quality counts in this issue - islamic finance...

Vol 7 Issue 13 31st March 2010

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

ALERTSRegister now - It’s freeIn this issue

IFN Rapid ..................................................... 2

Islamic Finance News ................................ 3

Takaful News ................ ..............................9

Rating News ..............................................10

IFN Report:Sukuk plan called off ............................11

Shariah compliant funds regulated ....11

Articles:Lebanon — A Truly RegionalOpportunity .............................................12

The Islamic Banking Sector inPalestine .................................................13

Dow Jones Islamic Market Indexesin March: All Eyes on the Emerging Markets ..................................................15

Good Governance — AchievingConsistency in Islamic Funds............... 17

Shariah Compliant Equity Investmentin the US .................................................19

Forum .........................................................21

Meet the Head ..........................................22Syed Adeel Hussain, Director and head of risk analytics of Tadhamon International Islamic Bank (TIIB)

Termsheet ..................................................23Kagiso Islamic Equity Fund

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

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

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

S&P Shariah Indexes ...............................27

Dow Jones Shariah Indexes ....................28

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

Thomson Reuters League Tables ...........32

Events Diary...............................................35

Company Index .........................................36

Subscription Form ....................................36

Recent times have seen practitioners them-selves asking thought-provoking questions about their trade. Although the industry boasts of a captive market of about 1.5 billion Muslims, has Islamic fi nance benefi ted the man on the street, asks Rushdi Siddiqui, Thomson Reuters global head of Islamic fi nance. He even ques-tions what is so “Islamic” about Islamic fi nance, asking: “Have we simply been putting an Islamic wrapper around conventional structures and products and placing a blessing on them?”

Siddiqui demands a group blueprint of the industry going forward, including the building of two-way bridges between the Middle East and Southeast Asia or with the Group of 20 developing countries. He notes that among the 57 Organization of Islamic Conference (OIC) countries, not one Muslim country in the last 40 years has “Islamized” its economy for general acceptance.

The 750-odd Islamic mutual funds have less than US$50 billion under management, a fraction of global asset management, prompting John Sandwick, an Islamic asset management consultant, to declare: “The demand is there, but we need products, products, products.” To several analysts, a weakness of Islamic fund products has been to focus on equities and real estate, without offering the comprehensive asset diversifi cation of conventional funds that typically allocate a large portion to fi xed-income investments. “There is still a gap in terms of plain vanilla products,” said Mark Smyth, managing director at consultancy Failaka.

Another call is for the international Islamic funds industry to offer more innovative areas of investment and expand into untapped geographical markets. Noted Shariah scholar Dr Mohammed Daud Bakar, managing director of Dubai-based Amanie Islamic Finance

Consultancy and Education, said Islamic fund managers should look at commodities such as gold and silver, metals and agriculture as well as relatively untouched markets for Islamic funds like Australia, Thailand and Vietnam besides Africa and Latin America. “They would provide interesting propositions for investors while other industries like shipping, technology and aviation could be fruitful areas for innovators to look at in creating new funds,” he contended.

One industry commentator questions the job qualifi cations of “so-called Islamic bankers” since they have done little in tackling a major issue confronting the industry — trading volume and transaction liquidity. This led to the issue of requiring more trading platforms specifi cally for Islamic fi nancial products. And the debate persists on Shariah compliant products versus Shariah based ones. With the world economy enmeshed in inter-connected interest rates, debt and other similar factors, Shariah scholars are compelled to allow a permissible amount of impurity. But does the industry have to continue using the London interbank offered rate (Libor) rather than working on a methodology for an Islamic interbank offer rate (Ibor)?

Following from that issue is another — some of the Shariah compliant companies include Microsoft, BP Amoco and Pfi zer, yet what is their link or connection to Islamic fi nance? Could such companies and Shariah compliant Islamic indices be deemed an economic indicator of Islamic fi nance in a Muslim country?

One thing is for sure: All these discussions and debates demonstrate the vibrancy of the industry. However, rather than basing expansion on statistics, the Islamic fi nance industry should really be aiming for qualitative improvements.

Quality counts

www.islamicfi nancenews.comA round-up of all this week’s news IFN RAPID

© 31st March 2010

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More African central banks • contemplate joining the Islamic Financial Services Board

MIZÂN All Equity Moderate Allocation • Fund out now

Florentez Investment • Management to launch Shariah compliant exchange traded funds

Growth opportunities abound for • Islamic banks in Malaysia

Danajamin Nasional• to guarantee Kencana Petroleum’s Sukuk

Malaysia mulls returning to the • international bond market

Bank Negara• to tighten Shariah regulations

Malaysian Merchant Marine • unable to continue operations due to debt issues

HwangDBS Investment • Management and Asian Islamic Investment Management launch a new fund

EONCap Islamic Bank• to turn to equity-based fi nancing

Bank Negara• to issue two more licenses for Islamic banking

Al-Amanah Islamic Investment • Bank of the Philippines and Petron Corporation ink MoU

More Sukuk for Malaysia•

Islamic clerics in India launch • Islamic Investment & Finance Board

The ongoing audit at • Kuwait Finance House’s Malaysian unit has not deterred the bank’s investment drive

Australia seeks closer ties with • Indonesia and the Gulf region in Islamic fi nance

The Islamic Bank of Thailand will • delay the country’s fi rst Sukuk issuance

Lafarge Malayan Cement• picks AmInvestment Bank as the principal

adviser for its nominal value Islamic debt papers

Malaysia plans to sell US$1.1 billion • of Sukuk

Titan Petrokimia Nusantara• is considering a Sukuk and conventional bond issue

BPCE and Qatar Islamic Bank• ink MoU to establish joint venture

Islamic Bank of Britain• records another loss

Malta Financial Services Authority • issues guidance note on Shariah compliant funds

Bank of London and The Middle • East offers development fi nancing to Stobart Group

Five Kuwaiti lawmakers want • conventional banking to be outlawed

International Investment Bank• selects Complinet Global Screening Enterprise’s solutions

Gulf Moroccan Holding Company • gets listed

Dubai World • starts debt restructuring talks

Central Bank of Bahrain’s• Sukuk Ijarah oversubscribed

Waha Capital• shareholders say yes to Sukuk

Government steps in to help • Dubai World and Nakheel

Creditors give positive feedback for • Dubai’s US$9.5 billion plan

Expansion of Islamic market a win-• win situation for all

Sukuk market saved through Dubai’s • Nakheel bond plan

Gloomy outlook for • Dubai World’s debt-restructuring plan

National Bank of Kuwait • to raise its stake in Boubyan Bank

Al Salam Bank-Bahrain’s • subsidiary becomes Islamic

Emirates NBD• launches Emirates Islamic Money Market Fund

The Islamic Development Bank• approves a US$120 million contribution for fi nancing a mega Jubail refi nery

Dubai Islamic Bank• has arranged a fi nancing deal of US$215 million for Kharafi National

TAKAFULMore Takaful products for Malaysia•

Friends Provident International• aims to expand its presence in the Gulf

T’azur Company• inks strategic partnership with NAS Administration Services

Bahrain National Holding• contemplates Takaful venture

Solidarity Group• hikes stake in First Insurance Company

RATINGSCapital Intelligence affi rms • Bank Islam at ‘BBB-’

Negative Rating Watch placed on • Kuwait Finance House (Malaysia)

Fitch has assigned • Titan Petrokimia Nusantara an ‘A+(idn)’ rating

S&P affi rms Oman at ‘A’ and ‘A-1’•

Moody’s confi rms • Dubai Electricity & Water Authority’s ‘Ba2’ issuer and Sukuk ratings

S&P to reassess the credit ratings of • fi ve Dubai fi rms

Capital Intelligence affi rms• Qatar Islamic Bank at ‘A’

Commercial Bank of Qatar • affi rmed at ‘A’

Qatar National Bank• gets top ratings from Capital Intelligence

MOVESPeter Wong Tung Shun is the new • chairman of HSBC Bank

Duo to leave • Alliance Investment Bank for personal reasons

Mohd Hassan Marican leaves • Bank Negara

Mark Mortimore becomes executive • director of Sanad Sukuk Fund

Zarinah Anwar is chairman of the• Securities Commission for another year

Mashreq Al Islami • appoints Yusra Abdul Gaffar as manager for Mashreq Gold

NEWS

www.islamicfi nancenews.comNEWS

© 31st March 2010

AFRICAWelcome aboardSUDAN: More African central banks may join Sudan and Nigeria in becoming members of the Islamic Financial Services Board (IFSB) as demand for Shariah compliant assets grow, said its secretary general Rifaat Ahmed Abdel Karim.

Rifaat, who declined to name the countries involved, said that Africa is a potential market for Islamic fi nance and banking, in addition to China, India and Indonesia.

The IFSB has 193 members, including 49 regulatory and supervisory authorities as well as the International Monetary Fund, World Bank, Bank for International Settlements, Islamic Development Bank and Asian Development Bank.

Its newest member is the Central bank of Luxembourg, which joined the group in November last year.

AMERICASShariah-based fundUS: Hand Benefi ts & Trust has announced that the MIZĀN All Equity Moderate Allocation Fund — a Shariah compliant collective investment fund — is now available upon request nationwide.

Managed by Lightstone Capital Advisers, the fund is designed to meet the needs of Muslim investors within their qualifi ed retirement plan.

The Shariah-based fund seeks long term capital appreciation by holding a portfolio of US stocks across seven equity styles.

Launch in the worksUS: Florentez Investment Management (ShariahShares ETF) is set to launch a family of Shariah compliant exchange traded funds on the New York Stock Exchange.

Its president and CEO Saeid Hamedanchi said the company has already received an exemptive relief order from the Securities and Exchange Commission, the US regulator, to launch the funds on the US exchanges.

Hamedanchi did not provide a specific date as well as further information on the launch.

ASIAComing rewardsMALAYSIA: Islamic banks are expected to register double-digit loan growth this year, according to RAM Rating Services (RAM) head of fi nancial institutions ratings Promod Dass.

He added that RAM foresees further growth for Islamic banks, as Malaysian banks with Islamic banking franchises — which are going regional — also have the opportunity to expand their operations abroad.

He said this can be attributed to the local Islamic fi nance industry players that have

been developing new products and services, along with the support and initiatives undertaken by Bank Negara.

Sukuk guarantorMALAYSIA: National fi nancial guarantee insurer Danajamin Nasional (Danajamin) has signed an agreement to guarantee oil and gas service provider Kencana Petroleum’s RM250 million (US$75 million) Sukuk Mudarabah Medium Term Note program.

Under the agreement, Danajamin will provide a Kafalah guarantee for Kencana’s seven-year Sukuk program.

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It said the funds raised would be utilized by Kencana Petroleum to acquire at least three offshore support vessels, including two anchor handling tug supply vessels, for charter to the oil and gas industry.

Global outlook MALAYSIA: The country may return to the international bond market for the fi rst time in about eight years to set a global benchmark or help indicate borrowing costs for its companies.

Prime minister Najib Razak said this was due to the strong demand for bonds in the market. He however did not say whether the bond would be Islamic or conventional.

The government has not sold foreign currency bonds since July 2002 when it raised US$600 million from the sale of fi ve-year Islamic bonds to fi nance its expenditure.

Rules tightenedMALAYSIA: Bank Negara has announced rules to tighten Shariah compliance at Islamic banks.

The new regulations provide for the setting up of Shariah review and audit and risk management control functions to reinforce compliance.

On sinking groundMALAYSIA: Malaysian Merchant Marine (MMM) was unable to provide a solvency declaration after defaulting on the RM40 million (US$12 million) primary collateralized loan transaction (CLO) plus interest.

As a result, MMM said it would not be able to continue operations in the foreseeable future with regards to its debt problems.

This followed the downgrading of two tranches of bonds the company had issued — a RM120 million (US$36 million) Al-Bai Bithamal Ajil Islamic Serial Bonds and the CLO — by Malaysian Rating Corporation in February.

The Islamic bonds were issued to the Em-ployees Provident Fund (EPF) while the CLO was issued to MIDF Amanah Assets Manage-ment. The fi nal payment of RM24 million (US$7.04 million) to the EPF is scheduled for the 29th November this year, while the RM40

million (US$12 million) is scheduled to be paid on the 26th January 2012.

Double fi rstMALAYSIA: HwangDBS Investment Management and Asian Islamic Investment Management (AIIMAN) launched the US-dollar denominated AIIMAN A20 China Access Fund (A20), which is aimed at local and offshore investors.

The A20 is an open-ended wholesale fund and will invest in Shariah compliant investment certifi cates that provide the

economic performance of the referenced underlying targeted A-shares.

AIIMAN executive director and CEO Nor’ Azamin Salleh said: “The fund represents a key milestone for us and the industry as it is the fi rst of its kind in Malaysia to offer a more direct access into the A-Share market and is also the fi rst Shariah compliant fund in the global market that invests in the same.”

The minimum initial and additional investment is US$10,000, with an approved fund size of 100 million units. The A20 will

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© 31st March 2010

close at US$30 million and is offered on a fi rst-come-fi rst served basis.

Profi t-sharing ventureMALAYSIA: EONCap Islamic Bank, a subsidiary of EON Bank, plans to launch its fi rst profi t-sharing property fi nancing by June, said CEO Fozia Amanulla.

Fozia did not elaborate further on the matter, except to say that the bank is evaluating several property projects for development.

Profi t-sharing ventures are a cornerstone of Islamic fi nance but Shariah banks have mostly granted straight fi nancing to avoid the risk of failure of the projects funded.

But some practitioners expect the industry to gradually use more equity fi nancing as it tries to distinguish itself from conventional lending, a move that could transform Islamic banks from capital providers to project partners.

Double offerMALAYSIA: Bank Negara will issue two more licences for Islamic banking, according to its governor Zeti Akhtar Aziz.

Zeti however did not provide any further details on the matter, except that the decision will be fi nalized by the end of April.

The license is part of the government’s plan to encourage more foreign investment in the country.

To date, only fi ve foreign banks have obtained Islamic banking licenses – Unicorn International Islamic Bank Malaysia, Kuwait Finance House (Malaysia), Bank Syariah Muamalat Indonesia, Al Rajhi Bank Malaysia and Deutsche Bank.

Promoting investmentPHILIPPINES: Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) and Petron Corporation signed a MoU for the Petron Bulilit Station dealership program aimed

at promoting investment opportunities in Mindanao.

AAIIBP chairman and CEO Armando O Samia said that under the program, the bank shall provide Ijarah-based fi nancing to qualifi ed dealers for Petron for project site acquisition and capital expenditure requirements for the operation of Petron Bulilit gas stations or micro-fi lling station outlets.

Sukuk reignsMALAYSIA: RAM Rating Services (RAM Ratings) expects that RM60 billion (US$18 billion) of new issuances are expected for the country’s Sukuk and bond markets this year, which will be about a quarter more than last year.

RAM Islamic ratings head Zakariya Othman said from that amount, RAM Ratings can anticipate between RM33 billion (US$10 billion) and RM36 billion (US$11 billion) of Sukuk issuance this year, given the fact that 60% of debt papers in the country is Sukuk.

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Zakariya said the reason that more Sukuk than bonds are being issued is because of government incentives and the legal certainties provided by the Central Banking Act 2009.

Help is at handINDIA: The country’s Islamic clerics have introduced the Islamic Investment & Finance Board (IIFB), aimed at assisting Islamic fi nance players with regards to Shariah principles.

The primary responsibility of IIFB is to ensure that all Islamic-based fi nancial products comply with the principles of Shariah.

The IIFB also plays a regulatory role and will advise corporations regarding Islamic investment and fi nance.

KFH: Investments unabatedMALAYSIA: The ongoing due diligence audit at Kuwait Finance House’s Malaysian unit — exposed last week by Islamic Finance news — has not interfered with the bank’s aim to step up its investment portfolio in the country, according to the parent company’s CEO, Mohammed Sulaiman Al Omar.

He recently led a delegation from the Kuwait headquarters to meet Prime Minister Najib Razak and his deputy Muhyiddin Yassin to discuss the group’s intention for further investment in the country.

Specifi cally, the group is interested in spearheading the establishment of a world-renowned university in an emerging development zone in southern Johor state.

KFH Malaysia CEO Jamelah Jamaluddin, who was appointed less than two months ago, said it was “business as usual” for the bank despite the ongoing due diligence audit.

Referring to IFN’s revelation that several of its senior management had been suspended due to the probe, she said some employees had taken leave to facilitate the exercise and internal reorganization with the objective of strengthening the bank’s credit team and processes with the intention of improving asset quality.

Following IFN’s report on the ongoing due diligence audit, RAM Ratings placed the

AA2/P1 fi nancial institution ratings of the bank on negative rating watch on the 26th March.

This is because the audit heightened concerns on the potential for further deterioration in the bank’s asset quality and credit fundamentals. RAM Ratings had a negative outlook on the fi nancial institution ratings of KFH Malaysia last November, based on the deterioration in the fi nancial metrics of both the bank and its parent.

Towards stronger bondsAUSTRALIA: Assistant treasurer Nick Sherry said the country needs to build better relationships with Asia, particularly Indonesia, in the sphere of Islamic fi nance.

He said Australia would gain from having closer ties with Indonesia as it is a close neighbor. Indonesia is the largest Muslim nation in the world.

Sherry will be visiting Qatar, Bahrain and the UAE in April to look into the promotion of Islamic banking and fi nance in Australia.

Sukuk on holdTHAILAND: The state-run Islamic Bank of Thailand will delay its plans to issue the country’s fi rst Sukuk worth THB5 billion (US$151 million).

The bank’s president Dheerasak Suwannayos said: “This is becouse the interest rate in the money market looks pretty volatile.”

Islamic bond issuance has been postponed several times in Thailand, in part due to the lack of a regulatory framework.

Wearing many hatsMALAYSIA: AmInvestment Bank has been appointed as the principal adviser, lead arranger and lead manager for the RM350 million (US$107 million) nominal value Islamic debt papers issuance by Lafarge Malayan Cement (LMC).

The program comprises Islamic commercial papers and/or Islamic medium-term notes.

The seven-year ‘AA2’/’P1’ program will enable LMC to tap liquidity in the local and global Islamic capital markets for medium to long-dated funding.

Sukuk saleMALAYSIA: The country plans to sell RM3.5 billion (US$1.1 billion) of Sukuk, as part of the government’s fi nancing measure, according to Bank Negara, without specifying the exact date for the Sukuk sale.

The Islamic bonds, which will mature on the 30th September 2015, closed its tendering process this week.

Bonds issuanceINDONESIA: Titan Petrokimia Nusantara (TPN), a subsidiary of Malaysia-based Titan Chemicals Corporation, is considering issuing a Sukuk and conventional bond amounting to IDR500 billion (US$55 million) via a public offering.

The two proposed bonds are Sukuk Ijarah Titan Petrokimia Nusantara I Tahun 2010 and Titan Petrokimia Nusantara I Tahun 2010 — IDR200 billion (US$22 million) and IDR300 billion (US$33 million) respectively.

Fitch Ratings has assigned expected ratings of ‘A+(idn)’ to TPN’s proposed senior unsecured notes — Sukuk Ijarah Titan Petrokimia Nusantara I Tahun 2010 and Obligasi Titan Petrokimia Nusantara I Tahun 2010 .

EUROPESpreading its wingsFRANCE: The country’s banking group, BPCE and Qatar Islamic Bank (QIB) signed a MoU to establish a joint venture fi nancial institution that will develop and market Shariah-based retail banking products in France.

The joint venture will look at developing and marketing mortgage, vehicle and consumer goods fi nance and deposits, and structured and investment products, said QIB CEO Salah Jaidah.

Jaidah said the joint venture will be established before the end of the year.

In the red againUK: Islamic Bank of Britain went further into the red last year when it posted an 85% increase in its loss to GBP9.5 million (US$14.2 million) in 2009, raising its losses

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from GBP5.9 million (US$8.8 million) in 2008.

The loss was attributed to the downturn in revenues from investments on the Islamic interbank market.

Operating income was also reduced by 67% to GBP1.6 million (US$2.4 million) for the same period.

Airport fi nancingUK: Bank of London and The Middle East (BLME) has provided GBP19.1 million (US$28.5 million) in development fi nance to the Stobart Group to further develop the London Southend Airport (LSA). The funding from BLME will help develop the airport as a key distribution gateway, as well as a new hub for fl ights to Europe.

Stobart Group has been granted permission by the local councils to extend the airport runway and is awaiting fi nal approval from the Secretary of State, which will allow an increase in annual passenger numbers to two million by 2020 from 42,000 currently and enhance freight opportunities on passenger aircraft.

The aim is to open the runway and new terminal in 2011 in order that LSA can be a gateway to the London Olympics and Paralympics in 2012.

In addition to the expansion of the airport, Stobart Group will develop a main railway station on the site this year that will enable for improved and sustainable access to the airport.

MIDDLE EASTRadical moveKUWAIT: Five lawmakers have submitted a bill to parliament calling for conventional banking to be outlawed, according to a report.

Under the bill, a three-year period will be given to conventional banks to make their operations Shariah compliant, the report added.

Double protectionBAHRAIN: The International Investment Bank (IIB) has selected Complinet Global Screening Enterprise to provide risk and compliance solutions to boost its anti-money laundering and fraud prevention efforts.

Its CEO and board member Aabed Al Zeera said: “IIB has a strong commitment to enforce regulatory measures; and with Complinet, we can continue to strengthen our offerings and build long-term relationships with our investors.”

Listing successKUWAIT: Gulf Moroccan Holding Company (Kuwait) has been listed on the Kuwait Stock Exchange.

Its chairman Talal Jassem Al-Kharafi said the listing is the due reward of the hard work put in by staff and managers of the company.

The Shariah compliant company, which invest in tourism and real estate, was founded in September 2005 with a capital of KWD15 million (US$52 million), through an alliance with several mega companies in the country.

Debt talksUAE: Dubai World and its core creditor banks began crucial negotiations this week on restructuring the conglomerate’s US$26 billion debt “on a positive note,” according to a report.

Dubai World, the parent fi rm of property developers Nakheel and Limitless World, has been in talks with its 97 lenders, including foreign and local banks, on debt restructuring matters since last November when the conglomerate asked for a debt standstill deal.

The committee of main creditors negotiating on behalf of the banks with Dubai World’s team headed by chief restructuring offi cer Aidan Birkett includes HSBC Holdings, Standard Chartered, Lloyds Banking Group, Royal Bank of Scotland Group, Abu Dhabi Commercial Bank and Emirates NBD.

Limitless World has a US$1.2 billion Islamic loan due on the 31st March.

Sukuk oversubscribedBAHRAIN: The Central Bank of Bahrain’s (CBB) monthly issue of short-term Sukuk Ijarah has been oversubscribed by more than three times.

It received BHD33 million (US$88 million) for the BHD10 million (US$27 million) issue with an expected return of 0.98% when it matures on the 23rd September.

This is CBB’s 55th issue of the short-term Sukuk Ijarah on behalf of the Bahraini government.

Green light givenUAE: Waha Capital has received the nod from its shareholders to issue Sukuk worth US$272 million, said its CEO Salem Rashid Al Noaimi.

Al Noaimi said the Sukuk, which will be used to fi nance its projects, will be issued in three tranches starting this July.

Helping handUAE: The Dubai government will commit US$9.5 billion in new funding to help Dubai World restructure its debt.

Of the US$9.5 billion infusion, the lion’s share of US$8 billion will be used to repay the Sukuk maturing this year and in 2011 — which belongs to Dubai World’s property development arm, Nakheel.

This will be funded by the US$5.7 billion remaining from the loan previously made available from the government of Abu Dhabi and from internal Dubai government resources.

Good responseUAE: Dubai’s proposed US$9.5 billion plan to settle its troubled conglomerate Dubai World’s debt crisis has been well

Legal explanationMALTA: Financial services regulator Malta Financial Services Authority (MFSA) has issued a guidance note on Shariah compliant funds.

The note explains how the application of the legal and regulatory framework established under the Investment Services Act would apply to Shariah compliant funds.

This note can be downloaded from the MFSA website under securities/guide to regulation.

(Also see IFN Report on page 11)

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© 31st March 2010

received by creditors, said the Dubai fi nance department director general Abdul Rahman Saleh Al Saleh, adding that it represents “a preliminary indication that the plan would be acceptable.”

The plan, which involves repaying property unit Nakheel’s 2010 and 2011 Sukuk in full and on time, will require other lenders of the conglomerate to wait fi ve to eight years for a full repayment.

Nakheel’s trade creditors will get 40% of their claims in cash, while 60% could be rolled into an Islamic bond.

“For the Nakheel Sukuk holders, it sounds great,” said a banker at a Gulf-based creditor bank.

Towards a common goalLEBANON: Turkey and Lebanon should work together to create a larger Islamic market in the Middle East and eastern Mediterranean region, said Lebanon’s parliament speaker Nabih Berry.

Berry said Turkey and Lebanon should also aim to enter European markets as well as member states of the Organization of the Islamic Conference.

He felt that both countries would gain from such collaboration, as a large joint market would increase opportunities in production and export to all countries in the world.

Market revivalUAE: Dubai World’s promise to fi nance its upcoming Nakheel Islamic bonds― due in May 2010 and January 2011 ― saved Nakheel from becoming the third high-profi le Sukuk to formally default in the region.

Global investors have seen high-profi le defaults over the last year ― including Kuwait-based The Investment Dar’s inability to pay its US$100 million Sukuk and Saudi Arabia’s Saad Group’s US$650 million Golden Belt Sukuk default.

Citi Islamic Investment Bank CEO and head of global Islamic banking Samad Sirohey said Dubai World’s intention to repay Nakheel’s Sukuk does lift the cloud from Sukuk-related issues.

He pointed out that this is because the interest in the Sukuk market is driven by expectations of liquidity.

Gloomy predictionUAE: Dubai World’s debt-restructuring plan may be “negative” for its bank creditors because repayments will be funded by asset sales and dividends, according to JPMorgan Chase & Co.

London-based JPMorgan Chase & Co analyst Zafar Nazim in a report said this is because the government intends to inject only US$1.5 billion of cash into Dubai World to support its creditors and working capital commitments.

Dubai World, a state-owned holding company, is asking creditors to wait as long as eight years before they receive all their money back as part of its US$23.5 billion debt reorganization announced last week.

Approval grantedKUWAIT: National Bank of Kuwait has obtained approval from the Central Bank of Kuwait to raise its stake in Boubyan Bank from 40% to 60% of the bank’s capital.

The approval is valid for three months effective last week.

Shariah rebrandingBAHRAIN: Bahraini Saudi Bank (BSB), a subsidiary of Al Salam Bank-Bahrain (ASBB), has rebranded itself as Bahraini Saudi, a Shariah compliant bank.

The move is a result of ASBB acquiring 90.31% of its equity last year in a two-for-one share swap deal.

Bahraini Saudi chairman Anwar Khalifa Al Sada did not specify the exact date for the bank to complete its conversion into an Islamic bank.

Money market fundUAE: Emirates NBD has launched the Emirates Islamic Money Market Fund, a daily dealing Shariah compliant open ended fund domiciled in Jersey.

Emirates NBD head of asset management Deon Vernooy said the fund is one of the fi rst of its kind globally and will look to access the growing range of Islamic cash or near cash investments. It will also seek to benefi t from the yield pick-up in US-dollar pegged currencies and the current cost of funding for corporates and banks.

The Islamic-based fund provides investors diversifi cation from traditional equity and real estate investments and can form part of an investor’s portfolio irrespective of their investment horizon. It can also be used as a parking facility during periods of surplus liquidity.

Shariah oil fundingSAUDI ARABIA: The Islamic Development Bank (IDB) has approved a US$120 million contribution for fi nancing a mega Jubail refi nery in Jubail with Total to be built at a cost of US$12.8 billion.

The project is fi nanced by all of Saudi Arabia’s commercial banks, the Saudi Industrial Development Fund, Public Investment Fund, Barclays, JP Morgan, Deutsche Bank, HSBC, BNP Paribas and Citigroup.

Funding for the refi nery would also include a Sukuk issue which could be for over US$500 million.

Saudi Aramco and Total have reportedly hired Deutsche Bank, Credit Agricole Corporate and Investment Bank and Samba Financial Group to manage the domestic Sukuk issuance.

Oil moneyUAE: Dubai Islamic Bank (DIB) has arranged a fi nancing deal of AED790 million (US$215 million) for Kharafi National, a Kuwait-based construction group.

Under the agreement, DIB will cover the fi nancing requirements for Kharafi National’s sub-contract with a JGC–Tecnimont joint venture to develop an integrated gas development project for Abu Dhabi Gas Industries.

The project, with a value of AED2.7 billion (US$728 million) aims to increase Abu Dhabi’s offshore gas production capacity by one billion cubic feet per day.

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www.islamicfi nancenews.comTAKAFUL NEWS

© 31st March 2010

ASIAExpenditure pushMALAYSIA: Household expenditure on healthcare is expected to increase especially with the growing middle-class population according to Bank Negara in its Financial Stability and Payment Systems Report 2009.

This in turn has spurred insurers and Takaful operators to come up with more cost effective options. The report explained that this is an indication that the country is progressing towards a high-income economy.

In the report, Bank Negara added that medical and health Takaful (MHT) alongside with medical and health insurance (MHI) are expected to continue its strong growth.

Total MHI gross direct premiums and MHT gross direct contributions increased 22.6% to RM1.1 billion (US$332 million) last year.

EUROPETakaful undertakingUK: Friends Provident International is looking to provide Takaful services in the Gulf to expand its regional presence.

The company currently offers conventional insurance products and services throughout the UAE from its headquarters in Dubai, but wants to open more offi ces in the GCC.

Friends Provident International (Middle East and Africa) general manager Matthew Waterfi eld said the fi rm however does not want to cosmetically put a Takaful brand over what it does.

The company plans to conduct a study on the insurance needs of the Islamic community next year.

MIDDLE EASTMedical offeringBAHRAIN: T’azur Company (t’azur), a Takaful subsidiary of Unicorn Investment Bank, signed an agreement to form a strategic partnership with NAS Administration Services (NAS), a specialist company focusing solely on medical administration.

Under the agreement, NAS will provide medical claims administration services to t’azur’s group medical clients.

CEO Nick Frei said the association with NAS will ensure that t’azur’s group medical offering is of high quality.

Takaful moveBAHRAIN: Insurance group Bahrain National Holding (BNH), the parent company of Bahrain National Insurance and Bahrain National Life Assurance, is looking to move into the Takaful market as part of its expansion plan, said CEO Mahmood Al Soufi .

Al Soufi said the company would likely do this through buying into an existing operation.He did not provide any further information

on BNH’s planned venture into the Takaful market, except that it would not have any impact on its core insurance business.

Eye on TakafulJORDAN: Solidarity Group, a member of the Ithmaar banking group, has increased its stake in First Insurance Company, a Jordanian Takaful operator.

It did not provide further details with regards to the stake increase.

Solidarity Group acting CEO Ashraf Bseisu said: “Jordan is a particularly promising Takaful market.

“By increasing our presence, we are also increasing our ability to participate effectively in this growing market.”

© 31st March 2010

www.islamicfi nancenews.comRATING NEWS

ASIAIn good hands

MALAYSIA: Capital Intelligence has affi rmed the long-term foreign currency rating of Bank

Islam at ‘BBB-’ and the short-term rating at ‘A3’ with a support rating of ‘2’. The ratings are underpinned by the bank’s majority government ownership.

The fi nancial strength rating is maintained at ‘BB+’, with the low return on average assets and high level of non-performing fi nancings being major constraining factors.

Probe affects outlookMALAYSIA: RAM Rating Services has placed the ‘AA2’/‘P1’ fi nancial institution rating of Kuwait Finance House (Malaysia) on Negative Rating Watch in view of an ongoing

due diligence status audit which required senior credit personnel to be on leave.

This measure, according to KFH-Malaysia CEO Jamelah Jamaluddin, is aimed at obtaining an accurate picture of certain transactions and contractual arrangements that had been undertaken over the years. RAM Ratings said this latest effort has led to increasing concerns on the potential for further deterioration in KFH-Malaysia’s asset quality and credit fundamentals.

RAM Ratings had issued a negative outlook last November on the fi nancial institution rating of KFH-Malaysia, based on the deterioration in the fi nancial metrics of both KFH-Malaysia and its parent, Kuwait Finance House.

Superb achiever INDONESIA: Fitch Ratings has assigned Titan Petrokimia Nusantara (TPN) an ‘A+(idn)’ national long-term rating with a stable outlook.

The outlook is given based on Fitch’s expectation that TPN can maintain a fi nancial profi le appropriate for its rating through an expected upcoming downturn in the petrochemical industry.

Fitch has also assigned expected ratings of ‘A+(idn)’ to TPN’s proposed senior unsecured notes — Sukuk Ijarah Titan Petrokimia

Nusantara I Tahun 2010 and Obligasi Titan Petrokimia Nusantara I Tahun 2010 and — were for amounts of IDR200 billion (US$22 million) and IDR300 billion (US$33 million) respectively.

MIDDLE EASTOn fi rm ground

OMAN: Standard & Poor’s Ratings Services (S&P) has affi rmed its ‘A’ long-term and ‘A-1’ short-term

sovereign credit ratings on Oman. The outlook remains stable.

S&P’s credit analyst Luc Marchand said the ratings are attributed to the government’s strong fi scal position.

Strength restoredUAE: Moody’s Investors Service has confi rmed the ‘Ba2’ issuer and Sukuk ratings of Dubai Electricity

& Water Authority (DEWA) with a stable outlook and has taken them off review for downgrade.

This follows DEWA’s recent successful negotiation of the terms of its receivables securitization program issued under Thor Asset Purchase Company.

Second lookUAE: Standard & Poor’s will re-evaluate the credit ratings of fi ve Dubai government-linked fi rms

following an “extremely positive” debt proposal for the emirate’s fl agship Dubai World conglomerate.

S&P Middle East head of government ratings Farouk Soussa said: “We will be looking to resolve credit watch we have on the ratings in the coming weeks, and this will obviously be an important piece of information that we will be taking into account. Implications for the rating are too early to tell.”

Dubai’s government said last week that it would inject US$9.5 billion and recapitalize debt-laden Dubai World and fully repay bonds for its Nakheel property unit when they fall due. “This (equity strengthening) is an important gesture from the government of Dubai. What it is effectively saying is that in

the worst case scenario, you (creditors) will be paid back before we will,” Soussa said, adding the full Nakheel bond repayment is “a positive surprise”.

Following the announcement last November of Dubai World seeking to delay repayment on US$26 billion of debts, S&P downgraded six Dubai government-related companies — DIFC Investments, DP World, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority (DMCC), Dubai Holding Commercial Operations Group (DHCOG) and Emaar Properties. It also withdrew the DHCOG rating this January.

Financially soundQATAR: Capital Intelligence has affi rmed Qatar Islamic Bank’s (QIB) long-term foreign currency rating of

‘A’, its short-term foreign currency rating of ‘A2’ and its fi nancial strength rating of ‘A’. All ratings carry a stable outlook.

QIB’s ratings is attributed to the government’s support of the Qatari banking system (including QIB itself).

Firm backingQATAR: Capital Intelligence has affi rmed the Commercial Bank of Qatar’s (CBQ) long-term foreign

currency rating of ‘A’, its short-term foreign currency rating of ‘A2’ and its fi nancial strength rating of ‘A’.

The ratings are attributed to CBQ’s good access to medium and long-term sources of capital. Al-Safa Islamic Banking is a subsidiary of CBQ.

Outstanding performerQATAR: Capital Intelligence has affi rmed Qatar National Bank’s (QNB) long-term foreign currency rating of

‘AA-’, short-term foreign currency rating of ‘A1+’ and its fi nancial strength rating of ‘A+’.

The outlook on all the ratings is stable.

QNB’s ratings are attributed to the bank’s excellent asset quality, strong profi tability and high quality earnings, good liquidity, professional management team and solid franchise in Qatar and in the wider GCC.QNB Al Islami is a subsidiary of QNB.

www.islamicfi nancenews.comIFN REPORTS

© 31st March 2010

The Malta Financial Services Authority (MFSA) has published a guidance note for Shariah compliant funds in the country. It directs fund promoters on setting up Shariah funds under the Malta Investment Services Act.

It also sets out the rules, apart from the standard license conditions applicable to both retail investment schemes and professional investor funds, plus the role of the Shariah advisory board, to ensure that the fund manager’s decision is not affected by non-fi nancial considerations.

The principal categories of these investment schemes set up under the common framework will be the undertakings for collective investment of transferable securities (UCITS), non-UCITS, experienced investor funds, qualifying investor funds, and extraordinary investor funds.

The Shariah compliant funds are required to disclose all relevant information enabling the investor to decide between the available options and transparency in the investment management process. This allows a higher level of freedom on the choice of investments and asset allocation policies adopted by the investment funds.

In addition to disclosure requirements applicable to non-Islamic fi nancial services and products, the audited fi nancial statements of Shariah funds should include a report on the Shariah advisory board’s opinion on the fund details of actual distribution and the reasons for such distribution of income to entities other than the investors.

MFSA senior manager Robert Aquilina told Islamic Finance news that Malta has gained recognition as an effi cient funds domicile providing competitive access to Europe and the international markets. “The country has 400 funds including 280 alternative investment funds and a large number of UCITS and retail funds. As an EU domicile, Malta is a strong potential site for Shariah funds distribution in southern Europe, the Middle East and North Africa,” he added.

MFSA is the regulator for all banking, investment, securities, insurance, pension and trust services in the country. Its responsibilities include keeping the regulatory framework under constant review and developing it in line with market needs.

Reports by Ashwin Hemmathagama

The Philippines government has cancelled plans to raise PHP45.3 billion (US$1 billion) through a Sukuk issue, mainly due to the lack of expertise in Islamic banking and anticipated socio-political concerns. The Sukuk issue was to fi nance a considerable portion of this year’s fi scal requirements.

According to a senior offi cial of the Al-Amanah Islamic Investment Bank (AAIB), the lack of a Shariah compliant legal and regulatory framework is among the obstacles being faced by the republic’s miniscule Islamic fi nance industry although an estimated 9.2 million or 10% of the country’s population is Muslim.

The government should not ignore the Islamic banking requirements but needs to consider the extensive support given by minority Muslim traders. The laws need to be amended for Islamic banking to thrive in the Philippines.

“AAIB is the only Islamic bank in the country with only nine branches. This year we are looking at disbursing PHP100 million (US$8.7 million) worth of loans, especially in the Muslim-dominated province of Mindanao, to encourage Islamic banking,” added the offi cial, who did not want to be named.

A senior offi cial of the Treasury said: “Initially, the government was looking at issuing US$1 billion worth of Sukuk for a 5 to 10-year period. The issue was mainly to benefi t Filipino Muslims and was to take place in the second quarter of this year. A budget defi cit of PHP111 billion (US$2.4 billion) was targeted during the fi rst quarter of the year, which would help the government maintain the fi scal defi cit below PHP293 billion (US$6.4 billion) or 3.5% of GDP.”

The government has already raised an estimated PHP120 billion (US$2.6 billion) from the sale of conventional bonds, 40% of its full-year target. The balance US$3.8 billion will be met by the offshore sale of retail bonds which would curb the budget defi cit. The retail bonds will be offered in US dollars and Euros, mainly targeting the Filipinos working abroad. This will help support the country’s economy through the considerable amounts foreign remittances.

The Philippines is the world’s third largest recipient of remittances from foreign workers, after India and Mexico. Last year the remittances from Filipinos abroad exceeded US$17 million and is expected to increase this year as a result of recovering economies around the world..

PHILIPPINESSukuk plan called off

MALTAShariah compliant funds regulated

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www.islamicfi nancenews.comCOUNTRY REPORT

© 31st March 2010

The central bank of Lebanon, Banque du Liban (BDL), passed the fi rst Islamic banking regulations in 2004, ushering in the era of fully functional Islamic banks and investment companies. The minimum capital requirement for Islamic banks is US$100 million, but many Islamic banks in the country operate under a special exception that allows the banks to post only US$20 million in capital.

Since the passage of the fi rst law, six additional circulars have been added by BDL to help refi ne the regulatory environment for Islamic banks. The regulator has provided Islamic fi nancial institutions with guidance on Murabahah, Musharakah, Ijarah, Bai al Salam, Istisnah and Mudarabah.

Current landscapeDemand for Islamic fi nance in Lebanon is driven by multiple factors — its faith-based appeal to the Muslim population, its ability to provide a socially responsible and ethical fi nancing alternative to standard options, and its assumption of attracting cross-border petro dollar surpluses.

These factors, and the support provided by BDL, have resulted in the fi rst wave of Islamic banks. These institutions have validated the market and are growing their product offerings to service the evolving marketplace. Still, the total number of Islamic banking customers in Lebanon remains low — the size is estimated at under 15,000 customers — and there are fi ve Islamic banks in operation. The total asset size for the industry remains small, estimated to be between US$200 million and US$300 million. The primary asset class for the Islamic fi nancial institutions is real estate, with increased activity in consumer lending.

With a population of four million, Lebanon’s market size is not the smallest in the region. Bahrain and Dubai have smaller populations, at 750,000 and two million respectively. Additionally, the potential for 18 million Syrian customers with a slight preference for Lebanese banks is expected to stabilize demand in the coming years. Because the fully regulated market for Islamic banks in Lebanon is less than 10 years old, the banks are currently engaged in brand and product development cycles.

Growth opportunitiesThe Lebanese Islamic fi nance consumer market is expected to grow at a steady rate for the next fi ve years, but may reach saturation point in the future. At the current adoption rate, the market is not expected to sustain a large number of institutions, hence internal consolidation and regional partnerships may provide growth opportunities beyond the local market for these banks.

In early 2010, Turkey and Lebanon signed an expansive bilateral economic development agreement that creates a bilateral strategic higher council. This partnership is expected to result in greater cooperation between Islamic banks in both markets. Turkey with its large Muslim population represents a regional growth opportunity for Lebanese Islamic banks.

High net worth individualsIn Lebanon, the opportunity to attract surplus petro dollars from wealthy GCC neighbors is currently underdeveloped. In the GCC region, the educated and multilingual Lebanese workforce can serve as the

intellectual capital for high net worth individuals and family businesses seeking complex investment advice. In this space, Dubai, Bahrain, Qatar and Riyadh represent opportunities for cooperation but also serve as the primary competitors. The Dubai International Financial Centre has attracted many of the Tier 1 banks and fi nancial institutions from Europe and the US, and the development of similar centers in Bahrain, Qatar and Saudi Arabia poses signifi cant challenges for the Lebanese institutions.

Securitization and secondary marketsThe Islamic fi nance product securitization space is currently underdeveloped globally. Lebanon is ahead of the curve with an existing securitization law on the books. This can serve as a competitive advantage if efforts are made to actively develop the marketplace.

Although the law is not perfect and leaves room for improvement in the areas of taxation and custodianship, it serves as an initial framework for Lebanese institutions to develop solution sets. Sukuk and the development of additional products also represent opportunities for growth. Although Lebanon is currently not well-positioned to take a leadership role in the global, or even the GCC regional, Islamic fi nancial markets, there appear to be signifi cant untapped opportunities for further growth.

Lebanon — A Truly Regional OpportunityBy Fawad Butt

Fawad ButtCEO and Managing PartnerZeus Capital AdvisersE-mail: [email protected]


© 31st March 2010

Since 1994, the banking sector in Palestine has grown substantially, from only two banks to 22, operating through a network of more than 180 branches and representative offi ces for a ratio of 20,000 people per branch. Despite these achievements this sector faces many challenges, dealing mainly with a weak Palestinian economy, acute fi nancial distress and security restrictions imposed by Israel, and the political situation.

Bank of Palestine is the fi rst and the largest national bank, founded in 1960. It commenced operations in 1961 with a network of 40 branches. About two-thirds of the banks that operate in the Palestine territories are Jordanian, with the rest owned by Palestinians.

These banks are being kept on the back foot by not only the weak economic and fi nancial situation but also by the Israeli curbs on the transfer of money to the Hamas government in Gaza. Hence, direct trading between Palestine and Israel is the main business for more than half of the Palestinian banks.

There are four Islamic banks in Palestine, and they have 12 branches with total assets of about US$261 million. They are Arab Islamic Bank, Palestine Islamic Bank, Jordan Islamic Bank and Cairo Amman Bank.

Arab Islamic Bank, the fi rst Shariah compliant bank in the country, began operations in 1996. Financial data as at the end of 2008 show that the bank recorded rising growth, with net profi t increasing by 55% over the previous year. Net deposits, including restricted investment accounts, at US$360 million, were 13% more than that in 2007. On the other hand, the net credit given to clients increased to US$112 million, achieving a growth of 18%, while paid-up capital went up to US$38million for a growth rate of 9%.

Palestine Islamic Bank (PIB) began operations in 1997 with its head offi ce in Gaza. It offers banking, fi nancial and investment services through 11 branches and representative offi ces across the Palestinian territories.

PIB offers its services through three main divisions —banking services, commercial services and treasury and investment services. The banking services include current and savings accounts, deposits, personal, housing and commercial loans, car fi nancing, export fi nancing, and direct debit and credit card issuing.

Its commercial services offer letters of credit, bank guarantees, bank transfers and collection policies while the treasury and investment services provide investment in international securities exchange markets, managing investment portfolios, purchasing and selling bonds, stocks and currency notes, and trading in post-dated contracts of foreign currencies.

In 1998, the Jordan Islamic Bank opened an affi liate Islamic bank, the Al Aqsa Bank, which has a branch in Ramallah.

The Palestine Monetary Authority (PMA) is the central bank and is located in Ramallah. It controls and regulates all the fi nancial businesses by enforcing the banking laws passed by the Palestinian Authority (PA).

The Palestinians do not have their own currency. The US dollar and the Jordanian dinar are both used for some transactions, though the Israeli shekel is most commonly handled in day-to-day cash transactions. The PA purchased a risk management system from accounting fi rm PricewaterhouseCoopers, and it operates a system for rating the credit of private consumers. All the banks in the territories are connected to this system.

The net profi t of banks in the Palestinian territories rose 31% in 2009, mainly due to new regulations that helped encourage lending as well as the creation of a credit bureau that increased the banks’ willingness to lend. Net profi t for 2009 stood at US$110 million compared with US$84 million in 2008. Banks’ net assets stood at US$7.9 billion at the end of 2009 compared with US$7.3 billion at the end of 2008.

The banks have to cope with a bewildering array of laws — not only Israeli and Jordanian laws but also old Palestinian laws and Egyptian laws in the Gaza Strip. But in spite of the numerous obstacles, Islamic banking has gained a foothold in Palestine.

In 2006 the PA began to implement a three-year reform of the Palestinian banking system, under which a reorganization was carried out. The number of employees was reduced from 318 to 240, international standards were introduced and the capital demands of the banks were increased. In the past, the minimum capital required to obtain a permit to establish a bank in the PA was US$25 million. It has since been raised to US$35 million.

One of the problems in Palestinian banking is the insuffi ciently developed legal system. This has led to several cases of loans being granted without suffi cient investigation of the borrowers, and the involvement of banks in fi nancing political goals.

When it comes to the fi nancial sphere, there is strict regulation that prevents banks from investing in derivatives and sophisticated fi nancial devices. They are not allowed to deal in derivatives, and have no exposure to hedge funds, collateralized debt obligations and subprime.

The main problem, aside from the underdeveloped legal environment, is the boycott imposed by Israel and the US against the Hamas government. The Israeli defense establishment sees the Palestinian

The Islamic Banking Sector in PalestineBy Ahmed Haroon Husain

continued...

“These banks are being kept on the back foot by not only the weak economic and fi nancial situation but also by the Israeli curbs on the transfer of money to the Hamas government in Gaza”


© 31st March 2010

The Islamic Banking Sector in Palestine (continued)

banks as a pipeline for channeling money to Hamas and for funding terrorist activity, and therefore they are under heavy restrictions, mainly in Gaza.

Due to this, the banks in Gaza are suffering from a problem of liquidity. Therefore, a large percentage of business activity in Gaza is done in cash and on the black market.

Due to the political situation in the country, the government cannot afford to pay the salaries of its employees, so the purchasing power of most Palestinians is drastically reduced, and they cannot repay existing loans.

While the previous government was taking loans from banks, the Hamas government is trying to pay back the loans; hence the level of loans to the government has been reduced. The Hamas government treats Islamic and conventional banks equally. It has not shown any indication of preferring Islamic banking.

PMA and Palestine Investment Bank plan to establish a Takaful company, the fi rst such in Palestine, with a capital of US$10 million. They will each own 15% and three local insurance companies own 22%, with the rest open to public subscription. The establishment of the fi rst Takaful company is a step forward, though PA and the Hamas government have not shown any indication of preferring Islamic banking.

Besides an electronic credit bureau, PMA has also developed a code of corporate governance for banks, issued explanatory instructions drawn from the banking law for regulating the banking sector, as well as developed a regulation for the licensing and supervision of the Islamic fi nancing companies.

PMA has signed a memorandum of understanding with the Central Bank of Jordan to smooth out the relationships between the two supervisory authorities in line with the recommendations of the Basel Committee on cross-border banking supervision. The International Monetary Fund has commended the PMA’s performance based on its Strategic Transformation Plan to become a modern and full-fl edged central bank.

Ahmed Haroon HusainManaging partnerAl Tijjarah Quantum Capital

Suite # 29 & 30, Old Ralli BuildingTalpur Road, Karachi, PakistanTel: +92 21 3240 0289, 3240 0891Mobile: +300 212 5490Fax: +92 21 3240 1816E-mail: [email protected], [email protected]

Sazali Baharom – Country Manager, CIM amic SingaporegaporeaporeSazali B B Islaamicam – Country Man

kRafael Dalmau – Director Emerging Mark & Islamic cc Investments, Fiscm cher Fc cisInvest Franncnkets && Is&u – Director EmerTress & Wattss

rMasood Tirmizi – Director of Capital Mar Standard Charrd Charteered Banke kkarrkets, Stas, andarrd Chad ChaStaizi – Director of Ca

in – Chief Investment OfficeChan Cheh Shin – Chief Investment Office Invvesttment Matm anagemea ntenve ementner, Assias n Islammic Invic Invan in – Chief Investm

ner & Head of Aviation, StepPaul Ng – Partner & Head of Aviation, Step ophennson n Harwwoodwoodsonner & Head of Avia

ti-Rahmati – Counsel, Allen &Hooman Sabeti-Rahmati – Counsel, Allen && Oveerveryti-Rahmati – Couns

ingh – Regional Head SoutheStephen Grundlingh – Regional Head Southe pleton naaaon Assset Manas nanaagemeagonon Assset MAsn entheast AAsA a, TemmpletopletopletoneAsiaingh – Regional He

slamicShamsiah Abdul Karim – Assistant Director, Is us Council o pouncil ool of Singapo o oreponcunslamiccicamicc Rc ligiousus Couns CoueligiouRReKarim – Assist

Our distinguished speakers and panelists include:

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FoFor more inforrmation, contact Karyn N +603 2162 7800 or emailnfor n,fomor 03 2162 7800 or emailr +603 2162 7800 or emailrr y y ppyyKaKaryn.Nair@RREDmE oneyGroup.cEDm pon@nryrrryyr

REGISTEISSTESTSTER NOWST attat www.IFNw IFFww FNNroadshow.com

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EXPANDING THE REALMS OF ISLAMIC FINANCER S O SOEX NG E REALHE REAL S OS O SNG T S SOEH REE XPANNDIEXPANDING THE REALMS OF ISLAMIC FINANCEEXPANDING THE REALMS OF ISLAMIC FINANCEEXPANDING THE REALMS OF ISLAMIC FINANCE

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Tai Booon Leoooon Leongoon LeongTai BTai Boi BExecutive Directorutive Dcutive DirectorEExec

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The Islamic Finance news Roadshow aims to explore and analyze the latest developments in the Singapore Islamic financial market and to tap the valuable potential which has yet to emerge

www.islamicfi nancenews.comMARKET REPORT

© 31st March 2010

Contact [email protected] or call +603 2162 7800

March 2010 has been “the month of the emerging markets.” Both the Dow Jones Islamic Market Index (DJIM) series and the conventional Dow Jones indexes saw composites from the Middle East and East Asia on the rise.

After a humble 2010 debut, the Dow Jones Dubai Financial Market (DFM) Titans 10 Index was boosted by rumors that Dubai’s state-owned conglomerate Dubai World is in an advanced stage in negotiations with its creditors over a restructuring of its crippling US$26 billion debt. The Dow Jones DFM Titans 10 Index jumped 12.21% higher, closing at 2,422.61 points (as of the close of trading on the 23rd March).

The next largest gainers were the DJIM South Korea Index (up 8.64% at 800.79 points) and the DJIM Hong Kong Index (7.96% higher at 1,510.40 points). As a direct comparison, the conventional bellwethers Dow Jones Industrial Average in New York added 5.46% (closing at 10,888.83 points (note that 8 is the lucky number in Asia)) and the Dow Jones Europe Index ended at 267.50 points (up 5.70%).

Dubai, home of Dubai Islamic Bank — which is the oldest regulated Islamic fi nancial institution — and the UAE are undergoing a series of radical changes. Its building boom may have slowed, but Dubai has successfully constructed the fi rst metro system on the Arab peninsula, which has been in operation since the 9th September 2009.

“Dubai 2.0 will not be a remote place in the desert anymore, but a well-connected international hub”, says Jeff Singer, CEO of Nasdaq Dubai. Moreover, the Gulf states have projects worth a whopping US$2.2 trillion in the pipeline, according to Dr Nasser Saidi, chief economist of the Dubai International Financial Centre (DIFC). Take Kuwait, for example: The small northern Gulf state alone announced a fi ve-year plan worth an astounding US$104 billion in mid-March.

Shares of Kuwait National Airways have been added to the DJIM GCC Index, which covers Shariah compliant stocks from Bahrain, Kuwait,

Oman, Qatar, Saudi Arabia and the UAE. They are considered Shariah compliant (or pure) because civil airlines usually do not, or post rather insignifi cant, turnover with pork, pornography, tobacco, weapons, or interest-bearing fi nancial products.

Another new addition to the DJIM GCC Index is Vodafone Qatar, which saw a US$1 billion initial public offering (IPO) in May 2009. The DJIM Kuwait Index dropped by a quarter percent and fi nished at 861.95 points — one of the worst composites of March. But, remarkably, it is still the top performer on a year-to date basis (up 10.55%). At the bottom of the charts, the DJIM Sri Lanka Index plummeted 2% and closed at 1,661.61 points.

According to Jennifer Choi, director of research, Emerging Markets Private Equity Association, emerging markets have not seen a major decline in the market for non-capital market fi nancing, bringing innovative fi rms “from Main Street to Wall Street”.

“In 2009, 26% of all private equity (PE) deals worldwide — which stood at US$85 billion — were done in the emerging markets in South America, Eastern Europe, the Middle East and North Africa and East Asia”, Choi explained. Rising activity in private equity is seen as a prelude for increasing capital market liquidity. Privately fi nanced fi rms, mergers or acquisitions are often followed by IPOs, listed spin-offs or bond issues.

However, PE fi rms and banks are focused more than ever on the “old economy” rather than on IT and biotech fi rms, as they used to be. Consequently, the DJIM Industrials Index closed 7.59% higher at 1,491.97 points — the highest of the DJIM industry indexes. All Shariah compliant industry composites gained territory in March.

Dow Jones Islamic Market Indexes in March:All Eyes on the Emerging Markets

By Gérard Al-Fil

Gérard Al-Fil is a fi nancial journalist in Dubai.

www.islamicfi nancenews.comMARKET REPORT

© 31st March 2010

Dow Jones Islamic Market Indexes in March: All Eyes on the Emerging Markets (continued)

Based on the close of trading on the 23rd March, the global Dow Jones Islamic Market (DJIM) Titans 100 Index, which measures the performance of 100 of the leading Shariah compliant stocks globally, gained 4.79% month-to-date, closing at 2145.77.

In comparison, the Dow Jones (DJ) Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a gain of 4.67%, closing at 173.61.

The DJIM Asia/Pacifi c Titans 25 Index, which measures the performance of 25 of the leading Shariah compliant stocks in the Asia/Pacifi c region, increased 5.43%, closing at 1895.92. The DJ

Asian Titans 50 Index, in comparison, posted a gain of 6.11%, closing at 139.25.

Measuring Europe, the DJIM Europe Titans 25 Index, which measures the performance of the 25 of the leading Shariah compliant stocks in Europe, closed at 2146.59, a gain of 5.24%, while the conventional DJ Europe Index gained 5.70%, closing at 257.50.

Measuring the performance of 50 of the largest Shariah compliant US stocks, the DJIM US Titans 50 Index increased, closing at 2179.41. It represents a gain of 4.49%. The US blue chip DJ Industrial Average increased 5.46%, closing at 10888.83.

Asia: Performance of DJIM versus Conventional DJ Indexes

Dow Jones Islamic Market Indexes Conventional Dow Jones IndexesIndex Names Index Close March 2010 MTD 2010 MTD 2009 Index Close March 2010 Index Names

DJIM Asia/Pacifi c Index 1343.52 5.96% 5.53% 127.35 DJ Asia/Pacifi c Index

DJIM China Offshore Index 2836.74 1.95% 3.03% 3906.34 DJ China Offshore 50 Index

DJIM Hong Kong Index 1510.40 7.96% 5.61% 426.03 DJ Hong Kong Index

DJIM India Index 1.873,32 6.93% 6.55% 1822.63 DJ India Total Stock Market Index

DJIM Indonesia Index 1263.24 5.72% 9.34% 165.18 DJ Indonesia Index

DJIM Japan Index 1063.85 4.61% 4.36% 86.82 DJ Japan Index

DJIM Malaysia Index 1387.48 4.21% 5.67% 198.32 DJ Malaysia Index

Dow Jones-JS Pakistan Islamic Index 11795.59 3.74% 2.41% 617.52 DJ Pakistan Total Stock Market Index

DJIM Philippines Index 1604.49 1.64% 6.02% 176.03 DJ Philippines Index

DJIM Singapore Index 1084.06 5.27% 5.89% 267.73 DJ Singapore Index

DJIM South Korea Index 800.79 8.64% 7.73% 239.62 DJ South Korea Index

DJIM Amana Sri Lanka Index 1.661,61 -2.02% -0.19% 244.01 DJ Sri Lanka Index

DJIM Taiwan Index 4306.91 5.03% 5.46% 151.33 DJ Taiwan Index

DJIM Thailand Index 1477.41 7.71% 11.13% 106.53 DJ Thailand Index

March 2010 Report on the Performance of theDow Jones Islamic Market Indexes

Vote Now atwww.islamicfinancenews.com

Categories

Closing Date : 8th May 2010

Islamic Banking & FinanceIslamic Corporate FinanceIslamic Dispute Resolution

Islamic Energy FinanceShariah Investment Funds

Offshore Islamic FinanceIslamic Project Finance

Islamic Real Estate FinanceRestructuring

Islamic Securitization & Structured FinanceTakaful & Re-Takaful

Islamic Transportation Finance

POLLING BEGINS!

www.islamicfi nancenews.comSECTOR REPORT

© 31st March 2010

As the world economies are beginning to emerge from the economic crisis, Islamic funds have proven adaptable and have been one of the survivors of the economic downturn. In 2009, the Islamic fund industry remained strong with almost US$50 billion in fund assets under management, according to Ernst & Young’s Islamic Funds and Investments Report 2009.

The Islamic fund industry has gained increased popularity and accord-ing to Lipper, the mutual fund division of Thomson Reuters, there are now 473 Islamic funds, more than half of which are equity funds. Is-lamic funds have been popular among investors seeking to limit the risk of their investment, especially in the Middle East and in Asia.

The defi ning feature of Islamic fi nance remains the ethical principles that underpin the industry. These principles comprise the ethical distribution of wealth, risk sharing, the prohibition of interest and linking deposits and investments to real underlying assets. These principles have assisted Islamic fi nancial institutions in maintaining more consistent returns, even during the economic downturn.

In light of this growing interest in Islamic funds, it has become even more imperative that robust corporate governance policies and adherence to internationally recognized standards are maintained in order for Islamic funds to remain consistent and have a degree of permanence comparable to conventional funds.

Standardization of industry best practiceInvestors increasingly expect funds to adhere to strict standards of corporate governance, which involves adopting structures and processes that incorporate the values of fairness, transparency and accountability. The objective of corporate governance is to put in place a system which will deliver a company’s business objectives whilst managing risk. Islamic entities share these same objectives, but are also subject to an additional layer of compliance with Shariah rules and principles.

Shariah governanceThe Islamic fi nance industry has developed industry bodies to provide guidance on the application of the Shariah, in line with good corporate governance. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) provides 41 Shariah standards for Islamic fi nancial institutions to ensure that their products and services are Shariah compliant. The Shariah standards as well as accounting, auditing and governance standards are widely adhered to among Islamic fi nance practitioners.

Accounting and auditing standards are provided by AAOIFI in order to provide a standard measure for accounting principles to be applied across Islamic fi nancial institutions.

The Islamic Financial Services Board (IFSB) issues global standards and guiding principles for the banking, insurance and capital markets sectors to promote the development of a prudent and transparent Is-lamic fi nancial services industry. IFSB introduces new, or adapts exist-ing, international standards consistent with Shariah principles and has so far issued 12 standards and guiding principles on the key areas of risk management, capital adequacy, corporate governance, transpar-

ency and market discipline, supervisory review process, governance for Takaful operations and a system of Shariah governance.

To comply with Shariah governance, an Islamic fund will appoint a Shariah board (usually consisting of three scholars as recommended by AAOIFI) which provides guidance on investment guidelines and undertakes a periodic review of the fund and its investments. The board also provides guidance on purifi cation. Purifi cation is the process of separating any income generated by an Islamic fund which is derived from any interest-based transactions or non-Shariah compliant trades. Such amount is either deducted prior to distribution of dividends or investors are informed of the amount that should be deducted and the Shariah board recommends that the income is purifi ed by the investor donating such amount to a nominated charity.

Conventional corporate governanceA number of industry bodies provide guidance on corporate governance and best practice for the conventional fi nancial industry. The key areas of corporate governance which these bodies address, to which Islamic funds should also seek to adhere, are structural governance and risk management, disclosure and transparency requirements and valuation and accounting policies.

The International Organization of Securities Commissions (IOSCO) promotes high standards of regulation and provides fund valuation and guidance. The Objectives and Principles of Securities Regulation are a set of 30 principles of securities regulation which are based upon the objectives of protecting investors, ensuring that markets are fair, effi cient and transparent and reducing systemic risk. IOSCO members regulate more than 90% of the world’s securities markets and is today the world’s most important international cooperative forum for securities regulatory agencies.

The Institutional Limited Partners Association (ILPA) is a non-profi t association committed to serving limited partner investors in the global private equity industry by facilitating value-added communication and promoting research and standards in that industry. ILPA member organizations collectively manage approximately US$1 trillion of private equity assets. ILPA has issued principles that address issues such as a general partner’s duty of care to the limited partners, recommendations to make valuation and fi nancial information available on a quarterly basis and the need for access to information and greater transparency for investors in a private equity fund.

ILPA has also established model preferred terms for private equity investors to consider when entering into investment structures, including the appointment of an independent auditor and the establishment of a limited partner advisory committee to give prior approval in relation to any confl icts presented by the general partner.

The British Private Equity and Venture Capital Association provides guidance on current best practice on the valuation of private equity and venture capital investments, through the International Private Equity and Venture Capital Valuation Guidelines. These guidelines can be applied to investments in early stage ventures, management buyouts, management buy-ins and similar transactions, and growth or development capital.

Good Governance — Achieving Consistency in Islamic FundsBy Uzma Khan

continued...


© 31st March 2010

Good Governance — Achieving Consistency in Islamic Funds (continued)

The Association of Investment Companies (AIC) provides guidance to a broad range of closed-end investment companies, including investment trusts, offshore investment companies and venture capital trusts, which are traded on the London Stock Exchange, AIM (Alternative Investment Market) and Euronext, through the AIC Code of Governance (AIC Code). The AIC Code is built on understanding the needs of shareholders and promoting best practice for boards to adhere to.

The Hedge Fund Standards Board (HFSB) brings together major hedge fund investors promoting conformity to the best practice Hedge Fund Standards, drawn up in 2007 in response to concerns about the fi nancial stability of the industry, and providing a guiding standard for hedge funds to limit systemic risk. In October 2009, HFSB participated in the CESR consultation on short selling and the UK Treasury Inquiry into macro and micro prudential fi nancial regulation.

The standards address the development of risk management techniques and the monitoring of operational and portfolio risks, the adequate disclosure of investment policies, risks and commercial terms to investors and the separation of duties to adequately mitigate potential confl icts of interest and provide investors with suffi cient information about the valuation process. These principles provide a basis for over 56 hedge fund managers who have signed up to the standards, accounting for over US$215 billion in assets under management.

Islamic shipping fundNorton Rose recently advised QInvest (a Qatar Financial Center Regulatory Authority authorized fi rm) and Fortis Bank Nederland (together the sponsors) on the launch of the QInvest-Fortis Bank Nederland Shipping Fund. The fund was structured as a limited liability company incorporated in the Netherlands Antilles to provide Shariah compliant mezzanine fi nance to shipowners, being the fi rst of its kind in the market. The structure of the fund was developed with good corporate governance in mind and with the aim of ensuring that the principles of disclosure, valuation, risk management, accounting and Shariah fund governance were adhered to.

Shariah governanceA Shariah supervisory board has been appointed by the fund’s investment manager to advise in relation to Shariah compliance and to approve the overall structure of the fund and each investment by the fund. In addition, the board periodically reviews the fund, its investments and the fi nancing provided by it. The resolutions of the board are binding upon the fund and the investment manager. However, the board does not have responsibility for the management of the fund and does not have the power to make any investment decisions for the fund; such decisions have been delegated to the investment manager.

The board comprises Islamic scholars from different geographic backgrounds with a track record in the practical implementation of Shariah. This complies with the IFSB principle that, in order to ensure independence and impartiality in the decision making process, no individual member of a Shariah board should be “connected” with a fund or serve another function within a fund. Shariah investment guidelines have been developed to ensure each of the fund’s investments is in compliance with Shariah.

Structural governance and risk managementThe fund board includes independent directors. The investment manager has been established as a joint venture between the sponsors. The board of the investment manager comprises an equal number of directors appointed by each of the sponsors, and it has appointed an independent consultant to provide advice.

A recommendation panel has been established to recommend transactions to the investment manager board. This panel is composed of three representatives from each of the sponsors, drawn from a range of business lines within the sponsors, including business and risk. The fund has adopted an investment process which separates the decision-making process into various stages, which include involving each of the investment manager board, the Shariah supervisory board and the recommendation panel at different stages of the process, to ensure that investments are made in a Shariah compliant manner and to minimize risk. To provide comfort to investors and to minimize risk, care has been taken in the selection of service providers to the fund to ensure that such service providers are independent and self-standing. The annual report and audited fi nancial statements of the fund will be prepared in accordance with international fi nancial standard reporting standards for each fi nancial year.

OutlookThere is growing optimism that the Islamic fi nance industry will benefi t from the consistent implementation of corporate governance policies and adherence to internationally recognized standards, which will strengthen the industry and provide a basis for investors to gain greater confi dence to invest in the long term. AAOIFI secretary-general Dr Mohammad Nedal Alchaar has highlighted the need for “the enforcement of well-designed standards backed by close regulatory supervision” to safeguard the Islamic banking and fi nance system.

Aligning Islamic principles with corporate governance principles and standards will provide a stronger platform for Islamic funds, and indeed the wider Islamic fi nance industry, to fl ourish. Such promotion within Islamic fi nance structures of corporate governance policies which encourage greater alignment of interests between investors, and increased disclosure and transparency obligations will arguably be a step closer to the true ethos of Islamic fi nance.

Uzma Khan, Senior AssociateInvestment Funds TeamNorton Rose

For more information, please contact:Sarah WebsterPR ManagerNorton RoseTel: 44 (0) 20 7444 5942 Fax: 44 (0) 20 7283 6500 E-mail: [email protected]


© 31st March 2010

Conventional wisdom regarding the Islamic investment industry during the last credit crisis was that the Dow Jones Islamic Index tends to outperform the general market since its counters are required to avoid banks, fi nancials, and companies with excess leverage, and performance will lag when markets rebound and investors become less risk averse.

Analyzing the performances of the DJ Islamic Index versus standard broad market indices through both market downturn and upturn seems to confi rm the fi rst part of the argument as the DJ Islamic Index outperformed general stock market indices during the crisis, but underperformed as risks came back to the market and investors bid up prices of badly beaten-down banks and fi nancial companies.

However, the DJ Islamic Index also did manage to quickly rebound with the general market and posted impressive absolute gains from last year’s market trough, highlighting its resilience and viability as a long-term investment option.

The performance of the DJ Islamic Index through the last bear market also underscores an important aspect of risk management to investors and fi nancial advisors — the less you lose, the less return you need. Despite underperforming since the market trough in the fi rst quarter of 2009, the DJ Islamic Index still showed overall outperformance versus the DJ Total US Stock Market and MSCI EAFE.

The performance between the Islamic Index and US Total Stock Market Index is striking, as even though the Islamic index underperformed by 12.3% during the upturn, it still posted a relative outperformance since the beginning of the bear market by losing less during the downturn.

For long-term investors, an Islamic fund can provide crucial risk management in a diversifi ed portfolio as it can help to anchor a portfolio by holding quality companies with solid balance sheets — positions investors can hold through bear markets. With diffi culties associated with market timing, having an Islamic fund as a core holding can be a prudent strategy as it is a viable investment strategy through various market cycles.

Looking forward, as investors’ optimism of the second half of 2009 dissipated as the world economy continued to struggle to recover from the credit crisis, quality companies with solid balance sheets should perform relatively well as investors refocus their attention on the fundamental drivers of stock prices. This should bode very well for Shariah funds as investing in sound companies without excess debts and solid balance sheet is one of the tenets of Shariah investment.

State of Islamic funds in the USThe Islamic mutual fund industry in the US started in 2009 with fi ve funds available to US investors. However, during the year, one of the Azzad funds was liquidated while two Islamic international funds —

Shariah Compliant Equity Investment in the USBy Monem A. Salam and John Scott

continued...

100

90

80

70

60

50

40

Bear market performance

US Islamic US Total Stock Market MSCI EAFE

*Source Bloomberg

01/2008 to 02/2009 02/2009 to 02/2010 Total Performance Monthly St’d Dev

DJ Islamic Index -42.4% 43.9% -17.1% 5.9%

DJ Total US Stock Market -48.4% 56.2% -19.3% 6.8%

MSCI EAFE -55.7% 50.1% -33.6% 7.8%

% Down 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Returns Needed to Break-Even 11.1% 17.6% 25.0% 33.3% 42.9% 53.8% 66.7% 81.8% 100.0%


© 31st March 2010

Shariah Compliant Equity Investment in the US (continued)

Amana Developing World Fund and JETS DJ Islamic Market ETF — were launched. These international funds were another positive step the industry is taking as they will allow investors to build a diversifi ed global asset allocation while keeping with the principles of Shariah.

The Amana Developing World Fund has very unique and interesting approach to gaining emerging markets exposures for its investors. In addition to taking direct positions in developing world companies, it also focuses on companies domiciled in developed markets which have signifi cant business and operational exposures to developing markets. For example, one of the fund’s holdings is US-based Colgate-Palmolive, which derives more than 50% of its revenue from developing markets. This approach allows fund’s shareholders to gain exposure to the growing middle-class of fast-growing emerging markets without some of the volatility that comes with it.

The Javelin Dow Jones Islamic Market International Fund (JVS) became the fi rst exchange-traded fund (ETF) for the Islamic funds industry last year. This ETF will track approximately 100 companies representing 23 countries outside the US. As with other ETFs, JVS will provide (for investors seeking Shariah compliant investments) an easy-to-use investment vehicle for their portfolios.

JVS’s smaller size, though, leads to the same market related issues faced by an investor or adviser trying to acquire or liquidate a position, in a smaller stock. Examples of those issues are lack of liquidity and larger-than-normal bid-ask spreads. Recently (as of the 25th March) the last 30 days average trading volume has been 825 shares, with a bid-ask spread of US$48.29-US$48.74.

Asset Growth by Fund

(US$ mil) FY 2008 FY 2009 02/2010

AMAGX $758.5 $1,046.9 $1,555.1

AMANX $493.9 $691.4 $1,068.5

AMDWX $0.0 $0.0 $6.5

IMANX $43.1 $24.7 $30.7

ADJEX $3.5 $6.1 $9.7

JVS $0.0 $0.0 $2.5

Total $1,299.1 $1,769.1 $2,672.9

YoY Growth 36.2% 51.1%

*Source Bloomberg, Company Info

Investors should remember that an Islamic investment has the same purpose as a conventional investment, except that it invests in

accordance with the principles of Shariah. Moreover, Shariah principles are based on Islam, not an active investment strategy designed to help investors to select best investment opportunities.

Islamic funds industry growthDespite the diffi cult markets in 2008 and 2009, the industry has shown tremendous asset growth. However, this growth as not been shared by all the participants in the industry as the Amana Funds, controlling over 98% of the industry’s assets, were the real drivers of the industry growth. Excluding Amana Funds, the Islamic funds industry in the US was only about US$43 million as of February 2010.

The Last FrontierSince earning and paying interest are haram, justifying money market or bond funds in investment portfolios have been diffi cult for investors seeking a Shariah compliant investment strategy. Although there are Sukuk investments available, primarily in overseas markets, both liquidity and the large bid-ask spread make them less than ideal investment products for most investors.

However, in keeping with free-market principles and innovation, we strongly feel that the Islamic fi nancial industry will eventually produce Sukuk investments that are a viable alternative to traditional bond funds.

When and how is unknown, but it will be interesting to track its development.

Ticker Type AUM (US$ mil) Inception

Amana Growth Fund AMAGX Open-end mutual fund $1,555.1 02/03/1994

Amana Income Fund AMANX Open-end mutual fund $1,068.5 06/23/1986

Amana Developing World AMDWX Open-end mutual fund $6.5 09/28/2009

Allied Asset Advisors Fund IMANX Open-end mutual fund $30.9 06/30/2000

Azzad Ethical Mid Cap ADJEX Open-end mutual fund $9.7 11/20/2000

JETS DJ Islamic Market JVS ETF $2.5 07/01/2009

Azzad Ethical Income Liquidated

*Source Bloomberg

Monem A. SalamDirector of Islamic investingTel: 360-734-9900Fax: 360-734-0755E-mail: [email protected]

John ScottInvestment analystE-mail: [email protected]

“Despite the diffi cult markets in 2008 and 2009, the industry has shown tremendous asset growth”

www.islamicfi nancenews.comFORUM

© 31st March 2010

With governments as well as regulatory and supervisory authorities mounting agendas to reformfi nancial regulations, what potential impact will this have on the Islamic fi nance industry overall?

The momentum for regulatory reform is certainly increasing, with responses to the consultative documents issued by the Basel Committee on Banking Supervision due in April. A signifi cant meeting of the G-20 fi nance ministers and central bank governors is scheduled for June in Busan, Korea, prior to the heads of state meeting in Toronto on the 26th and 27th June.

The changes proposed to capital adequacy and liquidity requirements will inevitably impose additional burdens and costs on Islamic banks. However, as raising capital has not been a problem for the Islamic banking industry in the past, enhanced capital requirements should not slow their growth.

Urging regulators to recognize the AAOIFI (Accounting and Auditing Organization for Islamic Financial Organizations) standards can also help Islamic banks in this respect.

What qualifi es as liquid assets has been a long standing issue for Islamic banks, but this is unlikely to change as a result of reforms to banking supervision. However, as liquidity is more than adequate for most Islamic banks, they should urge regulators to take a light-touch approach rather than impose additional burdensome requirements.

PROFESSOR RODNEY WILSON: Qatar Foundation, Faculty of Islamic Studies, Qatar

Capital fl ows between the Gulf region and Malaysia are small, even though buyers of assets on both sides are increasingly interested in expanding investments. What is helping or hindering the fl ow of capital between Malaysia

and the Gulf? How do you read the development in the coming years?

If you would like to air your views on the next Islamic Finance Forum Question, please email your response of between 50 and 300words to Christina Morgan, Forum Editor, at: [email protected] before Monday, 12th April 2010.

Next Forum Question

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www.islamicfi nancenews.comMEET THE HEAD

© 31st March 2010

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 as a treasury middle offi ce analyst and offi cer at the National Bank of Pakistan after graduating from the UK in 2004. Within a short period, and at the age of only 31, I have the unique distinction of working as head of risk management in three different sectors of the fi nancial thrift industry — commercial banking, asset management and now Islamic banking.

My early days were rotated within the risk management units, picking up quintessential learning experiences related to fi nancial risk management (FRM) oriented assignments.

What does your role involve?My primary role is to develop an enterprise-wide FRM identifi cation, measurement and management infrastructure. Yemeni banks are not under the Basel II Accord; hence we are fi rstly in the process of implementing the capital accord guidelines for TIIB to calculate its minimum capital requirements using internationally applied risk weights as per both IFSB (Islamic Financial Services Board) and Basel II documents.

We are also developing proactive investment risk screening, selection, allocation, performance review and rebalancing methodologies and modus operandi for all trading book transactions. Operational risk controls are being enhanced across all branches and arms of the bank to reduce the risk of internal process breakdown at any time.

What is your greatest achievement to date?This was when I was attached to Faysal Asset Management, a subsidiary of Faysal Bank, where I developed the risk management unit singlehandedly as well as trained and managed the fi nancial risks of three open-end funds. I further developed more than fi ve quantitative models at the same company to screen, select and back test investment portfolios. All fi ve models were approved by the board of directors and I received the “best manager award” from the senior management.

Which of your products/services deliver the best results?

The bank offers a wide variety of liability type products and services to its clients, benefi tting from its large branch coverage throughout

Yemen. By and large all liability type facilities offered to clients have resulted in huge growth of both the corporate and retail client base.

Today the bank has the highest number of deposits and depositors in Yemen as a result of product innovation, brand management and the intelligent work of our talented staff.

What are the strengths of your business?The bank is part of the Hayal Saeed Anam (HSA) Group, the largest and most respected business group in this country. This reputation strengthens our bank’s image and brand equity. Secondly the bank has a wide range of branches all over Yemen, which increases our ability to reach out to customers from the major hubs of business to the remotest part of our country.

Thirdly, the bank benefi ts from regional synergies and market intelligence related to international investment processes and high net worth banking by having a subsidiary, Tadhamon Capital, in Bahrain. This extends our reach into vibrant international market segments in the areas of private equity, venture capital investments and buyouts, real estate infrastructure development projects, asset management, wealth management and treasury. Last but not the least, our bank values its employees and clients, the bedrock of our continual growth and the support that we have received over the last 10 years.

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

Our customers, employees and the management.

What are the obstacles faced in running your business today?

Yemen is a rapidly growing economy, hence this presents both challenges and rewards for the commercial banking industry. I don’t believe that anything in this world is an obstacle unless you perceive it to be at the back of your mind.

Where do you see the Islamic fi nance industry in, say, the next fi ve years or so?

The Islamic fi nance industry has shown great resilience over the last two years in the aftermath of the global subprime debt crisis. I believe this has provided greater motivation to investors to explore new vistas in Islamic banking and asset management. The future seems to be promising and Inshallah the growth in the message of equitable and effi cient economic and social justice shall spread through Islamic banks all over the over world.

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

Greater imperative should be placed upon inculcating the risk management culture and processes within the larger scheme of things. At the moment globally it seems that conventional banks take up the lead in modeling and practicing the risk management theory. I hope Islamic risk desks will be in a position to theoretically and practically compete with non-Islamic banks in all faculties of risk management in the foreseeable future.

Name:

Position:

Company:

Based:

Age:

Nationality:

Syed Adeel Hussain

Director and head of risk analytics

Tadhamon International Islamic Bank (TIIB)

Sana’a, Yemen

31

Pakistani

www.islamicfi nancenews.comTERMSHEET

© 31st March 2010

The Q&A was conducted with the business development manager at Kagiso Asset Management, Michelle Ismay:

1. Why did you use this particular Islamic structure? What other structures were considered? When we decided to launch the Kagiso Islamic Equity Fund there were only four Shariah equity funds in the South African market. We

believed that there was a good opportunity for another fund which could offer investors performance, client servicing and transparency. Kagiso Asset Management will, in the future, consider launching other Shariah products.

2. What were the challenges faced and how were they resolved? The main challenges remain breaking into the market as a new fund manager with no Shariah investment track record. We have overcome

this obstacle by showing investors that our Kagiso Equity Alpha fund — which is a mirror image of the Shariah fund, although a general equity fund and not Shariah compliant — has shown exceptional performance since its inception in April 2004. The same investment team and an identical investment philosophy and process is followed on both funds, save for the Shariah screen that is applied. This has given investors the confi dence to support us and it has paid off handsomely when looking at our performance to date.

3. Geographically speaking, where did the investors come from? As the fund is a South African unit trust investment vehicle, most of the investors are domiciled in South Africa. However, Kagiso Asset

Management continues to approach investors from outside of South Africa who are looking for offshore exposure in an emerging market unit trust vehicle.

SUMMARY OF TERMS & CONDITIONS

Kagiso Islamic Equity Fund

ZAR14 million (US$2 million)

13th July 2009

Management Company Coronation Management Company is our unit trust administration provider

Third party manager Kagiso Asset Management

Minimum Investment ZAR500 (US$68) monthly debit order or alternatively ZAR5,000 (US$677) lump sum

Return 12.7% since inception on the 13th of July 2009 to 28th February 2010. Past performance is not indicative of future performance

Fee 1% (excluding value added tax at 14%) per annum management fee. No performance fee or initial fee applicable

Rating High risk equity investments

Investment Vehicle Collective Investment Scheme Unit Trust Vehicle

Trustee ABSA Bank

Governing Law South African

Regulatory Information Kagiso Islamic Equity Fund is a collective investment scheme portfolio (unit trust) registered in terms of the Collective Investment Schemes Control Act of South Africa under the Coronation Unit Trust Scheme

www.islamicfi nancenews.comMOVES

© 31st March 2010

HSBC BANKMALAYSIA: HSBC Bank has appointed Peter Wong Tung Shun as its new chairman and non-executive director.

Wong was previously the CEO of Hong Kong and Shanghai Banking Corporation.

HSBC Amanah is a subsidiary of HSBC Bank.

ALLIANCE INVESTMENT BANKMALAYSIA: Alliance Investment Bank executive vice-president/CEO Sachi Ratnajoothy and its head of dealing, equity markets Lok Eng Hong have tendered their resignations, citing personal reasons.

Alliance Investment Bank is a subsidiary of Alliance Bank, which owns Alliance Islamic Bank.

BANK NEGARA MALAYSIAMALAYSIA: Former Petronas CEO Mohd Hassan Marican is retiring from the board of Bank Negara after completing his term.

Bank Negara has appointed two new board members — secretary general of the ministry of domestic trade Sulaiman Mahbob and the director of Syarikat Prasarana Negara Chin Kwai Yoong.

SANAD SUKUK FUNDSWITZERLAND: Mark Mortimore has been appointed executive director to the world’s fi rst GCC-oriented Sukuk fund, Sanad Sukuk Fund.

Mortimore previously worked at Barclays Bank, Manufacturers Hanover Bank, General Electric Capital, Riyad Bank, United Bank of Kuwait and Arab Banking Corporation.

SECURITIES COMMISSION MALAYSIAMALAYSIA: The Securities Commission (SC) has extended the contract of chairman

Zarinah Anwar for another year, after her two-year term expires on the 1st April.

Zarinah was appointed chairman in April 2006. She had served as the deputy chief executive and was a member of the regulator since the 1st December 2001.

Prior to joining the SC, Zarinah spent 22 years with Shell Malaysia, holding several key positions including that of deputy chairman.

She is also a member of the Labuan Financial Services Authority, the Financial Reporting Foundation and the Malaysia International Islamic Financial Centre.

MASHREQ AL ISLAMIUAE: Mashreq Al Islami, a subsidiary of Mashreqbank, has appointed Yusra Abdul Gaffar as manager for Mashreq Gold — an affl uent fi nancial management service provider.

Gaffar will be responsible for the development and expansion of Mashreq Al Islami’s affl uent business offering across the UAE.

She was previously attached to Jumeirah ‘s Mashreqbank branch and the Commercial Bank of Dubai.

DEUTSCHE BANK AMERICAS HOLDING CORPORATIONUS: Deutsche Bank has appointed John Utendahl as vice-chairman of Deutsche Bank Americas Holding Corporation.

Utendahl’s primary focus will be on cultivating and enhancing major strategic client relationships for the fi rm.

He will also join the senior client team, headed by Deutsche Bank managing director and head of strategy and oversight Donna Milrod.

Utendahl was previously with Wall Street, Utendahl Capital Partners, Salomon Brothers and Merrill Lynch’s corporate bond department.

DBS GROUP HOLDINGSSINGAPORE: Koh Boon Hwee will step down as chairman of DBS Group Holdings and DBS Bank boards on the 30th April.

Koh has been the chairman of DBS since January 2006.

DBS board member Peter Seah Lim Huat will assume the chairmanship of both boards on the 1st May.

The Islamic Bank of Asia is a subsidiary of DBS Bank.

SOCIÉTÉ GÉNÉRALE CORPORATE AND INVESTMENT BANKINGFRANCE: Société Générale Corporate and Investment Banking (SG CIB) has appointed Sébastien Domanico as the global head of fi nancial institutions origination, debt capital markets.

Domanico was previously attached to HSBC, BNP Paribas and Bear Stearns.

SG CIB is a subsidiary of Société Générale Group, which is involved with Islamic fi nance activities.

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© 31st March 2010

Mr Daud Abdullah (David Vicary)Global Leader

Global Islamic Finance Group, Deloitte

Prof Dr Mohd Masum BillahGroup Executive ChairmanMiddle Eastern Business

World Group of Companies

Dr Humayon DarChief Executive Offi cer

BMB Islamic

Mr Badlisyah Abdul GhaniChief Executive Offi cer

CIMB Islamic

Ms Baljeet Kaur GrewalManaging Director/Vice Chairman

Head, Global ResearchKFH Research Limited

Mr Sohail JafferPartner

International Business Development FWU International

Dr Monzer Kahf Consultant/Trainer/Lecturer

Private Practice

Mr Mohamed Ridza AbdullahManaging Partner

Mohamed Ridza & Co

Prof Bala ShanmugamDirector of Banking & Finance Monash University Malaysia

Mr Muhammad Nejatullah SiddiqiAuthor, Scholar, Speaker, Trainer

Mr Rushdi SiddiquiHead of Islamic Finance

Thomson Reuters

Mr Dawood TaylorRegional Senior Executive-Middle East

Prudential PLC

Mr Abdulkader ThomasPresident & CEO

SHAPE – Financial Corp

Mr Paul WoutersPartnerBener

Prof Rodney WilsonDirector of Postgraduate Studies

Durham University

Mr Sohail ZubairiChief Executive Offi cer

Dar Al Sharia Legal & Financial Consultancy

Islamic Finance newsAdvisory Board:

Another Islamic Finance news exclusive

ISSUER SIZE INSTRUMENT

Nakheel, UAE TBA Sukuk

Waha Capital, UAE US$272 million Sukuk

Perusahaan Listrik Negara, Indonesia

IDR3 trillion Sukuk and conventional bonds

Indonesia TBA Sukuk

BNM Sukuk, Malaysia TBA Sukuk Murabahah

Kazakhstan TBA Sukuk

Finance Ministry, Jordan TBA Sukuk

Private Healthcare, London TBA Sukuk

The Philippines US$500 million Sukuk

Deutsche Bank US$500 million Sukuk

Saudi Aramco-Total US$1 billion Sukuk

Titan Kimia Nusantara IDR200 billion Sukuk

Prime Rate Capital US$250 million Islamic Liquidity Fund

Jubail Refi ning & Petrochemical, Saudi Arabia

SAR3.7 billion Sukuk

Qatar Islamic Bank TBA Sukuk

Al Aqeeq Real Estate Development, Saudi Arabia

SAR700 million Sukuk

Islamic Development Bank SAR3.8 billion Sukuk

Titan Petrokimia Nusantara IDR200 billion Sukuk

Syarikat Prasarana Negara RM3 billion Sukuk

Islamic Bank of Thailand THB55 billion Sukuk

Al Ijarah Sharia Finance (ALIF), Indonesia

IDR100 billion Sukuk

Mumtalakat TBA Sukuk

Ministry of Finance, Kazakhstan

KZT74 billion Sukuk

VTB Bank, Russia RUB10 billion Sukuk

Axiata Group US$1.2 billion Sukuk

ETA Star Property Developers AED1.5 billion Sukuk

Jordan Dubai Islamic Bank TBA Sukuk

Malaysia TBA Sukuk

Kerala, India TBA Sukuk

Qatar, Sudan, Pakistan, Indonesia and Malaysia

TBA Euro-denominated inter-government Sukuk issuance program

Binariang GSM RM5 billion Sukuk

For more details and the full list of deals visit

www.islamicfi nancenews.com

Keeping you abreast of the world’s upcoming Shariah compliant deals

www.islamicfi nancenews.comISLAMIC FUNDS TABLES

© 31st March 2010

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

Monthly returns for Emerging Markets funds (as of the 29th March 2010)

FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE

1 RHB Cash Management - Institutional RHB Investment Management 0.03 Malaysia

2 RHB Islamic Income Plus 1 RHB Investment Management 0.03 Malaysia

3 CIMB Islamic Money Market CIMB-Principal Asset Management 0.18 Malaysia

4 Public Islamic Money Market Public Mutual 0.19 Malaysia

5 PB Islamic Cash Management Public Mutual 0.19 Malaysia

6 Al Rajhi Commodity Mudarabah - EUR Al Rajhi Bank 0.24 Saudi Arabia

7 CIMB Islamic Deposit CIMB-Principal Asset Management 0.26 Malaysia

8 AlAhli Euro Murabahat The National Commercial Bank 0.28 Saudi Arabia

9 CMS Islamic Money Market CMS Trust Management 0.28 Malaysia

10 ING i-Enhanced Cash ING Funds 0.29 Malaysia

Eurekahedge Islamic Fund Index* 9.26

Eurekahedge North America Islamic Fund Index

Monthly returns for Developed Markets funds (as of the 29th March 2010)

FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE

1 Taurus Ethical B Taurus Asset Management 114.75 India

2 Kagiso Islamic Equity Kagiso Asset Management 34.63 South Africa

3 Public Islamic Select Enterprises Public Mutual 17.98 Malaysia

4 ETFS Physical Gold ETFS Metal Securities 17.29 Jersey

5 Am-Namaa’ Asia-Pacifi c Equity Growth AmInvestment Management 17.21 Malaysia

6 Al Ahli Saudi Trading Equity The National Commercial Bank 16.07 Saudi Arabia

7 Saudi Equity - (Al Raed) Samba 15.79 Saudi Arabia

8 Public Islamic Opportunites Public Mutual 15.55 Malaysia

9 Namaa’ Asia-Pacifi c Equity Growth AmInvestment Services 13.10 Malaysia

10 ING Annual Income Climate Structured ING Funds 13.05 Malaysia

Eurekahedge Islamic Fund Index* 1.90

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www.islamicfi nancenews.com

SHARIAH INDEXES

© 31st March 2010

The S&P Shariah Indices. Creating opportunity for Islamic investors.To learn more, contact [email protected].

S&P Shariah Indices Price Index Levels

29/03/10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Feb-10100

220

340

460

580

700

820

940

1060

1180

1300

S&P 500 ShariahS&P Europe 350 Shariah S&P Japan 500 Shariah

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29/03/10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Feb-10

Index Code Index Name 29/03/10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09

SPSHX S&P 500 Shariah 1043.633 995.080 968.978 1011.317 993.630 938.522 945.321

SPSHEU S&P Europe 350 Shariah 1213.717 1156.441 1174.161 1223.984 1191.590 1154.847 1134.881

SPSHJU S&P Japan 500 Shariah 1040.345 983.363 993.055 989.581 953.814 958.793 994.367


SPSHAS S&P Pan Asia Shariah 985.451 919.609 918.391 967.112 914.903 888.072 916.579

SPSHG S&P GCC Composite Shariah 755.525 711.143 670.074 676.445 692.555 708.224 725.528

SPSHPA S&P Pan Arab Shariah 128.521 121.354 115.703 116.267 118.162 121.749 123.831

SPSHBR S&P BRIC Shariah 1175.681 1117.929 1066.062 1173.998 1158.319 1101.842 1066.062


SPSHGU S&P Global Property Shariah 686.472 646.637 612.470 670.976 651.064 652.897 655.839

SPSHIF S&P Global Infrastructure Shariah 86.127 82.828 95.596 98.914 97.319 94.056 96.587

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S&P Pan Asia ShariahS&P GCC CompositeS&P Pan Arab ShariahS&P BRIC Shariah

29/03/10 Jan-10 Dec-09 Nov-09 Dec-09 Sep-09Feb-10

www.islamicfi nancenews.comSHARIAH INDEXES

© 31st March 2010

Tariq al-Rifai DirectorIslamic Market IndexesTel: +971 4374 [email protected]

Anthony YeungRegional Director Hong Kong, China, Taiwan, Korea, Japan, Australia & New ZealandTel: +852 2831 2580 [email protected]

Ariff SultanBusiness Development DirectorMalaysia, Singapore, Indonesia, India, Thailand, Pakistan, Sri Lanka & BangladeshTel: +65 6415 4262 [email protected]

For more information, please visit www.djislamicmarkets.com or contact

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

DJIM World 0.30 1.31 1.64 5.32 1.70 9.16 44.52 2.28

DJIM US 0.10 1.14 1.87 4.73 2.07 10.41 37.34 3.14

DJIM Europe 0.20 1.36 1.23 5.41 -0.76 6.41 47.51 -0.37

DJIM GCC 1.93 2.88 3.37 5.24 10.44 4.91 48.29 10.52

DJIM ASEAN 2.56 2.94 3.74 7.05 5.76 9.75 71.21 5.66

PERFORMANCE OF DJ INDEXES

Data as of the 29th March 2010

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

INDEXComponent

numberFull

Float adjusted

Mean Median Largest Smallest Large Small

DJIM World 2414 15565.91 12261.54 5.08 1.07 319.49 0.01 2.61 0.00

DJIM US 591 6762.90 6339.85 10.73 2.75 319.49 0.21 5.04 0.00

DJIM Europe 272 2921.36 2331.47 8.57 2.08 176.64 0.19 7.58 0.01

DJIM GCC 119 237.34 100.86 0.85 0.33 12.17 0.03 12.07 0.03

DJIM MENA 164 398.34 111.08 0.68 0.2 13.2 0.02 11.89 0.02

DJIM ASEAN 199 399.05 162.46 0.82 0.19 15.85 0.00 9.76 0.00

DJIM Titans 100 100 6861.72 6090.34 60.9 38.31 319.49 12.67 5.25 0.21

DJIM Asia/Pacifi c Titans 25 25 1017.58 675.22 27.01 20.58 70.15 12.67 10.39 1.88

*all performance is cumulative, based on price return and USD

PRIC

E R

ETU

RN

(%)

DJIM EuropeDJIM World DJIM GCCDJIM US DJIM ASEAN

-10

0

10

20

30

40

50

60

70

80

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

www.islamicfi nancenews.comISLAMIC LEAGUE TABLES

© 31st March 2010

TOP 30 ISSUERS OF ISLAMIC BONDS 12 Months

Issuer Nationality Instrument Market Amt US$ Iss % Managers

1 Government of Dubai UAE Sukuk Euro market public issue 1,931,000,000 1 11.4 Standard Chartered, UBS National Bank of Abu Dhabi, Dubai Islamic Bank, Bahrain Islamic Bank, Mitsubishi UFJ Financial Group, Emirates, Al Hilal Bank

2 Saudi Electricity Saudi Arabia Sukuk Istithmar Domestic market public issue

1,867,000,000 1 11.1 HSBC, Samba Financial Group

3 Petronas Global Sukuk Malaysia Sukuk Ijarah Euro market public issue 1,498,000,000 1 8.9 Morgan Stanley, CIMB, Citigroup

4 Terengganu Investment Authority Malaysia Sukuk Murabahah Domestic market private placement

1,422,000,000 1 8.4 AmInvestment

5 TDIC Sukuk UAE Sukuk Ijarah Euro market public issue 1,000,000,000 1 5.9 Standard Chartered, HSBC, Abu Dhabi Commercial Bank

6 Islamic Development Bank Saudi Arabia Sukuk Wakalah Euro market public issue 850,000,000 1 5.0 Deutsche Bank, BNP Paribas, HSBC, CIMB

7 Kingdom of Bahrain Bahrain Sukuk Ijarah Euro market public issue 750,000,000 1 4.5 Deutsche Bank, HSBC, Credit Agricol

8 Cagamas Malaysia Sukuk Domestic market public issue; Domestic market private placement

722,000,000 6 4.3 Standard Chartered, AmInvestment, Maybank Investment Bank, HSBC, CIMB, RHB Capital, Cagamas

9 Republic of Indonesia Indonesia Sukuk Ijarah Euro market public issue 650,000,000 1 3.9 Standard Chartered, HSBC, Barclays Capital

10 Sime Darby Malaysia Sukuk Musharakah Domestic market public issue

590,000,000 1 3.5 Public Bank, CIMB, Maybank Investment Bank

11 Syarikat Prasarana Negara Malaysia Sukuk Ijarah Domestic market private placement

573,000,000 1 3.4 CIMB, Maybank Investment Bank

12 GE Capital Sukuk US Sukuk Euro market public issue 498,000,000 1 3.0 Goldman Sachs, KFH, National Bank of Abu Dhabi, Citigroup

13 Dar Al-Arkan International Sukuk Saudi Arabia Sukuk Euro market public issue 446,000,000 1 2.6 Goldman Sachs Deutsche Bank, Unicorn Investment Bank

14 Danga Capital Malaysia Sukuk Musharakah Domestic market public issue

444,000,000 1 2.6 CIMB, AmInvestment

15 Khazanah Nasional Malaysia Sukuk Musharakah Domestic market private placement

442,000,000 2 2.6 CIMB, Standard Chartered

16 RAK Capital UAE Sukuk Euro market public issue 407,000,000 1 2.4 Standard Chartered, BNP Paribas

17 MISC Malaysia Sukuk Murabahah Domestic market public issue

368,000,000 2 2.2 HSBC, CIMB, AmInvestment

18 Pengurusan Aset Air Malaysia Sukuk Ijarah Domestic market private placement

341,000,000 1 2.0 CIMB

19 Seafi eld Capital Malaysia Sukuk Musharakah Domestic market private placement

269,000,000 1 1.6 CIMB

20 Dar Al-Arkan Real Estate Development Company

Saudi Arabia Sukuk Ijarah Domestic market private placement

200,000,000 1 1.2 HSBC, Samba Financial Group

21 Saudi Hollandi Bank Saudi Arabia Sukuk Domestic market public issue

193,000,000 1 1.2 Saudi Hollandi Bank, Riyad Bank

22 Islamic Republic of Pakistan Pakistan Sukuk Domestic government debt

174,000,000 1 1.0 Standard Chartered

23 Penerbangan Malaysia Malaysia Sukuk Murabahah Domestic market public issue

148,000,000 2 0.9 Bank Muamalat Malaysia, CIMB, HSBC, AmInvestment

24 UMW Holdings Malaysia Sukuk Murabahah Domestic market private placement

141,000,000 1 0.8 Maybank Investment Bank

25 International Finance Corp US Sukuk Euro market public issue 100,000,000 1 0.6 HSBC, KFH Dubai Islamic Bank, Liquidity Management Centre

26 CIMB Islamic Bank Malaysia Sukuk Musharakah Domestic market public issue

86,000,000 1 0.5 CIMB

27 Putrajaya Holdings Malaysia Sukuk Musharakah Domestic market public issue

82,000,000 1 0.5 CIMB, AmInvestment, Maybank Investment Bank

28 Projek Lebuhraya Utara Selatan Malaysia Sukuk Musharakah Domestic market private placement

75,000,000 1 0.4 CIMB

29 Projek Lintasan Shah Alam Malaysia Sukuk Ijarah; Sukuk Mudarabah Domestic market public issue; Domestic market private placement

65,000,000 3 0.4 RHB Capital

30 Jimah Energy Ventures Holdings Malaysia Sukuk Istisna Domestic market private placement

60,000,000 1 0.4 RHB Capital, EON Bank, Bank Muamalat Malaysia, AmInvestment

Total 16,872,000,000 67 100.0


© 31st March 2010

GLOBAL ISLAMIC BOND VOLUME BY QUARTER

20 MOST RECENT GLOBAL ISLAMIC BONDS

Priced Issuer Nationality Instrument Market Value US$ Managers

10th Mar 2010 Khazanah Nasional Malaysia Sukuk Musharakah Domestic market private placement 359,000,000 Standard Chartered, CIMB

11th Feb 2010 Dar Al-Arkan International Sukuk

Saudi Arabia Sukuk Euro market public issue 450,000,000 Goldman Sachs, Deutsche Bank Unicorn Investment

6th Jan 2010 Saudi Hollandi Bank Saudi Arabia Sukuk Domestic market public issue 193,000,000 Saudi Hollandi Bank, Riyad Bank

21st Dec 2009 Cagamas Malaysia Sukuk Domestic market public issue 148,000,000 Cagamas

19th Nov 2009 GE Capital Sukuk US Sukuk Euro market public issue 500,000,000 Goldman Sachs, KFH National Bank of Abu Dhabi, Citigroup

16th Nov 2009 Cagamas Malaysia Sukuk Domestic market public issue 142,000,000 CIMB, Maybank Investment Bank

28th Oct 2009 Government of Dubai UAE Sukuk Euro market public issue 1,931,000,000 Standard Chartered, UBS, National Bank of Abu Dhabi, Dubai Islamic Bank, Bahrain Islamic Bank, Mitsubishi UFJ Financial, Emirates NBD, Al Hilal Bank

22nd Oct 2009 Pengurusan Aset Air Malaysia Sukuk Ijarah Domestic market private placement 741,000,000 CIMB

14th Oct 2009 Sime Darby Malaysia Sukuk Musharakah Domestic market public issue 590,000,000 Public Bank, CIMB, Maybank Investment Bank

13th Oct 2009 TDIC Sukuk UAE Sukuk Ijarah Euro market public issue 1,000,000,000 Standard Chartered, HSBC, Abu Dhabi Commercial Bank

16th Sep 2009 Islamic Republic of Pakistan Pakistan Sukuk Domestic government debt 174,000,000 Standard Chartered

11th Sep 2009 UMW Holdings Malaysia Sukuk Musharakah Domestic market private placement 141,000,000 Maybank Investment Bank

11th Sep 2009 Syarikat Prasarana Negara Malaysia Sukuk Ijarah Domestic market private placement 573,000,000 CIMB, Maybank Investment Bank

11th Sep 2009 MISC Malaysia Sukuk Murabahah Domestic market public issue 286,000,000 HSBC, CIMB

9th Sep 2009 Islamic Development Bank Saudi Arabia Sukuk Wakalah Euro market public issue 850,000,000 Deutsche Bank, BNP Paribas, HSBC, CIMB

19th Aug 2009 Khazanah Nasional Malaysia Sukuk Musharakah Domestic market private placement 368,000,000 CIMB

5th Aug 2009 Petronas Global Sukuk Malaysia Sukuk Ijarah Euro market public issue 1,500,000,000 Morgan Stanley, CIMB, Citigroup

22th Jul 2009 RAK Capital UAE Sukuk Euro market public issue 400,000,000 Standard Chartered, BNP Paribas

16th Jul 2009 MISC Malaysia Sukuk Murabahah Domestic market public issue 280,000,000 HSBC, CIMB, AmInvestment

7th Jul 2009 Cagamas Malaysia Sukuk Domestic market public issue 138,000,000 RHB Capital, CIMB Group

GLOBAL ISLAMIC BOND VOLUME BY MONTH


© 31st March 2010

TOP 30 MANAGERS OF ISLAMIC BONDS 12 Months

Manager Amt US$ Iss %

1 CIMB 3,152,000,000 29 18.68

2 HSBC 2,380,000,000 14 14.1

3 AmInvestment 1,831,000,000 9 10.85

4 Standard Chartered 1,373,000,000 10 8.14

5 Samba Financial Group 1,033,000,000 2 6.12

6 Maybank Investment Bank 791,000,000 8 4.69

7 Citigroup 624,000,000 2 3.7

8 Deutsche Bank 611,000,000 3 3.62

9 Morgan Stanley 499,000,000 1 2.96

10 BNP Paribas 416,000,000 2 2.47

11 Abu Dhabi Commercial Bank 333,000,000 1 1.98

12 Dubai Islamic Bank 331,000,000 2 1.96

13 UBS 306,000,000 1 1.81

13 Mitsubishi UFJ Financial Group 306,000,000 1 1.81

13 Emirates NBD 306,000,000 1 1.81

16 Goldman Sachs 273,000,000 2 1.62

17 Credit Agricole CIB 250,000,000 1 1.48

18 National Bank of Abu Dhabi 222,000,000 2 1.31

19 Barclays Capital 217,000,000 1 1.28

20 Bahrain Islamic Bank 208,000,000 1 1.23

21 Public Bank 197,000,000 1 1.16

22 RHB Capital 183,000,000 6 1.09

23 KFH 150,000,000 2 0.89

24 Unicorn Investment Bank 149,000,000 1 0.88

25 Cagamas 101,000,000 1 0.6

26 Al Hilal Bank 97,000,000 1 0.58

27 Saudi Hollandi Bank 97,000,000 1 0.57

27 Riyad Bank 97,000,000 1 0.57

29 Bank Muamalat Malaysia 52,000,000 2 0.31

30 EON Bank 44,000,000 2 0.26

Total 16,872,000,000 67 100

GLOBAL ISLAMIC BOND VOLUME - US$ ANALYSIS

ISLAMIC BOND VOLUME BY CURRENCY US$ (BILLION)

ISLAMIC BOND VOLUME BY ISSUER NATION US$ (BILLION) - 12 Months

GLOBAL ISLAMIC BOND VOLUME BY SECTOR - 12 Months

GLOBAL ISLAMIC LOANS - YEARS TO MATURITY (YTD Comparison)

7.4

6.1

2.3

680

174

US dollar

Malaysian riggit

Saudi riyal

UAE dirham

Pakistan rupee

3.6

7.6

3.3

754

750

Malaysia

UAE

Saudi Arabia

Indonesia

Bahrain

Government

Finance

Utility & Energy

Oil & Gas

Real Estate/Property

Other

10%

9%

30%

18%

21%12%

0% 10% 30% 50%20% 40% 60% 70% 90%80% 100%

2004

2005

2006

2007

2008

2009

2010

0 to 3 years 3 to 5 years 5 to 7 years 7 to 10 years 10+years

www.islamicfi nancenews.comLEAGUE TABLES

© 31st March 2010

SUKUK MANAGERS MAR 2009 – MAR 2010

ManagerManager Commitment

(in US$)Issues

Market Share %

1 Malaysia (Government) 19,433,306,273 111 47.2

2 CIMB 4,130,391,341 109 10.0

3 AMMB Holdings 2,325,195,161 86 5.6

4 HSBC Banking Group 2,146,923,263 55 5.2

5 Citigroup 1,276,560,949 7 3.1

6 Standard Chartered 1,222,158,762 22 3.0

7 Morgan Stanley 1,215,000,000 5 2.9

8 Malayan Banking 1,203,430,799 94 2.9

9 RHB Banking Group 1,122,937,081 50 2.7

10 Malaysian Industrial Development Finance

1,001,628,336 252 2.4

11 Samba Financial Group 933,261,000 1 2.3

12= Dubai Islamic Bank 602,646,875 3 1.5

12= Mitsubishi UFJ Financial Group 482,646,875 2 1.2

12= UBS 482,646,875 2 1.2

15 Barclays Bank 435,500,000 3 1.1

16 Cagamas 357,618,275 39 0.9

17 Affi n Holdings 240,434,176 26 0.6

18 Indonesia (Government) 200,671,938 14 0.5

19 EON Capital 183,982,171 93 0.4

20 OSK Holdings 171,836,951 25 0.4

SUKUK MANAGERS DEC 2009 - MAR 2010

ManagerManager Commitment

(in US$)Issues

Market Share %


2 RHB Banking Group 189,095,745 5 2.9

3 CIMB 185,075,069 13 2.8

4 Malaysian Industrial Development Finance

176,026,166 43 2.7

5 Indonesia (Government) 167,871,925 7 2.6

6= Unicorn Investment Bank 148,500,000 1 2.3

6= Deutsche Bank 148,500,000 1 2.3

6= Goldman Sachs & Company 148,500,000 1 2.3

9 Malayan Banking 118,265,209 14 1.8

10 AMMB Holdings 116,217,532 16 1.8

11 OCBC Bank 101,897,899 10 1.6

12 HSBC Banking Group 88,597,754 5 1.4

13 Affi n Holdings 81,901,785 8 1.2

14 Standard Chartered 70,419,367 3 1.1

15= Mega Capital Indonesia 58,103,648 3 0.9

15= Danareksa Sekuritas 58,103,648 3 0.9

17= Andalan Artha Advisindo Sekuritas 51,664,629 1 0.8

17= Ciptadana Sekuritas 51,664,629 1 0.8

17= Citigroup 51,664,629 1 0.8

17= Bank Permata 51,664,629 1 0.8

SUKUK ISSUERS MAR 2009 – MAR 2010

IssuerIssuer Commitment

(in US$)Issues

Market Share %


2 BNM Sukuk 7,537,332,200 36 16.5

3 Bank Indonesia 4,217,926,057 53 9.2

4 Petronas Global Sukuk 3,000,000,000 2 6.5

5 Bank Negara Malaysia 2,668,102,698 47 5.8

6 Dubai DOF Sukuk 1,930,587,500 2 4.2

7 Saudi Electricity 1,866,522,000 1 4.1

8 Perusahaan Penerbit SBSN Indonesia 1,659,979,700 9 3.6

9 Terengganu Investment Auhority 1,419,647,927 8 3.1

10 Indonesia (Government) 1,300,000,000 2 2.8

11 Cagamas 1,273,771,851 39 2.8

12 Khazanah Nasional 1,073,562,800 3 2.3

13 TDIC Sukuk 1,000,000,000 1 2.2

14 ESSO Malaysia 823,224,051 12 1.8

15 Pengurusan Air SPV 739,865,000 3 1.6

16 Sime Darby 636,963,100 4 1.4

17 Syarikat Prasarana Negara 577,872,000 2 1.3

18 MISC 572,905,000 6 1.3

19 Danga Capital 454,287,337 2 1.0

20 Dar Al-Arkan International Sukuk 450,000,000 1 1.0

SUKUK ISSUERS DEC 2009 - MAR 2010

IssuerIssuer Commitment

(in US$)Issues

Market Share %

1 BNM Sukuk 2,712,653,700 13 33.2

2 Perusahaan Penerbit SBSN Indonesia

1,320,972,588 4 16.2

3 Bank Indonesia 1,182,734,758 13 14.5


5 Dar Al-Arkan International Sukuk 450,000,000 1 5.5

6 Khazanah Nasional 367,252,800 1 4.5

7 ESSO Malaysia 177,487,200 2 2.2

8 Cagamas 147,732,500 4 1.8

9 Hubline 80,682,835 7 1.0

10 Sunrise 58,794,800 2 0.7

11 Hytex Integrated 55,307,661 8 0.7

12 Perbadanan Kemajuan Negeri Selangor

52,894,640 4 0.6

13 Mulpha International 37,099,675 5 0.5

14 Tradewinds Plantation Capital 36,924,225 3 0.5

15 Perusahaan Perseroan (PERSERO) Perusahaan Listrik Negara

32,195,097 2 0.4

16 TESCO Stores (Malaysia) 29,980,500 1 0.4

17 Toyota Capital Malaysia 29,546,500 1 0.4

18 Bayu Padu 28,719,230 3 0.4

19 Nam Fatt 26,720,700 2 0.3

20 MM VIitaoils 24,223,694 19 0.3

(12 months) (3 months)

(12 months) (3 months)

Islamic Sukuk league tables refl ect Shariah compliant bonds showing evidence of ownership of assets or their earnings. These results include (but are not limited to) the following securities/assets: Sukuk Salam, Sukuk Mudarabah, Sukuk Ijarah, Sukuk Murabahah, Sukuk Istisna and Sukuk Musharakah.

For more information please contact:

Aimee Webster Telephone: +1-646-223-6816 Email: [email protected]

ALL DATA AS OF THE 30th MARCH 2010


© 31st March 2010

ISLAMIC LOANS RAISED MAR 2009 - MAR 2010

Borrower Country Islamic Loan Amount (US$)

1 Zain Saudi Arabia 2,499,800,000

2 Rabigh Independent Power Project

Saudi Arabia 1,503,000,000

3 Qatari Diar Real Estate Investment

Qatar 1,500,000,000

4 Dubai Electricity & Water Authority

UAE 1,474,000,000

5 Saudi Binladen Saudi Arabia 1,266,632,890

6 Qatari Diar Real Estate Investment

Qatar 1,098,538,943

7 Dubai Department of Civil Aviation

UAE 635,000,000

8 Etihad Etisalat Saudi Arabia 399,989,334

9 International Petroleum Investment

UAE 317,741,233

10 Al Dur Power & Water Bahrain 300,000,000

11 Dubai International Capital UAE 225,000,000

12 Dolphin Energy UAE 218,000,000

13 Qatar Airways Qatar 160,000,000

14 Bahrain Mumtalakat Holding Bahrain 140,000,000

15 Burgan Co for Well Drilling Trading & Maintenance

Kuwait 125,000,000

16 Olam International Singapore 100,000,000

17 Gulf Finance House Bahrain 100,000,000

18 Lana Development Kuwait 77,500,000

LOAN BOOKRUNNERS MAR 2009 - MAR 2010

LenderPro Rata

(US$)Full Credit

(US$) DealsMarket

Share %

1= Al Rajhi Banking & Investment

1,249,900,000.00 2,499,800,000.00 1 20.0

1= Credit Agricole Corporate & Investment Bank

1,249,900,000.00 2,499,800,000.00 1 20.0

3 Qatar Islamic Bank 1,098,538,943.20 1,098,538,943.20 1 17.5

4 Dubai Islamic Bank 495,500,000.00 2,109,000,000.00 2 7.9

5 Standard Chartered 468,500,000.00 1,774,000,000.00 3 7.5

6= Al Hilal Bank 368,500,000.00 1,474,000,000.00 1 5.9

6= Samba Financial 368,500,000.00 1,474,000,000.00 1 5.9

8 Noor Islamic Bank 227,000,000.00 935,000,000.00 3 3.6

9 Citigroup 130,500,000.00 130,500,000.00 3 2.1

10= WestLB 127,000,000.00 635,000,000.00 1 2.0

10= Emirates NBD 127,000,000.00 635,000,000.00 1 2.0

10= Industrial & Commercial Bank of China

127,000,000.00 635,000,000.00 1 2.0

13 Royal Bank of Scotland

75,000,000.00 225,000,000.00 1 1.2

14= Gatehouse Bank 41,666,666.67 125,000,000.00 1 0.7

14= Liquidity Management House for Investment

41,666,666.67 125,000,000.00 1 0.7

14= BNP Paribas 41,666,666.67 125,000,000.00 1 0.7

17 Arab Banking 25,000,000.00 75,000,000.00 1 0.4

(12 Months) (12 Months)

(12 Months)


LOAN MANDATED LEAD ARRANGERS MAR 2009 – MAR 2010

Lender Pro Rata (US$) Full Credit (US$) Deals Market Share %

1 HSBC 1,530,319,392.23 5,645,789,333.62 6 12.4

2 Standard Chartered

1,494,288,725.49 5,455,000,000.00 8 12.1

3 Samba Financial 1,289,688,778.30 4,643,622,223.41 4 10.5

4 Qatar Islamic 1,098,538,943.20 1,098,538,943.20 1 8.9

5 Credit Agricole Corporate & Investment Bank

835,322,058.82 4,520,800,000.00 4 6.8

6 National Commercial Bank

821,191,444.89 2,769,632,889.79 2 6.7

7 Al Rajhi Banking & Investment

791,722,058.82 4,302,800,000.00 3 6.4

8 Al Hilal Bank 541,370,616.42 1,833,741,232.85 3 4.4

9 Dubai Islamic Bank

495,500,000.00 2,109,000,000.00 2 4.0

10 Arab Bank 492,447,058.82 2,242,800,000.00 3 4.0

11 Noor Islamic Bank 385,870,616.42 1,252,741,232.85 4 3.1

12= Alinma Bank 187,875,000.00 1,503,000,000.00 1 1.5

12= Bank of China 187,875,000.00 1,503,000,000.00 1 1.5

14 WestLB 177,980,392.16 1,035,000,000.00 3 1.4

15= National Bank of Kuwait

155,000,000.00 775,000,000.00 1 1.3

15= Gulf Bank of Kuwait

155,000,000.00 775,000,000.00 1 1.3

15= Standard Bank Group

155,000,000.00 775,000,000.00 1 1.3

18 Citigroup 130,500,000.00 130,500,000.00 3 1.1

19= Emirates NBD 127,000,000.00 635,000,000.00 1 1.0

19= Industrial & Commercial Bank of China

127,000,000.00 635,000,000.00 1 1.0

21 Riyad Bank 117,644,392.23 699,989,333.62 2 1.0

22 National Bank 99,997,333.40 399,989,333.62 1 0.8

23 Royal Bank of Scotland

75,000,000.00 225,000,000.00 1 0.6

24 Development Bank of Singapore

67,222,222.22 400,000,000.00 3 0.5

25 Societe Generale 61,247,058.82 518,000,000.00 2 0.5

26 BNP Paribas 56,647,058.82 467,000,000.00 3 0.5

27 Mitsubishi UFJ Financial

42,647,058.82 400,000,000.00 2 0.3

28 Liquidity Management House for Investment

40,555,555.56 265,000,000.00 2 0.3

29= Raiffeisen Zentralbank Osterreich

33,333,333.33 100,000,000.00 1 0.3

29= Deutsche Bank 33,333,333.33 100,000,000.00 1 0.3

31= Masraf Al Rayan 26,666,666.67 160,000,000.00 1 0.2

31= Malayan Banking 26,666,666.67 160,000,000.00 1 0.2

31= Sumitomo Mitsui Financial

26,666,666.67 160,000,000.00 1 0.2

31= Bank Islam Malaysia

26,666,666.67 160,000,000.00 1 0.2

35= Arab Banking 25,000,000.00 75,000,000.00 1 0.2


© 31st March 2010

SUKUK BY COUNTRY MAR 2009 – MAR 2010

Country Volume Issued Volume Outstanding

Malaysia 29,655,253,495 18,556,451,959

Indonesia 6,076,925,550 2,101,571,788

Eurobond 5,080,587,500 5,080,587,500

US 2,600,000,000 2,600,000,000

Saudi Arabia 2,059,850,500 2,059,850,500

Pakistan 174,265,020 174,265,020

Bahrain 108,472,001 -

Singapore 56,757,284 56,757,284

Cayman Islands - -

UAE - -

Jersey - -

LOANS BY COUNTRY MAR 2009 – MAR 2010

Country Volume (US$) Market Share (%)

Saudi Arabia 5,669,422,223 46.1

UAE 2,911,741,233 23.7

Qatar 2,758,538,943 22.4

Bahrain 540,000,000 4.4

Kuwait 202,500,000 1.6

Turkey 128,000,000 1.0

Singapore 100,000,000 0.8

SUKUK BY INDUSTRY MAR 2009 – MAR 2010

Industry Volume Issued Volume Outstanding

Other fi nancial 19,699,725,085 13,235,921,234

Sovereign 15,986,053,293 9,298,284,532

Agency 2,852,141,983 2,798,117,660

Electric ower 2,074,541,097 2,074,541,097

Manufacturing 1,925,885,891 1,161,153,910

Transportation 1,416,573,143 1,242,190,110

Energy company 941,923,361 144,645,630

Service company 416,309,754 253,678,385

Banks 280,009,300 280,009,300

Consumer goods 190,652,602 119,744,593

Telephone 21,197,600 21,197,600

LOANS BY INDUSTRY MAR 2009 – MAR 2010

Industry Volume (US$) Market Share(%)

Utilities 3,277,000,000 26.6

Telecommunications 2,977,289,334 24.2

Real estate 2,598,538,943 21.1

Construction 1,266,632,890 10.3

Government 635,000,000 5.2

Financial services 540,000,000 4.4

Oil and gas 343,000,000 2.8

Chemicals, plastics and rubber 330,741,233 2.7

Transportation 160,000,000 1.3

GLOBAL ISLAMIC VOLUME SUKUK/LOANS (US$ IN MILLIONS)

For more information please contact: Aimee WebsterTelephone: +1-646-223-6816 Email: [email protected]




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AAOIFI 17, 18 ABSA Bank 23Abu Dhabi Commercial Bank 7Abu Dhabi Gas Industries 8Al Aqsa Bank 13Al Rajhi Bank 5Al Salam Bank-Bahrain 8Al-Amanah Islamic Investment Bank of Philippines 5, 11Alliance Investment Bank 24Al-Safa Islamic Banking 11AmInvestment Bank 6Arab Islamic Bank 13Asian Development Bank 3Asian Islamic Investment Management 4Association of Investment Companies 18Bahrain National Holding 9Bahrain National Insurance 9Bahrain National Life Assurance 9Bahraini Saudi 8Bank for International Settlements 3Bank Islam Malaysia 10Bank Negara Malaysia 3, 5, 6, 9, 24Bank of London and Middle East 7Bank Syariah Muamalat Indonesia 5Banque Du Liban 12Barclays 8BNP Paribas 8Boubyan Bank 8BPCE 6British Private Equity and Venture Capital Association 17Cairo Amman Bank 13CBB 7Central Bank of Jordan 14Central Bank of Kuwait 8CI 10Citi Islamic Investment Bank 8Citigroup 8Commercial Bank of Qatar 11Coronation Management Company 23Credit Agricole Corporate and Investment Bank 8Danajamin Nasional 3DBS Group Holdings 24Deutsche Bank 5, 8Deutsche Bank Americas Holding Corporation 24DIFC Investments 10DP World 10Dubai Electricity & Water Authority 10Dubai Holding Commercial Operations Group 10Dubai Islamic Bank 8, 14Dubai Multi Commodities Centre Authority 10

Dubai World 7, 8Emaar Properties 10Emerging Markets Private Equity Association 14Emirates NBD 7, 8EON Bank 5EONCap Islamic Bank 5Ernst & Young 17Faysal Asset Management 22Faysal Bank 22First Insurance Company 9Fitch 10Florentez Investment Management (ShariahShares ETF) 3Fortis Bank Nederland 18Friends Provident International 9Gulf Morrocan Holding Company (Kuwait) 7Hands Benefi ts & Trust 3Hayal Saeed Anam Group 22Hedge Fund Standards Board 18HSBC 8, 24HSBC Holdings 7HwangDBS Investment Management 4IDB 3, 8 IFSB 3, 17, 18, 22IMF 3Institutional Limited Partners Association 17International Organization of Securities Commissions 17Islamic Bank of Britain 6Islamic Bank of Thailand 6Islamic Investment & Finance Board 6Jebel Ali Free Zone 10Jordan Islamic Bank 13JP Morgan 8JP Morgan Chase & Co 8Kagiso Asset Management 23Kencana Petroleum 3Kharafi National 8Kuwait Finance House 6, 10Kuwait Finance House (Malaysia) 5, 6, 10Kuwait National Airways 14Lafarge Malayan Cement 6Lightstone Capital Advisers 3Limitless World 7Lloyds Banking Group 7London Southend Airport 7London Stock Exchange 18Malaysian Merchant Marine 4Malta Financial Services Authority 7, 11MARC 4Mashreq Al Islami 24MIDF Amanah Assets Management 4

Moody’s 10Nakheel 7, 8NAS Administration Services 9National Bank of Kuwait 8National Bank of Pakistan 22New York Exchange 3Norton Rose 18OIC 8Palestine Investment Bank 14Palestine Islamic Bank 13Palestine Monetary Authority 13, 14 Petron Corporation 5PricewaterhouseCoopers 13Public Investment Fund 8Qatar Financial Center Regulatory Authority 18Qatar Foundation 21Qatar Islamic Bank 6, 10Qatar National Bank 10QInvest 18QNB Al Islami 10RAM Ratings 3, 5, 6, 10Royal Bank of Scotland Group 7S&P 10Saad Group 8Samba Financial Group 8Sanad Sukuk Fund 25Saudi Aramco 8Saudi Industrial Development Fund 8Securities Commision Malaysia 25SG CIB 25Solidarity Group 9Standard Chartered 7Stobart Group 7t’azur Company 9Tadhamon Capital 22Tadhamon International Islamic Bank 22The Dubai International Financial Centre 12The International Investment Bank 7The Investment Dar 8Thor Asset Purchase Company 10Titan Chemicals Coporation 6Titan Petrokimia Nusantara 6, 10Total 8UK Treasury Inquiry 18Unicorn International Islamic Bank 5Vodafone Qatar 14Waha Capital 7World Bank 3Zeus Capital Advisers 12

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