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Thursday, 16 July 2015

Demand grows for Islamic finance body IILM sukuk

Demand for Islamic bonds issued by the International Islamic Liquidity Management Corp (IILM) is growing, signaling widening popularity for a programme designed as a cross-border tool for Islamic banks to manage their liquidity needs.
The Kuala Lumpur-based body is a likely beneficiary of a decision by Malaysia’s central bank to wind down its own sales of sukuk, which could in turn spur the IILM to expand its $3 billion issuance programme.
boost in demand could help widen the membership base of the IILM and encourage regulators across Asia and the Middle East to approve the use of IILM sukuk by their Islamic banks.
On Wednesday, the IILM sold $860 million worth of three-month sukuk attracting $1.7 billion in bids, bringing the total amount of IILM sukuk outstanding to $2.7 billion, according to regulatory filings.
This is above bids received for previous auctions for IILM sukuk of similar size and tenor: Auctions in April of this year and in July of last year drew $1.1 billion worth of bids each.
Demand has also increased for six-month tenors of IILM sukuk. A $500 million deal in May attracted $1.1 billion in bids, compared with a $400 million auction in August that attracted $652 million in bids.
The IILM, a consortium of central banks from Asia, the Middle East and Africa, began issuing sukuk in August of 2013 under an issuance programme which permits maturities of up to one year.
Since then, the IILM has sought to widen its membership although it has yet to attract any new shareholders, while in October it added Qatar’s Barwa Bank as its tenth primary dealer to handle its sukuk programme.
(Business Day / 15 July 2015)
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New legislation on Islamic banking pushed

THE National Commission on Muslim Filipinos (NCMF), the lead government agency tasked to spearhead the Philippine Halal industry, in partnership with Bangko Sentral ng Pilipinas (BSP), is now pushing for a new legislation on Islamic banking.
Secretary Yasmin Busran-Lao of NCMF told reporters Wednesday at the sidelines of the opening ceremony of the first Mindanao Halal Festival that they are now furnishing the draft of a bigger legal framework for Islamic banking.
"Our legal framework in the country on Islamic banking is not that friendly and embracing. At present, we are closely working with BSP to address that," she said, adding that banking andfinancing is still covered by Halal, which is not limited to food and products only.
She said that part of the plan is the conversion of Al Ahmana bank in the Philippines to a fully Shari'ah compliant bank.
"While we are working on the bigger Islamic banking legal framework, we revisited the Al Ahmana bank chapter and we thought of the transformation of the bank to a fully Islamic bank," she said.
"I hope that the business sector will be able to see an opportunity in this and support our move to transform Al Ahmana bank and introduce a more open and accessible Islamic banking to the public, not just for the Muslim community alone," she said, adding that in MayBank Malaysia, a fully Islamic bank, 80 percent of its client are non-Muslims.
Lao also mentioned that with the country's pluralistic legal system, there is a need to also have a pluralistic economic system.
European countries like United Kingdom and Germany are dominated by Islamic way of banking.
Meanwhile, NCMF reported that the global Halal trade is estimated to be worth US$150 billion annually. Southeast Asia and Middle East are considered to be the two strongest markets for Halal products with more than 400 million consumers. 
(Sun Star / 15 July 2015)
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