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Wednesday, 27 November 2013

Rising Tsunami Of Demand For Islamic Finance – Expert

Islamic finance provides banking with ethics and morals and is experiencing “a rising tsunami of demand” according to a panel of experts on the opening day of the Global Islamic Economy Summit.

Leaders from the Islamic finance world converged in Dubai on Sunday for the start of the two-day conference, the first time it is being hosted in the emirate.

“We are in the beginning, but we have so much room for growth and regulations and policy making is key in this progress,” said H.E. Eng. Mohammed Al Shehhi, undersecretary, UAE Ministry of Economy.

“Islamic finance is the future – not a single Islamic bank has been bankrupt, bailed out or affected by the financial crisis. We must build on it [Islamic banking] for future generations.

“The UAE has, with the initiative of H.H. Sheikh Mohammed, the potential to be the world capital for Islamic economy.”

V. Shankar, CEO of Standard Chartered in the UAE for the EMEA region, warned companies would be left behind if they are not prepared for the growth of Islamic banking.

“In the next 10 years, if you don’t have a strategy for Islamic finance you’re going to be in trouble,” he said.

“There is a rising tsunami of demand for Islamic finance. It doesn’t just appeal to Muslims but to all.

“Dubai of all cities in the world is well positioned to leverage this sector.”

Also on the panel was the RT Hon. Baroness Warsi, senior member of the UK’s Foreign and Commonwealth Office, who said the finance model shift from western to developing markets presented opportunities for Britain.

“Political stability plays an important role for the growth of all emerging countries,” Warsi said, as panel members discussed the positive economic affects parts of the GCC have felt as a result of the Arab Spring.

“I don’t see it [cities jostling to be world Islamic capital] as competition. I see it as Kuala Lumpur, Dubai, London and Bahrain all together.

“Islamic finance provides banking with ethics and morals…and it provides an opportunity to be economically engaged with five per cent of the UK Muslim population

(Gulf Business / 25 Nov 2013)
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Islamic finance body IILM expands sukuk primary dealers

Nov 26 (Reuters) - The Malaysia-based International Islamic Liquidity Management Corp (IILM) said it had expanded the number of primary dealers handling its Islamic bond programme to nine from seven, a step towards expanding cross-border trade in its sukuk.
In August the IILM, a consortium of central banks from Asia, the Middle East and Africa, conducted its first sukuk issue, selling $490 million of three-month paper.
The issue was designed to meet a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs. This shortage has become a barrier to the further growth of Islamic finance.
On Tuesday, the IILM said it had conducted an auction to resissue the sukuk as they matured, at an average yield of 0.5571 percent. The reissue was fully subscribed.

Abu Dhabi Islamic Bank, AlBaraka Turk, CIMB Bank Bhd, Europe's KBL Private Bankers, Kuwait Finance House, Malayan Banking Bhd (Maybank) , National Bank of Abu Dhabi, Qatar National Bank and Standard Chartered Bank acted as primary dealers in the auction.
(Reuters / 26 Nov 2013)
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Sri Lanka’s Islamic Finance market tops Rs 300 billion

The Islamic Finance market has an estimated market of around Rs 300 billion and with the operation of current five commercial licensed banks, three finance companies and other institutions,Sri Lanka’s total deposit base is nearly Rs 35 billion and the total loan base is Rs 24.8 billion,a top financial analyst said.
To tap a huge market potential of this size there is certainly much room for development in the Sri Lankan industry such as new products, product developments and liquidity and integrating with the country’s development needs, Head of Credit MCSL Financial Services Limited Leonard Perera said.
“It is essential that we raise funds and investments from the international markets. We have to search for new markets, institutions and entrepreneurs to open out channels to bring in investments to the country. Therefore Islamic Finance would be an ideal fund generator in the international markets,”Perera told the Daily News Business.
He further said that Islamic finance was one key opportunity, which we can make use of to bring in funds via different agencies, countries and foreign currencies. Introducing new Shariah-compliant instruments and bringing in our own new products are important in expanding the Islamic finance industry in the country, he said. The expansion in the banking, finance and insurance sector will not only assist to build the economy, but also to build the nation collectively,” he said.
Perera said Islamic finance industry is an ideal solution to the Sri Lankan market in order to enhance its banking, finance and insurance with different products and investments because Islamic Finance is not only to Muslims but also for every person. During the recent past the country has made remarkable progress in the Islamic finance industry and still has a huge market potential, he said.
“Sri Lanka can grow in the Islamic finance has lot of potential, but it is important that the industry has a plan and grow steadily. The thrust has to build among the public in taking the industry to the next level could be done since it could be distinguished from traditional banking system where its main advantage is it is risk free, interest free in interest asset and service backed and contractual certainty,’’he said.
Sri Lanka is one of the few non Islamic countries that available this business has a lot of potential in the market it is one of the growing sectors in the world, he said. According to industry sources that Islamic Financial sector has evolved and grown to reach US$ 1.3 trillion with a growth of 15 percent, which operates in 42 countries including15 non Islamic countries including USA, UK, Canada, and Switzerland Australia are top end countries that operate this instrument, he said. Perera said that major banks such as HSBC, Standard Chartered Bank ABN Amro have dedicated Islamic Banking subsidiaries or Islamic Banking windows, he said.
In Sri Lanka the Banking Act No 30 of 1988 was amended in March 2005 to accommodate the concepts of Islamic banking is recognized by IMF, World Bank, Basel Committee premier global bank regulator and funding body, he added. 
(Daily News / 27 Nov 2013)
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