Vol. 6, Issue 39 2nd October 2009 The World’s Global Islamic Finance News Provider BRUNEI 20 th October 2009 All voices matter In this issue IFN Rapid ..................................................... 2 Interaction — the free fl ow of ideas and As we greatly value the exchange of knowledge, Islamic Finance News ................................ 3 opinions between people who are sure of their experience and expertise, at this year’s Forum stands on principles and policies — has always we made a special effort to collate these Rating News ............................................... 8 been the cornerstone of forums, roadshows, questions and sought those well-versed in IFN Report: conferences and other events organized by the respective areas to respond. The topics Wanted: ‘Transnational’ body ..............10 Islamic Finance news. We have always believed are interesting, ranging from the secondary that people are the essence of Islamic fi nance, trading of Islamic papers to instances where Minor ‘hiccup’ .........................................11 as the system is all about enabling people to products that were being developed before Special Report ..........................................12 improve their lot. the global fi nancial crisis struck are now being considered too risky or potentially “toxic,” such Articles: This is why networking is an essential item as Islamic collateralized debt obligation. Unique American Approach to Interest on the agenda of IFN events. And its must- Free Financing .......................................14 read weekly online newsletter as well. This It is this diversity in thought, view and stance Taking the Road Less Travelled ...........17 newsletter facilitates the exchange of views that ironically fosters unity of purpose as and knowledge between Islamic fi nance well. Which is what this newsletter earnestly Product Innovation: Derivatives and practitioners and the related community, and promotes through its articles, reports and, Hedge Funds ..........................................19 has now become the focal point of industry signifi cantly, its forum pieces. As the global interaction. fi nancial crisis shows signs of receding and Forum .........................................................21 the prospects of economic recovery begin Meet the Head ..........................................25 This is best exemplifi ed in this issue’s Forum to emerge, Islamic fi nance activities will Dr Bernd van Linder, Acting managing director section where a record 14 respondents doubtless pick up pace. Which makes it even of Saudi Hollandi Bank have their say on a topic that always vexes more important for interaction, the meeting of the practitioners, scholars and academics minds, to take place. Termsheet ..................................................26 Syarikat Prasarana Negara’s Islamic Medium — Shariah compliant versus Shariah-based Term Notes products. Islamic Finance news will continue to facilitate this through its continuous process of upgrading Moves .........................................................27 The debate goes from one extreme to another: quality and presentation. It is important that one says those indulging in this debate “have Islamic fi nance practitioners view the disparity Deal Tracker ..............................................28 too much time on their hands,” while another in their stances in a positive light and seek Islamic Funds Tables ................................29 infers that Shariah compliant products common ground in striving for what’s best for are really a stage of the evolution process the fi nancial system and society. S&P Shariah Indexes ...............................30 towards Shariah-based products. Many of the responses will trigger fresh thinking among Already, thinking outside the box has yielded Dow Jones Shariah Indexes ....................31 our readers. Which is exactly what the Islamic ideas such as using Islamic fi nancing for the Islamic League Tables .............................32 fi nance community always savors. construction of the Olympic village in London or using television rights to sports activities Thomson Reuters League Tables ...........35 This issue takes interaction and networking as assets for Shariah compliant fi nancing further afi eld with a special report that answers products. Some practitioners are also looking Events Diary...............................................38 several pertinent questions which were raised at venturing into distressed properties as Country Index ............................................39 by participants of the IFN 2009 Issuers and a viable revenue generator. These are all Investors Asia Forum held in Malaysia last proposals that emanate from exchanges of Company Index .........................................39 August but were not responded at that point ideas and opinions. Interaction is truly the real due to lack of time and opportunity. game. Subscription Form ....................................39 A round-up of all this week’s news IFN RAPID www.islamicfi nancenews.com • The Saad Financial Advisory Services • Sorouh Real Estate’s CEO Mounir Haidar NEWS to give up its Dubai Financial Services resigns • Banque Al Baraka D’Algerie posts 39% Authority license increase in profi t to US$23 million in the • Macquarie Capital Advisors names fi rst half of 2009 RATINGS Andrew Low as chief operating offi cer • Al Baraka Bank opens its second branch • RAM Ratings reaffi rms the ‘AAA’ ratings of • Robert Waugh to join RBS as chief in Berea city Projek Lebuhraya Utara-Selatan’s Sukuk investment offi cer for the pension fund and insurance business • The Muslim Community Co-operative • MARC revises the outlook on MM Vitaoils’ Australia launches MCCA Income Fund US$13 million MCP rating to negative from • HSBC to move its CEO Michael Geoghegan stable to Hong Kong in February 2010 • Bank Negara Malaysia and the Hong Kong Monetary Authority sign MoU for • The foreign currency and fi nancial strength • Yahaya Besah and Dr Syed Musa Syed long-term strategic partnership ratings of Affi n Bank raised to ‘BB’ from Jaafar Alhabshi are Takaful Ikhlas’ ‘BB-’ independent non-executive directors • Bank Negara Malaysia: Strong legal framework in Islamic fi nance enables • RHB Bank’s foreign currency ratings • Mahdi Murad is appointed the new CEO of more innovative and complex products affi rmed at ‘BBB’ long-term and ‘A3’ short- AmIslamic Bank term • Sime Darby to undertake a US$1.3 billion • SABB Takaful appoints Philip Head as its IMTN • Preliminary ratings of ‘AAA-ID’ and ‘MARC- new CEO 1-ID/AAA-ID’ have been assigned to Sime • Indonesia to sell a global Sukuk of up to Darby’s proposed Islamic debt programs • Rasmala Investment Bank appoints US$1 billion by second quarter of 2010 Husam Kutaifan as head of corporate • The outlook on the long-term rating of fi nance and Michael Kidd as head of • Economist emphasizes the need for a Kesas’ US$230.5 million BaIDS revised private equity unifi ed regulatory framework for Islamic from negative to stable fi nance • Moody’s views the outlook for the • Bank Islam Malaysia: Dubai Financial direction of credit conditions in the Saudi Group has not subscribed to its portion of banking system as stable Islamic CRNCPS • Moody’s downgrades the long-term • Islamic banks need to resolve issues deposit ratings of Investcorp Bank to before France can grant license ‘Ba2’ from ‘Ba1’ • Crédit Agricole Asset Management • Jordan Islamic Bank gets ‘BBB- / A-3 / launches its fi rst Shariah compliant sicav, Stable’ for foreign currency long term and CAAM Islamic short term obligations from IIRA • National Bank of Kuwait launches Islamic • Fitch affi rms Ahli United Bank’s long-term KD Ijara Fund III Issuer Default Rating at ‘A-’ with stable outlook Launched in 2004 • Central Bank of Bahrain publishes a Japanese version of its book on Islamic • S&P affi rms National Bank of Kuwait’s 175 Issues published to date fi nance long term rating at ‘A+’ 12,000 articles and reports • Kuwait Finance House to reschedule Aref • S&P lowers its long-term counterparty featured Investment Group’s debts of US$461 credit and insurer fi nancial strength million ratings on Wethaq Takaful Insurance to 19,500 weekly readers from ‘BB’ from ‘BB+’ 53 countries • Central Bank of Bahrain’s monthly Sukuk issue oversubscribed 100% within a day MOVES 1 choice • MENA region’s fi rst Shariah compliant gold ETC increases four-fold in six months • BNP Paribas Wealth Management appoints Thierry Dana as CEO for Hong • Sharjah Islamic Bank launches its Kong and North Asia electronic banking service, Weyy@com • Four executives of Nakheel transferred • BMB Islamic to launch the World Zakat to Istithmar World under group The World’s Global Islamic Finance News Provider Fund in the fi rst quarter of 2010 organizational restructuring © Page 2 2nd October 2009 NEWS www.islamicfi nancenews.com AFRICA Good performer ALGERIA: Banque Al Baraka D’Algerie, a subsidiary banking unit of Al Baraka Banking Group, posted a 39% increase in profi t to US$23 million in the fi rst half of 2009 compared to the same period last year. Total operating income rose 16% to US$42 million, while net operating income climbed 13% to US$32 million. The bank attributed the results to its 17% growth in fi nancing activities to US$828 million in the fi rst half of this year as total assets grew by 8% to US$1.1 billion, in turn fi nanced by a 7% increase in customer deposits and unrestricted investment amounting to US$833 million. Banque Al Baraka D’Algerie plans a 33% increase in