The Tortoise Versus the Hare in This Issue an Annual Islamic Banking Conference Took These Shifts Would Conclusively Nurture Social IFN Rapid

Vol. 6, Issue 49 11th December 2009 The World’s Global Islamic Finance News Provider

ALERT Register now - It’s free S The Tortoise versus the Hare In this issue An annual Islamic banking conference took These shifts would conclusively nurture social IFN Rapid ...... 2 place this week in Manama, Bahrain where developments in Islamic societies, as opposed Islamic Finance News ...... 3 approximately 700 practitioners and students to just trying to fl ip profi ts off hard assets in descended to discus recent trends and future short spurts. But, even with Dubai’s issues Takaful News ...... 13 developments within the industry. and other looming hiccups in the industry, many seemed to affi rm that Islamic fi nance is Rating News ...... 14 Everyone’s mind was on the global fi nancial still relatively young. The bumps experienced IFN Report: crisis and Dubai; as both have heightened now will —hopefully — assist in the industry’s Kuwait forms a front ...... 16 attention surrounding Islamic fi nance’s future development with respect to effi ciency, strengths and weaknesses. stronger regulations and risk mitigation. Still mulling over Sukuk...... 17

Rashid Al Maraj, governor of Bahrain’s Central It does not seem as though the storms the Articles: Bank, opened the conference with some industry is currently weathering will curtail Abundant Opportunities in South Africa ...... 18 interesting insights on investor practices, long-term growth, particularly in non-Islamic especially with respect to managing risk. He markets. After all, publicity — whether positive Shariah Compliant Private Equity: warned against banks rushing into unilaterally or negative — still attracts attention. Post Recession Prospects ...... 20 concentrated investment practices like scurrying hares. For those already in the industry, the The Year That Was (Part 1) ...... 22 tumultuous events in Dubai are going to Al Maraj iterated that this sort of mentality serve as lessons learned. For those recently Islamic Investments Weather Most of the Storm in Asia ...... 24 manifests from fear of missing out on intrigued with Islamic fi nance, well, they are instantaneous profi ts. He conjured Warren still seemingly interested. The world is still Forum ...... 26 Buffet’s famous saying on investment fascinated with Islamic fi nance, whether to practices: “... to be fearful when others are draw international capital or accommodate Meet the Head ...... 27 greedy and greedy when others are fearful.” Muslim constituencies. Hilmy Cader, Global CEO of MTI Consulting

Termsheet ...... 28 Undoubtedly, he was alluding to Dubai’s real But, is Islamic fi nance ready to engage the Indosat’s Sukuk Ijarah estate sector. Ultimately, he drove home the world? point that banks should implement prudent Deal Tracker ...... 29 practices, tread slowly and invest in diversifi ed As the industry moves into non-traditional sectors. The tortoise approach, Al Maraj markets, other sophisticated fi nancial Islamic Funds Tables ...... 30 affi rmed, would mitigate fi nancial risk. sectors and non-Islamic spaces, there will be an increased need to focus on managing S&P Shariah Indexes ...... 31 Another regulator from the Central Bank fi nancial risks across the board — treasury, Dow Jones Shariah Indexes ...... 32 of Bahrain, Khalid Hamad Abdul-Rahman operational, liquidity and the like. Ultimately, Hamad, forecasted that there would be a shift these sorts of prudent measures will also Islamic League Tables ...... 33 in investments towards small- and medium- assist in eliminating Shariah risk. Of course, sized enterprises (SMEs) and more venture practitioners will have to reconcile with the Thomson Reuters League Tables ...... 36 capitalism as Islamic investors (fi nally) shy fact that treading cautiously may not yield high Events Diary...... 39 away from real estate. He keenly observed returns immediately. Partaking in fi scally solid that such reallocations in Islamic investments dealings will undoubtedly require a tortoise’s Country Index ...... 40 would intrinsically capture the essence of the approach; as Al Maraj pointed out. industry, that is, to build viable and robust Company Index ...... 40 communities organically by promoting smaller That is, slow and steady — not to mention, businesses. diversifi ed — will win the marathon. Subscription Form ...... 40 A round-up of all this week’s news IFN RAPID www.islamicfi nancenews.com

Dubai World needs extension on debts Central Bank of Bahrain and Monetary NEWS settlement Authority of Singapore sign MoU Royal Bank of Canada has no direct exposure to debt-laden Dubai World Market to see more Sukuk issuances Liquidity House and ePlanet Ventures to jointly establish asset management fi rm Nakheel’s creditors told to pursue Dubai Global banks’ exposure to Dubai World World’s overseas assets debt is manageable Drydocks World exempted from Dubai World’s restructuring exercise IMF says a sound legal framework is crucial Qatar Islamic Bank announces US$14.8 to encourage investments in Sukuk million exposure to Dubai World Emar Properties drops merger plan with Dubai Holding’s subsidiaries Pakistan’s North-West Frontier Province Ithmaar Bank to invest in Malaysia transfers control of Bank of Khyber Deadline approaches for Dubai Electricity UAE government needs to provide more and Water Authority’s Sukuk payment Asian Finance Bank to establish a support to banking sector representative offi ce in the country by 2010 Dubai World injects US$816.8 million into Legal defi nition of Sukuk sought Nakheel Indonesia to issue Sukuk for retail investors in April 2010 Investment Dar proposes a US$3.5 billion debt restructuring plan to creditors TAKAFUL Indonesia’s central bank optimistic Islamic t’azur signs agreement with National banking to see growth in 2010 Finance House Dubai World’s crisis has minimal impact on the Saudi banking sector Bank Simpanan Nasional to establish Al Salam Bank-Bahrain to launch Takaful more Islamic banking centers credit card Bank Muscat, Bank Sohar and National Bank of Oman reveal total exposure of Indonesia’s new tax regulation already US$77 million to Dubai World attracting foreign investors RATINGS Insurans Islam TAIB gets a ‘BBB+’ rating Dubai World’s creditors may turn down for its fi nancial strength High court adjourns petition opposing the standstill agreement establishment of an Islamic bank in Kerala Fitch assigns ‘AA+(idn)’ national rating for Discussions begins between Dubai World Bank CIMB Niaga State-run utility company PLN to issue and creditors Sukuk and conventional bonds Fitch upgrades Bank Negara Indonesia’s Al Faiz Fund 1 to acquire a 2.49% equity National Bank of Abu Dhabi spreads its long-term rating to ‘AA(idn)’ from ‘AA-(idn)’ interest in Pacifi c Healthcare Holdings wings to Asia PEFINDO reaffi rms Indosat’s ‘idAA+’ rating Amanah Saham Mara Investment Services Dubai protects its prized assets from plans to increase the size of its funds restructuring MARC affi rms Aras Sejagat’s Sukuk Ijarah at ‘AA+ID(bg)’ DP World to continue construction of Ithmaar Bank calls for innovation in Islamic container terminal project fi nance Premium Nutrients’ Islamic notes on MARCWatch Developing UK government to create level playing fi eld Nakheel records loss of US$3.65 billion for Islamic fi nance RAM removes Pharmaniaga’s ratings from DIFC Authority publishes white paper on Rating Watch Kuveyt Türk aims to be among Turkey’s top infrastructure projects ten banks in ten years Fitch affi rms Hong Leong Bank’s IDR at Bahrain Islamic Bank launches fi rst youth ‘BBB+’ Gatehouse-DDCAP to jointly launch account ‘Vevo’ structured trade fi nance fund Abu Dhabi’s backing for UAE a mainstay of Muslim countries to jointly issue Sukuk for its stable rating outlook Legal experts predict getting returns from better liquidity in Islamic fi nancial markets Dubai World will be a challenge Fitch downgrades Tamweel Residential’s Dubai Group sells stake in EFG-Hermes Class A and B notes MTI Consulting urges IFIs to improve their Holding Moody’s places ratings of GRIs on review marketing efforts

AMERICAS On safe ground CANADA: The Royal Bank of Canada (RBC) has declared that it has no direct exposure to Dubai World, the Dubai-based holding company that is restructuring its US$26 billion of debt.

RBC chief risk ofﬁ cer Morten Friis who describes RBC as being in a “fortunate condition”, said the bank has a minimal amount of exposure to the troubled entity and no direct exposure to property developers Nakheel and Limitless. Both ﬁ rms are involved in restructuring efforts.

‘Better to aim big’ US: Nakheel’s creditors may win the right to seize a strip of barren waterfront land meant for the now-delayed Dubai Waterfront project, if the company defaults on the US$3.5 billion Sukuk backing the development, according to the bond’s prospectus.

The delayed Dubai Waterfront project, which involves the construction of a conglomeration of canals and artiﬁ cial islands, will be the largest waterfront and man-made development in the world upon completion.

The Sukuk was backed by a 50-year lease on 677 million square feet of land that was valued at US$4.2 billion by US-based real estate ﬁ rm Jones Lang LaSalle three years ago. It would be worth US$11.8 billion when the project is completed in 2018.

However, not all creditors want to restrict their claims to Nakheel only. As one unnamed creditor said, it is not economically feasible. He said they should instead go after Dubai World’s overseas assets which are more valuable and easier to claim.

Dubai World has built up a list of property assets, including ofﬁ ce buildings in the UK and New York, such as the Metropole building and 10 Whitehall Place in the UK.

In addition, the company also owns a chain of luxury lodgings under the name of Nakheel Hotels, which includes the new US- based W Hotel in Washington.

It also owns the Turnberry golf resort in the west of Scotland.

‘Effective regulation is the way Middle Eastern investors and help fi nance aspects of Islamic banking, according to infrastructure projects. It feels the move will sources. to go’ also benefi t the Muslim population in the US: Global investors’ interest in Sukuk country, whose untapped funds can give the The government is to form a Shariah will depend on the progress of the legal economy a much-needed boost. supervisory board to monitor the functioning framework surrounding the securities of the Islamic banking system should the following Dubai World’s attempt to restructure The possible decision reversal by the policy reversal come into effect. its debt, said the International Monetary Reserve Bank of India with regard to the Fund’s (IMF) Middle East and Central Asia practice of Islamic banking came about department director Masood Ahmed. following a report submitted by a committee Eye on Brunei which highlighted the positive aspects of BRUNEI: Asian Finance Bank (AFB) is Shariah compliant fi nancial practices. “The demand and risk associated will very planning to establish a representative offi ce much rely on the clarity and effectiveness in the country by 2010, said CEO Mohamed Islamic banking is currently not allowed as well as investors satisfaction with the Azahari Kamil. under India’s banking law but can be regulation in future,” said Ahmed. practiced by non-banking fi nancial He said AFB seeks to work with Islamic institutions. However, this is about to change, He stressed that the IMF is concerned over banks in the Sultanate to develop as the government plans to amend the act, the developments in Dubai World, and would fundraising facilities for the shipping of oil adding a chapter exclusively dealing with be sending a team soon to visit the city and continued... study the impact of the crisis on the global economy. nnn%CXYlXe@9=:%dp

He also said that the economic body would review its assessments after visiting Dubai SONG BIRDS and suggest some measures to ease its 9XYYc\ij#ki`cc\ij#n_`jkc\ijXe[kXkkc\ijZfeki`Ylk\k_\ì gXikkfDXcXpj`XËjiXè]fi\jkfiZ_\jkiX%?\Xik_\d]ifd impact on the economy. ale^c\ki\\kfgj#dXeîfm\jXe[_`ccj%

ASIA Letting go PAKISTAN: The North-West Frontier Province government has transferred management control of the Bank of Khyber to the private sector after the State Bank of Pakistan (SBP) made changes to the minimum capital requirement.

SBP requires banks to increase their start- up capital of PKR5 billion (US$60) by PKR1 J?8I@8?%K8B8=LC%JLBLB%@A8I8% billion (US$12 million) every year to achieve the target of PKR10 billion paid-up capital A language we are most ﬂuent in. over the next ﬁ ve years.

Cfe^Y\]fi\fk_\iali`j[`Zk`fejle[\ijkff[@jcXd`Z]èXeZ\#CXYlXe@ek\ieXk`feXc9ljè\jjXe[ It was reported that the transfer was seen =èXeZ`Xc:\eki\nXjXci\X[p_`^_cpZfem\ijXekn`k_jlZ_èki`ZXk\k\idjXe[Zfdgc\ojkilZkli\j% as an effort to improve Bank of Khyber’s N\cc\efl^_kf`jjl\k_\]ìjk^cfYXcjlblbXe[k_\nfic[Ëj]ìjkjfm\i\`êjlblb%Fe\f]k_\cXi^\jk operating status and overcome losses due to XìZiX]k]èXeZè^kflj\@aXiXc\Xjè^nXjZfe[lZk\[_\i\% non-performing loans and other non-profi ting :cfj\kfLJ;(-Y`cc`fenfik_f]`jjlXeZ\j#èZcl[è^jlblb#_Xm\Y\\e`jjl\[k_ifl^_ljXe[(. assets. The report also states that the gi`mXk\@jcXd`Z]le[jnfik_LJ;*Y`cc`fe\jkXYc`j_\[%C\Xjè^Xjj\kj_Xm\îfnekfLJ;(.Y`cc`fe Xe[i\kXbX]lcYljè\jjgi\d`ldjèZi\Xj\[kfLJ;((.d`cc`fe%@e)''/#;XiXc$8ibXef]JXl[`8iXY`X provincial government was planning to inject c`jk\[XLJ;(Y`cc`fejlblbfek_\CXYlXe@ek\ieXk`feXc=èXeZ`Xc

The Bank of Khyber was established in 1991 Fm\i_\i\#n\dXb\`kfliYlj`e\jjkf_\\[pfliZXcc% and has 16 Islamic banking branches.

Possible changes ?FC;@E>:FDG8E@ F==@:< CXYlXe @ek\ieXk`feXc 9lj`e\jj =`eXeZ`Xc :\eki\ @eZfigfiXk\[ J[e 9_[ /(.,0*; Jl`k\ )9$(($'* make changes to its banking law to facilitate GcXqXJ\ekiXc#AXcXeJk\j\eJ\ekiXc#BCJ\ekiXc#,'+.'BlXcXCldgli#DXcXpj`X%K\c1"-'*)..*/0..=Xo1"-'*)./')'.. the Islamic banking system in order to attract

© Page 4 11th December 2009 NEWS www.islamicfi nancenews.com continued... deposits to fi nancing, in order to serve Mulia Siregar, Bank Indonesia’s chief of businesses and individuals from all races, Shariah banking research, development and gas, aviation and environment projects, regardless of religion. and regulation, mentioned that Al Baraka as well as to establish sovereign funds. and Asian Finance Bank (AFB) have already begun talks to acquire a local bank which “There is a lot of development in the oil and Gulf banks to establish will be converted into a Shariah compliant gas sector, hence there is a demand for presence fi nancial institution. shipping vessels and bunkering services,” said Azahari. INDONESIA: The new Indonesian tax Bahrain-based Islamic bank Al Baraka and regulation, which will take effect in April, Malaysia’s AFB, which is majority-owned He added that the bank is also interested is already attracting prospective foreign by Qatar Islamic Bank, opened offi ces in in tapping the huge potential inherent in investors to the Shariah banking sector. Indonesia three years ago to expand its Brunei’s sovereign wealth, despite the presence. The report also quoted Alwi country’s small market. The regulation, which was passed two Shihab, Indonesia’s special envoy to the months ago, will essentially remove the Middle East as saying that Qatar National double taxation of Shariah transactions. continued... Sukuk in the pipeline INDONESIA: The country plans to issue Sukuk for retail investors in April 2010 as part of efforts to fi nance the budget defi cit and develop domestic Islamic markets, said the fi nance ministry’s director in charge of Islamic debt, Dahlan Siamat.

He said that the Islamic bond is to have a maturity period of less than ﬁ ve years.

The issuance is part of the IDR104 trillion (US$11 billion) Sukuk and conventional bonds which are expected to be issued next year through retail, block booking, private placements and global issues.

Positive prospects INDONESIA: The central bank has expressed optimism that the Islamic banking sector in the country is poised for growth in 2010.

Bank Indonesia’s acting governor Darmin Nasution said the improving global economy, the establishment of new banks, coupled with the introduction of new policies will lead to accelerated growth.

Widening its reach MALAYSIA: State-owned Bank Simpanan Nasional (BSN) plans to increase the number of full-ﬂ edged Islamic banking centers in the country to meet the needs of its customers, and contribute towards the growth of Islamic banking in the country, said its CEO and general manager Adinan Maning.

So far, BSN has full-ﬂ edged Islamic banking operations in the states of Kelantan and Terengganu.

Adinan said the bank is committed towards developing a wider range of Shariah compliant products and services from

© Page 5 11th December 2009 NEWS www.islamicfi nancenews.com continued... 10 years, to conserve energy and natural comes in two series— Series A with a 7-year resources. tenure and Series B with a 10-year tenure. Bank was also looking to acquire a local bank and Kuwait Finance House has plans to “We are delighted to be part of this green Bahana Securities, Danareksa Sekuritas and establish a new Islamic bank next year. project. With Joyful Gateway’s support from Mandiri Sekuritas will act as the bond and its parent company, Emkay Group, and Ijarah Sukuk emissions’ underwriters. However, analyst cautioned that foreign the presence of the Shell Group, we are investments in domestic Shariah banks optimistic this project will be a success,” should be limited to avoid market domination said RHB Capital group managing director On acquisition mode by foreign players. Tajuddin Atan. MALAYSIA: Al Faiz Fund 1, a Shariah compliant private fund managed by Kuwait Currently, foreign investors are allowed to own Finance House-Malaysia and Kuwait– up to 99% of a Shariah compliant bank. Electricity bonds based Al-Aman, has made a conditional INDONESIA: State-run utility company PLN offer to acquire a 24.9% equity interest Former minister challenges plans to issue an IDR500 billion (US$53 in Singapore–based Pacifi c Healthcare million) Ijarah-based Sukuk and IDR1 trillion Holdings (Pacifi c Healthcare). decision of Kerala government (US$106 million) conventional bond. INDIA: The Kerala High Court has postponed Under the terms of the conditional offer, Al a petition fi led by Subramanian Swamy, a The Ijarah-structured Sukuk which received Faiz Fund 1 will subscribe for 73 million new continued... former union minister, against the proposed an “idAA-” rating with a stable outlook, establishment of an Islamic bank with state participation.

Chief justice S.R. Bannumath and justice A.K. Basheer fi xed the 5th January for a Our comprehensive product-focused training programs are delivered by leading industry detailed hearing on the matter. practitioners and will equip you with a detailed knowledge of Islamic fi nance and fi nancial products. For more information on a particular program, please don’t hesitate to contact us on the numbers Swamy had challenged the 14th October below, or logon to www.islamicfi nancetraining.com order of the principal secretary, industries, of the state government for allowing the Kerala February 2010 Courses State Industrial Development Corporation Sukuk & Islamic Capital Markets th rd (KSIDC) to register a company to provide 20 – 23 February, Riyadh banking services based on the principles of March 2010 Courses Shariah. Structuring & Documenting Islamic Financial Transactions 14th – 17th March, Doha The petitioner argues that such an institution would be against the basic principles of the Islamic Liability Products: Deposits & Investment Instruments 17th – 19th March, Kuala Lumpur country’s Constitution which provides equal status to all religions. Islamic Trade Finance 22nd – 24th March, Kuala Lumpur The Kerala government proposes to set April 2010 up the fi rst Islamic bank in India, with a Islamic Financial Markets & Treasury Management 13% equity participation by KSIDC. The 11th – 13th April, Dubai proposed bank will be registered as a non- banking fi nancial company, as the Banking Shariah Compliance, Control & Audit for Islamic Financial Institutions 14th – 16th April, Kuala Lumpur Regulation Act does not provide for operating banks under the rules in question. Fundamentals of Islamic Microfi nance 19th – 21st April, Karachi Ijarah goes green May 2010 Sukuk & Islamic Capital Markets MALAYSIA: Joyful Gateway, a local developer 16-19 May, Doha in the of Emkay Group, has signed an Risk Management for Islamic Finance agreement for a RM120 million (US$35 17-19 May, Kuala Lumpur million) Ijarah fi nancing facility from RHB Credit Risk Management for Islamic Financial Institutions Islamic Bank, to fi nance the construction of 20-21 May, Kuala Lumpur a green building complex in Cyberjaya which is estimated to cost RM151.4 million (US$45 million). Please see www.islamicfi nancetraining.com for more details.

Upon completion in 2011, the building will For more information, please contact be leased to petrochemical company Royal Ms Subashini Jaganathan at +603 2162 7800 ext 32 or email at [email protected] Dutch Shell as a service center for at least

© Page 6 11th December 2009 NEWS www.islamicfi nancenews.com continued... is because DP World is not involved in Dubai has launched its fi rst Shariah compliant World’s recent request for a six-month freeze liquidity fund. ordinary shares issued by Pacifi c Healthcare, on its US$26 billion debt obligations. which represents 20.6% of the enlarged It will offer a pooling mechanism that can be issued share capital of the company. As the largest shareholder, DP World has a used for investment of overnight, call and 30% stake in the Rotterdam World Gateway short-term cash extras. In addition, through a sale and purchase consortium that is building a terminal with a agreement with executive director and CEO capacity of four million containers a year on The fund will be used to invest in commodity of Pacifi c Healthcare William Chong Lai Maasvlakte 2, land reclaimed from the North Murabahah transactions and will be made Leong, Al Faiz Fund 1 will obtain another 15 Sea. available in pounds, dollars and Euros. million shares. Other shareholders include Japanese ocean KFH asset management’s head of private carrier Mitsui OSK Line, South Korea’s Ambitious plans automobile manufacturer Hyundai and equity Lew Oon Yew, said: “The acquisition TURKEY: Kuveyt Türk, one of the country’s Singapore-based container transportation of Pacifi c Healthcare is in line with our four participation (Shariah compliant) banks, company APL. commitment to share our experiences from seeks to become one the top 10 banks in the Middle East with the various industries in Turkey within 10 years, said CEO Ufuk Uyan. this part of the world.” Euromax Terminal is a joint venture between a shipping alliance — China’s Cosco, K-Line The Islamic bank which aims for further th of Japan, Taiwan’s Yang Ming and Hanjin of Launched on the 5 March last year, Al Faiz growth ahead, had undergone serious South Korea — and ECT, the Rotterdam termi- Fund 1 focuses on medium-sized businesses reconstruction during the past two to three nal owned by Hong Kong’s Hutchison Ports. with sales of around US$10 million to years, and has achieved many milestones in US$100 million a year in various industries, 2009. It also seeks to enter the list of top ten ranging from education to the food and banks in Turkey’s total banking industry after beverage sectors. It targets institutional and Equal VAT treatment claiming the 17th spot this year. individual investors from the Middle East and UK: The government plans to create a Asia. level playing fi eld regarding value added Uyan said although 2010 won’t be an easy tax (VAT) for retail investors in Islamic year for the banking industry as margins fi nance products. Finance minister are expected to narrow; Kuveyt Türk is High hopes for Islamic funds Alistair Darling said a guideline will also maintaining its positive outlook. MALAYSIA: Unit trust fund manager Amanah be issued on the VAT treatment of Sukuk. The bank, which has operated on Shariah Saham Mara Investment Services (ASM principles since its inception in 1989, plans Investment) aims to increase the size of all In addition, the government will propose to open 15 new branches next year in Turkey, its funds which currently stands at RM550 to provide relief from tax on capital gains, to add to the existing 130 branches around million (US$162 million) to reach RM1 billion thus making it possible for Muslims, who the country. In addition to that, Kuveyt Türk (US$294 million) within the next two years, own property that has appreciated in also plans to develop its pioneer Sukuk said CEO Nik Mohamed Zaki Nik Yusoff. value, to obtain additional bank fi nance based on the Shariah principle, using project. The fi rm seeks to achieve its target with the property as collateral. Prior to the change, such refi nancing often faced its best selling Shariah compliant-based Fund with a mission Islamic fund, Al-Aiman, which contributes 30% to its prohibitive tax costs. annual income, said Yusoff. UK: Shariah compliant Gatehouse Bank The announcement has been plans to launch a Shariah-based structured He added that the company also plans to warmly received by fi nancial experts. trade fi nance fund in early 2010 with PricewaterhouseCoopers’ partner increase the size of the Islamic fund by 50% wholesale Islamic market intermediary and Islamic fi nance head Mohammed in 2010. The amount currently stands at company DDCAP to inject new fl ows of capital Amin said the government’s move will RM66 million (US$19.4 million). into the global marketplace. encourage more activities that are related to Islamic fi nance. ASM Investment is a subsidiary of Amanah The Cayman-domiciled open-ended fund will Saham Mara, a fi nancial services company. focus on commodities, provide an alternative Scottish Widows Investment to traditional asset classes and also support Partnership’s head of strategic alliances the activities of the traditional trade fi nance Scott Dakers said he welcomed changes banks and other trade fi nance funds. EUROPE that create a level playing fi eld, so long as the fi eld is not at a lower level. “Given the liquidity challenges that many Project to proceed banks are experiencing, the Islamic-based NETHERLANDS: Dubai World’s debt woes (Also see IFN Report on page 17) structured trade fi nance fund has been launched at a time that will help alleviate do not have any impact on subsidiary the lack of capital available for transactions. DP World’s involvement in the ongoing This back-to-basics approach will benefi t construction of a US$1.35 billion container Liquidity fund launched international trade and will continue to do so terminal at the Euromax terminal, according UK: Liquidity and fi xed income products to authorities at the Port of Rotterdam. This provider Prime Rate Capital Management continued...

© Page 7 11th December 2009 NEWS www.islamicfi nancenews.com continued... that product development is not supported Nakheel Sukuk ‘no deterrent’ by consumer research, according to MTI as the economic situation improves,” said Consulting CEO Hilmy Cader. GLOBAL: The restructuring of Nakheel’s CEO Richard Thomas. US$3.52 billion Sukuk will see a change Cader added that Islamic fi nancial of quality in the Sukuk market, which was institutions have also had their marketing on the verge of recovery in recent months. and advertising budgets trimmed, like However issuances by sovereign borrowers GLOBAL most companies around the world, due and Western fi rms seeking diverse investor to the economic downturn, where 48% of bases will continue, according to a report. Legal experts predict an uphill respondents said the advertising budgets of battle their Islamic fi rms have shrunk over the last This year, nearly all Sukuk issues were 12 months. made by states and quasi-sovereign entities. GLOBAL: Lawyers from different countries Ratings agency Moody’s said this helped have warned investors that it will be a He however said that 87% of the issuances rise by 40% in the fi rst 10 months challenge for bondholders to get their hands respondents felt that their Shariah-based of the year compared with the same period on returns from the debt-laden Dubai World, companies will maintain or increase their in 2008. as the fi rm is heavily protected by the UAE’s advertising budget in the next two years. foreign ownership law and Shariah law. However, the situation changed when Dubai World announced at end-November a six- Although loan defaults would be governed month extension period for its Nakheel by the Shariah, Denton Wilde Sapte’s Aftermath uproar Sukuk which is due to be redeemed on the head of Islamic fi nance Shaikh Muddassir GLOBAL: There was further anger on 14th December. Siddiqui said the Shariah approach of each global markets this week, when the jurisdiction in the fi nancial structure is emirate’s fi nance minister Abdulrahman Credit risk has become a concern for different. Al Saleh conceded that the debt-riddled investors as some of the unrated Sukuk have Dubai World conglomerate would need defaulted, said Calyon global Islamic banking Thus, he stressed that both debtor and longer than six months to unravel its managing director Simon Eedle. creditor should refrain from assuming that a complex borrowing arrangements. single interpretation of the Shariah principles However, Eedle said the Sukuk issuances by will be universally applied. As a result, investor confi dence in Dubai highly-rated companies or sovereign entities World’s ability to settle its debts has should not be affected by Dubai’s troubles International bondholders will also have plummeted. EFG-Hermes director of because an increasing number of Islamic to contend with the foreign ownership law, institutional equity sales, Julian Bruce money market funds are chasing a limited which will further complicate the problem, said: “You can usually take the view that number of fi xed income assets to invest in. as their entitlement could be restricted no news is good news, but in Dubai’s because assets belonging to the ruling family case it’s quite the opposite — investors These asset managers are expected to cannot be seized and sold, even if Nakheel’s need to hear some developments on become more active in approaching issuers properties are liquidated. Dubai World’s restructuring.” with ongoing medium-term note programs, a strong element of the conventional bond Al Tamimi and Company senior partner Earlier, Al Saleh said Dubai World market, he said. Essam Al Tamimi said: “The courts in the would need more time to restructure UAE will order everyone to pay their debt, its US$59.3billion of liabilities. He said CEO Richard Thomas of the UK-based regardless of the individual or group. But six months would be too short for a full Shariah compliant Gatehouse Bank expected when it comes to government debt, it is restructuring, as it would focus on the the market to be the same as this year, the same as in other countries, where the creditors, the contractors and so on. while the quality of Sukuk to be issued will attachment of government assets and selling be improved. He added that he foresees a them by public auction is not allowed.” Dubai’s government would support the potential for more Sukuk issuance in Europe group “as an owner”, he added. “The and Asia. government is present to provide backing Product innovation required as an owner... we would like to emphasize GLOBAL: Compared to their conventional the distinction between guaranteeing and MIDDLE EAST peers, Islamic fi nancial institutions are still backing. The company has received [a lot lagging behind in marketing, especially when of] backing from the government since its Minimal impact it comes to product development, according inception.” to a survey by MTI Consulting. UAE: Global banks such as HSBC and Moody’s, the ratings agency, has so Standard Chartered have played down fears According to the survey, 55% of the far downgraded several Dubai World of their exposure to the Dubai World crisis, respondents said product development in companies “junk” status, saying it was citing it as ‘miniscule’ compared to their Islamic fi nance, has not gone beyond the clear that they did not enjoy the backing global businesses. ‘Islamization’ of conventional products. of the city-state. According to the Bank for International This problem is compounded by the fact that (Also see IFN Report on page 16) Settlements’s (BIS) data, HSBC’s exposure 57% of the respondents are in agreement continued...

© Page 8 11th December 2009 NEWS www.islamicfi nancenews.com continued... Janahi said the bank plans to use Malaysia Moody’s senior analyst Mohamad Damak as a platform to make forays into other was quoted as supporting the Sukuk hovered around US$17 billion while Standard emerging markets in the region which offers structure as a Shariah compliant instrument, Chartered could face a potential debt fallout abundant opportunities for growth. saying that the whole presentation of the of US$12.3 billion from Dubai World. structure was one where investors were meant to receive a share of profi ts and not It was reported that HSBC’s Middle East Analysts concerned over Dubai interests on debts. operations represent a mere 2% of its global exposure business. Analysts were optimistic that He said one view was that because a Sukuk the global banks’ exposure at such levels UAE: The central government needs to issuer was not generating profi ts, it should was manageable and would allow for the provide more support to the banking sector not have to pay the investors. standstill period for negotiating the debt in light of the Dubai World crisis. and for the restructuring of Dubai World and However, Bursa Malaysia’s global head Nakheel. A report quoting bankers and analyst said of Islamic markets Raja Teh Maimunah despite the UAE central bank and fi nance disagreed, saying that a Sukuk was a bond HS Securities and Investment which released ministry opening the fi rst AED50 billion and issuers needed to repay the money they a strategy note stated that the global banks’ (US$13.6 billion) credit facility last year borrowed. A banker quoted in the report said exposure was “a drop in the ocean compared guaranteeing all deposits, more needed to that Dubai World has created confusion over to the toxic assets wiped out during the be done to shore up the sector. the Sukuk defi nition, which could impede the global crisis”. revival of the Sukuk market. They also anticipate that the last AED20 It believed that with high liquidity in the billion (US$5.44 billion) capital injection, market and a greater market acceptance shelved earlier in the year on signs of Default continues towards risk, particularly when loans could renewed health in the economy will KUWAIT: Islamic fi nancial fi rm Investment be secured against tangible assets, it was materialize soon. Dar has proposed a US$3.5 billion debt very unlikely that Sukuk holders would vote restructuring plan to its creditors and expects to compel a company into liquidation. Analysts expressed concern over the fate of to receive feedback by the 23rd December. the local banks due to their heavy exposure Debt holders will accept penalties for to Dubai World as many are already facing The fi rm which defaulted on a US$100 breach of covenants and agree to refi nance mounting loan provisions due to the collapse million Sukuk last May, has set up a on better terms for borrowers rather than of the property market. committee representing creditors and banks engage in a lawsuit and receive ‘worthless’ to facilitate the restructuring of the debt assets, it said. Last week, Standard & Poor downgraded which includes Al Rajhi Bank, HSBC and the long-term credit rating on Emirates Lloyds. NBD and Dubai Islamic Bank, two state- Situation under control controlled fi nancial institutions, as well as Under the plan, Dar will make repayments to QATAR: The Qatar Islamic Bank (QIB) Mashreqbank, the largest privately owned creditors over a fi ve-year period, with the fi rst has an exposure of US$14.8 million to a bank in the UAE, to near non-investment payment expected by the end of 2010. The Dubai World Sukuk maturing in 2017. The grade. initial payment is expected to be between 5% lender is the fi rst Qatari bank to announce and 10% of the total debt and Dar’s assets its exposure to the Dubai state-owned will be moved to two holding companies conglomerate. Differing views abound under the proposed debt restructuring agreement. UAE: Should the Nakheel Sukuk default and QIB said the fi nancial impact will affect its holders resist the standstill agreement “The impact of the global fi nancial crisis the negative investment fair value reserve. with Dubai World, the court will have to is still being felt across the region and it is However, the bank will be monitoring the decide whether the instrument is equivalent important that Investment Dar and its banks situation and its fi nancial effects which will to a conventional bond, observers say. be announced accordingly. work together to conclude the proposed restructuring as quickly as possible,” said It was reported that a court could declare the chairman and chief operating offi cer Adnan instrument the equivalent of a conventional Al Musallam. Expansion strategy bond with repayment terms comparable to BAHRAIN: Ithmaar Bank plans to invest international practices, or rule it a Sukuk in Malaysia’s infrastructure, agriculture structured as either a Mudarabah product or Danger-free and hospitality sectors to make way for a Musharakah (a partnership involving profi t- its expansion in the region, said chairman and loss-sharing) product. SAUDI ARABIA: The country’s banking sector Khalid Abdulla Janahi. has been spared harm from the Dubai World Creditors will benefi t if the court rules the debt crisis. This is due to the fact that the exposure of its banks to the debt-laden He said the investment bank which has a former; that a Sukuk is the same as a company is less than 0.3%, said the governor stake in a Malaysian Takaful company via an conventional bond while the issuer will gain of the Saudi Arabian Monetary Agency associate, will use funds from its clients in a better footing if the court declares that Mohammad Al Jasser. the Middle East and elsewhere to invest in the Sukuk is an instrument that has to be the core sectors mentioned above. compliant with Shariah law. continued...

© Page 9 11th December 2009 NEWS www.islamicfi nancenews.com continued... The report also states that the Dubai of Dubai World, which is seen as a step that government is pushing for a wholesale would further dent fragile investor sentiment In view of this, Jasser urged investors in restructuring of Dubai World and may in prior to the meeting that began this week the Saudi stock not to be worried about the process inject cash into several ailing between heads of the conglomerate and key the impact from Dubai World, as there is property companies on the condition that creditors. absolutely no reason for them to shy away creditors are willing to compromise. from the market. This comes after reports quoting Dubai’s department of fi nance director-general So far, the country’ banks have not disclosed Negotiations expected to be Abdulrahman al-Saleh that the ailing their exposure to Dubai entities, but lengthy conglomerate may be compelled to sell its Deutsche Bank estimates Gulf countries overseas assets as part of its restructuring represent 3.3% of all their risk assets, with UAE: Monday reportedly witnessed the fi rst process. only 1% in Dubai. round of talks between heads of Dubai World and a group comprising international and Saleh had said that there was nothing to regional banks on the company’s efforts to prevent the government from selling some Cat out of the bag restructure its US$26 billion debt. of Dubai World’s foreign investments and overseas real estate assets that includes OMAN: Three leading local banks have The report stated that the meeting, which the cruise liner QE2 and Canadian circus announced an exposure of US$77 million to was predicted to be the commencement of a operator Cirque de Soleil. troubled conglomerate Dubai World. long process, would include the likelihood of key creditors forming a steering committee. He added that the government would not sell Bank Muscat, Oman’s largest lender by assets to support the state-owned holding market value, had US$50 million in exposure A person close to the talks was quoted as company. to a syndicated loan from the group, the saying that diverse views were presented biggest of the three exposures. Bank Sohar’s during the meeting where some were of the The department of fi nance, which supervises exposure stands at US$4.3 million, while the opinion that if there is a standstill, then it core government entities such as the Dubai National Bank of Oman’s exposure amounts should be across the board but some felt that Water & Electricity Authority and the Roads to US$22.6 million. the Sukuk had to be repaid at all costs. & Transport Authority, had confi rmed that it would support all government bodies that In view of this, the Central Bank of Oman’s enjoy a sovereign government guarantee. governor Hahmood Sangour Al Zadjali said Regional business prospects he saw no need for domestic banks to book HONG KONG: National Bank of Abu Dhabi However, the government has not offered provisions for their exposure to Dubai World’s (NBAD) has opened its fi rst Asian branch in an explicit guarantee to Dubai World or debt, as it was not related to loans under Hong Kong. companies within the Investment Corporation restructuring. of Dubai that include Emirates airline, Dubai Duty Free and its stake in Emaar Properties. Senior general manager of the bank’s He added that the debt was not part of the Dubai Holding, owned by Dubai ruler Sheikh international banking division, Qamber US$26 billion that the Dubai state-controlled Mohammed Rashid Al Maktoum is also not Ali Al Mulla said the branch which is a group was restructuring. believed to have sovereign backing. conventional bank with an Islamic arm will give the group fl exibility to expand to other Several bankers are of the opinion that that Asian markets. Rejection a possibility the severity of Dubai World’s debt was so intense that the government may have to UAE: More than a quarter of Dubai World’s Despite having a small number of clients in consider selling assets beyond those held creditors are expected to reject a standstill Asia, CEO Michael Hardwick Tomalin said he agreement proposed by the company of by Dubai World or its two real estate units sees much demand from its Middle Eastern Nakheel and Limitless to regain its stable its real estate unit, Nakheel’s US$4 billion clients wanting to do business in Asia. Sukuk, said a report. fi nancial footing. The bank disclosed in an Abu Dhabi stock Undisclosed advisors for the creditors said, exchange announcement in November that Growth drivers needed the process which involves 100 accountants, its US$345 million exposure was through lawyers, bankers and other professionals its investment in Sukuk and corporate loans BAHRAIN: Islamic fi nance can grow rapidly could take months. extended to Nakheel and Limitless, property if industry players from Asia and the Gulf arms of the Dubai World Group. region get their act together and become Ashurst, a fi rm representing the Sukuk more innovative, said Ithmaar Bank holders, is expected to issue a letter to Dubai However, Tomalin said Dubai World’s debt chairman Khalid Abdulla Janahi. World stating its clients’ intention to receive troubles, is nothing more than a short-term full payment of the US$4 billion by the 14th risk for creditors such as NBAD. “Currently industry players are not doing December or 28th December, which is a two- enough. We have to look at ourselves and week grace period. become the drivers of innovation,” said Dubai guards valued assets Janahi. He also stressed the need for Sukuk holders were quoted as unwilling to countries like Malaysia to strive harder allow Dubai World the luxury of a standstill, UAE: Dubai has begun protecting its prized in pushing for development in the sector, so as to avoid a default. assets from the US$26 billion restructuring continued...

© Page 10 11th December 2009 NEWS www.islamicfi nancenews.com continued... including term loans of AED16.3 billion of attention from both the local authorities and (US$4.43billion). social organizations in the country.” instead of looking to the West to lead the way. It also stated that Nakheel wrote down the value of land and certain developments under Inter-sovereign Sukuk in the According to Janahi, a lot of “kitchen work” construction to their market value following pipeline for Islamic banking including Sukuk, was the fall in property prices. The property IRAN: Muslim countries are teaming up to initiated in London, as the Islamic business developer has worked to reduce capital work on an inter-government Sukuk issuance community in Asia and the Gulf have failed to expenditure by slowing down or scaling back program to improve the short term and long take the required steps in this direction. some projects to beyond 2012. term liquidity of Islamic fi nancial markets, He advised the private sector in Asia to said the Central Bank of Iran director of stay abreast of current developments in ‘Tremendous potential’ banking studies and regulations Mahnaz the Gulf Cooperation Council countries Bahrami. The size and the price of the like Bahrain, the United Arab Emirates and UAE: The Dubai International Financial Sukuk have yet to be revealed. Saudi Arabia, in areas such as banking and Centre Authority has released a white paper Takaful. on the tremendous potential of Islamic Bahrami said the governments of Muslim fi nance towards infrastructure projects countries — Qatar, Sudan, Pakistan, globally, particularly countries in the Gulf Indonesia and Malaysia— would issue the Catering to investor sentiment Cooperation Council. euro-denominated Sukuk to each other which could transfer them to their fi nancial KUWAIT: Noor Financial Investment The paper highlights the viability of using institutions under the initiative. Company plans to collaborate with Al Islamic fi nancing for infrastructure projects Ridaya Finance and Investment to launch which are ideal for Shariah compliant The countries will also be working together a Shariah compliant real estate fund for with the Islamic Finance Services Board public subscription. The fund was introduced fi nancing, because of Islamic fi nance’s preference for equity-based and asset- and the Islamic Development Bank on the to provide investment products in line with program, she said. investors’ changeable requirements, said backed projects, and also because chairman and managing director Nasser Al infrastructure schemes benefi t the wider Merri. community, which fi ts well with the moral underpinnings of Islamic fi nance. Restructuring sale According to the fi rm, a total of KWD50 UAE: Dubai Group has raised about US$114 million (US$176 million) fund’s dividends DIFC executive director Islamic fi nance million by selling a 6.5% stake in Egyptian are to be reimbursed in monthly payments Farhan Al Bastaki said that the paper has investment bank EFG-Hermes Holding as ranging from between 6% and 8% on an been published at a time when governments part of its US$26 billion debt restructuring annual basis. are looking to the market to fund enormous program. Subsidiary Dubai Financial this infrastructure requirements and when week sold 25 million shares at EGP25 Islamic fi nance continues to record double- (US$4.56) each in EFG-Hermes Holding. In the red digit growth, increasingly regarded by the mainstream global fi nancial sector as an Dubai Group bought a 25% stake in Egypt- UAE: Ailing property developer Nakheel, a important asset class. based bank for US$1.1 billion in November subsidiary of Dubai World which is seeking 2007 from private equity investor Abraaj a six-month standstill on its US$3.52 billion Capital. Spokesmen for Dubai Group and Sukuk maturing next week, has reportedly Youth spirited account EFG-Hermes Holding were not available for made a fi rst-half loss of AED13.4 billion comment. (US$3.65 billion) due to a fall in revenue BAHRAIN: The Bahrain Islamic Bank (BISB), and a write down in the value of land and has launched its new Vevo savings account property. targeted at youths. MOU pact to develop Islamic According to the report, the losses were The Vevo account provides youngsters with fi nance in contrast to its AED2.65 billion (US$722 more offers from leading stores that cater BAHRAIN: The Central Bank of Bahrain million) profi t recorded in the same to the younger market, such as the Bahrain and the Monetary Authority of Singapore corresponding period last year. Nakheel’s International Circuit and Wahoo! Water Park. (MAS) have signed a memorandum of revenue fell by 78% to AED1.97billion In addition, the account offers customers up understanding in an effort to strengthen the (US$536 million). Dubai World has reportedly to 50% off at more than 100 stores on many growth of Islamic banking. declined to comment. items such as fashion, electronic appliances, automotive, restaurants, games outlets and Under the agreement, both organizations The report which extracted information from many more. will collaborate to improve supervisory a company document revealed that Nakheel cooperation and information-sharing had total assets of AED147 billion (US$40 BISB retail services general manager Abdul between the two organizations. billion) at the end of June as opposed Rahman Mohamed Turki said: “We are pleased to AED155.5 billion (US$42.3 billion) at to offer the new Vevo youth account. It is an MAS managing director Heng Swee Keat the end of December 2008. Its liabilities account that highlights our support to young said Singapore, as an international fi nancial stood at AED73.3 billion (US$20 billion), members of the community who are the focus continued...

© Page 11 11th December 2009 NEWS www.islamicfi nancenews.com continued... Dubai World added that Drydocks World Sukuk not guaranteed by had been in “constructive” dialogue with its center, was looking to develop Islamic creditors for several months. government fi nance by leveraging on its current strengths UAE: State-owned utility company Dubai in banking, insurance, asset management As of now, Drydocks World has a US$1.7 Electricity and Water Authority (DEWA) has a and capital markets. billion loan maturing in November 2011, in payment due next week on an AED3.2 billion addition to the US$2.2 billion loan in October (US$872 million) Sukuk that isn’t guaranteed He cited the agreement between Singapore- 2008, which involves 15 banks. by the government, according to the debt based Keppel Telecommunications and prospectus. Transportation and Saudi Arabia-based Al Sumitomo Mitsui, Japan’s third-ranked bank Rajhi Holding Group to set up a joint venture by assets and Australia’s Westpac Banking The June 2008 prospectus shows that the asset management company to manage the Corporation were among the banks that took Sukuk is due in 2013 and pays semi-annual world’s fi rst Shariah compliant data centre part in the fi nancing, while bookrunners distribution payments on the 16th June and fund, as one of the efforts to spur the growth included HSBC and Standard Chartered. the 16th December. of Islamic fi nance in the country. With the announcement, Drydocks World- Barclays, Citigroup, Dubai Islamic Bank and New fi rm to open Dubai now joins subsidiaries that are Emirates Bank International acted as the exempted from the restructuring of Dubai lead managers and book runners for the KUWAIT: Liquidity Management House for World — Infi nity World Holding, Istithmar Sukuk, according to the prospectus. Offi cials Investments (Liquidity House), a subsidiary World as well as Ports and Free Zone World at DEWA were unavailable for comment. of Kuwait Finance House, has established a that consists of DP World, Economic Zones strategic partnership with ePlanet Ventures World, P&O Ferries and Jebel Ali Free Zone, DEWA is among a handful of Dubai Group (ePlanet), to set up a new Shariah all of which are on a stable fi nancial footing, government-related entities and issuers compliant asset management company according to Dubai World. recently downgraded by ratings agencies under the name of ePlanet LMH Capital. following Dubai World’s shock debt restructuring. Through the partnership, Liquidity House Merger off for good will be able to offer for the fi rst time, a wide UAE: Real estate fi rm Emaar Properties has Moody’s Investors Service has downgraded range of high yielding alternative investment called off a proposed merger with three DEWA’s issuer and debt ratings to Ba2 from opportunities to its clients. entities owned by Dubai Holding — property Baa2, but said the rating includes one notch developer Dubai Properties and Sama Dubai uplift for government support recognizing “We are pleased to enter a joint venture as well as leisure developer Tatweer — as the its stronger strategic linkage to Dubai’s core with a high quality partner like ePlanet. reasoning that the transaction is no longer economic development policies.” The formation of ePlanet LMH Capital is “economically viable,” according to Emaar a refl ection of Liquidity House’s desire to Properties. continuously expand our product offerings Loan disclosed to Liquidity House’s clients across a broad It added that the decision was based on UAE: Property developer Nakheel, had range of asset classes, offering them the results of in-depth feasibility studies received AED3 billion (US$816.8 million) in the potential for enhanced returns,” said prepared by a group of senior economists fi nancial assistance from Dubai World in the chairman and managing director of Liquidity and international consultants under the fi rst half of 2009 as it dealt with a cash fl ow House Emad Al Monayea. supervision of offi cials from both parties. shortage and mounting obligations. ePlanet Ventures Group is the holding company for ePlanet Ventures, a venture “Emaar is a much healthier company than Dubai fi nance department director general capital fi rm, which has developed an the entities it was going to merge with as Abdulrahman Al Saleh said the amount integrated network of offi ces located in people were worried about the deal and was part of the AED9 billion (US$2.45 Beijing, Shanghai, Singapore, Bangalore, the terms of the merger,” said EFG-Hermes billion) parent company had lent to Dubai’s New Delhi, London, the Silicon Valley, Hong Holding head of regional asset management companies hit by the economic downturn. Kong, Seoul, and Tokyo. Hashem Montasser. The debt situation at Nakheel and Dubai Studies show the transaction would have World has been under close scrutiny Fine on its own created a company with AED13.4 billion since the Dubai Financial Support Fund (US$3.7 billion) in debt obligations, if the announced on the 25th November that it UAE: Drydocks World-Dubai (Drydocks merger had proceeded. was taking over the restructuring of the World), a ship building subsidiary of Dubai World, will not be included in the US$26 companies and sought a six-month reprieve billion restructuring program, as it has State-owned Dubai Holding and Emaar from creditors. suffi cient fi nancial capacity to service its Properties said in June that they were debt, according to Dubai World. in advanced talks to merge with three Nakheel has a US$3.52 billion Sukuk due developers owned by Dubai’s ruler; Dubai on the 14th December and it has yet to detail This is due to the expected improvements in Properties, Sama Dubai, and leisure how it will deal with this, while Dubai World the ship building and offshore industries in developer Tatweer, as part of its move to has called for a restructuring of US$26 the coming years. consolidate Emaar Properties. billion of its debts.

MIDDLE EAST Wider market reach BAHRAIN: Islamic insurance provider t’azur will provide its General and Family Takaful products to a bigger customer base through an agreement inked with the country’s largest insurance distributor National Finance House (NFH).

NFH clients will receive Takaful products for motor, home compact, accident and health plans, as well as the charitable savings plan Sadaqah.

The Takaful ﬁ rm has provided NFH with a customized online portal that provides state- of-the-art software to help agents transact business in real time for the beneﬁ t of its customers.

Pioneer concept BAHRAIN: Shariah compliant Al Salam Bank- Bahrain (ASBB) plans to launch a credit card based on Takaful principles, a ﬁ rst of its kind in the Islamic banking industry.

Executive vice-president and head for Middle East and North Africa regions Nabeel Al Tattan said the current Takaful concept in the Islamic ﬁ nancial industry is limited only to the insurance sector. However, ASBB’s Islamic insurance credit card is unique in the sense that it has all the features of a conventional credit card, and is also Shariah compliant.

“The card which is approved by the Central Bank of Bahrain and ASBB’s Shariah Supervisory Board offers protection, manages the risk of banking from the client perspective and provides support to all ASBB clients who utilize this service,” he added.

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(4.2%) and customer deposits (4.4%) as of bonds I/2005, II/2007 and III/2008 ASIA September 2009. amounting to IDR1.3 trillion (US$137 million) while affi rming the same rating on its Sukuk Monetary power Given the scope for growth in the Indonesian Ijarah bonds IV/2009 totaling IDR200 billion BRUNEI: Fitch Ratings has market where loans to GDP is below 30%, (US$21 million). NEW assigned an insurer fi nancial Fitch believes this would underpin the CIMB strength rating of ‘BBB+’ with Group’s long term commitment to provide The outlook has been revised to ‘negative’ a stable outlook to Insurans fi nancial and technical resources to further from ‘stable’ considering “the decreasing Islam TAIB based on its credit develop CIMB Niaga’s banking franchise in number of subscribers and a slight strength, stable profi tability, prudent Indonesia. decrease of cellular revenues as of the 30th investment mix, as well as the implied June 2009 as well as the anticipation of parental support from its ultimate 100% increasing debt to a higher than projected state-ownership. Financial uplift path”, said PEFINDO. INDONESIA: Fitch Ratings has However, the operator’s modest size in a upgraded Bank Negara Indonesia’s Airline-backed Sukuk relatively small domestic market compared (BNI) national long-term rating to to other Takaful markets in the region and ‘AA(idn)’ from ‘AA-(idn)’, and the MALAYSIA: Malaysian the regulatory and operational challenges individual rating to ‘C/D’ from ‘D’. Rating Corporation (MARC) it faces from the developing Takaful has affi rmed its ‘AA+ID(bg)’ industry in Brunei has also been taken into The agency has affi rmed the bank’s long-term rating on Aras Sejagat’s consideration by the agency. foreign and local currency Issuer Default bank guaranteed Sukuk Ijarah issuance of Rating (IDR) at ‘BB’, short-term foreign up to RM500 million (US$147 million) in Fitch notes that the Takaful operator is currency IDR at ‘B’, support at ‘3’ and support nominal value. constrained by the limited supply of Islamic rating fl oor at ‘BB-’. The outlook is stable. bonds in Brunei, especially long-dated issues The affi rmation is based on the unconditional in addition to other developing issues in The upgrade is based on the bank’s and irrevocable bank guarantee of up to the Takaful market, such as a limited pool improving fi nancial profi le refl ected by RM420 million (US$124 million) by Kuwait of skilled staff, scarcity of suitable Shariah stronger profi tability and higher reserves Finance House-Malaysia (KFH-Malaysia). compliant investments and stiff competition. cover on non-performing loans (NPLs). MARC has revised Aras Sejagat’s rating to Incorporated in 1993, Insurans Islam TAIB While the NPL ratio was up to 6.4% from 5% developing from stable, to mirror the outlook is a wholly owned subsidiary of Perbadanan in 2008, the credit risk was mitigated since of the facility’s guarantor. Tabung Amanah Islam Brunei (TAIB), an BNI raised its reserve coverage level to 110% Islamic banking and fi nancial institution in at the end of nine months of 2009 from Aras Sejagat is a wholly-owned subsidiary the country. 101% in 2008 due to downgrades of a few of Malaysia-based low-cost airline AirAsia larger accounts and Shariah fi nancing. incorporated for the sole purpose of raising the Sukuk Ijarah. With AirAsia’s operations Merger increases market Fitch believes that the bank’s higher pre- being the source of the Ijarah payments, the share provision profi tability and increased reserve underlying repayment ability of the Sukuk is driven by the credit profi le of AirAsia. INDONESIA: Fitch Ratings has cover will improve its capacity to absorb NEW assigned a national rating of higher credit costs should loan quality ‘AA+(idn)’ to Bank CIMB Niaga deteriorate. Early redemption with a stable outlook. MALAYSIA: MARC has placed NEW The rating is a refl ection of the bank’s Tougher competition its ‘MARC-2ID/AID’ ratings of majority ownership by the Malaysian based INDONESIA: Credit rating Premium Nutrients’ RM85 CIMB Group and its long term commitment agency PEFINDO has million (US$25 million) with regards to its parent’s regionalization reaffi rmed the ‘idAA+’ Murabahah Underwritten plans in name sharing and operational rating assigned to local Notes Issuance Facility/Islamic Medium alignment in key areas. telecommunication operator Indosat, based Term Notes (MUNIF/IMTN) program on on its sustained strong demand for cellular MARCWatch Developing following the fi rm’s Fitch also recognizes the improved market services as well as its fi rm market presence proposed early redemption of the entire and fi nancial position of CIMB Niaga after its and business diversifi cation. outstanding MUNIF/IMTN of RM45 million merger with LippoBank in 2008 as seen in (US$13 million). stronger core profi tability, improved operating However, Indosat’s high fi nancial leverage effi ciency and enhanced market share of with increasing refi nancing risk in the near- The early redemption will be fi nanced by lower cost deposits. to-medium term and tougher competition external borrowings. in the wireless sector are the constraining The combined balance sheet of the two factors according to the agency. Premium Nutrients expects the new term banks has increased the market share loan transaction to close by the end of of CIMB Niaga to the fi fth largest bank The agency has also affi rmed the ‘idAA+(sy)’ December 2009. in Indonesia by share of system assets rating set on the company’s Sukuk Ijarah continued...

© Page 14 11th December 2009 RATING NEWS www.islamicfi nancenews.com continued... Hong Leong Islamic Bank is the full-fl edged Class A notes, 29.1% for the Class B notes Islamic banking arm of HLB. and 21% for the Class C notes. As such, all Notwithstanding the refi nancing tranches of notes are able to withstand a arrangement, Premium Nutrients appears to high degree of losses. have suffi cient liquidity to meet its upcoming RM15 million (US$4.4 million) debt maturity MIDDLE EAST Tamweel Residential is a securitization in February 2010, given its RM41.4 million of residential property lease receivables (US$12 million) cash and cash equivalents Stable outlook under Shariah compliant long-term real as at end-September 2009. UAE: Fitch Ratings feels estate lease agreements that were initially that Abu Dhabi’s indirect originated by Tamweel, one of the major fi nancial support for Dubai home fi nance companies within the UAE Extension of agreement is in line with its willingness which was downgraded last month to ‘BB’/’B’/Rating Watch Evolving. MALAYSIA: RAM Ratings has lifted to come to the aid of fellow UAE emirates the respective ‘AA2(s)’ and ‘P1’ and helps underpin its ‘AA’ long-term foreign ratings of Pharmaniaga’s RM60 currency Issuer Default Rating (IDR) with a Under observation million (US$18 million) Islamic stable outlook. medium term notes program UAE: Moody’s Investors Service (2005/2010) and RM40 million (US$12 “Fitch expects Abu Dhabi to preserve its has placed the ratings of million) Islamic commercial papers program own balance sheet strength and avoid government-related issuers (2005/2012) from the Rating Watch with a actions that could jeopardize its own (GRIs) in the UAE on review for a negative outlook. creditworthiness, while at the same time possible downgrade. intervening selectively if needed to preserve The removal is attributed to the extension of the stability of the UAE,” it said. The ‘Aa2’ issuer and debt ratings of Abu Pharmaniaga’s concession agreement with Dhabi National Energy Company, Mubadala the Ministry of Health for 10 years which Fitch added that to its knowledge, Abu Development, Tourism Development & commenced on the 1st December 2009. Dhabi has made no direct bilateral transfer Investment and International Petroleum Under the agreement, the company has the to Dubai with support being confi ned to Investment as well as Emirates exclusive rights to the purchase, storage and the US$5 billion subscription of the Dubai Telecommunications’ issuer rating of ‘Aa2’, th distribution of pharmaceutical and medical government bond offer on the 25 November Dolphin Energy’s long term debt rating of products for government hospitals.. by two Abu Dhabi majority state-owned ‘Aa3’ and Aldar Properties’ issuer and debt banks as well as the initial US$10 billion rating of ‘A3’ have been placed on review for subscription to the US$10 billion Dubai bond a possible downgrade. Consistent profi tability eight months earlier. The placement is due to a need to revalidate, MALAYSIA: Hong Leong Fitch believes that the clarifi cation of Dubai’s and possibly reconsider, Moody’s support Bank’s (HLB) long-term direct sovereign obligations for the fi rst time assumptions following Dubai’s recent decision Issuer Default Rating in October may have made it easier for Abu to explicitly segregate its direct obligations (IDR) has been affi rmed Dhabi to contemplate assistance for Dubai, from those of its GRIs, following which a at ‘BBB+’, short-term IDR at ‘F2’, individual should the need arise. decision was subsequently made to pursue a rating at ‘C’, support rating at ‘3’, support debt restructuring at Dubai World. fl oor at ‘BB+’ and subordinated debt rating at ‘BBB’. The outlook is stable. Firm against losses The affi rmation by Fitch is based on the UAE: Fitch Ratings has downgraded bank’s robust balance sheet with strong Tamweel Residential’s Class A and capital position, low and well-reserved non- B notes to ‘A’ and ‘BBB’ respectively performing loans (NPLs), and generally while affi rming Class C notes at consistent profi tability. ‘BB-’.

Fitch attributes the stable outlook to The outlooks for all three classes of notes HLB’s fi nancial position which is suffi cient which are due in July 2037 have been in cushioning against any unexpected revised to negative. weakening in operating conditions. The agency added that risks arising from The downgrade is due to the deterioration potential acquisition activity, that exerts of credit fundamentals within the Emirate signifi cant pressure on capital and/or asset of Dubai, which in the agency’s opinion, quality, might have rating implications. increases the uncertainty regarding the transaction’s performance. However, Fitch’s concerns are allayed by the bank’s strong capital position with a Tier The notes funding the portfolio have 1 capital adequacy ratio of 14.9% at end- already been amortized to 32% of their September 2009, and by the management’s initial balance and credit enhancement prudent track record. has increased accordingly to 42.7% for the

KUWAIT Kuwait forms a front

Dubai World’s (DW) request for a payment “standstill” while it A Kuwaiti-based institution launching a creditor group initiative should restructures parts of its debts has creditors on the defensive as they come as no surprise, not because this small GCC country is overly try to strategically align themselves. QVT Financial, a hedge fund fi rm exposed to Dubai investments. in New York, called for all Nakheel Sukuk holders internationally to join its creditor group alliance to cultivate a streamlined approach in As Al-Tawari put it: “Everyone has exposure.” Rather, Kuwait has dealing with the matter...and Kuwait’s Rasameel responded with its a sophisticated Islamic fi nancial market- boasting over 40 Islamic own initiative. investment institutions, 15 Takaful companies and fi ve Islamic retail/commercial banks, and has been active in Islamic fi nance for Interestingly, QVT’s invitation extended to all global investors with decades. stakes in the matter — explicitly excluding GCC players. Evidently, there is a fear that too many Arabian Gulf investors in this western front Although Rasameel’s announcement explicitly targeted GCC/MENA would infl uence negotiations towards a more lenient stance given that creditors Rasameel is broadening its scope and even collaborating Dubai is within in the GCC. with the New York hedge fund fi rm: “We have been in touch [with QVT].” Al-Tawari separately added: “We are inviting everyone, even So Rasameel Structured Finance Company, a Kuwaiti based Islamic those outside the region. Those in Southeast Asia [and elsewhere] are investment company, proposed to assemble a group of all GCC and welcome.” MENA capital market creditors that have stakes in Nakheel and DW. Al-Tawari added: “Southeast Asia has been active in the Sukuk Issam Al-Tawari, chairman and managing director of Rasameel, market. They should not be let down by the GCC region.” He explained to Islamic Finance news the drivers behind this initiative: reassuringly further distilled: “History says sovereign restructuring “The idea is to form a creditors’ group to sit in front of DW and Nakheel comes out clean.” to negotiate restructuring plans.” Many practitioners in the industry say that when a bank lends to a Ultimately, the objective is to ensure that a unifi ed position is presented business entity that is wholly or partially owned by a government; it is to the Dubai Financial Support Fund and Chief Restructuring Offi cer, typically considered a government related entity or quasi government Aiden Birkett, because GCC creditors want to position themselves for an — thus, ultimately, a sovereign loan — while others say that these are equitable settlement just like everyone else when push comes to shove. commercial loans and their fi nancial risks should have been assessed as such, separately from a sovereign backing. “Investors feel let down because we were given assurances [just prior to the announcement] that things were under control.” Al-Tawari told Undoubtedly, Dubai’s economic issues will force regional and Islamic Finance news . “We can handle it…we are professionals. But international banks into more prudent lending practices. we need and want the government’s backing of this restructuring. Otherwise, it will not work.” By Fatimah S. Baeshen

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UK Still mulling over Sukuk

Late November, the UK government once again announced its deci- take it forward. “Overall, the UK is well set and quite often been asked sion against issuing a Sukuk “for now”. A fi nance ministry spokesper- about France. I would be delighted if Paris became an Islamic fi nancial son said issuing a Sukuk at this time was not a viable option as it center. The fact is they have to have the components which we have in would not offer value for money. He said the government would con- place in the UK to succeed. tinue to review the situation. It has also pledged to support the Sukuk issuance by introducing legislation to remove stamp duty and other Once they have those, there is no reason why they should not be barriers to Sukuk. successful in developing Islamic fi nance. I will be happier if the French issued a sovereign Sukuk as well. If Christine Largarde (France’s Bank of London and The Middle East (BLME) CEO Humphrey Percy told minister of economic affairs, industry and employment) gets her way Islamic Finance news that he personally felt the announcement was a and the government issues a Sukuk, it would be very positive for France “smokescreen”. “I think they were looking for an excuse and if that is and for Europe,” he said, adding he was unsure whether France would an excuse then it is rather a poor one,” he said. issue the Sukuk before the UK but added that he did not mind if this does happen. However, Percy remained confi dent that the issuance would happen. “There is not only a desire for it by the Islamic banks in the UK, but there On BLME, Percy said the bank has seen no shortage of opportunities is also an opportunity for the UK government to diversify its borrowing and transactions. “We feel confi dent that in the future we will continue by issuing such an instrument. It could start with a reasonable size to grow our business in leasing and real estate, trade fi nance and the issue to determine the demand and then maybe take it forward from other areas such as private banking and asset management besides there,” he said. being committed to develop more products and more clients. We work hard to build up our offering to our clients all the time and On whether the UK’s inaugural sovereign Sukuk would be able be today, we have been successful at doing that and going forward,” he replicate the success of Indonesia’s Global Sukuk, Percy was optimistic asserted. of its success. He explained that this was because it would be the fi rst issue by an ‘AAA’ rated western government and the issuance would Percy attributes BLME’s success to having a good business plan from be of a meaningful size. inception, supportive investors, a good capital base of GBP250 million (US$407 million) and its human capital — some 60-strong — who work “We could see demand for the Bahrain Sukuk (a US$750 million well as a group. issuance that was oversubscribed by almost eight times). I believe there will be a great deal of interest. It will not only be good for the In January 2009, BLME launched its private banking division, making market but also for the UK government to do that,” he added. it the only Islamic private banking facility in London. Asked about its progress, Percy said it was still in its “early days” but it had the London has long established itself as the Islamic fi nance hub of the platform in place, infrastructure, human capital, client relationship western world. In leading the race, which most UK practitioners are management, products and geographical location. not inclined to acknowledge, no other country in the west can be seen as its rival. “Once the world, the GCC in particular, begins to recover from the current fi nancial crisis, I believe it will be a good performing division Now even within the UK, other cities are beginning to show interest in for BLME,” he said. Islamic fi nance such as Birmingham. Scotland is getting into the act, too. Ireland’s capital Dublin is also seen as not wanting to miss out on Percy added that the events in Dubai will affect the Islamic fi nance the opportunity. industry as Sukuk and Islamic fi nance are in the spotlight at the moment. “It is extremely important to think about the consequences Percy was very positive on the potential of these markets, saying that for both, not only for Dubai but also for Islamic fi nance, as well in the they would not only complement London but also the country and way it is handled. the industry as a whole. “We would like to see more institutions, and successful ones at that, be involved in Islamic fi nance as well as more “If it is handled badly, that would do a lot of damage to the market. It international centers involved in it. will cause not only concern about the present situation but also for all the other Sukuk in issue, as well as the implications for the vibrancy of “I would be very happy with Birmingham and Edinburgh if they were the market in any meaningful form going forward. successful as well. That would be great. I do not view London as being UK but the UK as the UK itself.” However, Percy said that BLME would “But again I say it is the interpretation and treatment that needs to be not be opening up in these centers as its two offi ces in London were explained to the market. If it is a call for standstill and the principal will suffi cient for its current operations. be paid over time and coupons paid over that time, then I think it is a relatively elegant way through this. On the Islamic banking sector in the UK, Percy said it was in good health as the fi ve full-fl edged Islamic banks and almost 20 conventional “If however it is not the case, it will do very signifi cant damage not only banks with Islamic windows were “quite a good developing story”. The to this region but also to Islamic fi nance in general,” he said. industry in the UK has a good base of banks, regulators as well as knowledge — both in legal and accounting — plus the willingness to By Raphael Wong

Abundant Opportunities in South Africa By Islamic Finance news

When Islamic fi nance in Africa is mentioned, the continent’s northern is currently no specifi c legislation for Islamic banking but the current part comes to mind. Global Islamic fi nancial institutions, particularly framework does facilitate Islamic banking and its products. those in the Middle East, have often regarded countries such as Libya, Tunisia and even Sudan as having potential in abundance. However, Patel described the response of the regulators as “very positive,” their distant cousin at the southernmost region has not managed to particularly over the last two years. “Our National Treasury has garner much interest. initiated a project named ‘Gateway into Africa’ to explore the need for, and development of, Islamic fi nancial services and instruments for Al Baraka Bank charted unfamiliar territory when it pioneered Islamic southern Africa and Africa. banking in South Africa 20 years ago. The bank stated that it was established in response to the need for a system of banking in line “The department, together with other regulators and industry with Islamic economic principles. It is currently the leading Islamic stakeholders, established four industry-led working groups focusing on bank in South Africa. Islamic banking, pensions and collective investment schemes, Islamic insurance and accounting and governance. The department wants to Others who saw the potential followed suit, with major conventional make South Africa an Islamic fi nance hub,” he said. banks such as First National Bank (FNB), which is part of the FirstRand group, HBZ Bank and Absa Bank have incorporated Islamic windows On legislation to facilitate Sukuk and Islamic banking, Patel said there alongside conventional banking practices. FNB’s Islamic subsidiary is has been some movement in the investment space but not much in aptly named IslamicFinance. the area of banking. “We still need to operate within the ambit of the existing regulations. Either way, we face challenges in relation to value- Islamic Finance news spoke to FNB added and other taxes. Now that WesBank is part of the National IslamicFinance CEO Ebi Patel (pic) on the Treasury taskforce, we are going to test if it is conducive to allow fi nancial institution, current developments certain changes. Obviously, it will not be against the law or regulations, in the nascent industry in South Africa and but just the way you view some of these things,” he said. the institution’s potential going forward. Will there be legislative amendments in the near future? “Certainly,” He explained that when FNB became said Patel. “When you have a robust industry which proves its strength the fi rst conventional bank to launch and that has given us the opportunity to progress, I am sure the Islamic fi nance in 2004, it offered vehicle regulators will look at it favorably,” he added. and asset fi nancing using the Ijarah structure. Patel stressed that the Islamic fi nance industry is not just focused domestically. Asked whether South Africa was looking outward, he said A year later it extended to offering there had been interest over the last fi ve years from foreign investors Mudarabah products and in 2006, Shariah compliant commercial and from the GCC, Malaysia and even Australia. “However, none of those property product fi nancing schemes were available. “In the last three visits have produced any positive outcome. There had always been years, we have had good movement as a conventional bank operating discussions and exchanges of ideas but for us, the big opportunities an Islamic fi nance window. Historically, the only Islamic bank that lie within Africa itself,” he said. was of equivalent level was the Al Baraka Bank and it has been in the country for the last 20 years,” he said. Would foreign investments assist South Africa’s Islamic fi nance industry? “Absolutely. Bringing foreign capital and expertise would According to Patel, FNB IslamicFinance was the fi rst mainstream bank really help us because we can then open up markets we previously did in South Africa to offer Muslims the opportunity to purchase vehicles not have access to. Also, if one looks at it from another perspective, fi nanced by way of Shariah principles through WesBank, a division of the market has reached a point of saturation, in my personal opinion, FirstRand Bank and one of the largest credit installment institutions in that the ones that wanted to get in had managed to do so. in South Africa. WesBank partners with various motor industry stakeholders to deliver its major product, which is vehicle fi nance. “Markets such as the GCC and Malaysia have established Islamic markets and are well positioned, and there would be a point where He said since the bank deals with a lot of Muslim traders who are they would be looking at growth outside their existing markets and I involved in the motor vehicle business and own dealerships, it was feel we can afford the opportunity,” answered Patel. approached by a Durban businessman named Yunus Akoo who proposed enabling Muslims to purchase vehicles in line with Shariah Probed further into the reasons for the lack of foreign investor interest principles. “The bank in turn felt that his proposal had merit and in South Africa, Patel said that in the initial stages when Islamic fi nance embarked on it.” was new in the country, foreign investors were skeptical. “I think they waited for the market to mature. Five years is a good history to go Within the Islamic fi nance industry, regulators have played a pivotal back on. The fact is that if our total deals collectively is ZAR100 million role in ensuring its progress. Success stories are clearly seen in the (US$13.4 million), a large investor can do that in just one deal in his likes of Malaysia, Bahrain and even the UK. The South African banking country. sector is regulated by the Banks Act and related regulations. There continued...

Abundant Opportunities in South Africa (continued)

“Also, the size and the nature is an important consideration. Investors What about the infrastructure sector? “Sadly, not many of the who come into the country want to obtain quick gains, but Islamic companies and business are directly involved in huge infrastructure fi nance is not about a quick win; it’s about a long term sustainable projects. growth initiative that you follow,” he stressed. Where we do have them, probably they operation in the construction What then would attract foreign investors? Patel was convinced that sector and we do have requests to open up large residential blocks or South Africa’s resilience towards the global fi nancial crisis would make have Muslim businessman open large shopping malls. So you have it very attractive to foreign investors, particularly in the Islamic fi nance opportunities to structure such type of funding,” he said. industry. “We have a very robust banking system. Going forward, Patel said while there will be a lot of growth within the Yes, we went through a bad patch in a sense; our bad debts and industry, the effect would only be seen in three years. This is due to the impairments were a little higher than in the past but it was due to restriction on borrowing by the banks in South Africa last year. However, the ripple effect. As a banking system we have not suffered like we he feels that is slowly easing. On the other hand, he said, there was witnessed internationally,” he pointed out. excess liquidity which resided mainly with the investment companies. “What we (FNB IslamicFinance) have done is to utilize it to fund our Secondly, South Africa is a growing market. “We have gone past the asset books so that all our commercial property and vehicle fi nancing birth and crawling stages. We have established ourselves and we have are funded from that liquidity which is derived from the deposits. the credentials to prove it. We expanded into Africa two years ago and FNB IslamicFinance has a very successful operation in Botswana. “We have always managed the excess liquidity but now we are One factor is that the market opportunities in Africa are huge; there experiencing excess liquidity once again due to the slowdown in our are a lot of global trading opportunities like trade fi nance and Sukuk fi nancing. This excess liquidity is at about 23% above the level we have issuances. fi nanced. We are confi dent of easing this excess liquidity as there are clients who have approached us to fi nance huge expansion projects in South Africa as an emerging market has a lot to offer. One does not a month or two so much of the excess would be utilized,” he said. necessarily have to be restricted to purely investments in an Islamic bank. You can have Shariah compliant investment opportunities in Throughout Patel’s interview, Sukuk is mentioned just once. Asked how terms of infrastructure development and property funds, to name a few. he viewed Sukuk as a driver of the Islamic fi nance industry, Patel was So there are other vehicles to attract Shariah compliant portfolios. of the opinion that a Sukuk was the panacea of the Islamic fi nance industry and should not be issued merely for the sake of getting it Historically, the investors focused on a particular institution that was done. “My belief is horses for courses. If the business requires that a just getting off the ground. But if you look at the country as a holistic Sukuk be issued and allows you to gain growth and the capital that you opportunity for Shariah compliant investments that could either be need, then so be it. within the banking sector or the infrastructure sector, the opportunities are abundant,” he contended. “One of my concerns is that we do not have to emulate the conventional banking system. The Quran and the prophet are distinctly clear about Asked which sectors were promising at the moment, Patel believed trade and everything we do today is about trade. Provided that there that commercial business with products such as trade fi nance and is a genuine underlying asset in the transaction and there is a transfer commercial property is a very strong sector for growth and profi tability of ownership, you can do anything. Creating various terminologies for the banks. He also felt that investment opportunities are also to accommodate Islamic fi nance does not help the industry. I also abundant for Shariah funds, alternate investments and commodity believe that it is an invitation to people on how things really are,” he funds, among others. concluded.

“Since our inception, we have found IFN to be a timely source of intelligent commentary on the issues of the industry and a great source of reference material.”

Vince Cook SCR Chief Executive Officer, UB SUBSCRIBENOW! The Islamic Bank of Asia

Shariah Compliant Private Equity: Post Recession Prospects By Professor Rodney Wilson

Investor appetite for risk declined sharply in 2008 in the aftermath of Interestingly, over the last two years the closed ended funds have by the fi nancial crisis, with private equity being one of the worst affected far outperformed the open ended funds, illustrating that private equity sectors. For existing private equity investors the diffi culty was to exit, can be anti-cyclical, although there are issues over the fair valuation as initial public offerings were impossible due to the depressed state of the unlisted stock. of stock markets, including those in the Gulf and Southeast Asia. For the same reason the mergers and acquisitions route also proved Corecap, the Dubai and Qatar registered alternative investment fi rm unpromising, as potential investors wanting to buy into existing which is regulated by the Qatar Financial Centre, has also had a good private equity ventures could not raise the capital. year. The value of its private equity and venture capital investment exceeds US$500 million. In October it closed the fi rst tranche of a Shariah compliant private equity investment inevitably suffered the private placement in its subsidiary, Corecap Merchant Bank, in a deal same fate as its conventional equivalent. The inability to leverage was worth almost US$20 million. less of an issue given that excessive borrowing to fi nance investment is haram, but many investors were deterred by market uncertainties, Its investments include stakes in Prime Link Logistics of the UAE, especially with higher risks and pessimistic prospects for returns. Rakeen, a Ras Al Khaimah based developer, and Alkan of Egypt, a regional business services company. The timing of the fi nancial crisis was unfortunate as private equity investment was starting to take off in the Gulf in 2006 with One of Corecap’s largest involvements is with the Centre of Excellence Eurekahedge listing 279 funds, although less than 10% of these had for Applied Research and Training Innovations, a US$100 million fund formal mechanisms to ensure Shariah compliance. sponsored by the UAE Ministry of Higher Education. This is developing a science park, similar to that being developed by the Qatar Foundation, Yasaar Media estimates the size of the Shariah compliant sector at whose park was the fi rst of its type in the GCC. present as around US$3 billion, a tiny proportion of the global private equity industry which has assets worth over US$2.2 trillion. This shows The performance of other Shariah compliant private equity funds has the potential for Shariah compliant private equity, especially if investors been poorer and their future is less certain. Al Tawfeek, part of the are willing to take a long term view. Dallah AlBaraka Group, launched a private equity fund in Bahrain in 2006 with a seed capital of US$20 million. The fund will mature in Mixed experiences 2011, but it is unclear what return the investors will make, if any. There have been very mixed fortunes for the major GCC-based institutions involved in Shariah compliant private equity during 2008 They are however better positioned than those who placed funds with and 2009, with the larger companies generally performing the best. Investment Dar, the high profi le Kuwait Shariah compliant private equity company which bought Aston Martin. Unfortunately, one of its This was demonstrated by the successes of Swicorp of Riyadh, the subsidiaries, Oqyana Real Estate, was one of the fi rst investors in “The oldest and largest private institution in the region which was founded in World”, the man-made islands off the coast of Dubai. These may now 1987, with other offi ces in Jeddah, Geneva, Tunis, Dubai and Algiers. never be developed.

During the global ﬁ nancial crisis it continued to maintain the conﬁ dence Prospects for the Khabary Future City project in the Fahaheel area of of its investors. As a result it was able to continue to attract funding for Kuwait are better, another Investment Dar project, but investors may substantial deals. have a long wait to see any return.

For example, in September Intaj Capital, a US$250 million private equity Investment Dar itself has been unable to meet its obligations with fund managed by Swicorp, acquired a strategic stake in Powergres of its creditors, and has now reached a standstill agreement with the Italy, a leading ceramic designer and distributor. majority pending the implementation of a restructuring plan. Its defaults include a US$100 million Sukuk which matures in 2010. The signifi cance of this deal was that Powergres worked with There have been no payments to investors since May. Uniceramic, a Bahrain based ceramics fi rm focused on the GCC and wider Middle East region, in which Swicorp also had a major stake. Outlook It is these types of synergies that propel private equity investment Despite mixed results during the global recession, arguably now is a success. good time for private equity investment as there are some bargains available and many undervalued assets. Jadwa Investments of Riyadh also had a good year despite challenging conditions in capital markets. Much of its activity is in Shariah compliant Shariah compliant listed stock has already recovered in many markets, fund management, most of which is in listed rather than private equity, and investors may have missed the opportunities of earlier this year, as it is a leading Saudi Arabian provider of open ended funds. However but given more limited information fl ows, private equity usually lags around one third of its assets are in closed ended funds, accounting public equity. for around US$10 million. continued...

Shariah Compliant Private Equity: Post Recession Prospects (continued)

Of particular interest are companies specializing in alternative energy, of fi nancing. Such structures can involve combining profi t and loss likely to be given a boost by the carbon emission undertakings at the sharing with an assured exit route, making the risks more acceptable ongoing Copenhagen summit. Such “green” companies are inherently for investors. Shariah compliant, and provide welcome diversifi cation for investors based in oil and gas exporting countries. Venture capital implies taking risk and backing experiments. There is also a need to do this with the fi nancing structures themselves. Investment in healthcare, another Shariah compliant sector, also looks promising and this will benefi t from aging populations around the world in the long term, and possibly the passage of US President Barack Obama’s health care package in the medium term. GCC based Shariah compliant investors can also profi t from private equity activity in nearby emerging markets. Such investment remains in its infancy in India and East Africa, but the potential is enormous. Professor Rodney Wilson Islamic private equity investment can also win more supporters if Director of postgraduate studies it moves beyond Shariah compliance and develops Shariah-based School of Government and International Affairs structures. At present, all too often existing private equity contracts are Durham University simply edited, with all reference to interest and other haram returns Durham, UK removed. Email: [email protected] Devising new Musharakah structures for private equity could help www.durham.ac.uk/sgia bring more credibility, and become the leading application for this type

Awards 2009 Closing date for submissions: Thursday 17th December 2009

The Categories •Deal of the Year •Project Finance •Cross Border •Real Estate •Best Corporate Finance •Sovereign •Most Innovative •Structured Finance •Equity •Sukuk •Ijarah •Syndicated Finance •Initial Public Offering •Tawarruq •Mudharabah •Wakala •Murabahah / Trade Finance •Best Country Deal •Musharakah – All countries will be considered

For more information, please go to www.islamicﬁnancenews.com

The Year That Was (Part 1) By KFH Research

In less than a decade, the Islamic fi nance industry has evolved to compliant fi nancial products, backed by rising wealth and excess become an essential part of the international fi nancial system. liquidity arising from the high oil prices. The growth of the industry Islamic assets are expected to grow between 8% and 10% to reach would be further sustained by the strong economic growth in Malaysia US$964.2 billion in 2009 versus US$150 billion in the mid 1990s. and the GCC, the two main drivers for the development and growth of The tremendous growth has been mainly driven by abundant liquidity the Islamic fi nance industry. fl ows from the recycling of petrodollars, encouraging demographics, as well as the active role played by some jurisdictions around the The awareness of Islamic banking has increased after the recent world to promote the development of Islamic fi nancial markets in fi nancial crisis. While Islamic banks are not fully immune from the their respective countries. shocks of the fi nancial woes, the Islamic banking sector has been able to maintain stability owing to ample liquidity, safer debts (backed by an At present, there are more than 300 Islamic fi nancial institutions in underlying asset) and relatively high profi t margins. existence worldwide which include banks, mutual funds, mortgage companies and Takaful fi rms. Islamic fi nancial institutions have also Islamic banks seemed to be more resilient to the ongoing crisis started to tap new growth opportunities in other regions from cross- than their conventional counterparts because direct investment border linkages. Given that Islamic fi nance has become part of the for such institutions in subprime assets and its derivatives, such as global fi nancial system, several countries are now in the race to collateralized debt obligations and special investment vehicles, is become Islamic fi nancial hubs, including established fi nancial centers prohibited. such as London, Hong Kong and Singapore. The Islamic banking sector worldwide has grown at more than 10% Although Islamic fi nancial institutions have fared well thus far, the annually over the past 10 years, from about US$150 billion in the industry has not been totally insulated from the turmoil resulting from mid 1990s. Increasing demand for products and services based on the global fi nancial crisis. Immediate challenges faced by the players Islamic principles has led to the growth of Shariah compliant banking arising from the crisis include diffi culty in managing their short-term assets worldwide to an estimated US$700 billion in 2008. In was liquidity and impaired investment portfolios which are concentrated on reported that the world’s top 100 Islamic banks managed to grow illiquid and cyclical asset classes. their assets by an average rate of 29.7% in 2008, at a time when their conventional counterparts were struggling to deal with the As market conditions begin to improve, expect investors to increasingly global fi nancial crisis. look for Shariah compliant investment opportunities which are more transparent and ethically structured. In this regard, Islamic investment Access to the Islamic banking sector has also opened up for individuals banks will have an important role to play. and companies an alternative source of investment and funding. In 2009, we expect Islamic assets to grow between 8% and 10% to However, it is crucial for Islamic fi nancial institutions to have in US$770 billion. place effective and good governance practices, strengthen their risk management systems and manage their investment portfolios Given the volatility of the fi nancial markets, more individuals and diligently for the industry to remain resilient in trying times. corporations have started to invest in Islamic banking and Shariah compliant products. This is due to Islamic banks’ lower risk profi le, Overall, we believe that Islamic fi nance has vast opportunities to grow given that it is more diffi cult for Islamic fi nancial institutions to use further despite the global crisis, given the following factors: leverage, as well as a conservative approach to fi nancing as the risks is shared with investors. • Strong demand for Shariah compliant products and investments point to immense potential for further growth. Expect to witness a bigger migration to Islamic fi nancial services in • Encouraging demographics and the proactive measures by certain markets due to the loss of faith in the conventional system. jurisdictions worldwide to promote the development of Islamic Also expect the value of assets managed by Islamic banks to grow to fi nance. US$4 trillion by 2020, as the world’s Muslim population grows larger • Industry growth will be strengthened by further improvements and as more non-Islamic jurisdictions around the world warm up to the in industry architecture, development of government-backed concept of Islamic banking. Islamic fi nancial centers, as well as greater awareness and global technological development. Sukuk • Government-linked/top tier companies in the Middle East On the Sukuk front, the market has witnessed continued geographical and emerging Asia (fi nancial, real estate, oil & gas and diversifi cation in 2008, with new issuers such as Gambia and Brunei transport sectors) are looking for funds on the back of massive joining the bandwagon, and this trend is set to continue. Entities in infrastructure and construction projects in the two regions. more than 20 countries, predominantly non-Muslim countries, have • By 2020, the total Muslim population would have increased to expressed their intention to tap the Sukuk market. an estimated 2.5 billion from 1.5 billion currently. However, the market was not spared from the effects of the global The main driver behind the development and growth of the Islamic fi nancial crisis. After expanding robustly in 2007, the market has been fi nance industry is the growing demand and preference for Shariah continued...

The Year That Was (Part 1) (continued) experiencing a marked slowdown since 2008. New issuances were Global Sukuk Issuance by Country (January-July 2009) either delayed or priced slightly higher to refl ect rising debt market Gambia volatility as well as a slight drop in investors’ demand for Sukuk. Malaysia 0.08% Pakistan 45.03% In the fi rst half of 2009, total global Sukuk issued amounted to US$7.1 2.04% billion, 35.3% lower then the US$11 billion raised in the fi rst half UAE of 2008. The slowdown during the period was due to the following 4.26% reasons: Brunei 0.71% Saudi Arabia • The on-going challenging market conditions and drying up of Indonesia 22.03% liquidity. Bahrain 16.05% • Wide credit spreads and shortages of US dollar funding in 9.79% issuing countries. • The challenging economic environment in the GC countries, Source: S&P, KFHR particularly in the UAE. Total Sukuk Issuance by Type (January-July 2009) Global Sukuk Issued by Region Government and 8000 related entities 7000 74% 6000 5000 Financial institutions 4000 3% 3000 2000 Corporations% 1000 Source: S&P, KFHR 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Global Mena The long-term prospects for the Sukuk market are expected to remain strong, given the increasing popularity of Shariah compliant products, Source: Zawya, S&P, IFIS, Bloomberg, KFHR governments’ support for Islamic fi nance, huge investment and fi nancing requirement in the GCC and Asia, and issuers’ desire to tap On a quarterly basis, 1Q09 global Sukuk issuance stood at US$1.8 investors from the Middle East and Muslim Asia. billion, a decline of 35.6% year-on-year (1Q08: US$2.8 billion). 2Q09 total Sukuk issuance was also down by 34.9% year-on-year to US$5.3 The long-term pipeline for Sukuk issuance is healthy, and the market billion, but was 193.2% higher than 1Q09. Almost all this year’s fund- is attracting interest from an increasing number of issuers in Muslim raisers have been government-related. and non-Muslim countries alike. However to gain wider acceptance in the global Islamic fi nancial market and among Shariah experts, Sukuk Expect governments or sovereigns to drive the Sukuk issuances in issuers need to improve their features, which include introducing 2009/10, as many corporate issuers are deterred by tough market Sukuk based on both receivables and assets, or enhancing pricing conditions. Governments are likely to issue Sukuk to fi nance higher mechanisms. fi scal defi cits, as most governments are committed to supporting expansionary policies to help jump-start the sluggish economy. Part II of this article will discuss the Islamic wealth and asset management industry, the Islamic private equity industry and the Global Sukuk Issuance by Country (2008) developing Takaful and reTakaful landscape.

Gambia Pakistan 0.08% Malaysia 3.20% 36.90%

UAE 35.60% Brunei 0.64% KFH Research Level 12, Tower 2, Etiqa Twins Indonesia 4.46% 11, Jalan Pinang 50704 Kuala Lumpur, Malaysia Saudi Arabia Bahrain Qatar Tel: +603-2055-7777 11.21% Kuwait 4.60% 2.02% E-mail: [email protected] 1.28%

Islamic Investments Weather Most of the Storm in Asia By Sohail Jaffer

As the global economic and fi nancial landscape has undergone The Malaysian government has not only shown willingness to liberal- seismic changes over the past couple of years, it is hardly surprising ize its fi nancial sector, but has also played a leading role in promot- that the world of asset management has been affected too. The ing Islamic fi nance by launching its fi rst Sukuk for US$600 million in global asset management industry has seen its assets shrink for the 2002. Islamic deposits and Sukuk issuances send a clear signal of fi rst time since 2002; the number of funds has fallen from 70,000, support by the government and local authorities to the industry. worth US$26.2 trillion, in 2007 to only 58,000, worth US$21.7 trillion, in the third quarter of 2008. Not only is the number of funds Outside Malaysia, countries such as Indonesia, Pakistan and India decreasing, but also their value in assets, with investors erring on show a clear interest in Islamic fi nance, with local governments giving the side of caution and withdrawing their money. According to Lipper, their support, as well as populations becoming increasingly aware of estimated net withdrawals from investment funds are over EUR201 the Islamic range of products and showing an appetite for them. billion (US$296 billion) in Europe alone. However, this is not all bad news for the world of investment “The popularity of Takaful management. Ernst & Young and PricewaterhouseCoopers have both issued reports on Shariah compliant funds, highlighting their powerful in Malaysia shows a very and continuing growth. Between 2007 and 2008, Shariah compliant assets under management showed an increase of US$2 billion. interesting trend; research Overall, the Islamic fi nancial services volumes are growing at over 20% per annum and are now worth around US$800 billion, a momentum shows that a staggering 60% of not shared by the conventional sector. Takaful customers in Malaysia In terms of assets, those volumes have quadrupled in the past three years, due to a more diversifi ed range of fi nancial instruments offered are non-Muslims” by Islamic fi nancial institutions, out of which 90% are in the Middle East and Asia. It is believed, however, that Islamic fi nance will soon tap Between 2005 and 2007, global gross Takaful contributions posted new sectors and geographies in order to have a much greater global an average compound annual growth rate (CAGR) of 30%, according presence and attract a wider audience. to the World Takaful Report 2009. In 2008, total net Takaful contributions reached US$849 million. This translates into a double- Malaysia: The Asian case study digit net contribution growth of 18%. On the other hand, conventional The example of Malaysia is the most telling. It is widely recognized insurance’s net contributions recorded a single-growth digit of only that the country is well positioned to provide Islamic fi nancial 0.7% over the same period of time. The popularity of Takaful in Malaysia services and facilities in Europe, hence reinforcing the message that shows a very interesting trend; research shows that a staggering 60% secular countries can also benefi t from Shariah compliant fi nance. of Takaful customers in Malaysia are non-Muslims. Already, Malaysian banks, such as Malayan Banking and CIMB, have representative offi ces in London, which can collaborate with Growth in Takaful contributions is partly due to rising per capita institutions in Europe to expand their Islamic banking services. incomes across the Muslim world, driven in part by high commodity prices, which has fuelled a conspicuous increase in demand for The Lord Mayor of London Alderman Ian Luder praised Malaysia for its fi nancial products and services, including Shariah compliant insurance fl ourishing Islamic fi nancial sector during his speech at the Malaysia- and investment management. In Malaysia, Islamic insurance is an UK Islamic Finance Forum in Kuala Lumpur in July. He welcomed integrated concept and distributors are doing a very good job making the country’s fi nancial sector liberalization, which will enable the sure potential customers know about it. two countries to work even more closely together in areas like policy exchanges and mutual recognition of standards. Consequently, we see more and more strategic alliances between banks and insurance companies emerging in the Middle East and Asia, The British are also particularly interested in tapping into Malaysia’s evidence of the compelling economics of the Bancassurance business expertise in developing an Islamic fi nancial market, by encouraging model. The Malaysian government’s softening stance on the country’s professional exchanges between Islamic fi nance staff, experts and fi nancial sector saw the issuance of new licences for seven banks, students, as well as highlighting the necessity of joint education including two foreign players. These have contributed to the growing programs. success of the BancaTakaful solution, as it provided opportunities for further alliances. In Asia, the combined volume of the banking, Sukuk, asset management and Takaful sectors has grown from US$30 billion to US$58 Indeed, successful joint ventures have already been established for a billion in three years, with Takaful volumes growing at a staggering number of years, as for example, ING and Public Bank, or CIMB and 98% within the same period. Most of those volumes are concentrated Aviva. Maybank, the country’s fi rst BancaTakaful player with 39.3% of in Malaysia, where the total fund assets of the Takaful industry are the market for Family Takaful products in 2008, has also implemented worth MYR10.5 billion (US$2.9 billion) with a 5.7% return on invest- a successful model with its Takaful subsidiary Etiqa. ment (ROI). continued...

Islamic Investments Weather Most of the Storm in Asia (continued)

The rapid expansion in the Takaful industry in Malaysia is viewed by averaging and allows investors to benefi t from temporary dips in the many market participants as a blueprint for what could be achieved market by acquiring units at a lower cost when markets are weak. elsewhere. According to Kuala Lumpur-based CIMB-Aviva, worldwide demand for Takaful products is projected to reach US$10.1 billion by For investors, the process is a simple one, with most Family Takaful 2011, of which US$3.2 billion are expected to come from Asia. providers setting up monthly or quarterly bank debit schemes to allow unit-holders to build up their investments over a prolonged period. Shariah compliant investing makes sense According to the Global Banking Corporation based in Bahrain, Islamic However, it is not all rosy and despite new innovations and technologies fi nancial institutions have become far more aware of the necessity to to prevent too great a loss for the investor, there are always risks further diversify their asset portfolios. associated with investment products, as the return also depends on the ability of the fund issuers to perform their obligations, or for the The growing Sukuk market should help widen the range of asset counterparty not to default on the investment payments and principal classes eligible for investment, hence luring a growing number of of the investment program. investors. Islamic banks have also started to explore new business lines, such as mortgages, which could pave the way for more active The entity responsible for the safekeeping of investors’ funds can Shariah compliant securitization. Some of the global fi nancial players encounter fi nancial diffi culties and, therefore, investors need to have already joined the bandwagon and have added to their existing ensure that they are protected against custody risk, or the danger of range of Islamic products; Prudential, Citigroup and Deutsche Bank all the loss of securities, or cash held in custody as a result of insolvency, offer Islamic structured investments to their customers. negligence or fraudulent action of a custodian or sub-custodian.

The offering is an attractive one, as it guarantees capital protection One way of ensuring that this risk is minimized is for investors to choose on the initial sum invested for the duration of the program, as well as a custodian bank of a high-credit quality that is located in a developed a yearly profi t if the investment performs. In other words, a win-win jurisdiction, where assets under custody are securely ring-fenced from situation for the investor. Also, the growing success of multi-manager the balance sheet of the custodian bank itself. programs, like those offered by AXA, indicates that investors do not want to place all their eggs in one basket. While it is safe to say that the customer’s profi le has changed over the past couple of years, the appetite for diversifi ed and new types In terms of innovation, the FWU Group — a global leader in Takaful of investments still exists. In the Middle East and Asia, there is an expertise — has just introduced a principal-protected equity strategy increasing trend for professional individuals, on an average income, to for both regular and lump sum customers, in conjunction with an plan for the medium or longer term. Also, as most emerging markets international bank. The main customer benefi t is that it secures capital have predominantly young demographics, the customer base will growth at maturity by locking in the highest net asset value (NAV) of continue to grow over the years. This can only augur well for Shariah the strategy, measured on a monthly basis, during the complete term compliant investments throughout the world. of the investment. The new technology, used in the Family Takaful investment-linked programmes, involves an overlay of a dynamic principal protection strategy composed of an actively managed portfolio of underlying third-party equity mutual funds.

There is defi nitely a growing tendency to play it safe and, increasingly, products are based on a conservative asset allocation of 80% exposure to money market instruments and fi xed income securities and just 20% to equities. A balanced product would be based on a 50/50 allocation, while a growth strategy would channel 80% into equities and 20% into money market and fi xed income assets. As an added safeguard, Sohail Jaffer investors who change their risk appetite can recalibrate their allocation Partner to conservative, balanced and growth strategies accordingly, hence [email protected] diminishing the risk of losing money. FWU AG In terms of strategy, a number of studies have also suggested that 4a Rue Albert Borschette over the longer term, it is more rewarding to invest in the market at L-1246 Luxembourg regular and pre-defi ned intervals. This strategy is known as dollar-cost

Next Forum Question What in your mind were the key developments in the Islamic ﬁ nance industry in 2009? What were the major issues, and what lessons can we learn from them? What do you think 2010 holds in store for the industry? If you would like to air your views on the next Islamic Finance Forum Question, please email your response of between 50 and 300 words to Christina Morgan, Forum Editor, at: [email protected] before Monday, 4th January 2010.

Lately, more GCC banks are operating in Southeast Asia. This signals a higher level of cross-border initiatives. However, the ﬂ ow is seemingly not equal, that is, we do not see as many Asian banks operating in the GCC. What are the reasons for the imbalance in presence? And will this trend continue for the foreseeable future?

The imbalance will continue, as the banking markets in the GCC are very crowded, even in the Islamic banking sector. Institutions from the GCC have established a presence in Malaysia not merely because they see it as an attractive market but because they are running out of opportunities in their home markets. In other words, there are push as well as pull factors explaining the movements.

Banks from Southeast Asia are unlikely to fi nd the GCC a very profi table market for core activities such as trade fi nance due to the trade imbalances. The GCC exports signifi cant quantities of oil and gas to Southeast Asia, but apart from some Thai exports, there is little trade in the other direction. Maybank has an offi ce in Bahrain, but is unlikely to expand further in the GCC, especially given the uncertainties with the Dubai debt crisis.

PROFESSOR RODNEY WILSON: Director of postgraduate studies, Durham University

Historically, there are many reasons why banks operate outside their own jurisdiction. Generally speaking, these are typically related to economic elements such as trade relationships, establishment of local companies in BANK OF LONDON AND THE MIDDLE EAST foreign jurisdictions, reduction of concentration and increased diversiﬁ cation. Consider for instance one of the early Dutch merchant banks, the Nederlandsche Handel Maatschappij (NHM). Established by royal decree in 1824, its main purpose was to revive trade between the Netherlands and the Dutch East Indies, and also to look after the ﬁ nancial interests of Dutch companies and trading partners.

It is likely that the GCC banks and corporations are seeing similar opportunities in Asia, and may wish to capitalize on them. Vice versa, at this point in time, the reason for Asian banks not to move to the GCC may be the fact that for them, the main market is Asia and they do not see any opportunities in the Middle East that are attractive enough to justify the capital outlay to open an ofﬁ ce in a different country.

DR NATALIE SCHOON: Head of product management, Bank of London and the Middle East

Banking in Southeast Asia is still growing with large segments still unbanked. In the GCC, banks have established a strong distribution network where continued growth and asset base can only grow from international expansions. As the banking sector in Southeast Asia matures, you will see banks starting to expand their international operations.

OMAR KALAIR: President and CEO, UM Financial Canada

The imbalance in cross-border initiatives between the two regions is simply a matter of the GCC region not trusting the fact that Islamic banks in Asia are practicing Shariah according to their standards. The GCC region is very selective in the scholars it “approves,” with only one having broken the conventional stereotype that Asian scholars are too liberal: Dr Muhammad Daud Bakar. This will continue until the GCC region expands its understanding of what is “Shariah compliant”.

MONEM A SALAM: Director and vice-president, Saturna Capital

This trend is inevitable for three simple reasons: 1. Asia from India eastwards is more diversiﬁ ed with more opportunities than the GCC, which will remain hydrocarbon focused for the foreseeable future. The appeal is only improving in the forms of resources, education, plant and infrastructure. 2. Data is better in East Asia, thereby facilitating credit and investment analysis. 3. And, now the Dubai, Saad and other problems in the GCC will cause many non-GCC investors and ﬁ nanciers to be very cautious about the GCC markets.

ABDULKADER THOMAS: President and CEO, SHAPE Financial Corp

Islamic Finance news talks to leading players in the industry

Name: Hilmy Cader What are the strengths of your business? Position: Global CEO What differentiates us from many of the big name consultancies is our approach. We operate as a boutique consultancy. Our consultants and Company: MTI Consulting analysts consider themselves as extensions of the client.

Based: Manama, Bahrain We also involve our clients in a participative and consensus-based Age: 48 delivery model which gets organization-wide commitment. We are very practical, detailed and hands on. Our approach is down to earth and Nationality: Sri Lankan custom ﬁ tted. Finally we are also very bottom-line focused. We function more like Could you provide a brief journey of how you arrived resultants than consultants. I believe all of the above has made a big where you are today? difference for MTI. I started my career in sales and branding, enjoying stints with Glaxo- Boots, British Ceylon Corporation and the Maharaja Organization in Sri Lanka. What are the factors contributing to the success of your company? After this I joined the New Zealand Dairy Board in Bahrain to look We continuously reinvent ourselves and stay relevant to the needs of into their regional marketing function. Following this I was appointed our clientele given the turbulent and rapidly changing times we live in. Middle East and South Asia area director for the Ralston and Purina Our solutions are extensively researched, continuously improved and Company of the US. internationally tested.

I started MTI Consulting in 1997, initially with operations in Bahrain and We have also benefi ted from leveraging on our strength which is our Sri Lanka. In 2005, we expanded to India, Pakistan and Bangladesh approach, or in other words how we work with our clients. I am proud and later ventured into Malaysia. to say that most of our work is through repeat projects and client referrals. We don’t and have no intention of advertising ourselves. Since the launch of MTI, I have personally managed over 250 consulting projects in multiple industry categories across 40 countries. During this time I also served on the boards of four leading Sri Lankan blue What are the obstacles faced in running your chip companies. business today? As with most other business service providers, the past year or so has proven to be tough due to the ongoing worldwide recession. With What does your role involve? bottom lines under scrutiny and intense pressure, most companies As Global CEO, I provide strategic direction to MTI’s operations. I also have been persistent on freezing and cutting costs in each and every spearhead MTI’s consulting projects in the Middle East and other area of the business. major projects in south Asia and other parts of the world. However we remain optimistic as tough times don’t last forever. On a positive note, many companies which are trying to be proactive in What is your greatest achievement to date? seizing downturn opportunities are pursuing our services. Within a short span of 11 years, MTI has enjoyed many memorable achievements. However the one which defi nitely tops the list is MTI being awarded the tender to develop the national export strategy for Where do you see the Islamic fi nance industry in, say, the Government of Pakistan. the next fi ve years or so? Islamic fi nance is fast moving from what was once considered niche to This project was awarded by the then President of Pakistan. We mainstream even in non Muslim countries. You could say that it is at a outperformed some of the largest Consultancies in the world in this tipping point. The global credit crunch has in fact benefi ted the Islamic pitch. To date this has been MTI’s largest project. fi nance industry as it has to some extent leveled the playing fi eld with conventional fi nance. Which of your products/services deliver the best results? Name one thing you would like to see change in the Although MTI provides solutions across various functional verticals, world of Islamic fi nance. our strategy solutions such as “strategic planning and restructuring” Islamic fi nancial institutions need to make a better effort in educating have received high commendation from our clients. consumers. Many customers remain unsure about the real difference between conventional and Islamic fi nance and that has to change if Perhaps this is due to the greater involvement of top management for the industry is to grow further. such solutions, and a more direct link to the bottom line impact.

Indosat’s Sukuk Ijarah

ISSUER Indosat

Indosat is a telecommunication and information service provider in Indonesia that provides nationwide cellular prepaid and postpaid services. It also provides a fi xed telecommunication or fi xed voice offering including IDD, fi xed wireless and fi xed phone services. PRINCIPAL ACTIVITIES Together with its subsidiary companies Indosat Mega Media and Lintas Arta, Indosat provides fi xed data or multimedia, internet & data communication services such as IPVPN, leased line and internet services. Indosat was a pioneer in introducing wireless broadband services using 3.5G with HSDPA technology to Indonesia.

FACILITY DESCRIPTION Sukuk Ijarah Number IV Year 2009 (Series A and Series B)

IDR28 billion (US$3 million) for Series A of the Sukuk Ijarah and IDR172 billion (US$18.23 million) NOMINAL AMOUNT for Series B

PROGRAM TENOR Five years for Series A and seven years for Series B

Fixed Ijarah return amounting to IDR3.15 billion (US$333,863) per annum for Series A and a ﬁ xed Ijarah return RETURN amounting to IDR20.21 billion (US$2.1 million) per annum for Series B

PAYMENT Payable on a quarterly basis

DENOMINATION Indonesian Rupiah (IDR)

ISSUE DATE 8th December 2009

MATURITY DATE 8th December 2014 for Series A and 8th December 2016 for Series B

MANAGING Danareksa Securities, DBS Vickers Securities Indonesia and Mandiri Securities UNDERWRITERS

TRUSTEE Bank Rakyat Indonesia (Persero)

LISTING Indonesian Stock Exchange

RATING The issuance has received a rating of ‘idAA(sy)/Negative Outlook’ from Pemeringkat Efek Indonesia (Peﬁ ndo)

PURPOSE OF As part of Indosat’s external funding plan to further develop its business ISSUANCE For more termsheets, visit www.islamicfinancenews.com

Islamic Finance news Advisory Board: Keeping you abreast of the world’s upcoming Shariah compliant deals Mr Daud Abdullah (David Vicary) Another Islamic Finance news exclusive Global Leader Global Islamic Finance Group, Dealoitte ISSUER SIZE INSTRUMENT Dr Mohd Daud Bakar Indonesia TBA Sukuk Chief Executive Offi cer Qatar, Sudan, Pakistan, TBA Euro-denominated inter- International Institute of Islamic Finance Indonesia and Malaysia government Sukuk issuance Prof Dr Mohd Masum Billah program Group Executive Chairman Binariang GSM (US$1.5 billion) Sukuk, CIMB, Maybank and RHB Middle Eastern Business World Group of Companies are the arrangers Bahrain US$100 million and Sukuk Dr Humayon Dar US$500 million Chief Executive Offi cer BMB Islamic Pakistan US$500 million and Sukuk and Eurobonds US$1 billion Mr Badlisyah Abdul Ghani Chief Executive Offi cer South Korea Between US$500 Sukuk CIMB Islamic million and US$1 billion Ms Baljeet Kaur Grewal Managing Director/Vice Chairman Sharjah Investment and US$2.7 billion Sukuk Head, Global Research Development Authority KFH Research Limited Salim Ivomas US$130 million Sukuk Ijarah worth IDR250 billion Mr Sohail Jaffer (US$26 million) and IDR1 trillion Partner (US$104 million) of conventional International Business Development bonds FWU International Dubai US$6.5 billion Medium-term notes, involving the Dr Monzer Kahf sale of US$2.5 billion in Sukuk Consultant/Trainer/Lecturer and US$4 billion in conventional Private Practice bonds Mr Mohamed Ridza Abdullah Ithmaar Bank Between US$400 A fi ve-year mandatory convertible Managing Partner million and US$500 Sukuk, a rights issue and a credit Mohamed Ridza & Co million call option Prof Bala Shanmugam Jordan TBA Sukuk Director of Banking & Finance Dubai Civil Aviation Authority US$1 billion Sukuk and conventional bonds Monash University Malaysia Cagamas US$884.6 million Sukuk Mr Muhammad Nejatullah Siddiqi HSBC Bank Middle East US$5 billion Trust Certifi cates Author, Scholar, Speaker, Trainer Saudi Aramco & Total US$500 million Sukuk Mr Rushdi Siddiqui Head of Islamic Finance Port of Tanjung Pelepas US$292 million Sukuk Thomson Reuters Khazanah Nasional TBA US dollar denominated Mr Dawood Taylor exchangeable Sukuk Regional Senior Executive-Middle East France US$1.5 billion Sukuk Prudential PLC Guoco Land US$34 million Commodity Murabahah Mr Abdulkader Thomas Dubai Department of US$10 billion Sukuk President & CEO Finance SHAPE – Financial Corp Sakana Holistic Housing US$50 million Sukuk Mr Paul Wouters Solutions Partner Bener Dar-Al Dhabi Holding US$346.4 million Sukuk Unicorn Investment Bank US$425 million Sukuk Ijarah Prof Rodney Wilson Director of Postgraduate Studies Islamic Bank of Thailand US$1.4 billion Sukuk Durham University HSBC TBA Sukuk Mr Sohail Zubairi Chief Executive Offi cer For more details and the full list of deals visit Dar Al Sharia Legal & Financial www.islamicfi nancenews.com Consultancy

Eurekahedge Middle East/Africa Islamic Fund Index

270 250 230 210 190 170 150 130 110 90

7/1/00 1/1/01 7/1/01 1/1/02 7/1/02 1/1/03 7/1/03 1/1/04 7/1/04 1/1/05 7/1/05 1/1/06 7/1/06 1/1/07 7/1/07 1/1/08 7/1/08 1/1/09 7/1/09 12/31/99

Annualized returns for ALL funds (as of the 9th December 2009)

FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE

1 Al Rajhi India & China Equity Al Rajhi Bank 5.46 Saudi Arabia 2 InterPac Dana Safi Inter-Pacifi c Asset Management 5.40 Malaysia 3 Apex Dana Al-Sofi -i Apex Investment Services 4.18 Malaysia 4 Kenanga Syariah Growth Kenanga Unit Trust 2.79 Malaysia 5 Dana Makmur Pheim PHEIM Unit Trusts 2.77 Malaysia 6 CIMB Islamic Equity Aggressive CIMB-Principal Asset Management 2.47 Malaysia 7 Pacifi c Dana Aman Pacifi c Mutual 2.42 Malaysia MyETF Dow Jones Islamic Market Malaysia Titans i-VCAP Management 2.40 Malaysia 8 25 (MyETF-DJIM25) 9 Mega Dana Obligasi Syariah Mega Capital Indonesia 2.39 Indonesia 10 ING Ekuiti Islam ING Funds 2.37 Malaysia Eurekahedge Asia Pacifi c Islamic Fund Index* -0.06

Annualized Standard Deviation for ALL funds (as of the 9th December 2009) FUND FUND MANAGER PERFORMANCE MEASURE FUND DOMICILE 1 FALCOM Saudi Equity FALCOM Financial Services 9.73 Saudi Arabia 2 Al Rajhi Petro-Cement Sector Al Rajhi Bank 7.11 Saudi Arabia 3 Al Rajhi Local Shares Al Rajhi Bank 6.14 Saudi Arabia 4 Al Ahli Saudi Mid Cap Equity NCB Capital 5.99 UAE 5 Kagiso Islamic Equity Kagiso Asset Management 5.35 South Africa 6 Al Rajhi Balanced 2 Al Rajhi Bank 4.97 Saudi Arabia 7 Al Rajhi GCC Equity Al Rajhi Bank 4.14 Saudi Arabia 8 Jadwa Saudi Equity Jadwa Investment 3.98 Saudi Arabia 9 HSBC Amanah Saudi Equity Segregated Portfolio HSBC Amanah Central Shariah Committee 3.61 Cayman Islands 10 Al-Saffa Saudi Equity Trading Banque Saudi Fransi 3.36 Saudi Arabia Eurekahedge Middle East/Africa Islamic Fund Index* -0.42

Contact Eurekahedge To list your fund or update your fund information: [email protected] For further details on Eurekahedge: [email protected] Tel: +65 6212 0900 Disclaimer Copyright 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.

S&P Shariah Indices Price Index Levels

1250 1140 1030 920 810 S&P 500 Shariah 700 S&P Europe 350 Shariah 590 S&P Japan 500 Shariah 480 370 260 150 9/12/09Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09

Index Code Index Name 9/12/09 Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09 SPSHX S&P 500 Shariah 994.298 993.630 938.522 945.321 913.542 899.016 842.797 SPSHEU S&P Europe 350 Shariah 1186.070 1191.590 1154.847 1134.881 1095.741 1058.270 977.823 SPSHJU S&P Japan 500 Shariah 995.547 953.814 958.793 994.367 996.042 959.584 908.760

1250 1130 1010 890 770 650 530 S&P Pan Asia Shariah S&P GCC Composite 410 S&P Pan Arab Shariah 290 S&P BRIC Shariah 170 50 9/12/09Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09

Index Code Index Name 9/12/09 Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09 SPSHAS S&P Pan Asia Shariah 938.901 914.903 888.072 916.579 846.106 867.704 780.340 SPSHG S&P GCC Composite Shariah 654.757 692.555 708.224 725.528 688.379 669.202 654.208 SPSHPA S&P Pan Arab Shariah 113.095 118.162 121.749 123.831 118.463 115.322 112.643 SPSHBR S&P BRIC Shariah 1135.651 1158.319 1101.842 1066.062 973.014 996.242 924.814

1200 1080 S&P Global Property Shariah 960 S&P Global Infrastructure Shariah 840 720 600 480 360 240 120 0 9/12/09Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09

Index Code Index Name 9/12/09 Nov-09 Oct-09 Sep-09 Aug-09 July-09 June-09 SPSHGU S&P Global Property Shariah 669.584 651.064 652.897 655.839 625.881 641.907 592.683 SPSHIF S&P Global Infrastructure Shariah 97.224 97.319 94.056 96.587 82.238 80.488 75.034 The S&P Shariah Indices. Creating opportunity for Islamic investors.

To learn more, contact [email protected].

PERFORMANCE OF DJ INDEXES

DJIM World DJIM US

PRICE RETURN (%) 5

-5 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTD

INDEX PRICE RETURN (%) 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTD DJIM World -1.84 -1.48 -1.18 -0.02 3.04 21.45 36.83 30.77 DJIM US -1.13 -1.10 -0.79 0.46 4.12 20.66 27.51 23.78

PERFORMANCE OF DJ TITANS INDEXES

DJIM Titans 100 DJIM Asia/Pacific Titans 25

45 40 35 30 25 20 15 10 5

PRICE RETURN (%) 0 -5 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTD

INDEX PRICE RETURN (%) 1 Week 2 Week 3 Week 1 Month 3 Month 6 Month 1 Year YTD DJIM Titans 100 -1.79 -1.74 -1.00 0.56 4.11 19.19 23.41 19.71 DJIM Asia/Paciﬁ c Titans 25 0.47 1.51 1.46 2.66 0.92 21.66 39.25 30.79

DESCRIPTIVE STATISTICS Market Capitalization (US$ billions) Component Weight (%) Component Float Index Full Mean Median Largest Smallest Large Small number adjusted DJIM World 2399 15309.64 12030.82 5.01 0.98 349.81 0.00 2.91 0.00 DJIM US 616 6758.72 6307.38 10.24 2.39 349.81 0.10 5.55 0.00 DJIM Titans 100 100 6879.73 6175.20 61.75 39.93 349.81 13.56 5.66 0.22 DJIM Asia/Paciﬁ c Titans 25 25 998.31 683.20 27.33 20.27 75.42 13.56 11.04 1.98 Mean, median, largest, smallest and component weights are based on ﬂ oat adjusted market capitalization, not full market capitalization.

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

Anthony Yeung Ariff Sultan Tariq al-Rifai Regional Director Business Development Director Director Hong Kong, China, Philippines, Taiwan, Malaysia, Singapore, Indonesia, India, Islamic Market Indexes Korea, Japan, Australia & New Zealand Thailand, Pakistan, Sri Lanka & Bangladesh Tel: +971 4374 8045 Tel: +852 2831 2580 Tel: +65 6415 4262 [email protected] [email protected] [email protected]

TOP ISSUERS OF ISLAMIC BONDS DEC 2008 – DEC 2009

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

Standard Chartered, UBS, Dubai Islamic Bank, Bahrain Islamic Bank, 1 Government of Dubai UAE Sukuk 1,931 1 10.7 Emirates NBD, Mitsubishi UFJ Securities International

2 Saudi Electricity Saudi Arabia Sukuk 1,867 1 10.3 HSBC, Samba Financial Group

3 Petronas Global Sukuk Malaysia Ijarah Sukuk 1,498 1 8.3 Morgan Stanley, CIMB, Citigroup Terengganu Investment 4 Malaysia Murabahah Sukuk 1,422 1 7.9 AmInvestment Authority Standard Chartered, HSBC, Abu Dhabi 5 TDIC Sukuk UAE Sukuk Ijarah 1,000 1 5.5 Commercial Bank

6 Islamic Development Bank Saudi Arabia Sukuk Wakalah 850 1 4.7 BNP Paribas, CIMB, Deutsche Bank, HSBC

7 Kingdom of Bahrain Bahrain Sukuk Ijarah 750 1 4.2 Deutsche Bank, HSBC, Calyon

Standard Chartered, AmInvestment, 8 Cagamas Malaysia Murabahah MTN 719 5 4.0 Maybank Investment Bank, HSBC, CIMB, RHB Capital Standard Chartered, HSBC, Barclays 9 Republic of Indonesia Indonesia Sukuk Ijarah 650 1 3.6 Capital, (Persero) Danareksa, Trimegah Securities, Bank Mandiri CIMB, AmInvestment, Maybank Investment 10 Khazanah Nasional Malaysia Sukuk Musharakah 601 3 3.3 Bank

CIMB, Maybank Investment Bank, Public 11 Sime Darby Malaysia Musharakah MTN 590 1 3.3 Bank

12 Syarikat Prasarana Negara Malaysia Ijarah MTN 573 1 3.2 CIMB, Maybank Investment Bank

13 Abu Dhabi Islamic Bank UAE Sukuk 545 1 3.0 JPMorgan Securities Citigroup, Goldman Sachs KFH, National 14 GE Capital Sukuk US Sukuk Ijarah 498 1 2.8 Bank of Abu Dhabi

15 Danga Capital Malaysia Sukuk Musharakah 444 1 2.5 CIMB, AmInvestment

Standard Chartered, Dubai Islamic Bank 16 Islamic Republic of Pakistan Pakistan Sukuk 441 3 2.4 Pakistan

17 Penerbangan Malaysia Malaysia Murabahah MTN 418 2 2.3 HSBC, CIMB, AmInvestment

18 Rak Capital UAE Sukuk Ijarah 407 1 2.3 BNP Paribas, Standard Chartered

19 MISC Malaysia Murabahah MTN 368 2 2.0 HSBC, CIMB, AmInvestment

20 Pengurusan Aset Air Malaysia Ijarah MTN 341 1 1.9 CIMB

Total 18,050 72 100.0

For all enquires regarding the above information, please contact: Jennifer Cheung (Media Relations) Email: [email protected] Phone: +852 2804 1223

TOP ISSUERS OF ISLAMIC BONDS SEP 2009 – DEC 2009

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

Standard Chartered, UBS, Dubai Islamic Bank, Bahrain Islamic 1 Government of Dubai UAE Sukuk 1,931 1 28.64 Bank, Emirates NBD, Mitsubishi UFJ Securities International

Standard Chartered, HSBC, Abu 2 TDIC Sukuk UAE Sukuk Ijarah 1,000 1 14.84 Dhabi Commercial Bank

BNP Paribas, CIMB, Deutsche Bank, 3 Islamic Development Bank Saudi Arabia Sukuk Wakalah 850 1 12.61 HSBC

CIMB, Maybank Investment Bank, 4 Sime Darby Malaysia Musharakah MTN 590 1 8.75 Public Bank

5 Syarikat Prasarana Negara Malaysia Ijarah MTN 573 1 8.49 CIMB, Maybank Investment Bank

Citigroup, Goldman Sachs KFH, 6 GE Capital Sukuk US Sukuk Ijarah 498 1 7.39 National Bank of Abu Dhabi

7 Pengurusan Aset Air Malaysia Ijarah MTN 341 1 5.05 CIMB

8 Islamic Republic of Pakistan Pakistan Sukuk 174 1 2.59 Standard Chartered

9 MISC Malaysia Murabahah MTN 172 1 2.55 HSBC, CIMB, AmInvestment

10 UMW Holdings Malaysia Musharakah MTN 141 1 2.09 Maybank Investment Bank

Standard Chartered, AmInvestment, 11 Cagamas Malaysia Murabahah MTN 131 1 1.94 Maybank Investment Bank, HSBC, CIMB, RHB Capital HSBC, Kuwait Finance House, Dubai 12 International Finance US Sukuk 100 1 1.48 Islamic Bank, Liquidity Management Centre

13 CIMB Islamic Bank Malaysia Sukuk Musharakah 86 1 1.27 Maybank Investment Bank

14 Projek Lintasan Shah Alam Malaysia Ijarah MTN 37 1 0.54 RHB Capital

Bank Mandiri, CIMB, Kim Eng 15 Salim Ivomas Pratama Indonesia Sukuk Ijarah 29 1 0.43 Securities, OSK,(Persero) Danareksa Bank Mandiri, DBS, (Persero) 16 Indosat Indonesia Sukuk Ijarah 21 1 0.32 Danareksa 17 Majlis Ugama Islam Singapura Singapore Ijarah MTN 21 1 0.31 CIMB

18 TSH Sukuk Ijarah Malaysia Ijarah MTN 15 1 0.22 OSK Investment Bank

19 Pupuk Kalimantan Timur Indonesia Sukuk Ijarah 14 1 0.21 (Persero) Danareksa

20 Offshoreworks Capital Malaysia Musharakah MTN 11 1 0.17 MIDF Amanah Investment Bank

Total 6,740 21 100.00

ARE YOUR DEALS LISTED HERE? If you feel that the information within these tables is inaccurate, you may contact the following directly:

Jennifer Cheung (Media Relations) Email: [email protected] Telephone: +852 2804 1223

ISLAMIC BONDS DEC 2008 – DEC 2009 ISLAMIC BONDS SEP 2009 – DEC 2009

Manager or Group Amt US$ m Iss % Manager or Group Amt US$ m Iss %

1 CIMB 3,439 30 19.1 1 CIMB 1303 10 19.3

2 HSBC 2,509 14 13.9 2 Standard Chartered 813 3 12.1 3 AmInvestment 2,025 9 11.2 3 Maybank Investment Bank 689 4 10.2 4 Standard Chartered 1,465 10 8.1 4 HSBC 657 4 9.7 5 Samba Financial Group 1,033 2 5.7 4 Abu Dhabi Commercial Bank 333 1 5.0 6 Maybank Investment Bank 961 11 5.3 6 Dubai Islamic Bank 331 2 4.9 7 Citigroup 624 2 3.5 7 UBS 306 1 4.5 8 JPMorgan 545 1 3.0 8 Mitsubishi UFJ Securities 306 1 4.5 9 Morgan Stanley 499 1 2.8 8 Emirates NBD 306 1 4.5 10 Deutsche Bank 463 2 2.6 10 National Bank of Abu Dhabi 222 2 3.3 11 BNP Paribas 416 2 2.3 11 Deutsche Bank 213 1 3.2 12 Abu Dhabi Commercial Bank 333 1 1.9 12 BNP Paribas 213 1 3.2

13 Dubai Islamic Bank 331 2 1.8 13 Bahrain Islamic Bank 208 1 3.1

14 UBS 306 1 1.7 14 Public Bank 197 1 2.9

15 Mitsubishi UFJ Securities 306 1 1.7 15 KFH 150 2 2.2

16 Emirates NBD 306 1 1.7 16 Goldman Sachs 125 1 1.9

17 Calyon 250 1 1.4 17 Citigroup 125 1 1.9 18 National Bank of Abu Dhabi 222 2 1.2 18 Al Hilal Bank 97 1 1.4 19 Barclays Capital 217 1 1.2 19 RHB Capital 37 1 0.5 20 Bahrain Islamic Bank 208 1 1.2 20 (Persero) Danareksa 27 3 0.4 Total 18,050 72 100.0 Total 6,740 21 100.0

ISLAMIC BONDS BY COUNTRY DEC 2008 – DEC 2009 ISLAMIC BONDS BY COUNTRY SEP 2009 – DEC 2009

Amt US$ m Iss % Amt US$ m Iss %

Malaysia 8,408 49 46.6 UAE 2,931 2 43.5 UAE 3,882 4 21.5 Malaysia 2,102 11 31.2 Saudi Arabia 3,123 4 17.3 Saudi Arabia 850 1 12.6 Indonesia 827 8 4.6 Total 6,740 21 100.0 Bahrain 750 1 4.2 ISLAMIC BONDS BY CURRENCY SEP 2009 – DEC 2009 Total 18,050 72 100.0

Amt US$ m Iss % ISLAMIC BONDS BY CURRENCY DEC 2008 – DEC 2009 US dollar 3,698 5 54.9 Amt US$ m Iss % Malaysian ringgit 2,102 11 31.2 US dollar 7,003 9 38.8 UAE dirham 681 1 10.1 Malaysian ringgit 6,910 48 38.3 Total 6,740 21 100.0 Saudi Arabian riyal 2,273 3 12.6 For all enquires regarding the above information, please contact: UAE dirham 1,225 2 6.8 Jennifer Cheung (Media Relations) Pakistan rupee 441 3 2.4 Email: [email protected] Total 18,050 72 100.0 Phone: +852 2804 1223; Fax: +852 2529 4377

Manager Commitment Market Manager Commitment Market Manager Issues Manager Issues (in US$) Share % (in US$) Share % 1 Malaysia (Government) 21,114,975,956 154 49.1 1 Malaysia (Government) 4,525,827,300 20 40.1 2 CIMB 4,611,184,816 126 10.7 2 CIMB 2,089,420,104 24 18.5 3 AMMB Holdings 2,357,430,532 94 5.5 3 Malayan Banking 686,752,922 25 6.1 4 HSBC Banking Group 2,077,458,796 48 4.8 4 Standard Chartered 639,843,717 6 5.7 5 Dubai Islamic Bank 602,646,875 3 5.3 5 Malayan Banking 1,297,844,140 105 3.0 6= UBS 482,646,875 2 4.3 6 Citigroup 1,267,746,162 7 3.0 6= Mitsubishi UFJ Financial Group 482,646,875 2 4.3 7 Morgan Stanley 1,215,000,000 5 2.8 Malaysian Industrial Development 302,455,685 76 2.7 8 8 Malaysian Industrial Development 1,202,689,967 301 2.8 Finance Finance 9 HSBC Banking Group 299,976,242 13 2.7 9 Standard Chartered Bank 1,178,268,689 19 2.7 10 RHB Banking Group 214,434,600 18 1.9 10 RHB Banking Group 1,111,447,811 56 2.6 Qatar International Islamic Bank 120,000,000 1 1.1 11 Samba Financial Group 933,261,000 1 2.2 11=

12 Dubai Islamic Bank 602,646,875 3 1.4 11= Islamic Development Bank 120,000,000 1 1.1 13= Mitsubishi UFJ Financial Group 482,646,875 2 1.1 11= Far Eastern International Bank 120,000,000 1 1.1 13= UBS AG 482,646,875 2 1.1 11= UAE (Government) 120,000,000 1 1.1 15 Barclays Bank 435,500,000 3 1.0 11= Abu Dhabi Islamic Bank 120,000,000 1 1.1 16 Cagamas 365,784,522 35 0.9 16 AMMB Holdings 55,030,403 12 0.5 17 Afﬁ n Holdings 265,857,778 35 0.6 17 OSK Holdings 52,325,410 7 0.5 18 OSK Holdings 221,702,799 30 0.5 18 Afﬁ n Holdings 45,321,230 5 0.4 19 Indonesia (Government) 204,199,381 11 0.5 19 EON Capital 39,351,635 17 0.3 20 EON Capital 191,554,752 93 0.4 20 Cagamas 35,508,242 9 0.3

SUKUK ISSUERS(12 months) DEC 2008 – DEC 2009 SUKUK ISSUERS (3 months) SEP 2009 - DEC 2009

Issuer Commitment Market Issuer Commitment Market Issuer Issues Issuer Issues (in US$) Share % (in US$) Share % 1 Malaysia (Government) 8,379,344,623 23 17.7 1 Malaysia (Government) 2,410,930,800 9 19.2 2 Bank Negara Malaysia 5,848,114,055 103 12.3 2 BNM Sukuk 2,114,896,500 11 16.9 3 BNM Sukuk 4,642,985,334 22 9.8 3 Dubai DOF Sukuk 1,930,587,500 2 15.4 4 Bank Indonesia 4,061,461,789 53 8.6 4 Bank Indonesia 1,128,154,781 13 9.0 5 Petronas Global Sukuk 3,000,000,000 2 6.3 5 TDIC Sukuk 1,000,000,000 1 8.0 6 Dubai DOF Sukuk 1,930,587,500 2 4.1 6 Pengurusan Air SPV 739,865,000 3 5.9 7 Saudi Electricity 1,866,522,000 1 3.9 7 Sime Darby 594,088,000 3 4.7 8 Khazanah Nasional 1,700,063,549 5 3.6 8 Syarikat Prasarana Negara 577,872,000 2 4.6 9 MISC 288,936,000 3 2.3 9 Terengganu Investment Authority 1,419,647,927 8 3.0 10 Rantau Abang Capital 287,900,000 1 2.3 10 Indonesia (Government) 1,300,000,000 2 2.7 11 ESSO 177,804,600 2 1.4 11 Cagamas 1,008,310,775 35 2.1 12 Malakoff 175,824,000 1 1.4 12 TDIC Sukuk 1,000,000,000 1 2.1 13 Cagamas 142,032,960 9 1.1 13 Perusahaan Penerbit SBSN Indonesia 874,630,134 6 1.8 14 CIMB Islamic Bank 86,680,800 1 0.7 14 ESSO 787,701,644 14 1.7 15 Perusahaan Penerbit SBSN 79,677,100 2 0.6 15 Pengurusan Air SPV 739,865,000 3 1.6 Indonesia 16 Sime Darby 679,552,538 5 1.4 16 Hytex Integrated 62,062,364 15 0.5 17 Syarikat Prasarana Negara 577,872,000 2 1.2 17 Hubline 43,842,380 4 0.3 18 MISC 572,905,000 6 1.2 18 Projek Lintasan Shah Alam 36,630,000 8 0.3

19 Danga Capital 454,287,337 2 1.0 19 Pupuk Kalimantan Timur 31,796,400 1 0.3 20 Pakistan (Government) 440,994,225 3 0.9 20 Salim Ivomas Pratama 29,543,060 1 0.2

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]

LOAN MANDATED LEAD ARRANGERS(12 Months) DEC 2008 – DEC 2009 LOAN BOOKRUNNERS(12 Months) DEC 2008 - DEC 2009

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

1 Dubai Islamic 1,365,903,212.63 3,283,225,701.00 4 11.61 1= Calyon Corporate & 1,249,900,000.00 2,499,800,000.00 1 19.74 Bank Investment Bank 2 Samba Financial 1,316,528,064.01 4,643,622,223.41 4 11.19 1= Al Rajhi Banking & 1,249,900,000.00 2,499,800,000.00 1 19.74 Group Investment 3 Qatar Islamic 1,100,000,000.00 1,100,000,000.00 1 9.35 3 Qatar Islamic Bank 1,100,000,000.00 1,100,000,000.00 1 17.37 Bank 4 Standard Chartered 542,112,850.50 1,821,225,701.00 2 8.56 4 Calyon Corporate 862,161,344.54 4,520,800,000.00 4 7.33 & Investment Bank 5 Dubai Islamic Bank 495,500,000.00 2,109,000,000.00 2 7.82 5 National 848,030,730.61 2,769,632,889.79 2 7.21 Commercial Bank 6= Samba Financial 368,500,000.00 1,474,000,000.00 1 5.82 (Saudi Arabia) Group 6 HSBC Banking 807,158,677.94 4,145,789,333.62 5 6.86 6= Al Hilal Bank 368,500,000.00 1,474,000,000.00 1 5.82 Group 7 Standard 714,531,223.83 4,002,225,701.00 6 6.07 8 Mashreqbank 173,612,850.50 347,225,701.00 1 2.74 Chartered 9 Barclays Bank 150,000,000.00 150,000,000.00 1 2.36 8 Al Rajhi Banking & 603,847,058.82 2,799,800,000.00 2 5.13 Investment 10= Noor Islamic Bank 127,000,000.00 635,000,000.00 1 2.00 9 Al Hilal Bank 527,370,616.42 1,791,741,232.85 2 4.48 10= Industrial & 127,000,000.00 635,000,000.00 1 2.00 10 Arab Bank Group 492,447,058.82 2,242,800,000.00 3 4.18 Commercial Bank of China 11 Noor Islamic Bank 285,870,616.42 952,741,232.85 2 2.43 10= WestLB 127,000,000.00 635,000,000.00 1 2.00 12= Alinma Bank 214,714,285.71 1,503,000,000.00 1 1.82 10= Emirates Bank 127,000,000.00 635,000,000.00 1 2.00

12= Bank of China 214,714,285.71 1,503,000,000.00 1 1.82 14= BNP Paribas 41,666,666.67 125,000,000.00 1 0.65

14 Emirates Bank 170,403,212.63 982,225,701.00 2 1.44 14= Liquidity 41,666,666.67 125,000,000.00 1 0.65 Management House 15= Gulf Bank of 155,000,000.00 775,000,000.00 1 1.31 for Investment Kuwait 14= Gatehouse Bank 41,666,666.67 125,000,000.00 1 0.65 15= National Bank of 155,000,000.00 775,000,000.00 1 1.31 Kuwait 15= Standard Bank 155,000,000.00 775,000,000.00 1 1.31 ISLAMIC LOANS RAISED(12 Months) DEC 2009 – DEC 2009 Group

15= Barclays Bank 150,000,000.00 150,000,000.00 1 1.27 Borrower Country Islamic Loan Amount (US$)

19 WestLB 144,647,058.82 935,000,000.00 2 1.22 1 Zain [Saudi Arabia] Saudi Arabia 2,499,800,000

20 First Gulf Bank 130,747,962.29 783,949,449.33 2 1.11 2 Rabigh Independent Power Saudi Arabia 1,503,000,000 21 Industrial & 127,000,000.00 635,000,000.00 1 1.07 Project Commercial Bank of China 3 Dubai Electricity & Water UAE 1,474,000,000 22 Riyad Bank 117,644,392.23 699,989,333.62 2 1.00 Authority [DEWA]

23 Mitsubishi UFJ 104,991,808.49 736,723,748.33 2 0.89 4 Saudi Binladen Group Saudi Arabia 1,266,632,890 Financial Group 5 Qatari Diar Real Estate Qatar 1,100,000,000 24 National Bank 99,997,333.40 399,989,333.62 1 0.85 Investment 25= Royal Bank of 87,344,749.67 436,723,748.33 1 0.74 6 Borse Dubai UAE 827,000,000 Scotland 7 Dubai Department of Civil UAE 635,000,000 25= Abu Dhabi 87,344,749.67 436,723,748.33 1 0.74 Aviation Commercial Bank 25= National Bank of 87,344,749.67 436,723,748.33 1 0.74 8 Zayed University UAE 436,773,810 Abu Dhabi 9 Etihad Etisalat Saudi Arabia 399,989,333 28= Societe Generale 61,247,058.82 518,000,000.00 2 0.52 28= Mashreqbank 61,050,271.45 647,225,701.00 2 0.51 10 Al Ghurair Center UAE 347,225,701

30= Abu Dhabi Islamic 43,403,212.63 347,225,701.00 1 0.36 11 International Petroleum UAE 317,741,232 Bank Investment 30= Ajman Bank 43,403,212.63 347,225,701.00 1 0.36 12 Al Dur Power & Water Bahrain 300,000,000 30= Arab African 43,403,212.63 347,225,701.00 1 0.36 13 Dolphin Energy UAE 218,000,000 International Bank 14 Qatar Airways Qatar 160,000,000 33 BNP Paribas 42,647,058.82 425,000,000.00 2 0.36

SUKUK BY COUNTRY(12 Months) DEC 2008 – DEC 2009 LOANS BY COUNTRY(12 Months) DEC 2008 – DEC 2009

Country Volume Issued Volume Outstanding Country Volume (US$) Market Share(%)

Malaysia 32,240,112,618 21,001,558,036 Saudi Arabia 5,669,422,223 45.4 Eurobond 5,080,587,500 5,080,587,500 Indonesia 5,162,131,677 1,361,652,826 US 2,150,000,000 2,150,000,000 UAE 4,255,690,682 34.0 Saudi Arabia 2,073,188,667 2,073,188,667

Pakistan 440,994,225 440,994,225 Qatar 1,260,000,000 10.1 Bahrain 209,294,500 34,184,520 Singapore 88,907,998 88,907,998 Bahrain 300,000,000 2.4 Cayman Islands - - UAE - - US 150,000,000 1.2 Jersey - -

SUKUK BY INDUSTRY(12 Months) DEC 2008 – DEC 2009 LOANS BY INDUSTRY(12 Months) DEC 2008 – DEC 2009

Industry Volume Issued Volume Outstanding Industry Volume (US$) Market Share(%)

Sovereign 20,146,656,534 10,381,321,786 Utilities 3,277,000,000 .00 21.84 Other ﬁ nancial 17,179,604,411 13,908,789,367 Telecommunications 2899789333.62 19.33 Agency 2,685,827,261 2,629,041,344

Electric power 2,135,484,615 2,135,484,615 Construction 1,266,632,890.00 8.44

Manufacturing 2,038,257,397 1,144,412,916 Financial services 1144741232.85 7.63 Transportation 1,370,950,771 1,214,519,895

Energy company 908,913,978 141,985,355 Real estate 1100000000.00 7.33

Service company 400,780,989 253,790,326 Government 635,000,000 .00 4.23 Banks 293,347,467 293,347,467 Services 436723748.33 2.91 Consumer goods 195,201,273 107,183,102

Gas distribution 68,994,889 - Retail and supermarkets 347,225,701 .00 2.31

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

18,000

16,000 Sukuk 14,000 Loan

12,000

10,000

8,000

6,000

4,000

2,000

0 1Q - '07 2Q - '073Q - '07 4Q - '07 1Q - '08 2Q - '08 3Q - '084Q - '08 1Q - '09 2Q - '09 3Q - '09 TD 4Q - '09 TD

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

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© Page 39 11th December 2009 Company Index Company Page Company Page Company Page Company Page Abraaj Capital 11 DBS Vickers Securities 28 IMF 4 Pharmaniaga 15 Absa Bank 18 DDCAP 7 Indonesian Stock Exchange 28 PLN 6 Abu Dhabi National Energy Company 15 Denton Wilde Sapte 8 Indosat 14, 28 Ports and Free Zone World 12 AFB 4, 5 Deutsche Bank 10, 25 Indosat Mega Media 28 Premium Nutrients 14 AirAsia 14 DEWA 10, 12 Infi nity World Holding 12 Prime Link Logistic 20 Al Baraka 5, 18 DIB 9, 12 ING 24 Prime Rate Capital Management 7 Al Rajhi Bank 9 DIFC 11 Insurans Islam Taib 14 Prudential 25 Al Rajhi Holding Group 12 Dolphin Energy 15 Intaj Capital 20 Public Bank 24 Al Ridaya Finance 11 DP World 7, 12 International Petroleum Investment 15 PwC 7, 24 Al Salam Bank-Bahrain 13 Drydocks World 12 Investment Corporation of Dubai 10 QFC 20 Al Tamimi and Company 8 Dubai Duty Free 10 Investment Dar 9, 20 QIB 9 Al Tawfeek 20 Dubai Financial 11 Istithmar World 12 QVT Financial 16 Al-Aman 6 Dubai Holding 10, 12 Ithmaar Bank 9 Rakeen 20 Aldar Properties 15 Dubai Properties 12 Ithmaar Bank 10 Ralston and Purina Company 27 Amanah Saham Mara 7 Dubai World 3, 4, 7, 8,9, 10, 11, 12, 15, 16 Jadwa Investments 20 RAM 15 APL 7 Durham University 21, 26 Jebel Ali Free Zone 12 Rasameel 16 Aras Sejagat 14 EBI 12 Joyful Gateway 6 Rasameel Structured Finance Company 16 Ashurt 10 Economic Zones World 12 Keppel Telecommunications & Transportation RBC 3 ASM Investment 7 ECT 7 12RBI 4 Aston Martin 20 EFG-Hermes 8, 11, 12 KFH 5, 12, 23 RHB Islamic 6 Aviva 24 Emaar Properties 10, 12 KFH Research 22 RHB Capital 6 AXA 25 Emirates Airline 10 KFH-Malaysia 6, 14 Roads & Transport Authority 10 Bahana Securities 6 Emirates NBD 9 K-Line 7 Royal Dutch Shell 6 Bank CIMB Niaga 14 Emirates Telecommunication 15 KSIDC 6 S&P 9 Bank Indonesia 5 Emkay Group 6 Kuveyt Türk 7 Sama Dubai 12 Bank Muscat 10 ePlanet 12 Limitless 3,10 Saturna Capital 26 Bank of Khyber 4 ePlanet LMH Capital 12 Lintras Arta 28 Saudi Arabian Monetary Agency 9 Bank Sohar 10 ePlanet Ventures 12 Liquidity House 12 SBP 4 Barclays 12 Ernst & Young 24 Lloyds 9 SHAPE 26 BIS 8 Etiqa 24 Maharaja Organization 27 Standard Chartered 8, 9 BISB 11 Eurekahedge 20 Mandiri Sekuritas 6, 28 Sumitomo Mitsui 12 BLME 17, 26 Euromax Terminal 7 MARC 14 Swicorp 20 BNI 14 FirstRand 18 MAS 11 Swicorp of Riyadh 20 BRI 28 Fitch 14, 15 Mitsui OSK Line 7 SWIP 7 British Ceylon Corporation 27 FNB 18 Moody’s 8, 9, 12, 15 TAIB 14 BSN 5 FNB IslamicFinance 18, 19 MTI Consulting 8, 27 Tamweel 25 Bursa 9 FWU Group 25 Mubadala Development 15 Tamweel Residential 15 Caylon 8 Gatehouse Bank 7, 8 Nakheel 3 Tatweer 12 CBB 11, 13 Glaxo-Boots 27 Nakheel 8, 9, 10, 11, 12, 16 Tourism Development & Investment 15 Central Bank of Iran 11 Global Banking Corporation 25 Nakheel Hotels 3 Turnberry 4 Central Bank of Oman 10 Hanjin 7 NBAD 10 UM Financial Canada 26 CIMB 14, 24 HBZ Bank 18 NBO 10 W Hotel 3 Cirque de Soleil 10 HLB 15 New Zealand Dairy Board 27 WesBank 18 Citigroup 12, 25 HLIB 15 NFH 13 Westpac Banking 12 Corecap 20 HS Securities 9 Noor Financial Investment Company 11 Yang Ming 7 Corecap Merchant Bank 20 HSBC 8, 9 Oqyana Real Estate 20 Yasaar Media 20 Cosco 7 Hyundai 7 P&O Ferries 12 Dallah Al Baraka Group 20 IDB 11 Pacifi c Healthcare 6 Danareksa Sekuritas 6, 28 IFSB 11 Pefi ndo 14, 28

Country Index Country Title Page Country Title Page Country Title Page Bahrain Expansion strategy 9 Former minister challenges decision in South Africa 18 Growth drivers needed 10 of Kerala government 6 Turkey Ambitious plans 7 MOU pact to develop Islamic fi nance 11 Indonesia Sukuk in the pipeline 5 UAE Minimal impact 8 Wider market reach 13 Positive prospects 5 Analysts concerned over Dubai exposure 9 Pioneer concept 13 Gulf banks to establish presence 5 Differing views abound 9 Meet the Head — Hilmy Cader 27 Electricity bonds 6 Rejection a possibility 10 Brunei Eye on Brunei 4 Merger increases market share 14 Negotiations expected to be lenghty 10 Monetary power 14 Financial uplift 14 Regional business prospects 10 Canada On safe ground 3 Tougher competition 14 Dubai guards valued assets 10 Global Legal experts predict an uphill battle 8 Termsheet — Indosat’s Sukuk Ijarah 28 In the red 11 Product innovation required 8 Iran Inter-sovereign Sukuk in the pipeline 11 ‘Tremendous potential’ 11 Aftermath uproar 8 Kuwait Default continues 9 Youth spirited account 11 Nakheel Sukuk ‘no deterrent’ 8 Catering to investor sentiment 11 Restructuring sale 11 Sector Report — Shariah compliant private New fi rm to open 12 Fine on its own 12 equity: Post recession prospects 20 Malaysia Widening its reach 5 Merger off for good 12 Focus — The year that was (Part 1) 22 Ijarah goes green 6 Sukuk not guaranteed by government 12 Takaful Report — Islamic investments On acquisition mode 6 Loan disclosed 12 weather most of the storm in Asia 24 High hopes for Islamic funds 7 Stable outlook 15 Forum — Lately, more GCC banks are Airline-backed Sukuk 14 Firm against losses 15 operating in Southeast Asia. This signals a Early redemption 14 Under observation 15 higher level of cross-border initiatives. Extension of agreement 15 IFN Report — Kuwait forms a front 16 However, the fl ow is seemingly not equal, Consistent profi tability 15 UK Equal VAT treatment 7 that is, we do not see as many Asian banks Netherlands Project to proceed 7 Liquidity fund launched 7 operating in the GCC. What are the reasons Oman Cat out of bag 10 Funds with a mission 7 for the imbalance in presence? And will this Pakistan Letting go 4 IFN Report — Still mulling over Sukuk 17 trend continue for the foreseeable future? Qatar Situation under control 9 US ‘Better to aim big’ 3 26Saudi Arabia Danger-free 9 ‘Effective regulations is the way to go’ 4 India Possible changes 4 South Africa Country Report — Abundant opportunities

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2009 Poll Categories Best Overall Islamic Bank

Global Section Best Retail Islamic Bank Best Islamic Private Bank Most Innovative Islamic Bank Best New Islamic Bank Best Central Bank in Promoting Islamic Finance

Special Category Best Individual Islamic Banker This is the ﬁ rst round of polling for this speciﬁ c category.

Following the ﬁ rst round, the top 10 individuals as voted by you, will be invited to submit a short biography proﬁ ling their banks and their individual achievements during 2009. These biographies will be published in Islamic Finance news and on www.IslamicFinanceNews.com when the second round of voting will commence.

The second round of voting will commence on the 13th January 2010 and the ﬁ nal results will be announced separately on the 3rd February 2010.

Other Categories (Firms which offer Islamic ﬁ nancial services) Best Financial Consultancy Firm Best Shariah Advisory Firm Best Islamic Research Company Best Islamic Index Provider Best Law Firm Best Leasing Provider Best Ratings Agency Best Takaful / re-Takaful Company Best Asset / Fund Manager Best Wealth Management Firm Best Technology Provider

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