islamic fi nance, the world is your oyster and you have the entire Shariah corpus of law at your disposal to craft the product that you want.

What does your role involve?I head the Islamic fi nance practice in the fi rm. I am also a sub-head of the conventional banking department. My primary role is to develop the Islamic fi nance practice in a holistic manner with emphasis on organic growth. As the fi rm was a little late in entering this area, my other primary role is to jump-start the department. Alhamdulillah, we have been successful in our quest and the challenge now is to sustain our present position and to fuel exponential growth.

What is your greatest achievement to date?

To instill the passion in Islamic fi nance in my conventionally trained lawyers. Like most conventional fi nance players, “conventionally” trained lawyers do have certain prejudices and pessimism against Islamic fi nance. Having changed the mindset, the legal vocation and training in Islamic fi nance comes quite naturally to these new “converts”. In fact, I’m happy to observe that this newfound passion in my “converted” lawyers has been a catalyst in leveraging their experience and know how in conventional fi nance and importing these into the area of Islamic fi nance.

Which of your products/services deliver the best results?

I fi nd our best results in our advisory capabilities for new product development and our documentation and drafting skills in churning out the agreements for the transactions.

What are the strengths of your business?The fi rm has a very strong grounding in all levels of conventional fi nance. We have leveraged on this to grow the Islamic fi nance practice. We have found cross disciplines to be useful and productive. The fi rm has also been traditionally strong for its research capabilities and this strength has successfully exported into the R&D for Islamic fi nance.

What are the factors contributing to the success of your company?

We do not have a dedicated set of lawyers for Islamic fi nance. Our experience has shown that fi rm discipline in conventional fi nance and corporate law is certainly an advantage in the practice of Islamic fi nance. The lawyers are more able to assume a holistic approach to seeking solutions and are more balanced.

What are the obstacles faced in running your business today?

As with the industry as a whole, we suffer from scarcity of human capital. It is some challenge for a young lawyer to learn on the job while at the same time balancing the very high demand on timelines and deliverables to clients. The scarcity of resource materials locally also hinders the delivery.

Where do you see the Islamic fi nance industry, maybe in the next fi ve years?

Greater depth of instruments, greater pool of players and the merging of the primary markets. I see the gulf between the GCC and the rest of the world narrowing. Once this happens, there will be more room for innovation. This surge of innovation will, I hope, put to rest the nagging habit of replication and duplication of conventional products. I also hope to see Islamic fi nance reaching its pinnacle whereby Islamic fi nance is known more for its fi nancing than its “Islamicness”.

Name one thing you would like to see change in the world of Islamic fi nance?

I would like to see a fresh re-branding taking place in the Islamic fi nance industry with an emphasis on the ethical and equitable side of the fi nancing rather than an overplay of the Islamic play.

Name:

Position:

Company:

Based:

Age:

Nationality:

Jal Othman

Senior partner

Shook Lin & Bok, Kuala Lumpur Kuala Lumpur

40

Malaysian

In 1965, Shook Lin & Bok set up a branch offi ce in the Republic of Singapore. However, due to legislative changes in Malaysia in 1971, the Singapore branch became autonomous and continued as an independent law fi rm. From its humble origins as a sole practitioner established in 1918, Shook Lin & Bok has grown into one of the top three largest and oldest law fi rms in Malaysia today. From a litigation-oriented practice, the fi rm has evolved into a leading full service fi rm offering a comprehensive range of legal services to clients spanning the globe.

www.islamicfi nancenews.comTERMSHEET


FACILITY TYPE Syndicated Musharakah and forward lease

ARRANGER(S) Emirates Islamic Bank (EIB)

PARTICIPANTS/LESSOR

Emirates Islamic Bank, Emirates Bank International, Khaleeji Commercial Bank, National Bank of Umm Al Qaiwain, Bank Muscat International, Sharjah Islamic Bank

LESSEE/OBLIGOR/AGENT

Emirates Healthcare Development Company, Dubai (EHDC) incorporated in Dubai Healthcare City as a free zone company, a subsidiary of Saudi German Group Hospitals

PURPOSE To fi nance phase I of the building, operating and managing tertiary care hospital in Dubai

FACILITY AMOUNTUS$40 million being the fi nanciers’ 40% share in the Musharakah for construction of the proposed hospital in Dubai

MUSHARAKAH STRUCTURE

US$100 million 100% (equity + fi nance) • Equity: US$60 million (60%: 51% by SGH Group [Bait Al Batterjee Medical Co Ltd, or BAB] and 49% by

Islamic Finance Company PJSC [IFC], a subsidiary of Al Gaith Holdings, UAE)• Finance: US$40 million (40% by Islamic fi nance)

LEASE PERIODThe fi rst lease period will commence upon the handover of the hospitals and will last within seven days from the delivery date. The second lease period will be for six months from the date of handover, followed by another 11 consecutive lease periods of six months each.

PROJECT DELIVERY/ CONSTRUCTION PERIOD

The project is expected to be delivered by the 1st July 2008

PAYMENT OF LEASE RENTAL

The rent for each lease period is to be fi xed at the beginning of the period and paid at the end of that period. The fi rst lease rental is due six months after the project delivery date.

SECURITY

During the construction period: A- Purchase undertaking from Bait Al Batterjee Medical Co Ltd, KSA to buy the share of the participants in

the Musharakah, the sale price of which is the sum of the original purchase price of the fi nancier’s shares in the Musharakah and an agreed compensation until the completion of the project on the planned date. (Escrow account no longer valid.)

Continuous security:B- Pledge of all shares of EHDC held by Bait Al Batterjee Medical Co Ltd in favor of EIBC- Mortgage of project landD- Assignment of insurance policy covering all risk in favor of EIB

SHARIAH ADVISER EIB Shariah board

FINAL MATURITY Eight years from the date of signing the documents

EIB Syndicated Musharakah

For more term sheets visit www.islamicfinancenews.com

www.islamicfi nancenews.com


ISM Insurance Services Malaysia, a shared services company set up by the Malaysian insurance and Takaful industry in 2005, has launched the country’s fi rst database system that provides market valuation for more vehicles.

ISM chairman Cliff Lee Koon Yew said: “The system will fi ll the void for a credible source of information on vehicle specifi cations and used prices in Malaysia.”

The new system, known as the ISM Automotive Business Intelligence System (ISM-ABI), will provide the fi nancial services industry and automotive community in Malaysia with a credible source of market valuation data.

Bank Negara assistant governor Muhammad bin Ibrahim commented: “The implementation of this system is appropriate as fi nancial institutions prepare to adopt the Basel II and Risk Based Capital requirements in view that the system will serve as an important tool in the assessment of automotive related risks for banks, insurers and Takaful operators.”

MALAYSIAMarket valuation for vehicles

Bumiputra-Commerce Holdings (BCHB) has charted a post-tax profi t of RM1.03 billion (US$308.08 million), 56% higher than that of the previous quarter, including a RM628 million (US$186.83 million) gain from the sale of 100% of its general insurance and 49% of its life and Takaful businesses.

The core business net profi t in the third quarter of 2007 of RM404 million (US$102.19 million) was 39% lower than the previous quarter, refl ecting the sharply contrasting capital market environment between the two periods.

MALAYSIAHigher Takaful for BCHB

Saudi Re has been given the green light to set up with a capital of a SAR1 billion (US$267 million). The Saudi Hollandi Bank has been appointed the fi rm’s fi nancial adviser.

According to Saudi Arabian Monetary Authority’s decision, it will offer 40% of its shares to the public after getting the regulatory approval from the Capital Market Authority.

The formation of Saudi Re comes timely as it serves the newly-formed insurers and provides them with the necessary reinsurance protection. The reinsurer will be headquartered in Riyadh and will initially operate in the kingdom, the GCC and other neighboring countries.

SAUDI ARABIA Saudi Re set-up approved

AIG Qatar and AIG Oman, both branches of AIG MEMSA, have been granted licenses to operate from the Qatar Financial Center in Doha and Oman, respectively.

AIG Qatar will focus the insurance needs of small and medium-sized enterprises with individual or package products, while AIG’s offi ce in Oman will tap into the company’s global network and expertise and provide insurance solutions for direct as well as reinsurance clients. It will offer home, travel and motor insurance solutions to individuals and small business owners.

MIDDLE EASTAIG MEMSA’s new offi ces

Pak-Qatar Family Takaful’s CEO Pervaiz Ahmad has emphasized the need for synergy in Islamic banks and Takaful companies. He pointed out low insurance penetration in Pakistan compared to India.

Pervaiz said that the Takaful products must be competitively priced and available with the best services, adding that Takaful operators were needed to bring innovation in business process and product distribution.

PAKISTANCompanies urged to synergize

Every insurer, no matter how small, must be willing to embrace corporate governance readily for its own merits without regulatory pressures, said Percy Sequeira, MD of Gulf Union Insurance Group, which hosted a two-day conference on “Corporate Governance through Risk Profi ling” in Bahrain.

As smaller companies cannot be expected to have complex corporate governance (CG) models in place as those required by larger companies, he called on insurance associations to consider setting up and outsourcing common CG models, frameworks and facilities where relevant. Several speakers who stressed the importance of CG as fundamental to the business and strategic success of the company called for a CG model that could be adapted for the Middle-East region.

BAHRAIN ‘Embrace corporate governance’

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www.islamicfi nancenews.comTAKAFUL NEWS


Public Bank Bhd (PBB) and ING Group have struck a 10-year strategic regional alliance to jointly develop bancassurance, Takaful and various services such as wealth management, joint promotional activities and co-branded credit card services.

The two groups hope the alliance will enable them to be among the top three players in the country’s bancassurance sector in the next three years.

The alliance is set to commence on the 1st January 2008, starting with the distribution of ING’s insurance products at PBB’s 240 branches nationwide and in Hong Kong.

PBB’s insurance arm currently contributes 0.3% at RM15 million (US$4.47 million) to the bank’s annual revenue of RM5 billion (US$1.49 billion).

On the development of Takaful products, ING Insurance CEO Dr Nirmala Menon said the company was exploring various opportunities to produce these products. “We are talking to Bank Negara as well as looking at various other avenues. It is something that we are very interested in and will be exploring,” she said.

MALAYSIA PBB-ING form strategic alliance

According to RHB Equity Research, MNRB Holdings remains an attractive dividend yield stock, trading at a price-to-earnings ratio (PER) of 10.4 times based on FY2003/08’s core earnings per share (EPS).

MNRB’s proposed issuance of RM200 million (US$59.47 million) Islamic medium term notes (IMTN) had, however, raised concerns among investors, given this was the fi rst debt issue in its 30-year history, due to its absence of debt, and deposits of RM519 million (US$154.34 million).

MNRB’s proposed IMTN issuance was a three-pronged strategy to boost its reTakaful business and expand its Dubai business. MNRB has also confi rmed that funds would be used to expand its Dubai presence to become a full-fl edged offi ce to undertake underwriting business directly. Its Takaful Ikhlas business also required more capital as its current paid-up capital is insuffi cient to grow its business.

RHB Research, however, confi rmed that after its meeting with MNRB, it is confi dent that the reinsurer is on track to achieve its growth targets for the 31st March 2008.

MALAYSIAMNRB on track

Train the Trainer Program: Takaful and re Takaful Products© Islamic Finance Training

We are pleased to announce the introduction of a specialized education program to promote the understanding of global Takaful and re Takaful products and markets.

The program consists of two parts: Part one is a comprehensive training manual detailing Takaful products and markets. This will be a unique reference and teaching resource for all those involved in this growing market.

Part two is a Train the Trainer course, to be conducted in Kuala Lumpur in November (and in GCC in 2008) over 3 days. This course will teach participants about key aspects of the Takaful market, but more importantly how to train their own staff using the manual.

Please contact [email protected] for more detailsor call +603 2141 6022.

www.islamicfi nancenews.comTAKAFUL REPORT


How can I retain my best people? What can I do to motivate them? How can I tap their hidden potential? What can I do to build a better team? How can I provide a pleasant working environment?

These are the frequently asked questions, or FAQs, that managers have to grapple with as they try to inspire and manage people, but unfortunately, there are no off-the-shelf answers.

Given the emerging challenges, the rate of change is accelerating where goals are becoming moving targets and there is a growing awareness that the success of an organization depends directly on the effective management and proper utilization of its human resources (HR) — the “people component”.

Challenge for employersOrganizations that are surviving are those that have been obsessed with building a great customer experience, those who recognized the importance of providing an emotionally engaging, captivating customer experience that creates genuine customer loyalty.

The competitive edge in any organization is the “service edge” in relation to serving its customers. The “service edge” is directly related to the quality of its staff and their ability to create that “distinct edge” in customer service.

Basically, the way we lead and manage the staff will determine as to how they will treat the customers. The way customers are treated will determine the level of customer satisfaction, leading to customer loyalty resulting in repeat business and profi tability.

The golden rule in HR is: Treat staff well and with respect, and they will treat customers the same way. In other words, the external customer satisfaction is directly linked to the level of internal customer satisfaction (among the staff) in the organization.

If it treats staff as “unimportant” where the managers don’t have time for HR, because their diary is fi lled with much more important matters (based on the manager’s assumption), the bottom line will be that the staff too will be busy doing something and won’t have the time to serve customers since it will be a secondary function for them.

In their book, The Leadership Challenge, James M Kouzes and Barry Z Posner state: “The challenge for the leaders is how to mobilize others to want to get extraordinary things done in organizations. It’s about the practices leaders use to transform values into action, visions into realities, obstacles into innovations, separateness into solidarity and risks into rewards. It’s about leadership that creates the climate in which people turn challenging opportunities into remarkable success.”

Enabling transformationHow do we achieve the above transformation? Quite interestingly, many organizations have entrusted the task of managing HR to a designated manager or a team called the HR department. Each issue that concerns a staff member is passed on to the HR department with a commonly seen notation, “For necessary action, please”.

HR issues are generally “heart related” and quite sensitive in nature, hence the right approach and methodology will be vital to seek the correct remedial action.

In this regard, every line manager/department head should perform a mini-HR function in their day-to-day operations. The respective reporting manager will be the ideal person to address and solve his own staff issues rather than an outsider.

Since some line managers/department heads have not scaled up on their knowledge and competencies with modern managerial tools, we do also observe an emerging trend, where “managing people” has been replaced with “manipulating people” for convenience purposes.

Although, in the short term, this approach might seem attractive, the long-term implications and the damage to overall corporate brand image will be great and sometimes irreparable.

Managing people relates to effective internal networking coupled with a sense of partnership with a right blend of motivation in achieving corporate goals.

In the current context, the HR challenges go beyond the element of simply managing people — now, the challenge is not to manage people but how to “manage their talent”.

The much talked-about subject of “performance-based pay” (PBP) bears testimony to the importance and relevance of managing talent and remunerating performance based on talent rather than the old school criteria of seniority, long service, no leave taken and so on.

Managing talent is tough. It deals with the aspects of getting into the inner dimensions of the person, so that people are able to work with passion and moreover, deliver their full potential with a sense of ownership and accountability.

In his book The Principles of Scientifi c Management (1911), Frederick Taylor stated: “The search for better, for more competent men from the presidents of our great companies down to our household servants, was never more vigorous than it is now.”

Given the new trend, we need to view the traditional HR challenges with a fresh outlook and push the boundaries towards seeking solutions to take the organization to greater heights. The table at the end of this article will clearly show the traditional roles of HR and the new challenges it now face.

How do we meet the new HR challenges in a Takaful operation?Managing HR in a Takaful operation requires a clear, unbiased understanding of the ground situation at hand, e.g. deep insight into the HR profi le in the organization at both the individual and the team levels. Establishment of well-defi ned and communicated goals and objectives and the construction of a balanced set of tangible and intangible incentives.

Amana Takaful’s Approach to Human Resource IssuesBy Munshif Hussain

continued...

www.islamicfi nancenews.comTAKAFUL REPORT


Towards achieving the HR objectives, Amana Takaful Insurance plc, Sri Lanka embarked on a structured approach in managing the HR component of the business which has culminated in a strategic HR management plan covering the next fi ve years encompassing some unique HR practices that have been admired by the insurance fraternity and corporates in general.

Pioneering the concept of Takaful in Sri Lanka (since 1999), ATL believed that to succeed in the Sri Lankan market which had a high bias towards the conventional mode of operation (due to various factors), the theme should be “Either distinct or distinct”.

This school of thought emerged at the initial strategic planning sessions. Every single aspect of the ATL operation should “stand out” and be distinctly different from the “traditional league” (in particular, the HR component) if ATL is going to survive and succeed in this market.

The model utilized by ATL can be summed up under 4 Ps:1. Purpose2. People3. Process4. Place.

PurposeTo commence the HR process, ATL defi ned its corporate mission using the Adult Learning Experience, ALE) model and TBA (Team-Based Approach) via well structured strategic planning workshops.

The key component of the mission statement was selected having taken into consideration the aspirations of the various stakeholders — staff, customers, investors, service providers and the public at large.

Our mission statement:“Providing total Takaful solutionsWithin the guidelines of ShariahServing all in an admirable manner”

The key focus on the mission relates to “total solutions”. This is not simply matching the perils to the risks involved and providing the required cover. The mindset created in the staff in relation to total solutions refers to taking into consideration the well-being of the customer’s overall business in general and providing necessary advice and guidance towards risk management on the entire insurance portfolio. A weekly meeting called the “Corporate Mission Meeting” or CMM is held to reinforce the message on a regular basis.

Shariah guidelines: Every staff member is given training on the Shariah compliance procedure and the guidelines are provided in a user-friendly format. Staff training opportunity emphasizes the need to strive hard to achieve Shariah adherence. Admirable manner — the customer service delivery chain is captured and the areas for improvement are regularly visited with coaching and guidance.

PeopleIn developing the people component, ATL strives to develop the “total personality” and create a “learning culture”. Key focus is on the 3Is

— integrity, initiative and innovation. The staff needs to be of the highest integrity, taking the initiative (in every aspect) and continuously improving (innovation) all aspects of the business operation. Working at ATL will be an extension to the academic pursuits while being paid for doing a job you enjoy. The monthly PDF, Professional Development Forum, fulfi ls this task.

ProcessThe style of operation and the way to carry out the tasks are well defi ned via standard operating procedures (SOPs). Special training sessions are conducted to explain the SOPs on a regular basis. Modifi cations are issued based on customer feedback and suggestions from the staff.

PlaceATL strives to create a “pleasant working atmosphere” by inculcating in the staff fi ve key GCs (generic competencies): Open Communication, Value Creation, Visionary Approach, Sense of Ownership and Synergetic Relationship. ATL wants to add value to life in every staff member who passes through this institution.

ATL HR is working on a concept called “No Resignation — Only Graduation”. We believe that a staff member leaving the organization is not resigning but graduating in his job and hence, scaling greater heights in his career.

Amana Takaful’s Approach to Human Resource Issues (continued...)

Traditional HR role New challenge

1. Recruitment plan Finding and attracting right talent

2. Conduct orientation Quick integration of P to P (person to the place)

3.Job description Job profi le meeting the inner passion

4. Training and development Changing the mindset to break the self-imposed boundaries

5.How to motivate Creating a sense of ownership and the feeling, “It’s my work”

6.Remuneration Matching R to R (reward with results) — very specifi c

7.Offi ce environment Learning culture and offi ce as “University of Life”

8.Promotions Succession planning — Developing next generation’s leaders

9.Business plans Opportunity for the voice to be heard — to say, “We did it”

10.Meet competition Replace “competition” with “compliment” — Share know-how and improve the market conditions to provide better customer service

Munshif Hussain is a human resource consultant at Amana Takaful plc, Sri Lanka. He can be contacted at +94 112 597430 or via email at [email protected]

www.islamicfi nancenews.comMOVES


CITIGROUP — India

Pramit Jhaveri has been appointed head of global banking and vice-chairman of Asia investment banking for Citigroup India. In this newly created role, he will lead the unifi ed corporate banking and investment banking client coverage in India and oversee the coordination and delivery of Citi’s capital markets platform.

Jhaveri will work closely with Citi’s regional coverage teams to source for international expansion opportunities for local clients.

DIFX — UAE

The Dubai International Financial Exchange (DIFX) has elected four new directors in a bid to expand its listing and regional consolidation activities.

The new directors are Maha Al-Ghunaim, chairman and managing director of Global Investment House; Mohamed Binbrek, CEO of Dubai Properties; Per E Larsson, CEO of Borse Dubai/DIFX; and Gerald Lawless, executive chairman of Jumeirah Group.

ITHMAAR BANK — Bahrain

Carolyn Prowse is now Ithmaar Bank’s managing director for mergers and acquisitions and Masood Tyabji the bank’s managing director for Islamic fi nance.

Masood has a wealth of experience in Islamic corporate and investment banking, having held senior positions at several blue-chip international banks, while Prowse is a corporate fi nance specialist with a strong track record in structuring and negotiating acquisitions, disposals, strategic alliances and joint ventures.

She has also done management consulting for the transportation sector.

DWS — UK

Howard Morris has been re-elected as CEO of Denton Wilde Sapte following a partnership vote. Morris’ new three-year term will commence from February 2008.

CITIGROUP — US

Citigroup has lost two senior traders amid the fallout from its poor third-quarter performance. Michael Raynes, head of structured credit, and Nestor Dominguez, co-head of collateralized debt obligations have been entwined in the results from the credit crunch.

MERRILL LYNCH — Asia

Brad Schwartz has been appointed head of Merrill Lynch’s alternative investments origination and sales for the Pacifi c Rim, based in Hong Kong. His new role entails originating alternative investment opportunities, specifi cally focused on Pacifi c Rim institutional and high net worth clients. He will concentrate on hedge funds, fund of funds and private equity funds that can be incorporated into Merrill Lynch’s platform.

Schwartz will work closely with the fi rm’s global origination team led by David Barrett, and report to Abhinav Gorawara, head of equity structured solutions and fi nancial products group at Merrill Lynch Pacifi c Rim.

SABB — Saudi Arabia

Abdulaziz bin Abdulrahman Al-Helaissi has been appointed area general manager of SABB’s Central Province management, encompassing the bank’s overall activities in the Central Province.

Abdulaziz has 18 years of banking experience, including eight years in senior managerial positions. He most recently spent 11 successful years with a local Saudi bank, where he held various managerial positions; the most recent being head of its merchant banking group and deputy general manager of corporate banking.

NORTON ROSE — UK

Norton Rose has hired Denton Wilde Sapte (DWS)’s Islamic fi nance superstar Farmida Bi. Bi, who spent fi ve years at DWS, will join as a partner to help rebuild the fi rm’s securitization and debt capital markets practice in the Middle East.

Norton had lost a slew of Middle East experts to Ashurst and Herbert Smith earlier this year.

CREDIT SUISSE — UAE

Credit Suisse has hired Duncan Macaulay, CEO at the Dubai Investment Group, in a bid to further expand its presence in the region. Macaulay will join the Dubai offi ce at Credit Suisse as the managing director and head of real estate business in the Middle East.

Macaulay will report to Rob Brennan, head of global real estate fi nance and securitization, and Bassam Yammine, head of investment banking and co-chief executive in the Middle East. Macaulay will be responsible for originating and executing real estate related deals for the Middle East.

NBAD — UAE

John Malouf is now head of the National Bank of Abu Dhabi’s Retail Banking Group. Malouf, an Australian national, has years of experience in banking and fi nance gained from high-level positions held over 30 years in top international banks and companies, with a track record of leadership in growing companies to achieve sustainable profi tability.

CITIGROUP — US

Richard Stuckey will lead Citigroup’s newly formed subprime portfolio group. He is currently head of fi nance, G10 risk treasury and relative value in Citi’s FICC division. Prior to this, Stuckey was head of the risk management and risk treasury groups in FICC and was head of the global fi xed income derivatives group.

Citi also tapped Mark Tsesarsky to head the subprime portfolio group’s risk management strategy. Tsesarsky works with Stuckey in FICC as head of special situations securitization. Tsesarsky was co-head of global securitized markets at Citi prior to his appointment.

SOLIDARITY — Bahrain

Solidarity has appointed Mohamed Khalaf Hassan as internal audit manager, to be based at its Bahrain headquarters. Before this, Mohamed Khalaf had worked as senior auditor at the National Audit Court, auditor at PricewaterhouseCoopers and auditor trainee at Ernst & Young, among others.

www.islamicfi nancenews.comDEAL TRACKER


Islamic Finance newsAdvisory Board:

Mr Daud Abdullah (David Vicary)Chief Operating Offi cer

Asian Finance Bank

Dr Mohd Daud BakarChief Executive Offi cer

International Institute of Islamic Finance

Prof Dr Mohd Masum BillahAssociate Professor

International Islamic University of Malaysia

Dr Humayon DarChief Executive Offi cer

BMB Islamic

Mr Badlisyah Abdul GhaniChief Executive Offi cer

CIMB Islamic

Ms Baljeet Kaur GrewalChief Economist

Kuwait Finance House

Mr Sohail JafferPartner & Chief Executive Offi cer

FWU Group

Dr Monzer Kahf Consultant/Trainer/Lecturer

Private Practice

Mr Mohd Ridza bin Mohammed Abdullah

Managing PartnerMohamed Ridza & Co

Prof Bala ShanmugamDirector of Banking & Finance Monash University Malaysia

Mr Muhammad Nejatullah SiddiqiAuthor, Scholar, Speaker, Trainer

Mr Rushdi SiddiquiGlobal Director

Dow Jones Islamic Indexes

Mr Dawood TaylorHead of Takaful Taawuni Division

Bank Aljazira

Mr Abdulkader ThomasPresident & CEO

SHAPE – Financial Corp.

Mr Paul WoutersOf Counsel

Bener Law Offi ce

Prof Rodney WilsonDirector

Durham University

Mr Sohail ZubairiVice President & Head Shariah

Coordination Dubai Islamic Bank

Another Islamic Finance news exclusive

ISSUER SIZE (million) INSTRUMENT

Al Rajhi Cement US$595 Straight Sukuk

Century Paper & Board Mills

US$49.38 Private placement

Engro Chemical Pakistan US$49.38 Private placement

BCHB US$1.71 ICP/MTN

UEM Group US$230.66 Musharakah MTN

Sunway Infrastructure US$579.56 BBA restructuring

Perusahaan Listrik Negara

US$33.97 Ijarah

Dubai Financial TBA Sukuk

Thani Investments US$100 Sukuk

Al Imtiaz Investment US$75–150 Sukuk

Haisan Resources US$58.79 Sukuk Ijarah

IJM Corporation US$511.60 Sukuk Istisnah

Ras Al Khaimah Investment Authority

US$400 TBA (Sukuk)

ARAPESONA US$56.9/US$19.9 ICP/MTN

Bank Syariah Mandiri US$3.25 Subdebt

Cagamas US$584.60 TBA

Gamuda TBA Murabahah or Musharakah

Saudi Electric Company US$4,000 Sukuk

MTC US$1,200 Sukuk

Prolintas US$240.70 Senior Ijarah/Junior Musharakah

Tomei Consolidated US$28.50 Islamic Commercial Papers

Sui Southern Gas Co. US$49 Islamic Commercial Papers

JBIC US$250–US$350 Sukuk

Dynamic Communication US$143.40 Istisnah/MTN program

GLOMAC US$50.18 Murabahah MTN program

Indonesia Comnets Plus US$11.02 Sukuk Murabahah

Karachi Shipyard US$69.19 TBA

Kwantas US$69.19 Murabahah/Off CP/MTN program

Malaysia International Shipping

US$286.30 Sukuk Murabahah

Gamuda US$256 ICPs/IMTNs

Islamic Development Bank

US$142.40 Ringgit denominated Sukuk

For more details and the full list of deals visit

www.islamicfi nancenews.com

Deal trackerKeeping you abreast of the world’s upcoming Shariah compliant deals

www.islamicfi nancenews.comFUNDS PAGE


Sharpe ratio for ALL funds (as of 14th November 2007)

FUND MANAGEMENT COMPANY Performance Measure FUND DOMICILE

1 Amwal Islamic Money Market FundKuwait & Middle East Financial Investment Company

23.00 Kuwait

2 Boubyan Financial Fund US$ Boubyan Bank 14.80 Kuwait

3 Boubyan Financial Fund KWD Boubyan Bank 10.41 Kuwait

4 Mega Dana Obligasi Syariah Mega Capital Indonesia 7.97 Indonesia

5 BIG Dana Muamalah Bhakti Asset Management 7.52 Indonesia

6 Emirates Real Estate Fund (Accumulation Shares) Emirates Bank International 6.89 Channel Islands

7 Insight I-Hajj Syariah Fund Insight Investments Management 5.65 Indonesia

8 Al-Hilal Islamic Fund Kuwait Investment Company 5.22 Kuwait

9 Al Dar Money Market Fund ADAM 4.91 Kuwait

10 Al-Aman Islamic Fund Al-Aman Investment Company 4.12 Kuwait

Eurekahedge Middle East/Africa Islamic Fund Index* 0.08

DisclaimerCopyright Eurekahedge 2007, All Rights Reserved. You, the user, may freely use the data for internal purposes and may reproduce the index data provided that reference to Eurekahedge is provided in your dissemination and/or reproduction. The information is provided on an “as is” basis and you assume and will bear all risk or associated costs in its use, and neither Islamic Finance news, Eurekahedge nor its affi liates provide any express or implied warranty or representations as to originality, accuracy, completeness, timeliness, non-infringement, merchantability and fi tness for any purpose.

Contact EurekahedgeTo list your fund or update your fund information: [email protected]

For further details on Eurekahedge: [email protected] Tel: +65 6212 0900

Eurekahedge Islamic Fund Index

YTD returns for ALL funds (as of 14th November 2007)

FUND MANAGEMENT COMPANY Performance Measure FUND DOMICILE

1 Zajil - Service & Telecommunications Fund National Investments Company 78.74 Kuwait

2 DWS Noor China Equity Fund (Class A) DWS Noor Islamic Funds 55.38 Ireland

3 Al Darij Investment Fund National Investments Company 45.04 Kuwait

4 Al Fursan Fund Banque Saudi Fransi 44.24 Saudi Arabia

5 GCC Al-Raed Fund Samba 44.16 Saudi Arabia

6 Al Rajhi India & China Equity Fund Al Rajhi Banking & Investment Corporation 44.01 Saudi Arabia

7 Markaz Islamic Fund Kuwait Financial Center 42.21 Kuwait

8 CMS Islamic Fund CMS Trust Management 42.12 Malaysia

9 Al Danah GCC Equity Trading Fund Banque Saudi Fransi 41.60 Saudi Arabia

10 Al Safwa Investment Fund National Investments Company 38.73 Kuwait

Eurekahedge Asia Pacifi c Islamic Fund Index* 13.24

Ind

ex

Va

lue

s

80

90

100

110

120

130

140

150

Sep-04

Nov-04

Jan-05

Mar-05

May-05Jul-0

5

Sep-05

Nov-05

Jan-06

Mar-06

May-06Jul-0

6

Sep-06

Nov-06

Jan-07

Mar-07

May-07Jul-0

7

Sep-07

www.islamicfi nancenews.comMARKET INDEXES


DESCRIPTIVE STATISTICS Market Capitalization (US$ billions) Component Weight (%)

IndexComponent

numberFull

Float adjusted

Mean Median Largest Smallest Largest Smallest

DJIM World 2451 20247.53 16722.54 6.82 1.55 478.70 0.02 2.86 0

DJIM Asia/Pacifi c 1014 3946.91 2680.89 2.64 0.63 127.52 0.02 4.76 0

DJIM Europe 367 5371.37 4129.59 11.25 3.09 236.29 0.30 5.72 0.01

DJIM US 710 9184.61 8693.72 12.24 3.19 478.70 0.16 5.51 0

DJIM Titans 100 100 8910.21 8007.41 80.07 52.13 448.05 12.49 5.60 0.16

DJIM Asia/Pacifi c Titans 25 25 1336.12 892.22 35.69 25.91 99.26 12.49 11.12 1.4

Mean, median, largest, smallest and component weights are based on fl oat adjusted market capitalization, not full market capitalization.

Anthony YeungRegional Director

[email protected]: +852 2831 2580

Learn more about the Dow Jones Islamic Market Indexes

Data as of the 14th November 2007

INDEX PRICE RETURN (%)

1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTD

DJIM World -2.11 -4 -1.05 -2.35 7.90 5.27 19.23 16.28

DJIM Asia/Pacifi c -3.28 -4.57 -1.71 -2.41 10.48 9.79 21.98 16.06

DJIM Europe -1.48 -1.39 2.59 0.53 12.79 8.71 25.16 19.93

DJIM US -1.61 -4.89 -2.61 -3.92 3.66 1.20 13.19 12.22

PERFORMANCE OF DJ INDEXES

INDEX PRICE RETURN (%)


DJIM Titans 100 -1.52 -3.28 -0.47 -2.08 7.50 5.72 15.62 13.78

DJIM Asia/Pacifi c Titans 25 -2.94 -3.86 -2.24 -3.04 9.84 11.68 22.07 17.33

PERFORMANCE OF DJ TITANS INDEXES

DJIM Titans 100 DJIM Asia/Pacif ic Titans 25

PRIC

E R

ETU

RN

(%)


DJIM World DJIM Asia/Pacif ic DJIM Europe DJIM US

-10

-5

0

5

10

15

20

25

30


PRIC

E R

ETU

RN

(%)

-10

-5

0

5

10

15

20

25


www.islamicfi nancenews.comMALAYSIAN SUKUK UPDATE


RINGGIT ISLAMIC DEBT MARKET: WEEKLY SNAPSHOT AS AT 14th NOVEMBER 2007MOST ACTIVE BONDS TRADED BETWEEN 9th NOVEMBER and 14th NOVEMBER 2007

Stock Name Last Traded Price Last Traded YieldTotal Volume Traded

Last 7% w-o-w Price

ChangeLast Week Closing

Price

BNMNI B4 (68D - 91D) 3.36 203.70

PROFIT- BASED GII 3/2007 14.09.2012 99.08 3.79 135 -0.53 99.61

ALB 6.250% 08.05.2017 97.22 6.65 100 1 96.26

SILTERRA CAP 3.900% 06.06.2014 99.77 3.94 91.50 -0.17 99.94

RANTAU IMTN 15.03.2011-MTN 1 101.01 4.06 65 -0.04 101.05

PROFIT-BASED GII 3/2006 15.11.2016 100.15 3.80 60 -0.41 100.56

SYABAS PRIMARY IMTN 30.09.2016-TRANCHE 4

102.53 5.24 60 -0.9 103.46

BNMNI B3 (44D - 67D) 3.33 50

MITB B10 (312D-364D) 3.43 40

BNMNI B1 (Up to 21D) 3.50 35

MALAKOFCRP ICP 183D 30.04.2008-CP 002 98.3 3.68 35

KESTURI 0% 18.10.2016 - TRANCHE 7 107.08 7 30 0.13 106.94

PROFIT-BASED GII 1/2007 15.03.2010 99.98 3.58 30 -0.04 100.02

ESSO ICP 30D 12.12.2007 99.74 3.52 25

ALB 5.700% 08.05.2015 96.75 6.25 20 0.91 95.88

Outstanding Bond by Issuer Class as at 14th November 2007 (RM’000) Bond Traded Amount by Issuer Class as at 14th November 2007 (RM’000)

Financial3,870 (2%)

BNM19,500 (11%)

Corporate Guaranteed2,286 (1%)

Corporate95,291 (52%)

ABS5,896 (3%)

Government30,000 (17%)

Quasi-Govt24,925 (14%)

Financial15 (1%)

BNM254 (19%)

Disclaimer: Information on this page is intended solely for the purpose of providing general information on the Ringgit Bond market and is not intended for trading purposes. None of the information constitutes a solicitation, offer, opinion, or recommendation by Bondweb Malaysia Sdn Bhd (“Bondweb”) to buy or sell any security, or to provide legal, tax, accounting, or investment advice or services regarding the profi tability or suitability of any security or investment. Investors are advised to consult their professional investment advisors before making any investment decision. Materials provided on this page are provided on an “as is” basis, and while care has been taken to ensure the accuracy and reliability of the information provided in this page, Bondweb provides no warranties or representations of any kind, either express or implied, including, but not limited to, warranties of title or implied warranties of fi tness for a particular purpose, accuracy, correctness, non-infringement, timeliness, completeness, or that the information is always up-to-date.

Quasi-Govt102 (8%)

5 YR YTM Historical Chart (week closing, last 3 months)YTM Curves as at 14th November 2007

Corporate Guaranteed71 (5%)

Government265 (20%)

ABS115 (9%)

Corporate483 (37%)

www.islamicfi nancenews.comLEAGUE TABLES


For all enquires regarding the above information, please contact: Catherine Chu Email: [email protected] Phone: +852 2804 1223; Fax: +852 2529 4377

TOP ISSUERS OF ISLAMIC BONDS NOVEMBER 2006 – NOVEMBER 2007

Issuer or Group Nationality Instrument Amt US$ m Iss. % Manager

1 Malaysia Malaysia Sukuk 3,687 4 12.7 Malaysian Government bond

2 Aldar Funding MalaysiaExchangeable Sukuk Mudarabah

2,530 1 8.7Barclays Capital, Credit Suisse Securities (Europe), Abu Dhabi International Bank

3 Saudi Basic Industries Saudi Arabia Sukuk Istithmar 2,133 1 7.3 HSBC Saudi Arabia, Riyad Bank

4 Nucleus Avenue (M) Malaysia Sukuk Musharakah MTN 1,994 9 6.9 CIMB

5 DP World Sukuk UAE Sukuk Mudarabah 1,496 1 5.2Barclays Capital, Citigroup Global Markets, Deutsche Bank, Lehman Brothers

6 Saudi Electricity UAE Sukuk 1,333 1 4.6 HSBC Saudi Arabia

7 Dubai Sukuk Center UAE Sukuk Mudarabah 1,248 1 4.3Deutsche Bank (London), Goldman Sachs International

8 Dana Gas Sukuk UAE Susuk Mudarabah 1,000 1 3.4 JP Morgan

9 Dar Al-Arkan International Sukuk Saudi Arabia Sukuk Ijarah 1,000 1 3.4

ABC Islamic Bank, Arab National Bank, Deutsche Bank, Dubai Islamic Bank, Gulf International Bank, Kuwait Finance House, Unicorn Investment Bank

10 Cherating Capital Malaysia Exchangeable Sukuk 850 1 2.9Deutsche Bank (Malaysia), JP Morgan, CIMB

11 Hijrah Pertama Malaysia Sukuk Ijarah 847 2 2.9 Citigroup, CIMB

12 ADIB Sukuk UAE Sukuk Ijarah 800 1 2.8 HSBC

13 DIB Sukuk UAE Sukuk Musharakah 750 1 2.6Barclays Capital, Citigroup Global Markets, Standard Chartered

14 Cagamas MalaysiaBithaman Ajil Islamic Securities/Mudarabah MTN

668 10 2.3 Cagamas, Aseambankers, HSBC, CIMB

15 Golden Belt 1 Sukuk Saudi Arabia Sukuk Manafaa 650 1 2.2 BNP Paribas

16 Cagamas MBS Malaysia

Sukuk Musharakah Islamic Residential Mortgage Backed Securities

620 7 2.1Standard Chartered, National Bank of Pakistan

17 DAAR International Sukuk Saudi Arabia Sukuk Ijarah 600 1 2.1ABC Islamic Bank, Arab National Bank, Standard Bank, Unicorn Investment Bank, WestLB

18 Rantau Abang Capital Malaysia Sukuk Musharakah MTN 570 1 2.0 CIMB

19 Silterra Capital Malaysia Sukuk Ijarah 530 1 1.8 CIMB, HSBC, Citibank

20 Nig Sukuk Kuwait Sukuk Mudarabah 475 1 1.6BNP Paribas, Citigroup Global Markets, National Bank of Kuwait, Standard Chartered, WestLB

Total 29,030 285 100.0



ARE YOUR DEALS LISTED HERE?

Catherine ChuEmail: [email protected]

Telephone: +852 2804 1223

If you feel that the information within these tables is inaccurate, youmay contact the following directly:

TOP ISSUERS OF ISLAMIC BONDS AUGUST 2007 – OCTOBER 2007

Issuer or Group Nationality Instrument Amt US$ m Iss. % Manager

1 Malaysia Malaysia Sukuk 1,001 1 32.0 Malaysian Government bond

2 Dana Gas Sukuk UAE Susuk Mudarabah 1,000 1 32.0 JP Morgan

3 Cagamas MalaysiaBithaman Ajil Islamic Securities/Mudarabah MTN

214 1 6.8Cagamas Aseambankers, HSBC, CIMB

4 Tesco Stores (Malaysia) Malaysia Sukuk Musharakah 210 2 6.7 CIMB, Standard Chartered

5 MISC Malaysia Sukuk Murabahah 201 1 6.4 CIMB, AmInvestment, HSBC

6 Jimah Energy Ventures Malaysia Sukuk Istisnah 187 10 6.0AmMerchant Bank, RHB Investment, MIMB Investment Bank, Bank Muamalat Malaysia

7 Kuala Lumpur Kepong Malaysia Sukuk Ijarah 59 1 1.9 CIMB, Aseambankers

8 Century Paper & Board Mills Pakistan Sukuk 58 1 1.9Standard Chartered, National Bank of Pakistan

9 Engro Chemical Pakistan Pakistan Sukuk 50 1 1.6Standard Chartered, Meezan Bank, Dubai Islamic Bank

10 Sunway City Malaysia Sukuk Murabahah 35 2 1.1 HSBC

11 Total Mobile Malaysia Susuk Ijarah 20 6 0.6 Affi n Investment

12 Pak Elektron Pakistan Musharakah Islamic bond 20 1 0.6 BankIslami Pakistan

13 DESB Marine Services Malaysia Sukuk Murabahah 18 3 0.6 CIMB

14 Aeon Credit Service (M) Malaysia Musharakah MTN 15 1 0.5CIMB, Aseambankers, Bank of Tokyo-Mitsubishi UFJ (Malaysia)

15 Security Leasing Pakistan Sukuk 12 1 0.4 Standard Chartered

16 Amtex Textiles Pakistan Musharakah Islamic bond 11 1 0.3 BankIslami Pakistan

17 Shahmurad Sugar Mills Pakistan Musharakah Islamic bond 8 1 0.3 BankIslami Pakistan

18 Intelbest MalaysiaBai Bithaman Ajil Islamic Sukuk

6 1 0.2 MIDF Amanah Investment

19 Instacom SPV Malaysia Sukuk Murabahah 1 1 0.0 MIDF Amanah Investment

20 EP Manufacturing Malaysia Sukuk Murabahah 1 1 0.0 Amanah Short Deposits

Total 3,127 38 100.0



For all enquires regarding the above information, please contact:

Catherine Chu

Email: [email protected]: +852 2804 1223; Fax: +852 2529 4377

ISLAMIC BONDS BY CURRENCY AUGUST 2007 – NOVEMBER 2007

Amt US$ m Iss. %

Malaysian ringgit 1,969 31 62.9

US dollar 1,000 1 32.0

Pakistan rupee 159 6 5.1

Total 3,127 38 100.0

ISLAMIC BONDS BY CURRENCY NOVEMBER 2006 – NOVEMBER 2007

Amt US$ m Iss. %

US dollar 13,069 21 45.0

Malaysian ringgit 12,011 246 41.4

Saudi Arabian Riyal 3,466 2 11.9

Pakistan rupee 369 12 1.3

Total 29,030 285 100.0

ISLAMIC BONDS NOVEMBER 2006 – NOVEMBER 2007

Manager or Group Amt US$ m Iss. %

1 HSBC 4,483 32 15.4

2 CIMB 3,849 55 13.3

3 Malaysian Government bond 3,687 4 12.7

4 Citigroup 1,668 6 5.7

5 Barclays Capital 1,593 4 5.5

6 Deutsche Bank 1,393 18 4.8

7 JP Morgan 1,283 2 4.4

8 Riyad Bank 1,066 1 3.7

9 Standard Chartered 978 27 3.4

10 BNP Paribas 845 3 2.9

11 Abu Dhabi Investment 843 1 2.9

12 Credit Suisse 843 1 2.9

13 AmInvestment 801 48 2.8

14 Goldman Sachs & Co 624 1 2.1

15 Aseambankers 561 23 1.9

16 Dubai Islamic Bank 511 5 1.8

17 RHB Investment Bank 378 69 1.3

18 Lehman Brothers 299 1 1.0

19 Arab Banking 263 2 0.9

20 Arab National Bank 263 2 0.9

Total 29,030 285 100.0

ISLAMIC BONDS BY COUNTRY NOVEMBER 2006 – NOVEMBER 2007

Amt US$ m Iss. %

Malaysia 13,161 248 45.3

UAE 8,394 11 28.9

Saudi Arabia 5,716 5 19.7

Kuwait 775 3 2.7

Pakistan 369 12 1.3

Qatar 300 1 1.0

Total 29,030 285 100.0

ISLAMIC BONDS AUGUST 2007 – NOVEMBER 2007

Manager or Group Amt US$ m Iss. %

1 Malaysian Government bond 1,001 1 32.0

2 JP Morgan 1,000 1 32.0

3 CIMB 296 9 9.5

4 HSBC 174 4 5.5

5 Standard Chartered 163 5 5.2

6 AmInvestment 114 11 3.6

7 Aseambankers 106 3 3.4

8 Bank Muamalat Malaysia 47 10 1.5

9 MIMB Investment 47 10 1.5

10 RHB Investment Bank 47 10 1.5

11 BankIslami Pakistan 39 3 1.2

12 National Bank of Pakistan 29 1 0.9

13 Affi n Investment Bank 20 6 0.6

14 Dubai Islamic Bank 17 1 0.5

15 Meezan Bank 17 1 0.5

16 MIDF 9 3 0.3

17 Mitsubishi UFJ Securities 5 1 0.2

Total 3,127 38 100.0

ISLAMIC BONDS BY COUNTRY AUGUST 2007 – NOVEMBER 2007

Amt US$ m Iss. %

Malaysia 1,969 31 62.9

UAE 1,000 1 32.0

Pakistan 159 6 5.1

Total 3,127 38 100.0

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DATE EVENT VENUE ORGANIZER

November

10th – 14th 2nd IPO Summit Saudi Arabia IIR Middle East

12th – 14th 3rd Annual Achieving Operational Excellencein Banking Summit

Dubai Fleming Gulf

12th – 15th Islamic Funds World 2007 Dubai Terrapinn

12th – 15th Islamic Finance and Investment World Africa 2007 South Africa Terrapinn

13th Islamic Capital Markets London ICG

18th – 21st Private Equity World MENA 2007 Dubai Terrapinn

19th – 22nd 4th Kuala Lumpur Islamic Finance Forum 2007 Kuala Lumpur CERT

19th – 22nd International Islamic Finance Congress Abu Dhabi Dome Exhibitions

26th – 27th Asia Capital Markets Forum Hong Kong Euromoney

26th – 28th Private Equity World Espana 2007 Spain Terrapinn

27th – 28th 3rd Seminar on the Regulation of Takaful Cairo IFSB

27th – 28th National Conference in Islamic Finance 2007 TerengganuUniversity Darul Iman Malaysia

December

3rd – 4th Middle Eastern ATMs 2007 Dubai ATMIA Conferences

5th – 6th Islamic Financial Services Forum: The European Challenge

Germany IFSB

8th – 10th The 14th World Islamic Banking Conference BahrainMiddle East Global Advisors

9th – 11th Private Banking MENA 2007 Dubai Terrapinn

9th – 11th Global Halal & Islamic Business Forum Abu Dhabi IIR Middle East

9th – 13th 12th Middle East Finance & Accounting Forum Dubai IIR Middle East

January

14th Hong Kong IFN Forum Hong KongIslamic Finance events

15th – 16th Seminar on Islamic Finance Hong Kong IFSB

21st – 24th Financial Services Debate Series Dubai Interactive Events

22nd – 24th 3rd Annual Islamic Finance IQ Singapore IQPC

28th – 30th TradeTech Middle East 2007 DubaiWorldwide Business Research

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AB Capital 4Abu Dhabi Commercial Bank 6Abu Dhabi Islamic Bank 6ADDAX International Bank BSC 8AIG MEMSA 20AIG Oman 20AIG Qatar 20Air Arabia 8Al Salam Bank 7Alliance Bank 9Alpen Capital 8Amlak Finance 7Arab Bank 4Arab Bank Group 4ATF Bank 9Badr Al Islami 4Bahrain Islamic Bank 8Bahrain Monetary Agency 8Bahrain Stock Exchange 3Baiduri Bank 3Bank Centercredit 9Bank Islam Brunei Darussalam 3Bank Muamalat 9Bank Muscat 2,5Bank Negara Malaysia 3,6,20Bank TuranAlem 9Barclays 4Barclays 6Berber Cement Company 8BLOM Development Bank 8Boubyan Bank 8Brunei Investment Agency 3BSEC-Bemo Securitization 3

Bumiputra-Commerce Holdings 20Bursa Malaysia 2Cedar Management Consulting 7Central Bank of Bahrain 6Central Bank of the Gambia 1Chugoku Bank 9Commercial Bank of Dubai 2Commercialbank 2Daimler Financial Services 6Dana Gas PJSC 2Deutsche Bank 4Deutsche Bank AG Doha 6DFSA 5Dubai Financial Group 3Dubai Holding 4Dubai International Capital 4Dubai Islamic Bank 4, 6Dubai World 7Emirates Bank International 5Emirates Healthcare Development Company 5Emirates Islamic Bank 5, 8Ernst and Young 5Fitch Ratings 9FSA 5Gulf Union Insurance Group 20Halyk Bank 9Hanco 3Higo 9HSBC 6IdealRatings Corporation 2ING Funds 3ING Group 21ING Insurance 21

Insurans Islam TAIB 3International Finance Corp 2Islamic Capital Partners 5ISM Insurance Services Malaysia 20Kazkommertsbank 9Khaleej Commercial Bank 5Khaleeji Commercial Bank 8Kuwait Finance House 2Kuwait Finance House Malaysia 2, 3Lehman Brothers 4, 6Liquidity Management Center 8Mashreq 4Masraf Al Rayyan 8MNRB Holdings 21Moody’s Investors Service 4, 8, 9Morgan Stanley 4Mutual & Federal Insurance 9National Bank of Bahrain 8National Bank of Kuwait 6National Bank of Umm al Quwain 5National Bonds Corporation 6National Cement Company 8National General Insurance Co 2NCB Capital 7NCB Capital Investment Services 7Nomura Holdings 2OCBC 6Och Ziff 4Pak-Qatar Family Takaful 20Proton Holdings 3PT BNI Securities 6PT Danareksa Sekuritas 6Public Bank 21

Qatar Bank 1Qatar Central Bank 4Qatar Islamic Bank 2Qatar National Bank 2RAM Ratings 9RHB Equity Research 21RHB Research 21SABIC 3Sakana Holistic Housing Solutions 3Salam Bounian Development 2Saudi Arabian Bechtel 3Saudi Arabian Monetary Authority 20Saudi Aramco 3Saudi Electric Company 3Saudi Hollandi Bank 20Saudi Pak Bank 2Saudi Telecom 3Securities and Investment Company 3Securities Commission 3Shariah Capital 3Sharjah Islamic Bank 5, 8Siraj Capital 3Standard & Poor’s 4, 8State Bank of Pakistan 5, 7Tabung Amanah Pekerja 3Taib Bank 3Tamweel 7, 9Temirbank 9Trowers & Hamlins 1UK Treasury 7US Securities and Exchange Commission 4World Bank 8Yamanashi Chuo Bank 9

NE-IFN04/46

Company Index

Company Page Company Page Company Page Company Page

Country Index

Africa New instrument backed by gold 1Bahrain Taib a done deal 3 Banks gain momentum 6 Al Salam Bank stock split 7 Berber Sukuk closed at US$130 million 8 ADDAX and NBB get licenses 8 ‘Embrace corporate governance’ 20Brunei KFHMB’s treasury solutions 3Egypt Flood of FDIs 8GCC Lacking infrastructure Sukuk 5 Sovereign ratings upgraded 8Indonesia Co-managers appointed 6Iran Baby, you can ride my (Islamic) car 3Japan DFSA and Japan to cooperate Japanese banks affi rmed 9Jordan AB Capital launched 4Kazakhstan Fitch reviews ratings 9Kuwait NBK elects advisers 6Malaysia KFHM’s sky-high ambition 2 Bursa seeks foreign investors 2 KFHMB’s treasury solutions 3 ING Funds wants to increase units 3

Malaysia OCBC Islamic unit approved 6 No threat here 7 Halal hub commitment reiterated 8 Cagamas securities reaffi rmed 9 Bank Muamalat negative 9 Higher Takaful for BCHB 20 Market valuation for vehicles 20 MNRB on track 21 PBB-ING form strategic alliance 21Middle East KFH sponsoring security forum 2 IdealRatings launches fund solutionss Arab bank boost 4 AIG MEMSA’s new offi ces 20Pakistan Pak Bank takeover 2 Banks demand Sukuk 5 Islamic banking set to gain 12% 5 SBP reports surge 7 SBP tracks banks 7 Companies urged to synergize 20Qatar Doha Bank mulls Sukuk 1 Salam Sukuk to launch 2 Deutsche Bank in Doha 6

Saudi Arabia US fi rm lands Saudi job 3 NCBC unveils equity fund 7 Saudi Re set-up approved 20South Africa Fitch withdraws Old Mutual ratings 9UAE NGI covers homeowners 2 Dana Gas revenue up 2 Taib a done deal 3 Free Zone Sukuk 4 Morgan Stanley fi nances bridge 4 Badr Al Islami opens main branch 4 EIB’s healthcare endeavor 5 DIB branches out 6 International Islamic Finance Congress 6 National Bonds’ instant millionaire 6 Cedar to boost Amlak’s growth 7 Air Arabia to raise Sukuk 8 Tamweel stable 9UK London losing its charm? 1 Update on housing conference 3 One step closer to Sukuk 7

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