8th january 2014 deals of the year 2013: results v11i1.pdfthe world’s leading islamic finance news...

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Some bankers and analysts were disappointed that 2013 brought a less robust performance in the Sukuk sector than 2012’s record-sett ing year. However, the leading markets continued to cement their strong performance, while new players also emerged on the scene to demonstrate the ever-widening global scope of the Islamic capital market.

The UAE re-emerged as a leading center for Sukuk issuance in 2013. With the new UAE Sukuk rules expected in early 2014 and the ratcheting up of Dubai’s plans to become the leading center of the Islamic economy, we should expect Dubai to grow its role as a jurisdiction of choice for Islamic capital market transactions.

As always, Malaysia provided the largest universe of deals to analyze. Keeping their hat in the ring, the number of cross-border deals from Malaysia is also growing as Malaysian fi nanciers supported deals in Indonesia, Saudi Arabia, and Singapore.

Saudi Arabia’s strong domestic Sukuk market enjoyed the fi rst ever clear sovereign support for an Islamic capital markets transaction. Turkey, Pakistan and Indonesia continued to make contributions, whilst Egypt, Nigeria and Oman jumped onto the Islamic capital markets scene with notable deals.

The fi rst hint of tapering threw a scare into the Islamic capital markets in mid-2013. Nonetheless, as the slowing of quantitative easing in the US becomes a fact, most of

the Islamic fi nancial market players are adapting. As always, the Islamic syndicated fi nance market fi lled gaps that the Sukuk markets were not able to cover. A number of private equity, corporate fi nance and real estate equity deals also drew att ention.

In all, you nominated nearly 400 deals (a 33% increase over 2012) in over 30 categories (a 20% increase over 2012). The 2013 Deal of the Year competition soared past the record set in 2012.

Although 2013 showed more execution of well-tested ideas than innovation and despite local political unrest in several key countries and global markets as well as the dismay over tapering, 2013 remained a good year for the Islamic capital markets.

The top nominees for Deal of the Year included Saudi Arabian General Authority of Civil Aviation (GACA), Malaysia Building Society (MBSB), East Delta Electricity Production Company and Emirates Airlines. Each of these deals represented an important landmark in the industry, or a new development of benefi t to the market. With GACA as the largest MENA Sukuk issuance ever; East Delta delivering a new product during diffi cult times; and the MBSB and Emirates deals demonstrating new concepts that may be replicated throughout the markets, no choice was easy.

Nearly three years in the making, the International Islamic Liquidity Management Corporation (IILM) issued its fi rst Sukuk in 2013. Designed to support the Basel III-driven needs of Islamic banks to have access to high-grade, easily traded securities, the transaction was well received. Finally stepping into its role to support the Islamic fi nancial services industry, the inaugural Sukuk of the IILM won the Islamic Finance news Deal of the Year for 2013.

(The IFN DOTY Awards Board)

Deals of the Year 2013: Results

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Volume 11 Issue 1IFN Rapids .........................................................2

Islamic Finance news .......................................23

Shariah Pronouncement .................................39

IFN Reports:

Malaysian Sukuk outlook positive for 2014:

Corporates to drive growth; Maxis’ proposed

Sukuk receives preliminary ratings; Cross-

border skills and knowledge exchange: On the

increase; Regulatory revisions for the new

year .............................................................. 40

Special Report:

Shariah compliant technology stocks ....... 44

Country Focus: Syria

IFN Analysis: A country in crisis .................. 42

Sector Focus: Islamic Debt Capital

Market

IFN Analysis: A new year for Islamic debt

capital markets ...................................................43

Asset Management Feature: Asset

management and Chit funds . . . . . . . . . . . . . . . . . 48

IFN Country Correspondents:

Qatar; Turkey ......................................... 45

IFN Sector Correspondents:

Takaful ................................................... 47

Deal Tracker .....................................................49

REDmoney Indexes ........................................50

Eurekahedge data ...........................................52

Performance League Tables ...........................54

Events Diary.....................................................58

Company Index ...............................................59

Subscription Form ...........................................60

2013

2© 8th January 2014

IFN RAPIDS

Disclaimer: Islamic Finance news invites leading practitioners and academics to contribute short reports each week. Whilst we have used our best endeavors and eff orts to ensure the accuracy of the contents we do not hold out or represent that the respective opinions are accurate and therefore shall not be held responsible for any inaccuracies. Contents and copyright remain with REDmoney.

DEALSBoustead Holdings to issue Sukuk worth up to US$209.53 million by the end 2013

1Malaysia Development plans second Islamic debt off ering to fund air force base relocation

Securities Commission Malaysia approves Ahmad Zaki Resources’ proposed Sukuk Murabahah worth up to US$306.77 million

Bank Asya submits application to issue Sukuk worth up to US$500 million

KDU University College issues second tranche of US$106.48 million Sukuk program

Federal government of Pakistan to auction US$847.06 million in Sukuk to fund airport and motorway maintenance

Bank Rakyat launches second Sukuk issuance under its US$2.73 million proposed Islamic securities program

Amana Bank’s IPO receives full subscription

Luxembourg plans to issue sovereign Sukuk following introduction of government bill

NEWSBanque Misr grants Upper Egypt Electricity Production Company a diminishing Musharakah facility worth US$35.75 million for station renovation

Central Bank of Libya meets with Islamic banks to assess the effi cacy of the country’s implementation of Shariah fi nance

Bangladesh Petroleum Corporation procures IDB fi nancing to fund increasing oil imports cost

Noor Islamic Bank to dispose of entire stake in Meezan Bank

Tax on Malaysian Private Retirement Scheme to be waived for retirees above the age of 55

iSfi n signs partnership with Azmi & Associates in Malaysia

Meezan Bank to assist National Bank of Pakistan to convert the prime minister’s Youth Business Loan Scheme into a Shariah compliant fi nancing program

Pakistan’s Steering Committ ee for the Promotion of Islamic Banking to deliver recommendations by the 31st January

BIMB completes Bank Islam acquisition

Business Custodians debuts fi rst Queensland-based Islamic investment fund

Al-Falaah to roll out Islamic microfi nance products in April

TKSB and the IDB sign US$220 million Mudarabah partnership to fi nance energy projects

New guidelines on Islamic securities from Labuan Financial Service Authority come into eff ect

European Islamic Investment Bank to increase stake in Rasmala Holdings

IFC enters into a risk-sharing facility agreement to increase level of available renminbi-denominated trade fi nance in China

The IDB approves US$285.4 million-worth of development funding for new projects

World Bank signs agreement with Bait Al Mashura to further research and knowledge in Islamic fi nance

Ableace Raakin and Amanie Group join forces to create Dubai-based joint venture eyeing commodity Murabahah businesses in the Middle East

Islamic banking assets in rapid growth markets to hit US$1.6 trillion by 2018, with Malaysia holding at least US$390 billion, says EY

ASSET MANAGEMENTCheraman Financial Services receives permission to launch Islamic venture capital fund

Abraaj Group talking to Turkish food and education fi rms for possible investment

Islamic banks to fully manage Indonesia’s Hajj funds by the end of next year

First Guardian aims to launch Islamic pension fund this month

Al Meezan Investment Management launches new Islamic fund

Essel Finance eyeing Malaysian and West Asian partners to launch US$100 million Shariah compliant off shore fund

AAOIFI to receive fi nancial support from Bahrain’s Waqf Fund to develop CIPA program under recently-approved US$1.4 million budget

TAKAFULAMMB chooses MetLife as new equity partner for Family Takaful and life insurance operations

Stronger performance expected of Takaful Re as parent company assumes tighter control over underwriting operations

Takaful industry to maintain steady growth in 2014 according to industry experts

Takaful International Company announces new sanctions for 2014 including increased Wakalah management fee

MAA Takaful to launch seven new Family Takaful products in the fi rst half of 2014

Takaful Oman Company’s listing on Muscat Securities Market postponed until quorum is met

Al Madina Insurance Company commences business as Oman’s fi rst Takaful operator following regulatory approval

AIG Malaysia Insurance to begin re-Takaful operations this quarter

RATINGSRAM maintains MRCB Southern Link’s Sukuk ratings on Rating Watch

Fitch affi rms Saudi British Bank at ‘A’ with a stable outlook

Ratings outlook for 2014 stable for GCC banks according to Fitch

MOVESGulf Bond and Sukuk Association makes key appointments

CEO of the National Bank of Kuwait to step down aft er three decades of service

Dubai Islamic Insurance & Reinsurance makes two key appointments

National Bank of Abu Dhabi appoints head of corporate and institutional banking for its Hong Kong operations


COVER STORY

DEAL OF THE YEAR: International Islamic Liquidity Management Corporation (IILM)Deal Size: US$490 million from a US$2 billion programPrimary Dealers: Abu Dhabi Islamic Bank, AlBaraka Turk, CIMB Bank, Europe's KBL Private Bankers, Kuwait Finance House,

Maybank, National Bank of Abu Dhabi, Qatar National Bank and Standard Chartered BankLawyers: Allen & Overy for the issuer and Freshfi elds for the sponsorShariah Advisors: IILM Rating: S&P: ‘A-1’ Date: 26th August 2013

The Islamic Liquidity Management Corporation (IILM) is an international institution established by central banks, monetary authorities and multilateral organizations in 2010 to create and issue short-term Shariah compliant fi nancial instruments to facilitate eff ective cross-border Islamic liquidity management.

The IILM issued its fi rst Sukuk from a US$2 billion short-term Sukuk program. Rated by S&P, the issuer is a Luxembourg incorporated securitization vehicle. One reason for the diffi culty in launching was how to acquire access to government-sponsored assets in sponsor state jurisdictions. The deal also had to reconcile Shariah principles with Luxembourg civil law.

Underlying the deal are a number of Sukuk issues which were privately

purchased by IILM Holding 2. The Sukuk were issued by sovereign-related entities and were issued in Ijarah and Murabahah format. In order to ensure the Sukuk achieved the rating requirements for the short-term Sukuk program, collateral and credit enhancement features were incorporated into the deal.

1. The Sukuk are tradable US dollar-denominated short-term fi nancial instruments with maturities of up to one year;

2. The Sukuk qualify as money-market instruments backed by sovereign assets; and

3. The Sukuk are tradable globally via a multi-jurisdictional primary-dealer network.

As a result, the IILM’s Sukuk have strong global support as they represent a unique collaboration between several central banks and a multilateral development bank.

Apart from meeting the market demand for highly rated short-term Shariah compliant cross-border liquidity instruments, the IILM short-term Sukuk complement the intermediate and long-term Sukuk currently available in the market. The US dollar short-term cross-border Sukuk should address the challenges that Islamic fi nancial institutions face in managing their liquidity more eff ectively and effi ciently.

Honorable Mention for Deal of the Year included GACA; Malaysia Building Society; East Delta Electricity Production Company; and Emirates Airlines.

MOST INNOVATIVE: Telekom Malaysia Deal Size: RM200 million (US$60.84 million) Arrangers: CIMB Investment Bank and Maybank Investment BankLawyers: Adnan Sundra and Low for the issuer and Zaid Ibrahim & Co for the arrangersShariah Advisors: Maybank Islamic Rating: RAM: ‘AAA’Date: 18th December 2013

Innovation was not a hallmark of 2013. Two airlines came to market with seat voucher deals (Emirates and Pakistan International Airlines). Barwa’s The First Investor secured Istisnah fi nancing for a major project in the US. And DanaInfra launched the fi rst Malaysian retail Sukuk, albeit using tried and true methods.

Telekom Malaysia’s Islamic commercial paper (ICP) program and Islamic medium-term notes (IMTN) program have a total combined limit of up to RM3 billion (US$912.57 millon) in nominal

value applying the concept of Sukuk Wakalah. Telekom Malaysia’s seven-year Sukuk is the fi rst to utilize broadband units as an underlying asset. Returns on the Sukuk come from a share of the profi t generated by the issuer's broadband services as represented by a specifi c number of broadband units which Telekom Malaysia sells to customers on behalf of the Sukukholders.

Airtime, toll vouchers and seat vouchers have already qualifi ed as underliers for Islamic transactions. The application of broadband units are a unique addition

to the universe of intangible assets and facilitate Telekom’s speed to market on future issuances by not requiring the company to deal in complex sales and lease back transactions involving land, buildings, or switching stations. This method is a logical extension into the intangible asset base of most telecommunications companies and one may expect to see the method expand globally.

Honorable Mention: CityCentreDC; Emirates Airlines; Pakistan International Airlines; and DanaInfra Nasional

IFN Deals of the Year 2013: ResultsContinued from page 1


COVER STORY

SOVEREIGN: Saudi Arabian General Authority of Civil Aviation (GACA)Deal Size: SAR15.2 billion (US$4.05 billion)Arrangers: HSBC Saudi Arabia and NCB Capital CompanyLawyers: Cliff ord Chance and Al Jadaan & Partners for the issuerShariah Advisors: HSBC Saudi Arabia and NCB Capital Rating: Implied sovereign ratingDate: 7th October 2013

2013 was the year of sovereigns doing over. Structures and methods were almost universally repeated from prior year deals. In a thicket of similar deals, GACA just barely pips the rest. Due in 2023, GACA’s second issuance by GACA was oversubscribed and represented the largest ever issuance in the Kingdom of Saudi Arabia and the GCC. The hybrid Sukuk released funds to fi nance the

redevelopment of the King Abdulaziz Airport, Jeddah and King Khalid International Airport in Riyadh. One wing of the fi nance was invested in a Murabahah to create certainty of payment and redemption. The second wing was invested in the purchase of benefi ts owed to GACA, which entitles GACA to charge and collect fees from airlines landing and parking aircraft at airports in the

Kingdom. The second wing, essentially a Mudarabah, established the basis for the deal being tradable. This form of hybrid has become widely used in the past three years.

Honorable Mention: Government of Pakistan; Khazanah Nasional; Government of Dubai; Republic of Indonesia; and Republic of Turkey.

CORPORATE FINANCE: Sime Darby Global Sukuk programDeal Size: US$1.5 billion Sukuk Ijarah program:

Tranche 1 size: US$400 million (fi ve-year) Pricing: 2.05% (UST + 130 bps)Tranche 2 size: US$400 million (10-year) Pricing : 3.29% (UST + 145 bps)

Arrangers: Citi, HSBC, Maybank and Standard Chartered BankLawyers: Zul Rafi que & Partners (Malaysian counsel), Linklaters (International counsel) for the issuer; Allen & Overy

(International counsel), Zaid Ibrahim & Co (Malaysian counsel) for the arrangersShariah Advisors: The Shariah Committ ee of HSBC Amanah Malaysia, Maybank Islamic, the Shariah Board of Citi IslamicRating: S&P: ‘A’ Fitch: ‘A’ Moody’s: ‘A3’Date: 29th January 2013

In 2013, there was an active corporate fi nance market with a number of landmark mergers and acquisitions, syndications, and a number of creative deals. Sime Darby’s Reg S program is Asia’s fi rst internationally rated multi-currency Sukuk program based on an Ijarah structure. The issuer, Sime Darby Global, is an SPV which operates a multi-currency Islamic securities program by acquiring the

benefi cial ownership of assets from Sime Darby. The asset purchases resulting from each issuance are to be applied by Sime Darby to fi nance its own or its subsidiaries' working capital requirements, to fi nance future investments, capital expenditure, and/or to refi nance debt obligations of the parent or any subsidiaries. Each issue of Sukuk has a diff erent group of plantation assets underlying the

issue; the assets themselves may reside in various subsidiaries of Sime Darby. Complexities in the deal related to asset jurisdiction, matching back-to-back lease arrangements, and ease of determining the execution of transfer of benefi cial ownership.

Honorable Mention: BIMB Holdings; Gulf Marine Services; S P Setia; and Dabbagh acquisition of stake in Petromin.

RESTRUCTURING: A'ayan Leasing and Investment CompanyDeal Size: US$1.3 billionArranger: Creditor Steering Committ eeLawyers: DLA Piper for A’ayan and Allen & Overy continues to act for the steering committ ee, with support from

ASAR Al Ruwayeh & Partners in relation to Kuwaiti law issuesShariah Advisors: Each of the creditors and obligorsRating: UnratedDate: December 2013

The problems of the fi nancial crisis are slowly fading away in the GCC. In 2013, there were many high profi le restructurings. A’ayan was one of the standouts as it was the fi rst Shariah compliant restructuring under application of the fi nancial

stability law in Kuwait (Decree No. 2 of 2009). As a Shariah compliant company, the defaulted structures included Murabahah and other Islamic instruments. The ultimate restructuring involved a number of innovative restructuring techniques including

'haircut' arrangements, debt-for-equity and debt-for-asset swaps. Many of these were fi rst applied in the Kuwaiti legal and regulatory context.

Honorable Mention: Arcapita; Dana Gas; Noor Hospitals; and DEWA.

IFN Deals of the Year 2013: Results Continued from page 3


COVER STORY

CROSS-BORDER: International Bank of Azerbaĳ anDeal Size: US$120.5 millionArrangers: Barwa Bank, Emirates NBD Capital, JPMorgan and Noor Islamic BankLawyers: Norton Rose Fulbright/Omni Law FirmShariah Advisors: The committ ees of the arrangersRating: Moody's: ‘Ba3/Negative’ Fitch: ‘BB/Stable’Date: 16th July 2013

The nominated high quality cross-border deals in 2013 was diverse and exciting. The top nominees opened new markets, found innovative ways to raise capital, and posed a challenge for us to make decisions. Maran Nakilat brought Qatari funds to a new market in Greece. Al Noor Hospitals Group raised equity and listed on the London Stock Exchange (LSE), applying the proceeds to its healthcare business in the UAE. Mobily brought in the largest joint Scandinavian export credit agency (ECA) fi nancing to the MENA region and introduced Finland’s ECA to the Islamic market. Kuwait’s Al Kharafi Group secured its guarantees for the modernization and expansion

of the Kuwait International Airport form Dubai Islamic Bank. Atlanticlux Lebensversicherung generated funding for FWU’s Takaful operations. Abu Dhabi Equity Partners opened the Brazil market with a novel trading platform. And Arcapita famously reorganized their debts in New York bankruptcy court.

The International Bank of Azerbaĳ an stands out as the opening of a new Islamic fi nance destination for GCC and American banks. The cross-border Islamic syndicated fi nancing transaction was the fi rst Islamic facility raised for an Azerbaĳ ani bank. Among the key obstacles to the deal was the fact

that a substantial number of banks in the GCC have no country limits for Azerbaĳ an. When the deal was being pulled together, the syndicate had to overcome internal diff erences about how to execute the Tawarruq structure. The bank itself is conventional with an Islamic window, as Islamic fi nance is still in its infancy in Azerbaĳ an. On the one hand, the deal contributes to building this market. On the other hand, the size of the market means that opportunities are limited.

Honorable Mention: Maran Nakilat; Al Noor Hospitals Group; Mobily; Al Kharafi Group; Atlanticlux Lebensversicherung; Abu Dhabi Equity Partners; and Arcapita.

SYNDICATED: Gulf Marine Services Deal Size: US$340 millionArrangers: Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, First Gulf Bank, Qatar Islamic Bank, Noor Islamic

Bank, United Arab Bank, Al Hilal Bank, Ajman Bank, Mubadala GE Capital and Mashreq Lawyers: Gibson, Dunn & Crutcher for the obligor and White & Case for the arrangersShariah Advisors: Abu Dhabi Islamic BankRating: UnratedDate: June 2013

The 2013 syndication market was active with a number of mega deals across markets as well as well-targeted smaller syndications in local markets. Although the CityCentreDC deal represents the opening of a new market, the method is the tried and true Istisnah. Astra Sedaya Finance was remarkable as the fi rst Wakalah syndication for Indonesia. The Saudi ARAMCO Mobile Refi nery relied on Tawarruq.

The Gulf Marine Services deal is structured to provide a fl exible secured facility to the company and to provide for future cash needs, an uncommon

feature in Murabahah deals. Gulf Marine Services is a regional leader in the provision of services requiring self elevated support vessels and anchor handling tug supply vessels. Generally, the asset-heavy company serves the oil, gas and renewable energy sectors. In addition to vessels, the company off ers off shore accommodation, well maintenance, project management, construction and installation services.

The complex Ijarah transaction allowed Gulf Marine Services to re-profi le of existing debt into a multi tranche facility, fund a US$80 million dividend,

fi nance expansion, and meet ongoing working capital requirements. The deal is secured with an assignment of contracts, mortgage over vessels, with a low investment-to-value ratio. The deal has covenants and credit enhancements which include a cash sweep. The Ijarah is structured to facilitate an uncommitt ed line to future capital expenditures and business expansion.

Honorable Mention: CityCentreDC; Astra Sedaya Finance; and Saudi ARAMCO Mobile Refi nery.



COVER STORY

SUKUK: International Islamic Liquidity Management Corporation (IILM)Deal Size: US$490 million from a US$2 billion programPrimary Dealers: Abu Dhabi Islamic Bank, AlBaraka Turk, CIMB Bank, Europe's KBL Private Bankers, Kuwait Finance House,

Maybank, National Bank of Abu Dhabi, Qatar National Bank and Standard Chartered BankLawyers: Allen & Overy for the issuer and Freshfi elds for the sponsorShariah Advisors: IILM Rating: ‘A-1’ – S&PDate: 26th August 2013

Many interesting Sukuk deals were delivered to the market in 2013: DanaInfra with the fi rst retail Sukuk in Malaysia; Malaysia Building Society; Saudi Electricity Company; Osun Sukuk; Bank Asya; Ooredoo; Sadara; and Sime Darby all represent important landmarks in the Sukuk market either

on the global or national level. But, the long-awaited International Islamic Liquidity Management Corporation (IILM) Sukuk program off ering investment grade tradable Sukuk is the Sukuk deal of the year. IILM delivers instruments which facilitate eff ective cross-border Islamic liquidity

management and qualify as high quality investments for Basel III purposes.

Honorable Mention: DanaInfra Nasional, Malaysia Building Society; Saudi Electricity Company; Osun Sukuk; Bank Asya; Ooredoo; Sadara; and Sime Darby.

EQUITY: BIMB HoldingsDeal Size: Renounceable rights issue of 426.72 million new ordinary shares of RM1 (US$0.3) each in BIMB Holdings

(BHB Shares) (Rights Shares) together with 426.72 million free detachable warrants at an issue price of RM4.25 (US$1.29) per Rights Share on a basis of two Rights Shares and two Warrants for every fi ve existing BHB Shares held as at 5pm on the 12th November 2013 to raise gross proceeds of RM1.81 billion (US$551.75 million)

Arranger: Bank Islam MalaysiaLawyers: Wong & PartnersShariah Advisors: Shariah Supervisory Council of Bank IslamRating: UnratedDate: 11th December 2013 (Sukuk were issued the next day) and funds were applied to acquisitions on the 19th

December 2013

Several private equity deals were nominated including Alkhabeer’s Express Publishing & Investment which demonstrates the emergence of generational change in many UAE businesses founded by South Asian entrepreneurs; and RHB Investment Bank’s Weststar Aviation Services which brought Kohlberg Kravis & Roberts (KKR) into the Islamic ambit for a Malaysian deal. Al Noor Hospital’s London Stock Exchange (LSE) listing was also notable. But, BIMB Holding’s is perhaps notable for its strategic achievement.

BIMB Holdings supplemented the Rights and Warrants issues with a 10-year Tawarruq securities issuance

of RM1.66 billion (US$505.04 million) (nominal value). The proceeds of the issuances were applied to allow BIMB Holdings to acquire the remaining 49% of issued and paid-up share capital of Bank Islam from Dubai Financial Group (30.47% of the issued and paid-up share capital of Bank Islam for a cash consideration of US$550 million and from Lembaga Tabung Haji (18.53% of the issued and paid-up share capital of Bank Islam) for a cash consideration equivalent to US$334.6 million (payment was in Malaysian ringgit). The remaining funds covered the cost of executing the transactions and provided additional working capital requirements for BIMB Holdings.

The overall structure was designed to optimize the capital structure of BIMB Holdings and achieve the correct combination of equity and debt. The transaction is structured with covenants to ensure transparency and protection of investor's rights.

This deal was the largest fund raising exercise via Rights Issue with Warrants in the Malaysian fi nancial sector in 2013. The deal was also the largest such transaction for a publically listed company in Malaysia. The key outcome of the deal is the independence of Bank Islam.

Honorable Mention: Al Noor Hospitals Group; Express Publishing & Investment; and Weststar Aviation Services.


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COVER STORY

Ĳ ARAH: Siemens Pakistan Engineering Company Limited Deal Size: PKR200 million (US$1.87 million) Arrangers: Meezan Bank Shariah Advisors: Meezan BankRating: UnratedDate: December 2013

Some deals of the year are notable for size, others for sound execution of the basics. Certainly, Saudi Electricity Company, Kimanis Power and Telekom Malaysia all had mega deals in the market.

Both Tilal Development Company (Modern Sukuk Company) and Osun Sukuk represented the opening of new markets. Meezan Bank, however, oft en sticks to the simple and clear application

of basic principles to serve their customers.

Meezan structured the operating fi nance lease to enable Siemens Pakistan to continue enjoying the benefi t of the leased assets. Simultaneously, the transaction took the assets off of Siemens Pakistan’s balance sheet in the local reporting of fi nancial statements done in accordance with IFAS, and to keep both assets and related fi nancing

off balance sheet under International Accounting Standards followed by the company for its group reporting purposes. As a result, Siemens Pakistan unlocked cash without increasing fi nancial leverage on its balance sheet.

Honorable Mention: Tilal Development Company through Modern Sukuk Company; Telekom Malaysia; Kimanis Power; Osun Sukuk; and Saudi Electricity Company.

INFRASTRUCTURE & PROJECT FINANCE: Sadara Chemical Company (as the Project Company) and Sadara Basic Services Company (as issuer of the Sukuk)

Deal Size: SAR7.5 billion (US$1.99 billion)Arrangers: AlBilad Investment Company, Alinma Investment Company, Deutsche Securities Saudi Arabia and Riyad

CapitalLawyers: Milbank, Tweed, Hadley & McCloy and Allen & Overy for the arrangers

Shearman & Sterling (London) and Hatem Abbas Ghazzawi & Co as legal advisors to The Dow Chemical CompanyWhite & Case and The Law Offi ces of Dr. Waleed N. Al-Nuwaiser in association with White and Case as legal advisors to Saudi Arabian Oil Company

Shariah Advisors: The Joint Shariah Committ ee of Alinma Investment Company and AlBilad Investment Company. DB Shari'a Advisers. The Shariah Committ ee of Riyad Capital

Rating: UnratedDate: 28th June 2013

As expected the project fi nance and infrastructure markets are extremely important in the Islamic fi nance fi eld. CityCentreDC, Kimanis Power, and Deyar Al Balad were all very important and distinct projects. The fi rst represented the largest ever Istisnah construction fi nancing in the US. The second is a major Malaysian Ijarah-based project fi nancing. And Deyar Al Balad is a smaller Saudi public private partnership real estate development in Makkah.

The Sadara Basic Services Company Sukuk forms part of a US$20 billion multi-source project fi nancing for the construction of a chemical facility in Saudi Arabia. The project, when constructed, will be one of the world’s largest integrated chemical facilities. It will be the largest ever built in a single phase. Sadara incorporates complex inter-fi nancier issues, ECA issues, and validation of the newly promulgated,

but not yet, in force Saudi Arabian Sukuk rules.

Listed on Tadawul, the Saudi Arabian Stock Exchange, Sadara is only the second Sukuk to be approved under new rules. The structure is declining Musharakah with a project Istisnah and Ijarah for pre and post-occupation of the Islamic assets. The profi t and principal payable under the Sukuk are funded by the underlying forward lease rentals during construction and actual lease rentals post-construction of the project assets. The Musharakah ensures that the Sukuk are tradable even during the construction period.

The transaction is particularly notable as the sponsors (Saudi Aramco and Dow Chemical) wanted to issue the project Sukuk reasonably early on in the overall fi nancing timeline — in particular, the Sukuk was to be issued prior to the signing of the wider fi nancing, which presented some unique

challenges. A regime was required that would allow the Sukuk to be issued, yet also allow certain aspects of the inter-creditor arrangements to continue to be negotiated with the ECAs and the lenders, without having to consult the holders of the Sukuk. The consent regime needed to be robust enough to keep the Sukukholders comfortable, but fl exible enough to accommodate the continuing discussions with the conventional lenders and the ECAs.

The transaction also saw a number of enhancements to the structure used on the preceding Saudi Arabian project Sukuk for SATORP. Foremost among these was the introduction of a new special purpose entity to act as an ‘authorized agent’ on behalf of Sadara in its various capacities as lessee and procurement contractor.

Honorable Mention: CityCentreDC; Kimanis Power; and Deyar Al Balad.



COVER STORY

IPO: Al Noor Hospitals Group

Deal Size: GBP221 million (US$362.78 million)Arrangers: Deutsche Bank and Goldman Sachs InternationalBookrunners: Deutsche Bank, Goldman Sachs International and HSBC BankLawyers: King & Spalding and Linklaters for the issuer and Cliff ord Chance for the arrangersShariah Advisors: Not applicableRating UnratedDate: 21st June 2013

This was a light year for IPO nominations. UMW Oil & Gas Corporation was a major transaction in Malaysia resulting in a new Islamic stock off ering under the Securities Commission’s new criteria. DAMAC was also a signifi cant event in the UAE. Noor Hospitals, however, brings a unique fl avor to the IPO segment.

Al Noor Hospitals Group took advantage of its GBP221 million IPO to restructure its Abu Dhabi operations. Proceeds of the IPO funded the acquisition of a specialty center and a group of medical centers for US$50 million; the expansion of existing

facilities at Khalifa Hospital and the continued development of new medical centers in Abu Dhabi; and to support the group’s entry into other key emirates.

An eye-catching reality is that Al Noor listed, not in the UAE or MENA region, not in Malaysia, but on the LSE. The shareholding structure involves a Mudarabah arrangement which allows UK investors to acquire an interest in the Issuer's principal limited liability company, incorporated in the UAE, in a manner that maximizes foreign control in such company while, at the same time, respecting the fundamental UAE laws relating to (a) foreign ownership;

and (b) anti-fronting. The Mudarabah structure incorporates complex shareholder arrangements to ensure that close to 100% of the economic benefi ts in the issuer's local UAE company indirectly revert to the issuer. The structure was rigorously tested by the UK Listing Authority before it was approved for purposes of the IPO. The structure may be replicable to allow UAE companies to seek international liquidity by listing on a foreign exchange.

Honorable Mention: UMW Oil & Gas Corporation and DAMAC Real Estate Development.

MUDARABAH: East Delta Electricity Production CompanyDeal Size: US$110 millionArranger: Abu Dhabi Islamic Bank — Egypt and Banque MisrLawyers: In-house for both sides of the dealShariah Advisors: Abu Dhabi Islamic Bank — EgyptRating: Implied sovereign ratingDate: January 2013

2013 saw many mega Mudarabah deals including Dana Gas; GEMS Education; Dubai Islamic Bank; and Arcapita Investment Holdings restructuring. Abu Dhabi Islamic Bank — Egypt (ADIB Egypt) was not the largest, but it was executed in diffi cult circumstances and applied a novel structure to purpose for which conventional banks are oft en quick to act with fi ne pricing.

The ADIB Egypt structure relates to the issuance of lett ers of credit and their prospective refi nance through restricted a Mudarabah fi nance facility. The deal was executed for

sight and usuance lett ers of credit up to US$110 million in favor of East Delta Electricity Production Company for the importation of spare parts for the production facility stations. The facility covers a fi ve-year base stock supply. The Mudarabah facilities were priced at profi t sharing ratio refl ecting a pre-agreed margin above the mid-corridor rate as announced by the Central Bank of Egypt. The Mudarabah facility has a term of four years and funds in Egyptian pounds up to 85% of goods under the lett er of credit documents. The deal is guaranteed by the Egyptian Electricity Holding Company.

The transaction is the fi rst corporate fi nance Mudarabah of its type deal in Egypt, and the fi rst Shariah compliant syndication for a major Egyptian public energy sector entity. In addition to its Islamic fi nance benefi ts, the fi nancing supported a strategic sector at a time where power outages were frequently aff ecting the industrial and commercial sectors and the daily life of every Egyptian. The fi nancing prospectively helps the obligor to provide electricity in seven strategic governorates.

Honorable Mention: Dana Gas; GEMS Education; Dubai Islamic Bank; and Arcapita Investment Holdings.



COVER STORY

MURABAHAH: MobilyDeal Size: US$645.85 millionArrangers: Crédit Agricole Corporate and Investment Bank and Deutsche Bank, London Branch.Lawyers: Latham & Watkins for Mobily and Allen & Overy for the arrangers.Rating: UnratedDate: August 2013

Normally, our Murabahah class does not encompass Tawarruq as we wish for the category to refl ect the true movement of goods between parties. This year, many of the true trade fi nance deals incorporated Tawarruq. The Mobily US$645 million deal with northern Europe ECAs highlights the importance of cross-border trade with non-Muslim countries. This transaction follows SEK’s prior deal for Saudi Telecom’s Indonesian subsidiary. The Mobily deal was disbursed in two tranches backed by the Swedish and Finnish export agencies. The fi rst of

US$320.85 million was a Murabahah facility with the support of Sweden’s Exportkreditnämnden for the purchase of eligible goods and services from Ericsson AB. The second was a US$325 million Murabahah facility with the support of Finnvera, for the purchase of eligible goods and services from Nokia Siemens Tietoliikenne Oy. Each deal provides long-term low cost fi xed rate fi nancing to Mobily on terms which cannot be found in commercial banking market. The proceeds help fund Mobily’s capex development plan. Although Mobily

could have been contemplated as a true trade Murabahah, the counterparties preferred the fl exibilities that Tawarruq would provide including the facilitating of multiple tranches.

For Finnvera the deal represented a number of fi rsts: its fi rst Islamic deal, its largest deal ever in Saudi Arabia and its largest ever deal in the Middle East.

Honorable Mention: Trading Corporation of Pakistan; Turk-Eximbank; Abu Dhabi Equity Partners; and Bahra Advanced Cable Manufacturing Co.

MUSHARAKAH: SP Setia Deal Size: RM700 million (US$212.97 million)Arrangers: CIMB Investment Bank, Hong Leong Investment Bank and RHB Investment Bank Shariah Advisors: CIMB Islamic Bank and RHB Islamic BankRating: UnratedDate: 13th December 2013

The Musharakah category was also hotly contested with the competition spilling into the perpetual category. Each of Malaysia Airports Holdings, UMW Holdings, Pandu Logistics, and Sadara Chemical Company had an off ering with strong merits.

SP Setia is a public-listed company and a prominent property developer. The company is constantly increasing its land bank as well as developing townships. Given the nature of the real estate business, SP Setia requires long-term funding. As a public company, SP Setia has to consider the issues relating to dilution if it issued new shares.

Given the lack of favor that real estate is currently suff ering, and the Basel III impact on long-term project fi nancing,

SP Setia’s Sukuk Musharakah program addresses the key issues facing the company and helps it to stand out in a large crowd.

This Sukuk Musharakah is a perpetual Sukuk, combining Musharakah and Musawwamah, to be issued by a Malaysian public listed company in the property sector. The issuance has no fi xed tenure or maturity date, but it does incorporate a step up feature aft er the fi ft h year. The Sukuk Musharakah was structured to be classifi ed as equity in the fi nancial statements of the issuer while having common features of a fi xed income instrument such as a periodic distribution to investors thanks to the Musawwamah element. The net proceeds arising from the

issuance of the deal will be utilized towards the deal expenses, purchase of lands, buildings and property; and development and construction costs and working capital of existing and future projects; as well as the issuer’s working capital. The issuance allows SP Setia to tap a large pool of funds without increasing its debt to equity ratio. As a result, the company preserves fi nancing capacity in the broader market.

The securities are not convertible to any class of the Issuer’s ordinary shares avoiding dilution of the existing shareholders of the Issuer.

Honorable Mention: Malaysia Airports Holdings; UMW Holdings; Pandu Logistics; and Sadara.



COVER STORY

PERPETUAL: SP SetiaDeal Size: First issuance of RM609 million (US$185.28 million) from RM700 million (US$212.97 million) authorizedArrangers: CIMB Investment Bank, Hong Leong Investment Bank and RHB Investment Bank Lawyers: Albar & Partners for the issuerShariah Advisors: CIMB Investment Bank and RHB Islamic Bank Rating: UnratedDate: 13th December 2013

Perpetuals became the fl avor of the year in 2013 with the form moving into the corporate, education, and real estate sectors. Al Marai Company as the largest integrated dairy company in the MENA region issued, as did GEMS

Education, one of the largest education fi rms in the GCC. But, property is the most challenging business segment in which to att ract funding. Given the success of publically listed real estate developer S P Setia to launch its RM700

million program allows them to top the very well-noted competition.

Honorable Mention: GEMS Education; Al Marai Company; and Dubai Islamic Bank.

REAL ESTATE: CityCentreDCDeal Size: US$390 millionProject Sponsor: TFI US Real Estate Fund (part of Barwa Bank group)Arranger: JPMorgan ChaseShariah Advisors: The First Investor (member of Barwa Bank Group)Rating: UnratedDate: May 2013

As always, real estate is a deeply desired investment for Muslim investors. This year’s nominations included a number of interesting deals. Deyar Al Balad was proposed a Makkan public private partnership for real estate development. The SAR4.3 billion (US$1.14 billion) Arabian Centers Company was the largest fi nancing for a private sector company in Saudi Arabia. DLA Piper nominated Alkhabeer’s Park 10 US acquisition, which applied the well-tried

master sub-lease structure for real estate acquisition. CityCentreDC, however, is a landmark. It is the largest ever domestic US Islamic real estate fi nancing for GCC investors.

It is one thing to build on Key Bank’s 2002 authorization to use Istisnah and another to craft suitable tax-friendly documentation. The process took nearly 18 months aft er selection of JPMorgan Chase to lead the fi nancing syndicate

which including many leading US banks. The project itself is a major urban redevelopment project in the US capital. Composed of multiple offi ce and residential buildings, the project is a short walk from the Capitol Building, sporting arenas, and the convention center.

Honorable Mention: Deyar Al Balad; Arabian Centers Company; and Park 10.

TAWARRUQ: Maran NakilatDeal Size: US$662.4 millionArrangers: Qatar Islamic Bank and Barwa BankLawyers: Latham & Watkins for the issuer and Allen and Overy for the arrangersShariah Advisors: Qatar Islamic Bank and Barwa Bank Shariah BoardsRating UnratedDate: 26th June 2013

Tawarruq, oft en termed commodity Murabahah, is the process of generating cash or fi nancing from a series of sales transactions, typically involving four counter-parties. Albaraka Turk Participation Bank used the structure to issue non-tradable Sukuk as part of its regulatory capital structure. BIMB Holdings incorporated Tawarruq into its shareholder buyout. Malaysia’s Cagamas and Perbadanan Tabung Pendidikan Tinggi Nasional also achieved successful large-scale Tawarruq transactions.

Maran Nakilat jumps ahead of the crew for its various characteristics. The transaction fi nances two LNG which are contracted to for Ras Gas and British Gas through its own vessels. Maran Nakilat is the fi rst ever Islamic vessel fi nancing transaction for a Greek company (co-owned by Qatar’s Nakilat). The fi ve-year deal has an extension option for a further fi ve years which also allows for re-sizing of the facility.

One reason that Tawarruq is oft en preferred for shipping fi nance is that it

facilitates the use of shipping mortgages which are well understood in the global market, and it allows fi nancing without ownership risk. In the hydrocarbon sector, ownership risk oft en extends to carrying the liability for pollution.

Honorable Mention: Albaraka Turk Participation Bank; BIMB Holdings; Cagamas; and Perbadanan Tabung Pendidikan Tinggi Nasional.



COVER STORY

STRUCTURED FINANCE: Malaysian Building Society (MBSB) Deal Size: RM495 million (US$150.59 million)Arranger: RHB Investment Bank Lawyers: Kadir, Andri & Partners for the arrangerShariah Advisors: Amanie AdvisorsRating: RAM: ‘AA1’ (fi rst tranche)Date: 24th December 2013

Although a number of clever structures were nominated for the Structured Finance Deal of the Year, the MBSB deal is the fi rst covered Sukuk transaction in the Islamic housing fi nance sector. Tamweel and others have issued asset-backed securities. But, with the growing Basel III challenges, many Islamic banks operate in jurisdictions in which securitization is not easy, not possible. Leave it to the Malaysians to pioneer a model for which is replicable and may be adjusted to other markets. A key distinction in this deal is that

unlike many covered deals in the MENA region, the investors are legally able to access the ‘cover’ to satisfy their claims. Most earlier deals in the MENA region are asset-light and the Sukukholders cannot make claims on the underliers.

MBSB is a key provider of personal fi nancing facilities for civil servants in Malaysia. The institution is seen as very secure as almost all repayments (99%) collected through salary-deduction schemes. Funding in this deal is provided through Tawarruq creating a

direct claim against MBSB. The pool of receivables transferred to the guarantor SPV give a second avenue to cover the fi nancial claims of the Sukukholders from a dedicated pool of identifi ed Islamic personal fi nancing receivables which are ring fenced in the bankruptcy remote SPV.

Honorable Mention: International Islamic Liquidity Management Corporation; Univers Acier; Telekom Malaysia; and KDU University College.

TRADE FINANCE: MobilyDeal Size: US$645.85 millionArrangers: Crédit Agricole Corporate and Investment Bank and Deutsche Bank, London Branch.Lawyers: Latham & Watkins for Mobily and Allen & Overy for the arrangersRating: UnratedDate: August 2013

Refer to explanation under Murabahah Deal of the Year on page 9.

Honorable Mention: Trading Corporation of Pakistan; Turk-Eximbank; Abu Dhabi

Equity Partners; and Bahra Advanced Cable Manufacturing Co.

WAKALAH: Astra Sedaya FinanceDeal Size: US$50 million Arrangers: Bank of Tokyo-Mitsubishi UFJ (Malaysia), BNP Paribas Malaysia, CIMB Bank, Singapore Branch, HSBC

Amanah Malaysia and Standard Chartered SaadiqLawyers: Linklaters (English Legal Counsel), Mochtar Karuwin Komar, (Indonesian Legal Counsel) for the obligor

and Bakers & McKenzie. Wong & Leow (English Legal Counsel) Hadiputranto, Hadinoto & Partners (Indonesian Legal Counsel) for the fi nanciers

Shariah Advisors: None statedRating: UnratedDate: 27th November 2013

Although there were many large and well publicized Wakalah deals, Bank of Tokyo-Mitsubishi UFJ (Malaysia) was an intriguing cross-border deal allowing 3.5-year tenors (inclusive of six months of availability period). The deal, availed in Singapore dollars, was the fi rst syndicated Wakalah fi nancing in

Indonesia and the fi rst Islamic fi nancing deal in Indonesia provided by Japanese bank.

Supporting the auto fi nance business of Astra Internasional, the deal provides a means for participation in the underlying installment sales

and leasing contracts of Astra Sedaya Finance.

Honorable Mention: Abu Dhabi Equity Partners; Al-Mourjan For Electricity Production Company (Rabigh 2 IPP); Emirates Airlines; Ooredoo; and PIA.



COVER STORY

Country Deals:(Please note that for a country/region to be featured in this section a minimum of three recognized transactions are to have been completed in the specifi ed period.)

AFRICA: Osun Sukuk (Nigeria)Deal Size: NGN11.4 billion (US$72.15 million)Lead Arranger: Lotus CapitalCo-Arrangers: Chapel Hill Advisory Partners, FBN Capital, Fidelity Securities, FCMB Capital Markets, Greenwich Trust,

Lead Capital, Marina Securities, Oceanic Capital Company, PanAfrican Capital, Phoenix Global Capital Market, Skye Financial Services, Stanbic IBTC Capital, Sterling Capital Markets, Uni Capital, Union Capital Markets, Zenith Securities

Lawyers: Kola Awodein & Co and FO Fagbohungbe & Co for the issuer and Tope Adebayo for the trusteeShariah Advisors: Professor Dr Monzer Kahf and Professor Muhammad BasharRating: Agusto & Co: ‘A’Date: 10th October 2013

Fulfi llment of the African promise is slow. In 2013, only a few African nominees emerged. ITFC structured a revolving trade facility for Morocco’s Univers Acier, freeing cash during the trade cycle for the Moroccan steel maker. The winner of the Mudarabah Deal of the Year, East Delta Electricity Production Company pulled together an innovative syndication during diffi cult times. But, in Nigeria, Lotus Capital pulled together the fi rst sub-sovereign issuance applying the new Nigerian ‘non-interest’ capital markets framework. This is also the fi rst sub-Saharan sub-state sovereign deal. Based

on the strength of the product and the opening of the market, Osun Sukuk is the African Deal of the Year.

The 14.75% fi xed return Sukuk Ijarah due in 2020 supports the construction of 23 high schools, two middle schools and two elementary schools across Osun State. The Sukuk are guaranteed by the government of Osun State. The deal won widespread support from the full Nigerian fi nancial market community with almost all domestic investment banks acting as co-underwriters and almost all banks, conventional and non-interest buying the Sukuk. As the fi rst

sub-sovereign Sukuk in sub-Saharan Africa the deal went well despite the challenging regulatory and legal framework environment. The Sukuk were oversubscribed notwithstanding their novelty. Lotus Capital rightly takes pride that the deal was completed successfully and effi ciently with Nigerian talent doing the heavy lift ing and no international underwriters or structuring agents.

Honorable Mention: East Delta Electricity Production Company (Egypt) and Univers Acier (Morocco).

EUROPE: Sukuk Wakalah Program (Salam III) for European insurance group, FWUDeal Size: US$100 million; the fi rst tranche of the program, US$20 million, has already closedArranger: European Islamic Investment Bank, Rasmala Group Lawyers: Morgan, Lewis and Bockius (Legal Counsel for Issue, Transaction Structuring Counsel) and Bedell Cristin

Guernsey Partnership (Guernsey Counsel to the issue and issuer)Shariah Advisors: Amanie AdvisorsRating: Fitch: 'BBB -' Date: 30th October 2013

In a year of ongoing European malaise and anemic UK growth, the DOTY fl ow was light for the UK and Europe in general. BLME continued their niche real estate business with new competition. LTH deserves merit for facilitating Tabung Haji's leveraging of UK real estate.

Up until now the theme has been real estate and Tawarruq. As a result,

the FWU-sponsored Sukuk Wakalah Salam III stood out as innovative. The investment-grade sponsor delivered the Sukuk through its subsidiary Atlanticlux, Luxembourg. The fi rst of three tranches was US$20 million and closed in October 2013. Two more tranches are planned. The Sukuk appoint the issuer to invest in the re-Takaful business and its permissible activities. This frees cash for the sponsor

to pay commissions to its agents. The deal is highly collateralized by the sponsor's underlying Shariah compliant cash fl ows.

Honorable Mention: Somerset Place and LTH.



COVER STORY

INDONESIA: Golden Agri-ResourcesDeal Size: RM5 billion (US$1.52 billion)Lead Arranger: RHB Investment Bank Shariah Advisors: SC MalaysiaRating UnratedDate: March 2013

Indonesia had a limited number of nominations for 2013. Golden Agri was the largest Malaysian ringgit-denominated issue by a foreign issuer in the Malaysian debt market. Golden

Agri is the world’s second-largest palm oil plantation company and the largest in Indonesia. The Sukuk program gives Golden Agri access to US dollar funding at competitive pricing through

cross-currency swaps in a volatile environment.

Honorable Mention: Astra Sedaya and Pandu Logistics

KUWAIT: Mohammed Abdul Mohsin Al Kharafi & Sons Co (Al Kharafi )Deal Size: US$172 millionFinancier: Dubai Islamic Bank Shariah Advisors: Dar Al ShariaRating: UnratedDate: April 2013Kuwait is only now fully emerging from the fi nancial crisis. Many investment companies are refocusing their businesses, which is the essence of Noor Investment Bank’s exit from its investment in Pakistan’s Meezan Bank. Others like A'ayan Leasing and Investment Company have restructured.

Al Kharafi won the project from the Directorate General of Civil Aviation for the Kuwait International Airport Expansion project (Phase II). In this project, Al Kharafi will be working on

the administration building, car park and fi re station.

Dubai Islamic Bank, fronted by a Kuwaiti bank, is providing performance cover for Al Kharafi during the nine-month project period. The guarantees are covered by ‘escrowing’ of payments from the Directorate General of Civil Aviation Al Kharafi with a local bank in Kuwait; Notice of Assignment to transfer project proceeds to Dubai Islamic Bank (Amanat/collection account) from the project account

with the Kuwaiti bank only in case of any outstanding claims under lett er of guarantees and/or due payments under lett er of credit and acceptances or any due payments under funded exposure; and acknowledgement, consent and undertaking on the Notice of Assignment from the Kuwaiti bank. Documenting and validating the security package was complicated.

Honorable Mention: Noor Investment Bank sale of shares in Meezan and A'ayan Leasing and Investment Company.

MALAYSIA: DanaInfra NasionalDeal Size: RM300 million (US$91.27 million) fi rst trancheArrangers: AmInvestment Bank, CIMB Investment Bank, Maybank Investment Bank, and RHB Investment Bank Lawyers: Adnan Sundra & Low for the issuer and Mohamed Ridza & Co for the arrangersShariah Advisors: CIMB Islamic BankRating: Unrated, guaranteed by the Government of MalaysiaDate: 8th February 2013 fi rst tranche

The Malaysian Sukuk market is the most vibrant and active Sukuk market. As a result, selecting Malaysia’s deal of the year is never easy. With deals like BIMB Holdings, Malaysia Building Society, S P Setia, and Malaysia Airports Holdings, the competition was crowded at the top. As always, Malaysia breaks new ground, despite

the achievements of the other deals, DanaInfra’s fi rst ever exchange traded Sukuk successfully created a new asset class for retail investors. By reaching beyond institutional investors, high net worth individuals, and fi nancial institutions, DanaInfra’s retail Sukuk promises to bring greater liquidity to the Islamic capital markets by tapping the

deeper pool of national savings. In light of this achievement, DanaInfra is the Malaysian Deal of the Year.

Honorable Mention: BIMB Holdings; Malaysia Building Society; S P Setia; and Malaysia Airports Holdings.



COVER STORY

PAKISTAN: Government of PakistanDeal Size: PKR43.018 billion (US$402.41 million)Joint Financial Advisors:

Meezan Bank, Dubai Islamic Bank Pakistan, Standard Chartered Bank Pakistan

Shariah Advisors: State Bank of PakistanRating: Domestic sovereign issueDate: March 2013

Many sovereign deals in 2013 were repeats of the same structures used by the same issuers. Litt le new ground was broken. Meezan Bank, Standard Chartered Bank Pakistan and Dubai Islamic Bank Pakistan provided advisory services to the Government of Pakistan (GoP) to enable it to raise funds in a Shariah compliant manner.

The resultant Sukuk Ijarah issuances help to allow the establishment of a domestic benchmark. The transaction, which uses Pakistan’s M1 motorway as underlying asset, also serves the needs of the Islamic banking industry by enabling them to eff ectively manage their liquidity with a high quality liquid instruments. The Sukuk are

issued through State Bank of Pakistan auctions.

Honorable Mention: Qasim International Container Terminal; Pakistan International Airlines; Siemens Pakistan Engineering Company; and Pakistan Mobile Telecommunications.

QATAR: OoredooDeal Size: US$1.2 billion issuance from US$2 billion programArrangers: DBS Bank, Deutsche Bank, HSBC, QInvest and QNB CapitalLawyers: Latham & Watkins for the issuer and Cliff ord Chance for the arrangersShariah Advisors: HSBC Saudi Arabia Executive Shariah Committ ee; Dr. Hussein Hamid Hassan, Shariah advisor to Deutsche

Bank, London Branch; the Shariah supervisory board of QInvest; and the Shariah supervisory board of the Islamic Bank of Asia (a subsidiary of DBS Bank)

Rating: Fitch: ‘A+’ Moody’s: ‘A2’ S&P: ‘A’Date: 13th December 2013

Ooredoo is the security that many hope will generate more enthusiasm for state-linked and corporate Sukuk in the Qatari market. The Reg S deal is listed on the Irish Stock Exchange and was very well received, being oversubscribed four times. The Sukuk program utilizes airtime as the underlying asset. This inaugural issuance was through Ooredoo Tamweel, a Cayman Islands spv wholly-owned by Ooredoo (the trustee), of US$1.25 billion trust certifi cates due 2018. The program utilizes a Manafae structure, conferring

on the certifi cateholders the right to receive income arising from the sale by Ooredoo to the Trustee of minutes of airtime on Ooredoo's mobile telecommunications network and the distribution thereof by Ooredoo to its customers. The use of the telecom airtime minutes instead of property assets, for example, to underpin the Sukuk, provides Ooredoo the opportunity to use a much larger pool of available assets and thus issue on a regular basis in future. The development of the Sukuk structure also required the

cooperation and interaction with the Qatari telecommunications regulator because sale of airtime is a regulated activity in Qatar.

The deal was Ooredoo’s fi rst time issuing in the Islamic capital market. Previously, Ooredee had been a frequent conventional issuer.

Honorable Mention: Qatar Islamic Bank and Maran Nakilat Co.


Join us at the industry’s most prestigious and recognized awards ceremonies, celebrating the best of Islamic finance

To reserve your table, please call:

Dubai: Geraldine Chan: +971 44 273 628

Kuala Lumpur: Steve Stubbs: +603 2162 7800 ext 55

Kuala Lumpur: Shangri-La19th February 2014

Dubai: Ritz Carlton (DIFC)24th February 2014

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COVER STORY

SAUDI ARABIA: Sadara Chemical Company (as the Project Company) and Sadara Basic Services Company (as issuer of the Sukuk)

Deal Size: SAR7.5 billion (US$1.99 billion)Lead Arrangers: AlBilad Investment Company, Alinma Investment Company, Deutsche Securities Saudi Arabia and Riyad

CapitalLawyers: Milbank, Tweed, Hadley & McCloy and Allen & Overy for the arrangers

Shearman & Sterling (London) and Hatem Abbas Ghazzawi & Co as legal advisors to The Dow Chemical CompanyWhite & Case and The Law Offi ces of Dr. Waleed N. Al-Nuwaiser in association with White and Case as legal advisors to Saudi Arabian Oil Company

Shariah Advisors: The Joint Shariah Committ ee of Alinma Investment Company and AlBilad Investment Company. DB Shariah Advisers. The Shariah Committ ee of Riyad Capital

Rating: UnratedDate: 28th June 2013

Saudi Arabia is increasingly a sprint to compete with Malaysia in volume and variety in Islamic capital market transactions. In 2013, the volumes of syndicated deals and Islamic securities deals were also robust. Mobily’s Tawarruq facilities from the Finnish ECA, Finnvera, and the Swedish ECA, Exportkreditnämnden, GACA, Kemya,

and Al Marai all provide strong claims for being the Saudi Arabian deal of the year. But, Sadara grabs the lead by refi ning the SATORP structure and applying the anticipated new Sukuk rules. With the help of the Sadara Basic Services Company Sukuk, more structure is delivered to the Saudi Arabian market, and a template for

asset-rich corporates and real estate companies is defi ned. Sadara also must do so while managing complex inter-fi nancier issues and export credit agency requirements for the overall project. The tradable Sukuk are listed on Tadawul.

Honorable Mention: GACA; Kemya; Mobily; and Al Marai Company


Key Highlights:

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SIDC CPE - accredited: 10 CPE Points

[email protected]

RESCHEDULING, RESTRUCTURING

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FINANCE FACILITIES


COVER STORY

TURKEY: Turk EximbankDeal Size: US$50 millionArrangers: International Islamic Trade Finance Corporation (ITFC)Shariah Advisors: ITFCRating UnratedDate: 26th June 2013

The Turkish market performed well again in 2013. The participation banks improved their regulatory capital, and the republic returned to the market with a successful off ering. A key part of the Turkish success story over the past 10 years has been trade fi nance. The ITFC has been playing an important role in the expansion of Islamic trade fi nance tools. The ITFC has successfully

delivered its two-step Murabahah products throughout the IDB’s footprint. The tool has generally been used for import fi nance. With the Turk Eximbank, the ITFC applied the concept for export fi nance.

Under the export structure, the ITFC purchases the goods from exporters upon presentation of proof

of exports, via export declaration forms. The ITFC then sells the goods on to Turk Eximbank which has assignment of the ITFC’s receivables from exporters.

Honorable Mention: Albaraka Tü rk Katılım Bankası; and Bank Asya.

UAE: Dubai DOF Sukuk (issuing on behalf of the Government of DubaiDeal Size: US$7.5 billionArrangers: Dubai Islamic Bank, Emirates NBD, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank Co Lead Managers: Al Hilal Bank, Barwa Bank, Commercial Bank International, IDB and Sharjah Islamic BankLawyers: Allen & Overy for the arrangers and Latham & Watkins for the issuer.Shariah Advisors: HSBC Amanah Central Shariah Committ ee and the Shariah advisory board of Dubai Islamic Bank, Dar Al

Sharia Rating: UnratedDate: 30th January 2013

The markets ended 2012 feeling that something extraordinary was happening in Dubai. Business indicators showed more than recovery. Yet, concerns remained about the Emirate itself: would it be able to reposition itself into an ever bett er position? For the government of Dubai, other issues were at stake including the establishment

of its yield curve and a benchmark of investor confi dence.

The deal was executed swift ly, delivering att ractive pricing on the unrated 10-year Reg S Sukuk. This buoyed and continues to support growing confi dence in the emirate. The transaction was over subscribed by 12

times, a clearly supportive voice from the market, and a very good way to start the campaign to establish Dubai as a capital of the Islamic economy.

Honorable Mention: Al Noor Hospitals; Dubai Islamic Bank; Gulf Marine Services; GEMS Eductaion; and Emirates Airlines.

UK: LTH Property Holdings, a wholly owned subsidiary of Lembaga Tabung HajiDeal Size: GBP225 million (US$369.34 million)Arrangers: Maybank Islamic, OCBC Al-Amin Bank and Standard Chartered SaadiqLawyers: Trowers & Hamlins for the obligor and Baker & McKenzie, Wong & Leow (as to English Law), Walkers (as

to Jersey Law) and Wong & Partners (as to Malaysia Law) for the arrangers and fi nanciersShariah Advisors: Maybank Islamic, OCBC Al-Amin Bank and Standard Chartered SaadiqRating: UnratedDate: 17th October 2013

For a number of years, Bank of London and The Middle East (BLME) held up the Union Jack fl ag. They return with the Somerset Place deal which is the fi rst redevelopment of an entire Georgian Grade I listed property. On the continent, FWU also led the charge with the second-ever European Sukuk in 2012. In 2013, FWU delivered more innovation to the market with

market with a premium linked Sukuk product. On the one hand, the innovation will require more market investigation of the concepts applied. On the other hand, the Tabung Haji as sponsor of LTH Property Holdings used a tried and true method to overcome challenges relating to tax and jurisdiction.

In order to leverage two central London properties, LTH Property Holdings applied Tawarruq to fund clients’ investment in two central London properties. The facility involves multiple jurisdictions including Malaysia, Jersey (Channel Islands) and the UK.

Honorable Mention: Somerset Place and Atlanticlux Lebensversicherung.



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The results are in and, perhaps unsurprisingly given the att ention and encouragement the country has given to Islamic fi nance over the last year, UAE institutions have surged ahead to claim some of the top awards in the contest. However, the impressive array of categories and countries and the number of nominees in each closely fought contest demonstrates unequivocally the exceptional growth that the industry has enjoyed over the previous year: with a strong theme of cross-border and international activity.

Covering all major and emerging Islamic finance markets across 38 categories, the IFN Best Banks Poll received an overwhelming response from industry players across the globe: including new and emerging markets such as Australia, Syria, the UK, Lebanon, Iran and Kenya as well as the more established jurisdictions of the GCC and Southeast Asia. This year saw a record number of 13,480 votes (over 1,000 more than in 2012) and aft er a comprehensive process of due diligence 11,117 of these went towards the fi nal results.

And these results, while perhaps not throwing up any major surprises, clearly reaffi rm not only the reassuringly consistent growth of the industry despite the global economic challenges faced by the wider fi nancial industry; but also highlight key themes of cross-border expansion, global reach and international cooperation and collaboration that provide hope and promise for 2014.

This year we received 264 nominations, over 100 more than in 2012. Six of the top eight general categories had nominees well into the double digits, while out of 30 country awards none had fewer nominees than three and the majority saw between fi ve and 10 banks competing for the award.

One of the biggest winners of the year was Abu Dhabi Islamic Bank (ADIB), which came out top in a hard-fought contest with CIMB Islamic to achieve Best Overall Islamic Bank to build on its previous win. ADIB also came a close second in the category of Best Islamic Retail Bank, which it also won in 2012, but was pipped at the post by Saudi Arabia’s Al-Rajhi Bank.

However, the bank came top for Most Innovative Islamic Retail Bank (beating last year’s winner Bank Muamalat Indonesia as well as runner-up CIMB Islamic) as well as taking home the prize for Best Islamic Bank in the UAE (in a close contest with Dubai Islamic Bank)

and Best Islamic Bank in Egypt (edging out Al Baraka Bank Egypt).

The bank has posted an impressive performance in 2013 with total income of US$912.7 million and profi t of US$301.3 million for the fi rst three quarters. With a focus on international expansion including core targets of Iraq and the UK, 2014 looks set to be another exciting year for one of the brightest stars in the Middle Eastern Islamic fi nance fi rmament.

A close competitor to ADIB and fi ghting a tight batt le to come runner-up in two of the top categories of Best Overall Islamic Bank and Most Innovative Islamic Bank, CIMB Islamic also cemented a stellar performance in 2013.

While its position as one of Malaysia’s leading Islamic groups is longstanding, the group has extended its reach and established its position across the key markets of Southeast Asia to cement its position as one of the region’s powerhouses in terms of both retail and institutional banking, with a particular nod to its sterling asset management performance.

Demonstrating its unrivalled strength in the ASEAN region, CIMB Islamic this year scored the full hat-trick: not only reclaiming the award for Best Islamic

Results of the 2013 IFN Best Banks Poll

continued...

Category WINNER RUNNER-UP

Best Overall Islamic bank Abu Dhabi Islamic Bank CIMB IslamicBest Central Bank in Promoting Islamic Finance Government of Dubai Bank Negara Malaysia

Best Islamic Leasing Provider Gulf International BankLanka ORIX Finance - Al-Falaah, Islamic Business Unit

Best Islamic Private Bank Standard Chartered Saadiq

Al Rajhi Banking & Investment Corporation

Best Islamic Retail Bank Al Rajhi Banking & Investment Corporation Abu Dhabi Islamic Bank

Most Innovative Islamic Retail Bank Abu Dhabi Islamic Bank CIMB IslamicBest Islamic Trustee/Custodian Deutsche Bank AmanahRaya TrusteesBest Private Equity House Abraaj Capital Fajr Capital


IFN BEST BANKS POLL

Bank in Malaysia from 2012 winner Bank Islam Malaysia but achieving Best Islamic Bank in Singapore and Best Islamic Bank in Thailand; as well as coming a close second to Bank Muamalat Indonesia for Best Islamic Bank in Indonesia.

The Singapore win is of particular interest, with CIMB Islamic winning out over the incumbent Islamic Bank of Asia (IBA), who have won the award every year since inception: demonstrating CIMB’s capital market infl uence as well as its strong entry into the Singaporean retail market.

The group identifi ed Indonesia and Singapore as focus markets as long ago as 2010 and eff orts to establish these markets have clearly been successful: with profi t before tax from its Indonesia operations increasing by 24% in the fi rst nine months of 2013 and total profi t contribution from Singapore growing by 28% to RM160 million (US$48.67 million).

Also showcasing the strength and success that a strong global footprint can bring, the Bahrain-based Al Baraka Bank is another institution that fl exed its international muscles in 2013. Renowned for its extensive geographical presence, the group has subsidiary banking units and offi ces in 15 countries with over 450 branches.

As of September 2013 the group held assets of US$19.89 billion, with total income of US$206.21 million and net profi ts of US$57.21 million. This year Al Baraka took home Best Islamic Bank in Bahrain, Best Islamic Bank in Lebanon and Best Islamic Bank in Sudan (all of which it won in 2012). Its subsidiaries also came runner-up for Best Islamic Bank in Egypt, Pakistan, Syria and Turkey.

The Bahrain win was a particularly interesting achievement, given that despite technically being a Bahrain bank Al Baraka is headquartered in Saudi Arabia and positions itself as a global Islamic banking group. This highlights another theme this year: of local banks losing votes to ‘outsiders’ or foreign banks.

While Al Baraka won in Lebanon and Sudan, Egypt was taken by UAE-based ADIB and Malaysia’s CIMB Islamic won

Singapore over the local IBA as well as taking the Thailand award from leading domestic player and last year’s winner, the Islamic Bank of Thailand.

In one of the sturdiest strongholds of Islamic fi nance however, Saudi Arabia, the domestic banks still retain their dominance. Al Rajhi Bank, one of the largest Shariah compliant banks in the world with assets of US$71.2 billion, this year took home not only the award for Best Islamic Bank in Saudi Arabia (winning out over another domestic giant, National Commercial Bank, to build on its 2012 success) but also won the category of Best Islamic Retail Bank in one of the hardest-fought batt les of the year with the most nominees of the entire poll.

Another tight fi ght came in the category of Best Islamic Private Bank, in which Al Rajhi came runner-up. However, Standard Chartered Saadiq eventually beat out the other 14 competitors, including last year’s winner National Development Bank (now ADIB Egypt) to take home the prize.

Best Islamic Leasing Provider saw a win for Bahrain-based Gulf International Bank (GIB), with the runner-up being Al-Falaah, the Islamic unit of Lanka ORIX Finance.

Deutsche Bank won out over Malaysia’s AmanahRaya Trustees to take home the title of Best Islamic Trustee/Custodian for the fourth consecutive year, based on its commitment to delivering world-class solutions to its impressive array of global clients. As one of the most experienced specialists in the administration of fi nancial instruments, the bank’s trust and securities services can be relied upon to provide support, leadership and excellence.

In the category of Best Islamic Private Equity House, the UAE once again comes to the fore with Dubai-based Abraaj Capital taking the crown, closely followed by runner-up Fajr Capital (also based in Dubai), superseding last year’s winner Qatar First Investment Bank. Abraaj Capital has taken full advantage of Dubai’s focus on building its Islamic economy to deliver a sterling performance over the past year. The group has developed its own unique

approach over the last decade, and is now known as one of the leading private equity houses both in the Middle East and globally. With a focus on growth markets, Abraaj should be applauded as a pioneer, leading the way where others only follow and combining deep experience with innovation and adventure.

Its network of 25 offi ces over six regions gives it the strength and capacity to provide both a local and global approach, and its most recent win highlights the potential the group holds for the next generation of Islamic equity investment.

We fi nish with one of the biggest awards of the poll: and one of the most infl uential. It will come as no surprise to our readers that following a year of extraordinary progress, impressive goals and exceptional dedication to the industry, the Government of Dubai takes the title of Best Central Bank in Promoting Islamic Finance (beating last year’s winner Bank Indonesia as well as runner-up Bank Negara Malaysia).

In 2013 the emirate confi rmed its ambition to become a major player in the market but, unlike many new entrants, its authorities have placed their money fi rmly where their mouth is: making real strides forward and taking material action to actively develop the Islamic economy: starting with the launch of the Dubai Center for Islamic Banking and Finance in July 2013 and continuing with the proposal for a center for Islamic corporate governance to be set up in 2014.

And not only has Dubai’s commitment to the industry made an impact within the Muslim world. Its highly publicized action plan has also had an undeniable eff ect on other markets around the world who have been toying with the idea: and subsequent to the January announcement of its intention to promote Dubai as an Islamic fi nance center both the UK and Hong Kong also took the plunge.

The Government of Dubai must therefore be congratulated not only for its own admirable eff orts, but also for its invaluable role as a catalyst stimulating wider global participation. — LM

Continued


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AUSTRALIA: Muslim Community Cooperative Australia (MCCA)Runner-up: KFH AustraliaMCCA has been in business since 1989. Twenty fi ve years on, the cooperative has proven itself as a leading provider of Islamic fi nancial and wealth management services to the country’s Muslims. Although the institution currently only has a 2% market penetration rate, it is looking to expand its services from being a mortgage provider to extending a wider suite of Islamic banking business to its existing clientele and potential customers.

BAHRAIN: Al Baraka Islamic BankRunner-up: Bahrain Islamic BankIncorporated in Bahrain 30 years ago in 1984, Al Baraka Islamic Bank has pioneered the development of Islamic banking in the kingdom. Rated ‘BBB-‘ by S&P, it operates as a retail and investment Islamic bank and currently operates six branches in the kingdom. Despite being indirectly aff ected by the harsh operating environment in Bahrain stemming from political and economic uncertainty since 2011, the bank has managed to record double digit growth across its banking assets and profi tability.

BANGLADESH: Islami Bank BangladeshRunner-up: Al Arafah Islamic BankIslami Bank Bangladesh, launched in 1983, is a pioneer of Islamic banking in Bangladesh. It has 37% local ownership and 63% foreign shareholders including the IDB, JPMorgan, Dubai Islamic Bank and Kuwait Finance House. The fi rm is the largest private banking network in Bangladesh with 285 branches and over 11,000 staff . The bank claims to be the fi rst Shariah-based bank in South Asia, and operates both consumer, corporate, investment management and international divisions. As of the 31st December 2012 the bank had US$526.34 million in equity. In the fi rst three quarters of 2013 the bank saw net profi t before tax of US$87.2 million, down 37% from US$137.4 million in the same period the previous year but a continued recovery from the US$17.3 million low the bank saw in 2011; and currently holds total assets of US$6.59 billion.

BRUNEI: Bank Islam Brunei DarussalamRunner-up: MaybankBank Islam Brunei Darussalam is the largest Islamic bank in Brunei, and provides consumer and corporate banking services to the country’s population.

The bank, which has the largest network of ATMs across the country, was formed in 2005 through a merger of the Islamic Bank of Brunei and the Islamic Development Bank of Brunei.

The bank’s total assets stood at US$4.8 billion as at 2011, and is committ ed to growing in tandem with the country’s Vision 2035, to achieve a developed nation status.

EGYPT: Abu Dhabi Islamic Bank (Egypt) Runner-up: Al Baraka Islamic Bank EgyptFounded in 1980 as the National Bank for Development, Abu Dhabi Islamic Bank (Egypt) is one of the largest Islamic banks in the region with 19 subsidiaries operating across Egypt and the UAE. Based in Cairo, the bank has a nationwide network across Egypt of 69 branches, 39 microfi nance units and 67 ATMs across 21 governorates.

In 2007 Abu Dhabi Islamic Bank acquired 49% of the National Bank for Development (NBD), which it subsequently restructured to comply with Shariah.

Since 2007 the bank’s paid-up capital has increased seven-fold from around US$40.1 million to over US$286 million by the end of 2010.

In April 2013 the bank was rebranded from NBD to Abu Dhabi Islamic Bank (Egypt) As of September 2013 the bank held US$2.18 billion in assets, up from US$2.01 billion in 2012.

The bank has built an exceptional foundation based on its strength in multiple core markets across personal banking, microfi nance, wholesale banking and treasury, and remains one of the leading lights of the North African Islamic fi nance industry.

INDONESIA: Bank Muamalat Indonesia (BMI)Runner-up: CIMB Niaga SyariahBank Muamalat Indonesia was founded in 1991, endorsed by the Indonesian government, and was the fi rst institution to off er Islamic banking in the country. The bank has continued to play an innovative and groundbreaking role in the industry, with over 400 branches across 33 provinces as well as over 3,800 online post offi ce outlets off ering wide-ranging access to fi nancial services for all segments of society. Shareholders include the IDB, Boubyan Bank Kuwait, and SEDCO Group. The bank holds an ‘AA Shariah Quality Rating’ from IIRA Bahrain and Fitch Ratings affi rmed a rating of 'A (idn)' in 2010. In 2009 BMI launched its fi rst branch in Kuala Lumpur, becoming the fi rst foreign Islamic bank to open a branch under Malaysia’s International Islamic Banking (IIB) license.

JAPAN: Bank of Tokyo Mitsubishi UFJRunner-up: Sumitomo-Mitsui Banking CorporationThis was a new category for this year, looking at the best Japanese bank off ering Islamic services rather than at the best Islamic bank in Japan. The 2013 winner, Bank of Tokyo Mitsubishi UFJ, was the runaway winner in a fi eld of four. The bank is the largest in Japan and serves as the core retail and banking arm of the Mitsubishi UFJ Financial Group. The bank has focused on building up its foreign operations, and saw overseas corporate lending increase by 40% in 2011 alone.

Bank of Tokyo Mitsubishi UFJ Malaysia was the fi rst Japanese bank to off er Islamic services, entering the industry in 2008 with its International Currency Business Unit aiming to att ract Japanese business transactions to Malaysia. The bank is active in the Islamic capital markets, including a recent syndicated Istisnah and Ijarah fi nancing to a major producer of LNG vessels based in Brunei, and is the fi rst Japanese bank to have an in-house Shariah committ ee.


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IRAN: Bank Melli IranRunner-up: Bank Al Jazira (Jeddah)Bank Melli Iran currently has assets worth US$67.14 billion, ranking it among the top Islamic fi nancial institutions in the world, by Shariah compliant assets. The bank is also actively involved in the country’s development plans and is currently one of the largest fi nanciers to the government. The 80-year old bank has over 3,300 branches in Iran and employs over 43,000 personnel. The bank has grown to become the largest bank in Iran in terms of assets, deposits and credit facilities.

JORDAN: Jordan Dubai Islamic BankRunner-up: Jordan Islamic BankJordan Dubai Islamic Bank is a subsidiary of Dubai Islamic Bank, one of the largest Shariah compliant banks in the UAE. Islamic banks hold over 12% of the total Jordanian banking sector and Jordan Dubai Islamic Bank is a key player, opening its 15 branch in August 2013. The bank was established in 2010 and has grown rapidly and off ers a variety of predominantly retail services to cater to the growing domestic demand: including personal Murabahah fi nance, Ijarah home fi nance, savings accounts and online banking. In 2012 the bank’s total assets grew by 35.6% to reach US$3.1 million, with a promising future of sustainable profi tability and an impressive capital adequacy ratio of 43%.

KUWAIT: Kuwait Finance HouseRunner-up: Bank BoubyanKuwait Finance House was the fi rst Islamic bank to be established in Kuwait in 1977. Since its inception, the bank has grown into a robust banking and fi nancial institution, with a presence in Australia, Bahrain and Malaysia. The bank currently provides a diverse suite of Shariah compliant products and services covering banking, real estate, trade fi nance, investment portfolios, as well as corporate, commercial and retail fi nancing. In 2012 the bank held US$51.9 billion in total assets and saw revenues of US$3.29 billion.

KENYA: Gulf African BankRunner-up: First Community BankGulf African Bank is the fi rst and largest Shariah compliant bank in Kenya, and one of the fastest-growing banks in the country. Launched in 2006 and starting operations in 2008 under the country’s fi rst full commercial banking license for an Islamic bank, the bank has total assets of over US$112 million and as of 2012 held shareholder’s funds of US$31 million. The bank has future plans to expand into Uganda and Tanzania. Asad Ahmed, CEO of Gulf African Bank in Kenya is optimistic on the bank’s future, stating: “We are proud that aft er only four years in operation, the bank has achieved tremendous growth and profi tability and contributed well to the economy of this country. Gulf African Bank was the fi rst Islamic Bank to be set up in East Africa and today, is the largest Islamic bank in this region. Gulf African Bank has been established to provide a full suite of Shariah compliant products and services to its customers in Kenya and beyond.”

LEBANON: Al Baraka LebanonRunner-up: Arab Finance HouseAl Baraka Bank Lebanon was founded in 1991 and operated under a commercial banking license until 2004 when an Islamic Banking Law was instituted and the bank obtained an Islamic banking license. An Islamic banking pioneer in the country, the bank’s activities comprise of retail and commercial banking in accordance with Shariah principles, and currently has seven branches across the country. As of September 2013 the bank held total assets of US$19.88 billion and total net income of US$57.2 million.

SAUDI ARABIA: Al Rajhi BankRunner-up: National Commercial BankAl Rajhi Bank is Saudi Arabia’s largest private bank by assets, worth US$59 billion. The bank, which has a fi rm foothold in Saudi Arabia and in international markets such as Malaysia and Jordan, is continuously looking to expand its retail and corporate banking suites, and is also actively involved in the market as a lead arranger for some of the landmark deals in the industry.

MALAYSIA: CIMB IslamicRunner-up: Bank Muamalat MalaysiaCIMB Group is Malaysia’s second-largest banking group, and CIMB Islamic is one of the most infl uential Islamic institutions in the Southeast Asian region. A full service Islamic fi nancial solutions provider, the bank off ers investment banking, consumer banking and asset management services catering to fi nancial institutions, governments, corporations and individuals, and has cemented its position as an industry leader and global presence.

OMAN: Bank NizwaRunner-up: BankMuscatBank Nizwa is Oman’s fi rst dedicated Islamic bank and has demonstrated an exceptional growth story since its launch in January 2013. The bank provides a full range of banking solutions to individuals, small and medium size enterprises, corporations and government institutions. It currently operates three branches with an extensive expansion program planned for 2014 as well as a signifi cant investment in technology. As of the fi rst half of 2013 total assets reached US$440.2 million, an impressive achievement in just six months.

QATAR: Qatar Islamic Bank (QIB)Runner-up: Barwa BankQatar Islamic Bank was established in 1982, making it the fi rst Islamic fi nancial institution in Qatar. Since then, the bank has emerged as a force in the local and international markets, and today, the bank plays a leading role in developing competitive and innovative Islamic fi nancial products and services worldwide.

QIB currently holds 37% of the Islamic banking market in Qatar, and an overall market share of 11% in the banking sector as a whole. This makes QIB the biggest Shariah compliant bank in Qatar and one of the top fi ve globally. For the past 30 years, QIB has played a pivotal role in Qatar’s development and growth. Backed by a dedicated team, the bank has successfully established a foothold in the UK, Malaysia and Lebanon.


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PAKISTAN: Meezan BankRunner-up: Al Baraka Islamic BankIn one of the most strongly contested categories of the awards, Meezan Bank wrestled the top Pakistani position from 2012 winners Al Baraka Islamic Bank Pakistan. The bank was launched in 2002 and is the fi rst and largest Islamic commercial bank in Pakistan, celebrating its 10-year anniversary in 2012. Key shareholders include the IDB and Kuwait’s Noor Financial Investment Co. It operates a branch network of over 300 across 99 cities. As of the third quarter of 2013 the bank held total assets of US$2.9 billion and saw deposits increase by 16% and net profi t grow by 8%.

PALESTINE: Palestine Islamic BankRunner-up: Arab Islamic BankPalestine Islamic Bank was established as a joint venture public limited institution and received its Islamic banking license from the Palestinian Monetary Authority in 1997. In 2012, the bank recorded a surge in profi ts by 268.4% to US$5.37 million, despite a continuously uncertain political and economic environment. The bank has 15 branches across the country.

SINGAPORE: CIMB IslamicRunner-up: Islamic Bank of Asia(See Malaysia)

South Africa: Absa Islamic BankRunner-up: Al Baraka BankAbsa Group, listed on the JSE, is one of South Africa’s largest fi nancial services groups. Absa is a subsidiary of Barclays Bank, which owns 55.5%. The bank off ers a complete range of retail, business, corporate and investment banking, insurance and wealth management products and services. The group’s business is conducted primarily in South Africa. It also has equity holdings in banks in Mozambique and Tanzania, representative offi ces in Namibia and Nigeria and bancassurance operations in Botswana and Mozambique. At the 31st December 2012, the group had assets of US$75.98 billion, 10.9 million customers and over 33,000 employees.

SRI LANKA: Amana BankRunner-up: Lanka ORIX Finance — Al-Falaah, Islamic Business UnitThe bank, which is a pioneer in the country’s Islamic fi nance sector has been instrumental in initiating changes to the Banking Act 2005 to incorporate Islamic banking. Since its establishment in 1997, the bank became the fi rst commercial bank to receive an Islamic banking license in August 2011 and has been successful in bringing in a substantial amount of foreign equity investments into the country’s nascent Islamic banking sector despite the global fi nancial crisis.

SUDAN: Al Baraka Bank SudanRunner-up: Al Salam BankAl Baraka Bank Sudan was established in 1984 and its activities comprise retail, corporate, commercial and investment banking. The bank’s operations currently span 25 branches.

UAE: Abu Dhabi Islamic Bank (ADIB)Runner-up: Dubai Islamic BankAbu Dhabi Islamic Bank swept the board this year winning some of the biggest categories including Best Overall Islamic Bank as well as Best Bank in the UAE. The bank in 2013 cemented its position as a major issuer in the Islamic capital markets following its innovative Tier-1 perpetual Sukuk issuance in 2012.

The bank is also expanding its network across Abu Dhabi and the Middle East, with four subsidiaries under its patronage including the Abu Dhabi Islamic Bank (Egypt), Burooj Properties, ADIB Securities and recruitment consultancy Kawader Services; and is focusing on Iraq and the UK as key growth areas for the future.

Established in 1997, the bank is 29% owned by the ruling family of Abu Dhabi and the Abu Dhabi Investment Authority. For the nine months ending September 2013 the bank saw total income of US$912.7 million, and profi t of US$301.3 million. As of September the bank holds assets of approximately US$26.23 billion.

SYRIA: Syrian International Islamic BankRunner-up: AlBaraka Syria BankSyrian International Islamic bank was established as a Syrian private anonymous joint stock company under a strategic partnership between the private sectors in the Syrian Arab Republic and the State of Qatar. In 2006, the Syrian cabinet approved the license to launch SIIB under Decree No. 35 (2005). The bank’s launch was led by Qatar International Islamic Bank and is considered the largest private bank in the country in terms of paid capital and number of shareholders.

THAILAND: CIMB IslamicRunner-up: Islamic Bank of Thailand(See Malaysia)

UK: Bank of London and The Middle East (BLME)Runner-up: Gatehouse BankKnown for its active involvement in the real estate sector, as well as its structuring expertise and treasury products in the UK, the Bank of London & The Middle East has continued to persevere despite the challenging economic climate in Europe, and is expected to continue on a positive run as demand for Islamic real estate investment solutions grow in the UK.

The bank also has a property advisory service which was launched in 2012 to provide its private clients support in sourcing and acquiring property. The bank saw total operating income of US$41.5 million for the fi rst six months of 2013, and as of June 2013 held total assets of US$1.86 billion. In 2013 the bank had an exposure of around 28% to real estate and a 57% concentration on the UK.

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TURKEY: Turkiye Finans Katilim BankasiRunner-up: Al Baraka Turk Katilim BankasiTurkiye Finans Katilim Bankasi was selected as the best participation bank in Turkey due to the bank’s growing reach across the country. The bank, which is majority-owned by Saudi Arabia’s biggest lender, National Commercial Bank, charted a capital adequacy ratio of 14.24% last year; higher than a majority of the other participation banks.

US: Lariba American Finance House Runner-up: Devon BankLariba is the oldest community-owned, Shariah compliant fi nance company in the US, serving communities across the country since 1987. The company has been recognized by, and has collaborated with the Fannie Mae organization, the largest home mortgage company in America and the world for its Riba-free fi nancing model.

YEMEN: Islamic Bank of YemenRunner-up: Saba Islamic BankFollowing internal political turmoil in Yemen in 2011, the Islamic Bank of Yemen, along with other Islamic banks in the country were directly aff ected by the unrest. The bank, which came under direct rocket att ack, saw up to 80% of its banking activities paralyzed. However, some banks from the GCC had pledged their support towards rebuilding the bank’s infrastructure.

Best Islamic Bank by Country

THE AMERICASUS — Lariba

ASIA PACIFICAustralia — Muslim Community Co-Operative AustraliaJapan — Bank of Tokyo Mitsubishi UFJ

SOUTHEAST ASIABrunei — Bank Islam Brunei DarussalamIndonesia — Bank Muamalat IndonesiaMalaysia — CIMB Islamic BankSingapore — CIMB Islamic Thailand — CIMB

EUROPETurkey — Turkiye Finans Katilim Bankasi UK — Bank of London & The Middle East

INDIAN SUBCONTINENTBangladesh — Islamic Bank BangladeshPakistan — Meezan BankSri Lanka — Amana Bank

MIDDLE EASTBahrain — Al Baraka Islamic BankIran — Bank Melli IranJordan — Jordan Dubai Islamic BankKuwait — Kuwait Finance HouseLebanon — Al Baraka LebanonOman — Bank NizwaPalestine — Palestine Islamic BankQatar — Qatar Islamic BankSaudi Arabia — Al Rajhi BankSyria — Syrian International Islamic BankUAE — Abu Dhabi Islamic BankYemen — Islamic Bank of Yemen

AFRICAEgypt — ADIB (Egypt) Kenya — Gulf African BankSudan — Al Baraka Bank SudanSouth Africa — Absa Islamic Bank

BOLD Same winner as 2012NOT BOLD New winnerITALIC New entry


NEWS

DEALSBoustead to issueMALAYSIA: Boustead Holdings, parent company of Islamic plantation-based Al Hadharah Boustead REIT, has announced the issue of a RM1.2 billion (US$368.12 million) Sukuk. The fi rst tranche of the junior Sukuk worth RM683 million (US$209.53 million) was reported to be issued to institutional investors by the end of 2013. RM650 million (US$199.4 million) of the fi rst tranche will be used to take Al-Hadharah Boustead REIT private.

Affi n Investment Bank is the principal adviser, lead arranger and lead manager for the facility, while United Overseas Bank Malaysia is a joint lead manager for the issuance.

CBB Sukuk fully subscribedBAHRAIN: The Central Bank of Bahrain (CBB)’s monthly Sukuk Ijarah issuance worth BHD20 million (US$52.79 million) has been fully subscribed. The 182-day facility carries an expected return of 1.15% and will mature on the 19th June 2014.

The bank’s monthly Sukuk Salam issuance worth BHD36 million (US$94.48 million) has also been oversubscribed by 101%. The 91-day facility carries an expected return of 1% and will mature on the 26th March 2014.

1MDB second Sukuk?MALAYSIA: Sovereign wealth fund, 1Malaysia Development (1MDB), is said to be considering a RM1.5 billion (US$460.16 million) Sukuk sale to fund the relocation of an air force base in Kuala Lumpur, according to Bloomberg.

SC grants approvalMALAYSIA: Construction fi rm Ahmad Zaki Resources’ proposed RM1 billion (US$306.77 million) Sukuk Murabahah has been approved by Securities

Commission Malaysia (SC). With a tenor of up to 22 years, the facility will be established via the fi rm’s subsidiary EKVE and will be used to fund the East Klang Valley Expressway in Kuala Lumpur.

SABB closes dealSAUDI ARABIA: Saudi British Bank (SABB) has concluded a seven-year capital-boosting Sukuk sale worth SAR1.5 billion (US$399.92 million). Priced at 1.4% over six-month SAIBOR, the paper is redeemable aft er fi ve years.

Bank Rakyat’s sophomore issuanceMALAYSIA: Islamic cooperative fi nancial institution, Bank Rakyat, has launched its second Sukuk off ering, worth RM500 million (US$151.84 million) under the bank’s proposed Islamic medium-term notes program worth up to RM9 billion (US$2.73 billion) in nominal value. The Musharakah facility will be issued in three and fi ve-year tranches of RM200 million (US$60.74 million) and RM300 million (US$91.12 million), with a yearly return of 4.3% and 4.45% respectively. Issued via Imtiaz Sukuk II, proceeds from the off ering will be used to fund the bank’s working capital and general corporate purposes.

CBB Sukuk oversubscribedBAHRAIN: The Central Bank of Bahrain (CBB)’s monthly Sukuk Salam issuance worth BHD36 million (US$94.48 million) has been oversubscribed by 101%. The 91-day facility carries an expected return of 1% and will mature on the 26th March 2014.

Dar Al Arkan buys backSAUDI ARABIA: Dar Al Arkan Real Estate Development Company has reacquired 87%, or SAR650 million (US$173.29 million), of its SAR750 million (US$200 million) Sukuk in line with its

DEAL TRACKER Full Deal Tracker on page 49ISSUER ISSUING

CURRENCYSIZE (US$) DATE

ANNOUNCEDGovernment of Luxembourg EUR 272.08 million 7th January 2014Government of Oman OMR 518.12 million 6th January 2014Vallianz Capital US$ 500 million 26th December 2013Bank Asya US$ 500 million 23rd December 2013Ahmad Zaki Resources RM 304.19 million 19th December 2013

continued

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TurkMenistanGermaNy ..... CrOatia

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FRanceIndoneSia ....

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MoldoVa .. KuWait MeXico MalaYsia

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Triple ‘A’ all the way as IDB continues its financing schemesSAUDI ARABIA: The IDB’s long-term and short-term credit ratings have been reaffi rmed by three leading international rating agencies. The Islamic fi nancial institution was reaffi rmed at: ‘AAA, A-1+Stable’ by S&P; ‘AAA, F-1+Stable’ by Fitch; and ‘Aaa, P-1 Stable’ by Moody’s.

According to the IDB, it is currently the highest-rated institution in the Islamic fi nance sphere as well as among international multilateral development banks.

The stable triple ‘A’ ratings are butt ressed by its strong fi nancial profi le, the relevance of its policies, continual shareholder support for successive capital increases and its prudential fi nancial risk management policies.

In pursuit of its objectives to foster the economic and social progress of its member countries and Muslim communities in non-member countries, the multilateral development bank has approved a total of US$285.4 million for the fi nancing of new projects this year. The fi nancing covers infrastructure developments in Saudi Arabia, Senegal, Mali, Kyrgyzstan, Uzbekistan and Togo.

Funding approvals also include contributions to educational plans in Bosnia Herzegovina, Guyana, Thailand and the US, under IDB’s Waqf Fund. A specifi c sum is also allocated to countries such as Chad, Mali, Mozambique, Niger, Nigeria and Yemen to assist in the prevention and control of malaria.

Having announced its plans to tap the Middle East Sukuk market in November last year, the IDB is seeking to list a Sukuk program worth AED37 billion (US$10.07 billion) on NASDAQ Dubai.

The international fi nancial institution has mandated the International Shariah Research Academy, SABIC Chair for Islamic Financial Markets from Imam Mohammad bin Saud University, and Holland & Knight to develop a Musharakah-based Sukuk structure. Discussions thereof are expected to commence within the fi rst quarter of the year.

liabilities management strategy. The repurchased Sukuk had been terminated with the remaining SAR100 million (US$26.66 million) due to mature on the 15th April 2014.

Below Cagamas’ averageMALAYSIA: National mortgage corporation Cagamas was reported to be planning to issue its fi nal Sukuk of 2013 to the tune of RM500 million (US$151.37 million), bringing the fi rm’s total issuance for 2013 to RM9.9 billion (US$2.99 billion). Responses for the three-month paper fell below Cagamas’ average subscription rate due to uncertain market conditions and increased competition from other banking products, said Rafi za Ghazali, the relief CEO of Cagamas.

Amana’s IPO fully subscribedSRI LANKA: Islamic fi nancier Amana Bank’s IPO has been fully subscribed. The bank off ered 214.3 million shares at LKR7 (US$0.05) apiece, with an option of issuing a further 71.5 million ordinary shares. Proceeds from the IPO will be used to meet the minimal capital requirement of LKR4 billion (US$30.56 million) set by the central bank.

Vallianz SukukSINGAPORE: Vessel and equipment owning company Vallianz has established Vallianz Capital, an SPV for the purpose of issuing Sukuk of up to US$500 million. Proceeds from the Islamic trust certifi cate sale will be used towards replenishing the Singapore-listed company’s working capital and for its refi nancing needs. Vallianz’ biggest shareholder, Swiber Holdings, in August, debut a SG$150 million Sukuk tranche as part of its US$500 million Islamic debt program.

Intention to issue SukukTURKEY: Bank Asya announced its application to issue Sukuk worth up to US$500 million to the Capital Markets Board via a statement to the Istanbul Stock Exchange in December 2013.

KDU’s sophomore issuanceMALAYSIA: Real estate developer Paramount Corp has issued the second tranche of its Sukuk program via its wholly-owned subsidiary KDU University College. Part of a RM350 million (US$106.48 million), the seven-

year facility is worth RM18 million (US$5.48 million).

Pakistani Sukuk auctionPAKISTAN: The Pakistani federal government plans to auction Sukuk worth up to PKR90 billion (US$847.06 million) this month (January) to fi nance the repair and maintenance of the Jinnah International Airport Karachi and Pindi Bhatian Motorway.

Sentral 384 dueMALAYSIA: Sentral 384’s semi-annual profi t payment on its RM200 million (US$60.79 million) Islamic medium-term notes program was due and payable on the 3rd January 2014.

SEC names arrangersSAUDI ARABIA: Saudi Electricity Company (SEC) has selected HSBC’s Saudi Arabian unit and Banque Saudi Fransi to arrange the fi rm’s upcoming riyal-denominated Sukuk off ering, which is slated to be sold to investors between the 9th January and the 27th February. SEC is also looking to issue a dollar-denominated Sukuk this year via HSBC, Deutsche Bank and JPMorgan Chase.

WCE makes forayMALAYSIA: West Coast Expressway (WCE) plans to off er Sukuk worth up to RM1.5 billion (US$456.29 million) with a minimum tenor of 10 years in the fi rst quarter, according to reports. Proceeds raised will be utilized to fund the construction of a highway in Peninsular Malaysia. RHB Investment Bank is the deal’s mandated sole arranger.

GEMS Sukuk upUAE: Private school operator GEMS Education’s debut hybrid Sukuk of US$200 million rose 106.78 US cents on the dollar since its off ering last November, according to data from Bloomberg, while corporate Sukuk in the GCC dropped 2bps to 92.56, according to HSBC/NASDAQ Dubai indexes.

Luxembourg’s Sukuk plansLUXEMBOURG: It has been reported that the Luxembourg government is looking to issue a sovereign Sukuk following the introduction of a government bill to bring up to EUR200 million (US$272.08 million)-worth of notes in euros or dollars.

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AFRICAFunding for station grantedEGYPT: Banque Misr has provided Upper Egypt Electricity Production Company with a EGP285 million (US$35.75 million) diminishing Musharakah facility to fund the maintenance and renovation of the power producer’s Al-Waledeya station in Assiut. The 80-month facility (from the fi rst withdrawal) is split into 20-month withdrawal periods with a 60-month repayment period.

Libya’s Islamic banking aimLIBYA: The central bank has met with the heads of Libya’s Islamic banking departments in local banks to review the progress in the country’s changeover to Islamic fi nance, following the implementation of Law No. 46 by Libya’s National Transitional Council in 2012. Committ ees have been formed to monitor the roll out of the interest-free banking policy.

AMERICASGeographically diversified investmentUS: Investment bank Taylor-DeJongh has brokered a deal between US-based Continental Rail and unnamed Islamic banks whereby the latt er will provide fi nancing for the acquisition of 1,000 rail cars. Taylor-DeJongh is also said to have brokered a deal for private toll bridges in the US to be fi nanced in a Shariah compliant manner.

ASIAAgreement ratifiedAZERBAĲ AN: The parliament of Azerbaĳ an has agreed to register the republic as a member of the IDB’s International Islamic Trade Finance Corporation.

IDB eyes TRXMALAYSIA: The IDB plans to establish an Islamic Center of Excellence at the Tun Razak Exchange (TRX) in Kuala Lumpur within the next three to fi ve years, announced Ahmad Husni Hanadzlah, the second fi nance minister of Malaysia. TRX, or formerly known as the KL International Financial District, is slated

to complete in 2017. The minister also called for the IDB Group to continue to excel in improving benchmarks in its role as catalyst for developmental projects and interventions around the world.

Authorities taking actionINDONESIA: Indonesian authorities are planning to introduce a slew of policies next year in a bid to boost the fl agging Islamic banking sector. The initiatives include the regulation of foreign exchange markets, introducing Islamic repurchase agreements as well as conducting education and awareness programs. Shariah compliant assets in the republic are estimated to grow between 19-29% in 2014, lower than the 31.8% forecast in 2013 and almost half of 2012’s performance, which reached 34.1%.

Observers trade placesBANGLADESH: The central bank of Bangladesh has swapped Shafi qul Islam and Kazi Sayedur Rahman, observers at ICB Islamic Bank and Islami Bank Bangladesh respectively, in their roles; with Shafi qul observing at Islami Bank Bangladesh and Kazi at ICB Islamic, following a central bank meeting regarding allegations of militancy fi nancing. As yet no evidence has been found.

Oil import to increaseBANGLADESH: Bangladesh Petroleum Corporation (BPC) has announced plans to increase the volume of oil it imports for its refi nery in 2014 by 8%, bring the total to 1.3 million tonnes. BPC has procured fi nancing from the IDB and foreign banks to meet the growing oil costs of importing oil from Abu Dhabi National Oil Company and Saudi Aramco. The country’s fuel needs

Dubai Islamic Bank increases foreign ownership limit to 25%UAE: To address the unmet demand from large foreign institutional investors, Dubai Islamic Bank (DIB) plans to raise its foreign ownership limit (FOL) from 15% to 25% upon receiving necessary regulatory approvals; following a recent consensus by its board of directors.

“Following a well-craft ed strategy during the economic downturn, we ensured that while aligning the bank to the adverse market conditions prevailing at the time, we remain cognizant of stakeholders’ expectations from the organization.Hence, the strategy and the business model shift were squarely aimed to improve and maximize returns for the benefi t of stakeholders, including local, regional and global investors,” said Adnan Chilwan, CEO of DIB.

Adnan further elucidated that the improved overall economic climate and the stellar performance of the Dubai Financial Market over the last year have allowed the bank to build greater liquidity for foreign investors, particularly institutional funds. “The bank’s stock is up signifi cantly so far [in 2013] and we remain confi dent that, with a return to growth, we will continue to fulfi l our commitments to all stakeholders,” he added.

In light of the MSCI upgrade taking eff ect this year, the new FOL limit is believed to position DIB as a strong candidate for inclusion in the MSCI basket of securities. The emerging status upgrade is expected to reign in AED1 billion (US$272.18 million)-worth of investments into listed companies. Following the board approval for the FOL, the bank will proceed to follow the required regulatory process to formalize the decision.continued

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Business Custodians debuts first Queensland-based Islamic investment fundAUSTRALIA: Business Custodians (BC) and the Australian Shariah board for Islamic Finance-Australian Center for Islamic Financial Studies (ASBIF-ACIFS) have successfully launched the Brisbane Islamic Investment Fund (BIIF). BIIF is the fi rst Queensland-based and regulated Shariah compliant investment fund in Australia and is structured as an Australian resident open-ended unit trust.

In a statement communicated to Islamic Finance news, an estimated initial investment of AU$100 million (US$88.51 million) will kick-start BIIF, with a number of projects identifi ed for commencement in March 2014. The fund will be invested solely in Shariah compliant projects and established small to medium-sized businesses, located in both Australia and overseas. It is also expected to utilize some of the excess liquidity of over US$1 trillion in the global Islamic investment funds landscape over the next decade.

According to the fund’s information memorandum, 30% of the portfolio will be focused on tourism; 20% on manufacturing and service businesses; 15% on livestock; 15% on solar and clean energy; and 10% on real estate, energy and resources respectively. The investment timeframe is set for a minimum period of seven years and targets to achieve an annualized rate of return ranging from 10-12% above the average Reserve Bank of Australia cash rate in each respective fi nancial year. Investment risks will be mitigated primarily by a portfolio spread across a number of acquisitions in diff erent industry segments.

As the manager and trustee of BIIF, BC holds an Australian Financial Services License which is strictly regulated by the Australian Securities and Investment Commission, a regulatory body which is recognized worldwide. ASBIF-ACIFS and BC are jointly responsible for regulatory corporate governance as well as ensuring adherence to the investors’ mandate and compliance with Islamic investment criteria.

have grown sharply due to a shortfall of natural gas, and the government subsidizes the cost of fuel oil for the local market.

Noor disposes stakePAKISTAN: Kuwait-based Noor Financial Investment Company has announced that it will sell its entire stake (498.4 million ordinary shares) in Shariah compliant Meezan Bank. The transaction is estimated to be valued at US$190 million. Karachi-based investment bank Vision Financial Holding has expressed interest in acquiring the 49.1% stake.

PRS tax waivedMALAYSIA: The 8% tax on the Private Retirement Scheme (PRS), which off ers Shariah compliant and conventional private insurance investment funds to Malaysians, is waived for withdrawal by retirees above the age of 55 years, confi rmed Ahmad Maslan, the deputy fi nance minister. This is to discourage early withdrawals from the scheme.

Exclusive representationMALAYSIA: Global Islamic fi nance legal network iSfi n has partnered with Malaysian law fi rm Azmi & Associates to make the latt er the exclusive representative for iSfi n in Malaysia. Azmi & Associates’ managing partner and head of the global fi nancial services & Islamic banking practice group, Ahmad Lutfi Abdull Mutalip has also been appointed to the advisory board of legal network.

Target not metPAKISTAN: Three Islamic banks in Pakistan have collectively disbursed PKR250 million (US$2.34 million)-worth of Shariah compliant fi nancing to the agricultural sector for the year 2013-14. The amount of fi nancing provided fell short of the PKR500 million (US$4.68 million) target set by the State Bank of Pakistan.

Focus on youth businessPAKISTAN: Shariah compliant Meezan Bank has affi rmed its support in providing the National Bank of Pakistan (NBP) with any assistance to expedite the latt er’s eff ort in converting the prime minister’s Youth Business Loan Scheme to be in compliance with the Shariah. NBP, which off ers Islamic banking solutions through its Aitemaad

subsidiary, does not have the resources to manage the expected volume under the program.

Separately, Sirajul Haq, the fi nance minister of Khyber Pakhtoonkhawa province, has recently called for the Youth Business Program, worth PKR100 billion (US$929.74 million), to be channeled through Islamic banking.

Funding for projects in KyrgyzstanKYRGYZSTAN: The Jeddah-based IDB will provide fi nancing of US$37.25 million for the implementation of two projects in Kyrgyzstan: the improvement of the electricity supply of Arkin massif in Batken province, which will receive US$16.25 million, and the reconstruction of the Osh-Batken-Isfana highway from the 74th up to 108th kilometer, which will receive US$21 million. The IDB president also proposed that Kyrgyzstan becomes a member of the Islamic Solidarity Fund for Development and the Islamic Corporation for the Insurance of Investment and Export Credits.

Separately, the deputy prime minister of Kyrgyzstan, Taiyrbek Sarpashev has announced the launch of an Islamic leasing company with an authorized capital up to US$10 million, in collaboration with the IDB affi liate organization, Islamic Corporation for the Development of the Private Sector (ICD). The president of the ICD, Khaled Al Aboodi agreed that an allocation of US$5 million-worth of credits to support small and medium-sized businesses would be made to the state banks of Kyrgyzstan in 2014.

New recommendationsPAKISTAN: The Steering Committ ee for the Promotion of Islamic Banking is expected to deliver its recommendations by the 31st January 2014, as required by its terms of reference.

BGSM plans SukukMALAYSIA: A 65% stake of telecommunication fi rm, Maxis; 4.88 billion shares, were traded off -market for RM7 (US$2.12) on the 23rd December 2013. The sale equaled the number of shares owned by T Ananda Krishnan, majority shareholder in the company. Reports have stated that the transaction could be linked to the planned two-year

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Sukuk program worth up to RM10 billion (US$3.03 billion) announced by parent company Binariang GSM (BGSM) in November 2013.

CIMB donatesMALAYSIA: CIMB Islamic Bank has made a RM240,000 (US$72,657.3) contribution to Yayasan Dakwah Islamiah Malaysia in Sabah for the construction of a fi ve-unit longhouse in the district of Kudat.

Potential earnings of RM500 millionMALAYSIA: Estimates show that the sale of signifi cant shares in AMMB Holdings AmInsurance and AmTakaful, to Metlife, could make the Malaysian company RM500 million (US$152.11 million). This follows the deal agreed between Metlife and AMMB Holdings in December 2013.

Stable outlook for TurkeyTURKEY: Escalating interest rates, declining economic growth and a weakened Turkish lira may lead to a modest fall in margins and rise in loan impairment charges in Turkish banks next year, according to Fitch Ratings. However, the republic’s banking sector still has a stable outlook as strong capitalization, healthy funding structures and liquid balance sheets are expected to drive down the impact on credit quality.

Al-Falaah’s expansion plansSRI LANKA: Islamic fi nance company Al-Falaah will launch microfi nance products in the fi scal year beginning April, with an eye to double its branch network to 10 in the next two years, confi rmed Krishan Thilakaratne, the fi rm’s managing director.

BIMB completes purchaseMALAYSIA: Bank Islam has announced the completion of BIMB Holdings acquisition of the outstanding 49% share of the bank. This follows an announcement of BIMB’s intention to issue a RM1.7 billion (US$521.62 million) Sukuk in order to fund the purchase.

Malaysia to retain the leadMALAYSIA: The Sukuk market will perform positively in 2014, with a projection of between US$42 billion and

US$48 billion of new issuances led by Malaysia and Saudi Arabia, according to CIMB Islamic‘s CEO, Badlisyah Abdul Ghani. CIMB Islamic has arranged RM9.7 billion (US$2.94 billion)-worth of Sukuk issuance, garnering a 25.9% market share; Malaysia retained the lead in the global Sukuk market in 2013, accounting for 70.5% of the US$75 billion of new Sukuk issued globally in the fi rst 10 months of the year.

NPF on the risePAKISTAN: As a result of poor law and order, an energy crisis as well as a higher default ratio in the SME sector, non-performing fi nancing (NPF) of the Islamic banking industry in Pakistan has increased by PKR1.2 billion (US$11.29 million) from December 2012 to reach PKR19.7 billion (US$185.41 million) by the end of September 2013.

J&K Bank to walk the talkINDIA: Mirwaiz Umar Farooq, the chairman of All Parties Hurriyat Conference, has urged Jammu and Kashmir Bank to initiate Islamic banking services following the bank’s chairman’s statement indicating that Shariah compliant banking holds great potential in the state.

Drive for technologyINDIA: Oracle Financial Services Soft ware has outlined the growth of Islamic banking and the increasing demand for technological solutions from North American banks as the growth drivers for the company, affi rmed Chet Kamat, the fi rm’s managing director and CEO.

Towards poverty alleviationPAKISTAN: Microcredit services provider Akhuwat has distributed Riba-free fi nancing totaling to PKR6 billion (US$55.77 million), with a recovery rate of 99%, said Saleem Ranjha, one of the fi rm’s directors. Out of that amount, approximately PKR1 billion (US$9.26 million) was distributed in the metropolis of Faisalabad.

Adopt the Muamalah systemMALAYSIA: It is reported that 70% of Islamic banking deposits and customers in Malaysia comprise of non-Muslims and entrepreneurs, according to Musa Aman, the chief minister of the state of

Halal food financing to see good prospects in Saudi ArabiaSAUDI ARABIA: According to a recent research report released by NCB Capital (NCBC), Saudi Arabia’s food and agriculture sector will maintain its positive outlook. This could pave the way for Halal food fi nancing to fl ourish in the kingdom. The asset manager’s optimism is att ributed to the strong macroeconomic environment that supports the sector outlook, together with heavyweights, Almarai and Savola seeking to strengthen their dominance though capacity increases.

The global Halal industry is estimated to be worth more than US$2 trillion. The lion’s share of the market is commanded by the Islamic fi nance industry at an estimated US$1 trillion with the food sector valued at over US$650 billion.

Both Almarai and Savola have issued Sukuk this year worth SAR1.7 billion (US$453.22 million) and US$400 million, respectively. Farouk Miah, the head of equity research at NCBC, expounded that Almarai’s performance is set to improve in 2014, with the continued fall in soft commodity prices and bett er performance in its poultry business being the drivers for the dairy producer. As for Savola, Farouk expects that margin expansions and continued benefi ts from non-core investments would lead to a compounded annual growth rate income accretion of 17% between 2013 and 2018.

An international trade food and beverage exhibition held in Saudi Arabia has revealed that the kingdom’s food industry is in the midst of a boom and is forecast to grow signifi cantly over the next fi ve years. The rise is expected to sustain the country’s demand and meet its international export potential. Several prominent food and beverage companies have expressed their intentions to gain a bett er foothold in the industry to tap the kingdom’s potential.

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Sarawak. Musa also indicated that while this is a positive indication towards the acceptance of Islamic fi nancial services by non-Muslims, Muslims would lose out if they do not participate in the Islamic fi nancial landscape.

BSN offers luxury prizesMALAYSIA: Bank Simpanan Nasional (BSN) aims to reach RM3 billion (US$911.85 million) in deposits to its Mudarabah-based, Shariah compliant Sĳ il Simpanan Premium (SSP) product, which off ers dividends as well as lucky draw prizes, including a grand prize of RM1.4 million (US$425,532) apartment in Kuala Lumpur’s Golden Triangle area.

Guidelines for Islamic licensees MALAYSIA: The revised guidelines announced by Labuan Financial Services Authority in December have come into eff ect as of the 1st January 2014. The guidelines seek to provide clarity on the application procedures, operational and regulatory requirements of a Labuan securities (both conventional and Islamic) licensee operating in Labuan International Business and Finance Center.

INCEIF dismisses CAPMALAYSIA: The Consumer Association of Penang (CAP)’s allegation that Islamic personal fi nancing products are a “rip-off ” and that banks make up to 42% in profi ts per year from such facilities, with monthly profi t rates of 2%, have been refuted by INCEIF’s teaching fellow Abdul Rashid Kadir as unfounded: as the Malaysian central bank would not permit such profi t rate calculation. Abdul Rashid called for in-depth studies and discussions with the central bank over any concerns with regards to Islamic fi nancial products.

Agreement signedTURKEY: The IDB and Turkish bank TKSB have agreed a US$220 million Mudarabah deal which will be used to fi nance energy projects in the republic.

Potential share swapTURKEY: NASDAQ OMX Group has announced that it will take a 5% share of Borsa Istanbul in a deal that holds the possibility of Borsa Istanbul gaining a 2% share in the US company, as part of

a potential share swap. Confi rmation of the share swap will be made on the 30th June 2014, but in the meantime NASDAQ OMX Group has the option to increase its share to 7% and will also receive a series of cash payments. Borsa Istanbul will buy trading, clearing and infrastructure technology for all asset classes from NASDAQ OMX and will be able to use and resell the soft ware in 25 countries. Exchange chairman Ibrahim Turhan stated that Borsa Istanbul aims to list its shares by the end of 2015.

LTH exits companyMALAYSIA: Lembaga Tabung Haji (LTH), Malaysia’s national Hajj pilgrimage fund board, has sold its 6.76% stake of Konsortium Logistik, following the proposed acquisition of a 61.61% share of the company by DRB-HICOM in October.

LTH procured a Shariah compliant fi nancing package totalling GBP225 million (US$361.11 million) to fi nance investments in the UK in October.

Lack of talent MALAYSIA: The talent shortage being experienced in the fi nancial sector is predicted to get worse over the next 10 years, according to Dr Raymond Madden, CEO of the Asian Institute of Finance. The Islamic fi nance sector, particularly the fi eld of Shariah expertise, is an area that is particularly aff ected by the shortage. The demand for workforce employed in the sector is due to rise to 200,000; an increase of 56,000 employees in the next decade.

Turkish club financingTURKEY: Kuveyt Turk has signed a syndicated club Murabahah facility with a consortium of banks from nine countries. The banks include mandated lead arrangers: ABC Islamic Bank, Abu Dhabi Commercial Bank, Citibank, Emirates NBD Capital, HSBC Amanah Malaysia, Kuwait Finance House (Bahrain) and Standard Chartered Bank; lead arranger Kuwait International Bank and arrangers: Banka Kombëtare Tregtare, Commerzbank Aktiengesellschaft , Dubai Islamic Bank and the IDB.

The facility comprises of two separate tranches worth US$272 million and EUR83 million (US$112.77 million) respectively. The fi rst tranche

Oman seeks to debut maiden Sukuk worth US$517.98 million this yearOMAN: In a bid to meet its projected budget defi cits, Darwish Al Balushi, fi nancial aff airs minister of Oman, has confi rmed that the government will debut a sovereign Sukuk this year. The Omani government intends to raise approximately OMR200 million (US$517.98 million) from its domestic market as part of its plan to plug the sultanate’s estimated budget defi cit in 2014.

Darwish has reportedly stated that the government is att empting to absorb the liquidity available in two Islamic banks and the Islamic banking window operations of conventional banks by issuing the Sukuk. “Normally the government issues development bonds to borrow from the domestic market, but this year it will issue Sukuk,” he said.

The sultanate witnessed its fi rst Sukuk issuance in October 2013, by Tilal Development Company. Although Sukuk regulations in the country are at a nascent stage, industry experts expound a positive sentiment on the Sukuk market in Oman. It is expected to receive a strong boost in the short to mid-term with the corporate sector and the government looking towards Sukuk issuances as an att ractive alternative form of debt issuance.

The government is said to borrow OMR400 million (US$1.04 billion) from foreign and domestic markets to plug the budget defi cit which has been projected at OMR1.8 billion (US$4.66 billion). Besides the borrowings which consists of OMR200 million (US$517.98 million) in foreign borrowings and Sukuk respectively, a surplus of OMR1 billion (US$2.59 billion) from 2012 and another OMR400 million (US$1.04 billion) in fi nancial reserves will be used to meet the defi cit.

“We can borrow from local market to meet short-term requirements, while external borrowings are for meeting long-term requirements. Our general debt is OMR1.6 billion (US$4.14 billion) and it is low when compared with the country’s gross domestic product. It all depends on the size of the economy and the ability of the government to repay the debt. We are still in safe limits,” affi rmed Darwish.

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carries a one-year term at a rate of LIBOR+EURIBOR+90bps, while the second, holds a term of two years at a rate of LIBOR+EURIBOR+1.25%.

EUROPEEIIB ups stakeholdingUK: European Islamic Investment Bank (EIIB) will increase its shareholding in subsidiary Rasmala Holdings by issuing 152.3 million shares to purchase the latt er’s share at a ratio of 3.6 EIIB shares per Rasmala Holdings share. This will increase EIIB’s current 56.8% stake to 76.3%.

GLOBALIBB accepts offerGLOBAL: Over 90% of the shareholders of Islamic Bank of Britain (IBB) have accepted the GBP24.1 million (US$39.26 million) takeover off er made by Qatar’s Masraf Al Rayan, allowing the latt er to fully control IBB should the deal receive regulatory clearance.

Risk-sharing deal in ChinaGLOBAL: IFC, the private investment arm of the World Bank Group, and Standard Chartered Bank have partnered in a risk-sharing facility, to increase the amount of renminbi-denominated trade fi nance available to Chinese banks, businesses and corporates and emerging markets involved in trade with China. The facility of up to CNY3 billion (US$490.11 million) is anchored by an investment of up to US$100 million from IFC and US$250 million from Standard Chartered. The additional funds have been provided by the Korea Development Bank and Swiss Re International.

In October IFC bought 167 million shares in Ahli United Bank (AUB) as part of a conversion of its preference shares in AUB to equity.

Sukuk growth for 2014GLOBAL: The Sukuk industry in the GCC is set to grow in 2014 according to industry players. Humphrey Percy, CEO of BLME, predicts that scheduled Sukuk maturities in Gulf Arab countries next year will encourage new issuances, many larger than the ones they will be

replacing; Mark Watt s, the managing director and chief investment offi cer of NBAD’s Asset Management Group, believes that Sukuk in the GCC will earn as much as 3% on average in 2014. In 2013, NBAD’s Sukuk Income Fund, was the best performer of the year among 17 Islamic bond funds tracked by Bloomberg in the GCC, making a 2.3% gain.

Funding for new projects approvedGLOBAL: The IDB board of directors, in a meeting on the 22nd December, has approved US$285.4 million-worth of project funding for new development projects in both member countries and Muslim communities in non-member countries.

Transparency still a key challengeGLOBAL: Regulatory developments in Saudi Arabia and Qatar (including the new Qatar Central Bank Law) are expected to promote a higher level of transparency, which absence is deemed as a hurdle in the GCC banking landscape including among Islamic banks, according to a report by Insight Discovery.

New issuers for 2014GLOBAL: Industry experts believe that debut Sukuk issued by governments and corporates will drive the Islamic fi nance market in 2014, with Moody’s estimating that approximately US$60 billion-worth of Sukuk will be sold this year, primarily by Malaysia and GCC countries. GCC countries sold US$21 billion-worth of Sukuk in 2013, a fi gure roughly the same as the sales for 2012. Klaus Froehlich, the head of investment banking for MENA at Morgan Stanley, believes US$40-45 billion could be possible for issuances out of the region in 2014.

In terms of facilitating issuances, HSBC helped to manage 110 sales in 2013, resulting in a 17% share of the global Sukuk market, according to data compiled by Bloomberg. CIMB Group and Maybank were placed second and third, respectively.

GFH Capital’s acquisitionGLOBAL: Dubai-based GFH Capital has completed the acquisition of a prime

Public Mutual launches new Islamic equity fund on the back of resilient prospects of the Malaysian economyMALAYSIA: Public Mutual, a wholly-owned subsidiary of Malaysia-based Public Bank, has launched a new Islamic fund with two potential streams of return. The Public Islamic Growth & Income Fund (PISGIF) is a Shariah compliant equity fund which is engineered to achieve an optimal combination of capital growth and regular income by primarily investing in a diversifi ed portfolio of growth and dividend stocks in the domestic market.

Affi rming her confi dence in the country’s economic landscape, Yeoh Kim Hong, CEO of Public Mutual, said: “The prospects for growth and dividend stocks listed on Bursa Malaysia are generally resilient as the broad base of the Malaysian economy off ers opportunities for these two diff erent types of companies to thrive in.

“Share prices of growth companies may be more volatile than the broad market as these companies are focused on achieving strong earnings growth. Meanwhile, dividend stocks are considered more stable as their dividend yields help to cushion potential declines in their share prices during periods of market volatility,” continues Yeoh. She elucidated that growth companies are typically in the fi nancial services, construction, oil and gas, healthcare and manufacturing sectors. Dividend stocks tend to be in sectors such as consumer, telecommunications, utilities, and real estate investment trusts.

Distributing income on an annual basis, the equity exposure of the fund ranges from 75-98% of its net asset value (NAV). PISGIF looks to invest in Sukuk, Islamic liquid assets including Islamic money market instruments. Twenty fi ve percent of its NAV has been allocated for investments in selected foreign markets. The fund aff ords investors the opportunity to capitalize on Malaysia’s economic growth prospects in the medium to long-term.

Public Mutual is said to be the largest private unit trust company in the country. At the end of November 2013, the total NAV of the funds managed by the company stood at RM61 billion (US$18.55 million).

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Central London residential property located in Kensington. The property is a Grade II-listed building overlooking the Queens Gate Gardens. GFH Capital is a fully-owned subsidiary of Bahrain-based Islamic investment bank, Gulf Finance House.

Non-traditional assetsGLOBAL: The anticipated increase in Sukuk issuances in 2014 from the GCC region by industry players is also expected to feature an increase in new structures using an expanded range of assets as underlying profi t sources, opening the option of Sukuk issuance to a larger number of companies, according to market observers. Examples in 2013 include Ooredoo, using airtime as an underlying asset and Emirates, using revenues per passenger.

Niche market in North AfricaGLOBAL: The number of fi nancial institutions off ering Islamic banking products has exceeded 600, operating in 75 countries, according to Gallup World Poll survey conducted in 2012 to supplement the World Bank Global Financial Inclusion (Global Findex) database. The poll showed that in Algeria, Egypt, Morocco, Tunisia and Yemen, only 3% of respondents said they currently use a Shariah compliant banking service and only 48% had heard of Islamic banks operating within their country.

Ableace Raakin-Amanie partnershipGLOBAL: Malaysia-based Islamic advisory fi rm Ableace Raakin has partnered with Amanie Group in a 50:50 venture leading to the establishment of Ableace Raakin-Amanie, a joint venture domiciled in Dubai, to tap into the commodity Murabahah Middle Eastern market.

Sukuk popular choice for air financeGLOBAL: Banks in the Gulf are primed to increase funding to airlines in the region, following the combined total US$160 billion-worth of orders placed by Emirates Airline, Etihad Airways, Qatar Airways and FlyDubai at the Dubai Airshow last year. The debt instruments predicted for use include Sukuk, bonds, fi nance leases, enhanced equipment trust

certifi cates and debt. This follows the issuance of Sukuk in 2013 by Emirates Airlines from fi nanciers including Dubai Islamic Bank and Abu Dhabi Islamic Bank.

In related news, Ibrahim Al Assaf, the fi nance minister for Saudi Arabia, has said that the Kingdom is contemplating Sukuk in order to raise funds for a new airport in Taif; reportedly construction of the airport via public sector funds has already been agreed upon.

World Bank collaborationGLOBAL: The World Bank and Islamic consultancy fi rm Bait Al Mashura have signed an agreement to reinforce cooperation in a range of areas, including research and knowledge in Islamic fi nance.

Islamic banking assets to growGLOBAL: Islamic banking assets in rapid growth markets Indonesia, Malaysia, the UAE, Saudi Arabia, Turkey and Qatar are projected to reach an estimated US$1.6 trillion in 2018, according to the EY World Islamic Competitive Report 2013-14. Out of this share, Malaysia is expected to hold at least US$390 billion, up from the US$125 billion recorded in 2012. In 2012, the rapid growth markets registered a fi ve-year compound annual growth rate of 16.4% and commanded 78% of global Islamic banking assets.

MIDDLE EASTPrecedence setUAE: Sukuk issued outside Abu Dhabi by public sector-owned entities within the emirate will be eligible for dual listing on the Abu Dhabi Exchange (ADX) following the precedence set by approval from the Securities and Commodities Authority (SCA) for the secondary listing of Abu Dhabi government bonds on the ADX; the bonds have been listed on the London Stock Exchange since 2009.

KFH launches educational financing productKUWAIT: Shariah compliant Kuwait Finance House (KFH) has launched a new fi nancing product allowing the public, whether they are KFH clients or not, to purchase places at schools and universities, with monthly payment

installments. The positions are initially purchased by KFH and resold to the public. The ceiling of the service is KD15,000 (US$53,059.08).

Decree issuedUAE: Sheikh Mohammed Rashid, the vice-president of the UAE and ruler of Dubai, has issued a decree to establish a center dedicated towards developing Dubai as a capital for the Islamic economy. The center will hold regulatory powers to draw up Shariah compliance standards for fi nancial services.

Deal concludedUAE: Following talks in September, Istithmar World, the investment arm of state-owned Dubai World, has sold its 50% stake in Miami Beach property, Fontainebleau Hotel, back to the developer, Turnberry, according to a report by Reuters. The price of the sale is not yet known.

The company narrowly avoided a default in 2009 on the outstanding US$3.2 billion Sukuk issued by its subsidiary Nakheel.

Shariah compliant working capitalOMAN: Maisarah, Bank Dhofar’s Islamic window, has launched a new Mudarabah-based business working capital fi nance product that can be used by large and mid-sized businesses to avoid using short-term, interest-based fi nancing products for working capital needs.

Successful 2013QATAR: Doha-based Shariah compliant investment bank, QInvest, has revealed that it was involved in Sukuk transactions totalling US$3.5 billion in 2013, acting as joint lead manager and bookrunner for the US$1.25 billion Sukuk issued by Ooredoo and the US$1.25 billion Sukuk issued by Turkey this year. The company anticipates 2014 to be a year of increased Sukuk activity both in the MENA region and in the wider world, with Islamic fi nance becoming a more mainstream product.

Syrian refugee reliefUAE: Dubai Islamic Bank has donated AED10 million (US$2.72 million) to the “Our Hearts with the Syrians” campaign

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launched by the Red Crescent Authority in the UAE.

Steady performance since 2011BAHRAIN: The Bahraini banking sector can expect modest growth in 2014, according to a new report by Fitch, following a reasonable performance since 2011, despite political uncertainty and social unrest. The strong variance in the core capital ratios of the country’s banks cause the ratings agency to believe that capitalization at Bank of Bahrain and Kuwait and Ahli United Bank may need boosting in the medium term.

The rating agency predicts a pick-up in Bahrain’s economic growth for 2013 to 5.5% due to a boost by government spending and oil production, but this will be tempered by expected rise of the country’s debt to GDP ratio to 46.5% by the end of 2014, leaving Bahrain dependent on subsidies from the GCC.

SABB grooms talentsSAUDI ARABIA: HSBC’s Saudi British Bank (SABB), which off ers Islamic banking services, has launched the ‘SABB Managers Development Program’ for Saudi graduates, whereby participants will be given classroom and practical training before att ending a fi ve-week intensive program at HSBC’s Business School in London. The program is designed to groom young Saudi talents to assume senior leadership positions in the future.

QIA looking to investQATAR: The state’s sovereign wealth fund, Qatar Investment Authority (QIA), is in talks with Kotak Realty Fund with the aim of investing US$200 million in residential property in India, according to reports. The fund, which has been appointed by Abu Dhabi Investment Authority to invest in Indian real estate on its behalf, is managed by Kotak Mahindra Bank.

UAB signs loan dealUAE: United Arab Bank, which off ers Islamic banking facilities, has announced the signing of a US$250 million loan deal to fi nance its general business. The deal was backed by 12 lenders with Abu Dhabi Commercial Bank, National Bank of Abu Dhabi, Arab Banking Corp, First Gulf Bank, National Bank of Umm al-

Qaiwain and Union National Bank acting as bookrunners.

Increase in PPPsSAUDI ARABIA: The Saudi Arabian government is expecting the private sector to become more involved in infrastructure development projects to ease the burden on the government, according to a report released by National Commercial Bank. The kingdom is experiencing a growth in the number of private public partnerships (PPPs) and Sukuk is a fi nancing option that is also gaining traction as a means to diversify fi nancial exposure.

Basel III adoptionBAHRAIN: The Central Bank of Bahrain has introduced new regulations requiring all licensed fi nancial institutions, all approved persons and material risk-takers whose total annual remuneration is in excess of BHD100,000 (US$263,769) to publically disclose their risk profi le, risk management, capital adequacy, capital instruments and remuneration practices, in a step towards incorporating the Basel III measures into its regulatory framework.

Financing agreedSAUDI ARABIA: Shariah compliant Alinma Bank, has agreed the renewal of an existing Islamic credit agreement with Abdullah AM Al-Khodari Sons Company, an Al Khobar-based contracting company. The SAR500 million (US$133.30 million) agreement is comprised of 59% Murabahah fi nancing and 41% multi bonds and documentary credit, and will expire on the 30th November 2014.

KFH restructuring completeKUWAIT: As part of its restructuring process, Kuwait Finance House has launched a new entity focusing on investments, known as KFH Capital Investment Company, replacing its subsidiary Al-Muthanna.

Home financingUAE: Shariah compliant Ajman Bank has entered into a strategic agreement with Meydan Sobha Group, a development group involved in the establishment of Mohammed Bin Rashid City - District One, a mixed-use development in Dubai that is the brainchild of Mohammed Rashid Al Maktoum, the prime minister of the emirate. Ajman Bank will provide

Islamic home fi nancing packages for homes in the new development.

New ATM launchedBAHRAIN: Kuwait Finance House — Bahrain has added a new ATM to its network in Bahrain, located at the Women’s Competence Development Center (Riyadat) in A’Ali, in support of the Riyadat initiative launched by the Supreme Council for Women and in the hopes of encouraging and supporting the entrepreneurship of Bahraini women using the center.

M&A in the UAEUAE: According to the 2013 M&A Att ractive Index released by Cass Business School of City University London, the UAE is ranked as the 19th (out of 131) most att ractive country for merger and acquisition (M&A) activity; up eight places over the last fi ve years. The ranking is based on advancements in technological development, stable regulatory and political environment, economic and fi nancial factors, infrastructure and assets, technological capability and socio-economic characteristics of the emirate.

New Islamic banking rulesUAE: New rules regulating Islamic banking, outsourcing and fi nancial bonuses for CEOs will be put in place next year by the Central Bank of the UAE. The bank’s board of directors has also approved the implementation of the US Foreign Account Tax Compliance Act.

Towards food securityQATAR: Qatar Development Bank has launched a new Shariah compliant fi nancing scheme in cooperation with the Livestock Management Unit at the Ministry of Environment and Widam Food Company. The scheme is aimed at Qatari small and big farm owners for the purpose of acquiring and raising livestock, in line with the sultanate’s strategy on national food security.

Barwa approves financingQATAR: Islamic fi nancier Barwa Bank has agreed to provide a fi nance facility of US$123 million to Qatar Petroleum International Upstream, a subsidiary of Qatar Petroleum International. The funds will be used to part fi nance the increase in the oil company’s share capital investment in Total E&P Congo to 15%.

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Strong levels for UAE banksUAE: Banking analysts expect the liquidity levels of UAE banks to remain high, with strong deposit growth this year; Moody’s predicts the level of capital to be maintained at 16%, up from 2010’s 14.4%.

IIRA signs MoUBAHRAIN: The Islamic International Rating Agency (IIRA) will jointly conduct ratings on Islamic fi nancial institutions with Dagong Global Credit Rating Company by way of an MoU. The two entities will carry out international and national scale assessments, with fi duciary assessments including Shariah governance to be conducted by the IIRA.

IIFM reviews initiativesBAHRAIN: The 29th International Islamic Financial Market (IIFM) board of directors meeting was held this week. The board reviewed IIFM development initiatives in areas including Islamic capital and money market standardization and collateralized Murabahah liquidity management documentation. The board also confi rmed the decision to implement the IIFM Sukuk standardization initiative to develop guidelines which will help the primary and secondary Sukuk market and the development of Sukuk structure and documentation standards.

150% profit increaseUAE: Government-backed Dubai Investments anticipates a net profi t of approximately AED800 million (US$217.75 million) from 2013, a potential increase of almost 150% on 2012 profi ts of AED320.60 million (US$87.26 million).

In November, Dubai Investments announced its intention to launch a maiden Sukuk issuance worth up to US$300 million by the end of 2013.

New CBB rulesBAHRAIN: The Central Bank of Bahrain (CBB) has introduced new rules with regards to off ering securities and Sukuk in an eff ort to enhance transparency, market integrity and investors’ confi dence in the kingdom’s capital markets. The framework was released as a module in the CBB’s Capital Market Rulebook Volume 6.

Government encourages IPO investmentQATAR: Qatar International Islamic Bank (International Islamic) has announced it will provide 100% interest-free fi nance to Qatari nationals who wish to purchase shares in the Mesaieed Petrochemical Holding Company IPO. Qatari nationals have been encouraged by Sheikh Tamim Bin Hamad Al Thani, the Emir of Qatar, to take part in the IPO as part of the government’s aim to promote a culture of saving and investment.

Aggressive expansionOMAN: Islamic fi nancier Bank Nizwa plans to open four to fi ve branches every year over the next fi ve years as part of its expansion strategy, confi rmed its CEO Dr Jamil El Jaroudi. The bank recently launched its seventh branch in Ghubra.

Investing in youthBAHRAIN: Shariah compliant Khaleeji Commercial Bank (KHCB), in collaboration with non-profi t organization INJAZ-Bahrain, has hosted 20 students from Sheikh Abdulla Bin Isa Secondary School in a ‘Job Shadow Program’. KHCB promotes Islamic fi nancial education for young people as part of its corporate social responsibility program.

NCBC names its top picksSAUDI ARABIA: Saudi British Bank (SABB) and Riyad Bank have been singled out as top picks for 2014 by NCBC Research, the research division of NCB Capital, with the rating given to SABB upgraded to overweight from neutral. Al Rajhi Bank has been removed from the local fi nancier’s top picks due to its retail lending restrictions.

ADIB supports pro leagueUAE: Abu Dhabi Islamic Bank (ADIB) will continue to be Arabian Gulf League’s exclusive banking partner following the renewal of its three-year sponsorship.

Masraf calls for nominationQATAR: Islamic fi nancier Masraf Al Rayan has called for nominations to fi ll seven seats on its board of directors for the period 2014-16. Applications will be open from the 5-9th January and elections will take place on the 3rd March, during the bank’s regular general assembly meeting.

Saudi Arabian banksSAUDI ARABIA: Accumulated bank profi ts in Saudi Arabia are predicted to hit a record level of almost SAR36 billion (US$9.6 billion) according to data released by the Saudi Arabian Monetary Agency. This follows reports that bank profi ts rose by 9% for the fi rst 11 months of 2013.

The Saudi Arabian banking sector, which is theoretically entirely Shariah compliant, has benefi ted from the performance of the kingdom’s economy: with total bank reserves increasing by 17.4%, total capital accounts increasing in November 2013 by 8.6% to SAR261.9 billion (US$69.82 billion) when compared with the same period in 2012 and the total budget surplus for the period 2011-13 coming to almost SAR871 billion (US$232.19 billion).

Dubai Group owes US$6 million UAE: Dubai Group, a unit of Dubai Holdings, has repaid a US$300 million syndicated loan led by Citigroup, according to reports. This follows news last year of the company’s announcement to restructure up to US$10 billion of its debt and the sale of its share in Bank Islam Malaysia at the end of 2013.

Bloomberg has reported that some of the Dubai Group’s lenders will exit talks with the company and that fi nal documentation for a deal between the company and its remaining creditors could be agreed soon. Dubai Group reportedly owes approximately US$6 billion to banks.

Dubai Group’s investments include stakes in Bank Muscat, EFG-Hermes and previously Bank Islam Malaysia.

Home territory expansionOMAN: Shariah compliant Meethaq Bank has opened a new state-of-the-art branch in Buraimi this week, as part of its planned domestic expansion. The bank aims to open branches in all major cities and towns across Oman.

Unlicensed lending crackdownUAE: The Securities and Commodities Authority (SCA) has introduced new

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margin lending rules, allowing fi rms to lend each client up to 30% of the capital set aside for margin fi nancing, instead of the previous 10%. Firms that do not abide to the new rules and engage in illicit margin lending will be subjected to a AED100,000 (US$27,200) fi ne while repeat off enders risk losing their license. The rules are to take eff ect immediately.

The SCA has also issued rules for the issuance and trading of covered bonds, allowing banks and other fi rms to obtain licenses to off er such a debt instrument. Malaysia Building Society, in December, issued the world’s fi rst covered Sukuk Murabahah backed by fi nancing receivables.

Sukuk set to soarGLOBAL: Bond issuance in the GCC is expected to grow this year due to infrastructure spending by GCC governments and refi nancing needs in the region. S&P expects demand for Sukuk in the GCC to continue to grow at a double-digit rate over the next two years, though it’s believed that the tapering of monetary stimulus by the US Federal Reserve may cause instability in interest rates over the course of the year. The GCC has US$30 billion in bonds and syndicated loans maturing in 2014.

Higher charges in 2014QATAR: Banks in Qatar including banks off ering Shariah compliant services, such as Qatar Islamic Bank (QIB), Commercial Bank of Qatar (CBQ) and Doha Bank, are likely to see poor earnings growth in 2014 due to net interest margins being squeezed by the cost of funds according to a report by SICO Investment Bank.

CBQ and QIB are expected to see higher provisioning charges due to a rise in real estate-impaired loans, whilst higher year-on-year net income for Doha Bank is expected to drive earnings, according to the report. GCC-listed companies covered by QIB are predicted to show an earnings growth of 22% on fi gures from 2013, while remaining fl at on a quarter-on-quarter basis.

Banks pay due diligence BAHRAIN: As at the 5th January 2013, a lett er to the Bahrain bourse stated that the due diligence between Shariah compliant Khaleeji Commercial Bank and Bank Alkhair was still ongoing with no further updates available.

Al Rajhi-ezetop dealSAUDI ARABIA: Al Rajhi Bank has signed a deal with ezetop, an Ireland-based international mobile top up provider, to allow customers to use the service and send mobile phone top ups to 100 countries, 24 hours a day, across the bank’s network of 500 branches, 3,300 ATMs and 27,000 points of sale.

Lebanon missed its markLEBANON: Islamic banking is struggling to thrive in Lebanon, with an increase of only US$38 million in total assets across the country’s four Islamic banks between December 2012 and November 2013 and a market share of less than 1% eight years aft er the introduction of Islamic banking. Analysts believe that a lack of public education regarding Islamic banking and the regulatory framework are contributors to the slow progress of the sector in Lebanon.

Pioneering Saudi partnership SAUDI ARABIA: Cliff ord Chance has become the fi rst international law fi rm to establish a partnership in Saudi Arabia. The fi rm has established a fi ve-partner team in its Riyadh offi ce, with a total of 30 lawyers. Mohammed Al Jadaan remains as both special advisor and managing partner of Al-Jadaan & Partners Law Firm which has been integrated into the practice.

The Cliff ord Chance Saudi Arabia team has been consistently ranked Tier 1 for each of its practice areas and in the past year has advised on deals including the SAR15.2 billion (US$4.05 billion) Saudi Arabia General Authority of Civil Aviation (GACA) Sukuk.

Potential gains for SukukUAE: Real estate developer Nakheel has announced plans to pay over US$1 billion of bank debt early, giving a potential boost to the company’s AED4.4 billion (US$1.19 billion) Sukuk.

The Islamic facility rose to a high of 108.16 cents on the dollar on the 26th December last year and its yield has reduced by 215bps over the last 12 months to 6.58% as at the 3rd January. The payments of AED2.35 billion (US$626.02 million) in February, which will be 15 months ahead of schedule, and AED1.65 billion (US$449.10 million) in August represent almost half of the company’s outstanding bank debt.

RESULTSSaudi Investment BankSAUDI ARABIA: Saudi Investment Bank posted a 41.1% year-on-year growth in net profi t to reach SAE1.29 billion (US$343.9 million) for the 12-month period ending the 31st December 2013. Total assets accrued by 36.28% to stand at SAR80.49 billion (US$21.46 billion).

ASSETMANAGEMENTCheraman launches fundINDIA: Shariah compliant Cheraman Financial Services has received approval from the Securities and Exchange Board of India to launch a venture capital fund. Known as the Cheraman Premium Fund, the fund will have a corpus of INR2.5 billion (US$40.48 million) and will be utilized to support start-up initiatives and infrastructural projects.

Eyes on TurkeyGLOBAL: Private equity fi rm Abraaj Group plans to make another investment in Turkey next year following the recent acquisition of Turkish dairy maker Yorsan Gida Mamulleri. The Dubai-based fi rm, which launched a US$2 billion Islamic growth and infrastructure fund due to mature in 2016, is reportedly in talks with Turkish companies in the food and education sector.

Hajj funds to Shariah banksINDONESIA: The Hajj pilgrims’ funds of Indonesia worth IDR11 trillion (US$908.6 million) will be shift ed to Islamic banks by the end of 2014, according to reports.

Al Meezan’s new fundPAKISTAN: Al Meezan Investment Management has launched a new Shariah compliant fund known as the Meezan Capital Preservation Fund, which will be open for subscription for a limited period from the 26th December 2013.

Second Aussie Islamic pension fundAUSTRALIA: First Guardian, a diversifi ed investment management fi rm based in Melbourne, has announced plans to launch Australia’s second Islamic

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pension fund this month. The fund has been developed with the Australian Center for Islamic Finance, the Muslim Community Cooperative of Australia, and endorsed by the Islamic Council of Victoria, the governing body for the state’s Muslim community.

Fund exceeds targetPAKISTAN: ABL Asset Management has announced it has raised over PKR1 billion (US$9.3 million) in its ABL Islamic Preservation Fund.

The fund is one of three Shariah compliant funds managed by the company, which has plans to launch an Islamic pension scheme this year.

Indian offshore fund in the makingINDIA: Business conglomerate Essel Group’s fi nancial services arm, Essel Finance, plans to introduce an Islamic fund for foreign investors in partnership with Shariah compliant fund managers in Malaysia and West Asia. With a corpus of US$100 million, the fi rm is looking to establish partnerships by March.

Separately, Taqwaa Advisory and Shariah Investment Solutions are reported to be establishing a INR2.5 billion (US$40.46 million) fund on behalf of a state-backed fi rm.

Waqf Fund approves budgetBAHRAIN: Bahrain’s Waqf Fund, which recently approved a US$1.4 million budget for 2014, has identifi ed several initiatives including providing fi nancial support to AAOIFI to further enhance the Certifi ed Islamic Professional Accountant qualifi cation as well as launching a leadership development program with a leading university.

Acquisition of landmark propertyUAE: Shariah compliant Emirates REIT has increased its portfolio to almost AED1.2 billion (US$326.62 million) with the acquisition of the seventh fl oor of the Index Tower comprising 22,000 sq ft of commercial space, from EFG Hermes in exchange for an approximate 4% share in the REIT.

Emirates REIT also has ownership of 698 parking spaces in the Index Tower as

well as retail space; the offi ce space and car parking are available for immediate lease.

The trust has also expanded its shareholder base with regional and international investors: Emirates NBD, which now holds a 5% share, Singapore Enterprises, with 3% and private investors with 1%. Singapore Enterprises is a majority shareholder in Sabana, the largest listed Shariah compliant REIT in the world in terms of both market capitalization and total assets as of the 30th June 2013.

Al Hilal proposes dividendOMAN: Shariah compliant Al Hilal MENA Fund will declare a dividend of 25 Omani baiza (US$0.06) for 2013, subject to approvals. The return is representative of the 6.5% growth in net asset value (NAV) since the fi rst NAV release on the 21st July last year. NAV for the fund stood at OMR1.06 (US$2.74) per unit as on the 31st December 2013.

TAKAFULPioneering Islamic saccoKENYA: Crescent Takaful Sacco Society, promoted by Crescent Investment Cooperative and Takaful Insurance of Africa Group, has launched front offi ce operations.

The savings and credit cooperative company (sacco) has become the fi rst Islamic fi rm of its kind to off er savings, fi nancing and investment services in compliance with the Shariah. The services will also be off ered to Kenyans overseas.

ATMC receives approvalSAUDI ARABIA: The Saudi Arabian Monetary Agency has given its fi nal approval to Alinma Tokio Marine Company (ATMC) for the launching of cooperative health insurance products.

Arig to boost Takaful ReBAHRAIN: Takaful Re’s fi nancial performance is expected to improve over the short-term as its parent company, Arab Insurance Group (Arig), will be adopting tighter control over its underwriting operations, predicted AM Best Europe – Rating Services. Arig will consolidate the fi nancial results of Takaful Re’s re-Takaful fund into its

own fi nancial statements for the year 2013. The ratings agency also affi rmed Arig’s ‘B++’ rating with a revised positive outlook.

AMMB-MetLife partnershipMALAYSIA: In line with its intention to select an equity partner for its Family Takaful and life insurance businesses by the end of this year, AMMB Holdings has signed an agreement with MetLife to seek regulatory approval for a strategic partnership.

Upon approval, MetLife will own 50% plus one share in AmLife Insurance (with AMMB holding the remaining shares), and AMMB will own 50% plus one share in AmFamily Takaful, with the rest of share to be owned by MetLife.

Only for Takaful firmsMALAYSIA: The government’s proposed i-BR1M scheme will be implemented exclusively through a consortium of Takaful operators, and not conventional insurance players as previously hoped for by the Life Insurance Association of Malaysia.

Estimated to benefi t up to fi ve million household recipients with an allocation of RM250 million (US$75.92 million), the scheme qualifi es recipients (with a RM50 (US$15.18) contribution) to a coverage of up to RM30,000 (US$9,110.7) in the event of death or permanent disability.

Steady Takaful growthMALAYSIA: Despite the changes that will be introduced with the enforcement of the risk-based capital framework in 2014, the Takaful industry in Malaysia is expected to maintain a steady rate of growth according to industry experts.

Ab Latiff Abu Bakar, the president and CEO of Takaful Ikhlas, said the Takaful industry is projected to end 2013 with a strong growth of approximately 20%.

TIC’s new sanctionsBAHRAIN: Takaful International Company has announced new sanctions for the year 2014 including a Wakalah management fee of up to 35% of gross contributions instead of the previous 20-25% range, as well as a Mudarabah profi t share of 25% of net investment returns for managing participants of investment funds.

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MAA Takaful confidentMALAYSIA: MAA Takaful will launch seven Family Takaful products by the fi rst half of 2014, with plans to upgrade the operator’s information technology features. Anticipated growth in the Family Takaful segment is expected to boost MAA Takaful’s fi nancial performance to reach its RM88 million (US$26.7 million) target of new business for 2014.

Takaful Oman’s listing delayedOMAN: Due to unmet quorum for the founding general assembly of the fi rm (under incorporation), Takaful Oman Company’s listing on the Muscat Securities Market, which was scheduled for the 2nd January, has been delayed until the listing requirements are met.

Al Madina Takaful opens doorsOMAN: Al Madina Insurance Company (trading as Al Madina Takaful) commenced off ering Takaful products on the 1st January following regulatory approval from the Capital Markets Authority, to eff ectively become Oman’s fi rst Takaful operator. All existing insurance policy agreements will be replaced by Shariah compliant agreements and the fi rm is due to make a public announcement on applicable Wakalah and Mudarabah fees applicable for this year.

AIG joins Takaful marketMALAYSIA: AIG Malaysia Insurance has received regulatory approval to off er re-Takaful products and is looking to begin operations in the fi rst quarter, confi rmed CEO Antony Lee.

Issue approved by regulatorQATAR: Doha Insurance which operates Takaful window, Doha Takaful, has received regulatory approval for the issuance of 24.26 million new shares via a rights issue. The shares will be priced at QAR18 (US$4.94) each. The company will next seek shareholder approval for a capital increase worth QAR436.7 million (US$119.86 million), which will almost double the company’s capital.

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15th April, JAKARTA 21st April, TEHRAN15th October, DHAKA

26th - 27th May, KUALA LUMPUR 15th - 16th May, LUXEMBOURGSeptember, DUBAI

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An all New Experience in Events coming your way for 2014

13th October, COLOMBO 6th November, ISTANBUL November, DUBAI


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RATINGSBGSM receives ratingMALAYSIA: Investment holding company BGSM Management’s proposed Sukuk Musharakah program worth up to RM10 billion (US$3.07 billion) has been assigned a preliminary rating of ‘AA3’ by RAM, with a stable outlook.

SHUAA stableUAE: SHUAA Capital, the parent company of Shariah compliant Gulf Installments, has been assigned a long-term foreign and domestic currency issuer rating of ‘B1’ by Moody’s. The negative outlook on the ratings has been revised to stable.

UNB affirmedUAE: Moody’s has affi rmed the ‘A1’ long-term and ‘Prime-1’ short-term deposit ratings as well as ‘D+’ standalone bank fi nancial strength rating of Union National Bank (UNB), which off ers Shariah compliant services. The outlook on the long-term deposit ratings have been changed to stable from negative.

Still on Rating WatchMALAYSIA: The ‘BBB3’ rating on MRCB Southern Link’s RM845 million (US$259.22 million) senior Sukuk and the ‘BB1’ rating on its RM199 million (US$61.05 million) junior Sukuk will be maintained on RAM’s Rating Watch (developing outlook), pending the government of Malaysia’s long-term solution to the Eastern Dispersal Link highway’s inability to start tolling operations.

Outlook revision for SABBSAUDI ARABIA: Saudi British Bank’s ‘A’ long-term credit rating has been affi rmed by Fitch, with a stable outlook.

AUB upgradedBAHRAIN: S&P has upgraded Ahli United Bank’s (AUB) long-term counterparty credit rating from ‘BBB’ to ‘BBB+’; while its short-term counterparty credit rating was affi rmed at ‘A-2’. The ratings carry a stable outlook.

Stable outlook for 2014GLOBAL: The ratings outlook for almost all the banks in the GCC region is stable according to Fitch, with sound capital levels and ample liquidity. The sector

outlook for the UAE, Saudi Arabia and Kuwait has a positive trend, as does Qatar despite the potential for asset quality issues and capacity limitations; whilst in Egypt, Lebanon and Jordan the sector still remains a challenging environment.

Ratings for MaybankMALAYSIA: Maybank has been assigned ASEAN-scale fi nancial institution ratings of ‘seaAAA/Stable/seaP1’ by RAM based on the bank’s strong position in its business lines. The rating agency also affi rmed the ‘AAA/Stable/P1’ rating for Maybank Islamic, Maybank, Maybank Investment Bank and Cekap Mentari, the group’s funding conduit.

Final rating confirmedMALAYSIA: The proposed RM10 billion (US$3.04 billion) Sukuk Musharakah program by BGSM Management has been assigned a fi nal ‘AA3/stable’ rating by RAM.

S&P affirms final ratingTUNISIA: At the request of the Tunisian government, S&P will no longer rate the country, but affi rmed that the rating of ‘B/B’ with a negative outlook was valid at Tunisia’s withdrawal from the rating list in December 2013.

‘AA’ for KuwaitKUWAIT: Fitch has affi rmed the ‘AA’ long-term foreign and local currency issuer default ratings for Kuwait. The country ceiling is affi rmed at ‘AA+’ and short-term foreign currency issuer default rating at ‘F1+’. The outlook for the long-term ratings is stable.

ACR ReTakaful ratedGLOBAL: UAE-based ACR ReTakaful Holdings’ ‘bbb-’ issuer credit rating (ICR) has been affi rmed by AM Best Asia-Pacifi c. The re-Takaful operator’s associated companies in Malaysia and Bahrain have both received a fi nancial strength rating of ‘A-’ and an ICR of ‘a-’. All ratings carry a stable outlook.

Outlook change for DRB-HICOMMALAYSIA: The ‘AA-IS’ rating on DRB-HICOM’s RM1.8 billion (US$547.61 million) Islamic medium-term notes program has been affi rmed by MARC, with a revised outlook to stable from negative.

Oman remains stableOMAN: S&P has affi rmed Oman’s rating of ‘A/A-1’ for its short and long-term sovereign credit ratings. The ratings have a stable outlook.

Ratings withdrawnMALAYSIA: Following a full early redemption, MARC has withdrawn the ‘AA-IS’ rating on Malakoff Power’s RM5.6 billion (US$1.7 billion) Murabahah securities. The facility was restructured using a new RM5.38 billion (US$1.64 billion) Sukuk Murabahah issuance rated ‘AA-IS’, which is still under MARC’s rating surveillance.

Rating for BayuPaduMALAYSIA: Oil and gas services and solutions provider SapuraKencana’s RM500 million (US$151.98 million) Istisnah serial bonds have been affi rmed at ‘AA-ID’ by MARC, with a stable outlook. The facility is issued via the fi rm’s SPV, BayuPadu.

Mydin reaffirmedMALAYSIA: Retail outlet operator Mydin Mohamed Holdings’ RM350 million (US$106.38 million) Islamic medium-term notes program (2011/2024) has been reaffi rmed at ‘AAA(fg)/stable’ by RAM.

TTPC reaffirmedMALAYSIA: Independent power producer Teknologi Tenaga Perlis Consortium (TTPC)’s RM835 million (US$253.8 million) Sukuk Murabahah (2013/2023) has been reaffi rmed at ‘AA1’ by RAM, with a stable outlook.

ABS ratings withdrawnMALAYSIA: Following an early redemption of all outstanding amounts in November, MARC has withdrawn the respective ‘AAAIS’, ‘AAIS’ and ‘AAAIS’ ratings on ABS Logistics senior Sukuk Ijarah program consisting of RM100 million (US$30.45 million) Class A, RM20 million (US$6.09 million) Class B and RM40 million (US$12.18 million) Class C Sukuk. ABS is Tiong Nam Logistics Holding’s SPV to acquire a portfolio of warehouse properties from its parent.

PLSA re-evaluatedMALAYSIA: RAM has reaffi rmed highway concessionaire Projek Lintasan

continued


NEWS

Shah Alam (PLSA)’s RM330 million (US$100.5 million) Sukuk Ijarah (senior Sukuk) and RM415 million Sukuk Mudarabah (junior Sukuk) at ‘A1’ and ‘A3’ respectively. Concurrently, the outlook on PLSA’s Lebuhraya Kemuning-Shah Alam Highway has been revised to negative from stable due to projected insuffi cient funds to meet its fi nancial obligations by 2023. As a result, the company has begun a refi nancing exercise for its senior Sukuk, to be completed within the next six months, with plans for the junior Sukuk underway.

JIB Shariah rating maintainedJORDAN: Jordan Islamic Bank (JIB)’s ‘AA’ Shariah quality rating has been reaffi rmed by Islamic International Rating Agency, indicating a high standard of compliance with all fronts of Shariah quality analysis.

Tradewinds ratedMALAYSIA: Tradewinds Plantation Capital’s RM180 million (US$54.75 million) Class A and RM30 million (US$9.13 million) Class B Sukuk Ijarah have been rated ‘AAAIS’ and ‘AA+IS’ respectively by MARC, with a stable outlook. The fi rm’s ‘MARC-1ID(bg)/AAAID(bg)’ ratings on its bank-guaranteed Murabahah commercial paper/medium-term notes program worth RM100 million (US$30.42 million) have also been affi rmed with a stable outlook.

Musteq reaffirmedMALAYSIA: Independent power producer Musteq Hydro has had the ‘AAA(bg)/Stable’ rating on its bank-guaranteed Sukuk Musharakah of up to RM80 million (US$24.34 million) in nominal value reaffi rmed by RAM, refl ecting the credit strength of the bank guarantee provided by Maybank Islamic (rated ‘AAA/Stable/P1’).

Final rating for TNB Western EnergyMALAYSIA: TNB Western Energy’s RM4 billion (US$1.22 billion) Sukuk has been assigned a fi nal rating of ‘AAAIS’ by MARC, with a stable outlook. The fi rm is a wholly-owned funding vehicle of TNB Manjung Five; which is in turn wholly-owned by the country’s national utility company, Tenaga Nasional.

Stable for KwantasMALAYSIA: Palm oil producer Kwantas Corporation’s RM15 million (US$4.56 million) Sukuk Ijarah and RM65 million (US$19.78 million) Murabahah commercial papers/medium-term notes have been affi rmed at ‘AAAID’ and ‘MARC-2ID(cg)/A-ID(cg)’ respectively by MARC, with a stable outlook.

MARC withdraws ratingMALAYSIA: Upon the issuer’s request, MARC has withdrawn all ratings on Senai-Desaru Expressway’s RM1.89 billion (US$575.58 million) nominal value senior Sukuk Ijarah and RM3.69 billion

(US$1.12 billion) nominal value junior Sukuk Ijarah. Prior to the withdrawal, the facilities were rated ‘BBIS’ and ‘B-IS’ respectively, with a negative outlook.

‘AAA’ for LKPPMALAYSIA: Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP)’s RM300 million (US$91.36 million) Bai Bithaman Ajil Islamic debt securities have been reaffi rmed at ‘AAA(s)/stable’ by RAM.

Outlook upgradeEGYPT: Fitch has raised Egypt’s economic outlook to stable from negative, for the fi rst time since the country’s revolution in 2011. According to a press release by the Egyptian Finance Ministry, the ratings agency has maintained its long-term foreign and local currency credit ratings at ‘B-’ and short-term foreign currency rating at ‘B’.

Stable outlook SAUDI ARABIA: Fitch has assigned a rating of ‘AA-(EXP)’ to Saudi Electricity Co’s proposed Sukuk. The outlook for the rating is stable.

Ratings reaffirmedMALAYSIA: RAM has reaffi rmed the ‘AA3’ rating of the RM540 million (US$164.13 million) Sukuk Murabahah from Jati Cakerawala, a Malaysian investment holding company. The outlook for the rating is stable.

continued...

STRUCTURING SHARIAH BASEDFINANCIAL PRODUCTS

Key Highlights:

www.miftraining.com | [email protected]

18th – 20th February 2014, Dubai111111111111111888888888888888888thhhhhhththththtththtt ––––– 22222222222222222220000000000000000thhhhhhthththththththtt FFFFFFFFFFFFFFFeeeeeeeeeeeeeeeebbbbbbbbbbbbbbbbbbrrrrrrrrrrrrruuuuuuuuuuuuuaaaaaaaaaaaaaaarrrrrrrrrrrrryyyyyyyyyyyyyyyyyy 222222222222222220000000000000000011111111111111444444444444444444,,,,,,,,, DDDDDDDDDDDDDDDuuuuuuuuuuuuuubbbbbbbbbbbbbbbbbbbbbaaaaaaaaaaaaaaiiiiiiiiiiiiiiii18th – 20th February 2014, Dubai


NEWS

MOVESGulf Finance HouseBAHRAIN: The acting CEO of Shariah compliant Gulf Finance House, Hisham Al Rayes, has been confi rmed as CEO. Rayes has held the position of acting CEO since March 2012.

GBSAGLOBAL: Stuart Anderson, the managing director and regional head of S&P Middle East, has succeeded Giambatt ista Atzeni as chairman of the Gulf Bond and Sukuk Association (GBSA) Steering Committ ee for 2014, while its Islamic Finance Practice Group will be co-chaired by Hani Ibrahim and Alex Armstrong from QInvest, and Debashis Dey from Cliff ord Chance.

Walid Salamed from Standard Chartered Bank and Fahad Al Khalifa are slated to chair the newly-launched Qatar chapter while the Kuwait chapter will be led by Rani Selwanes from NBK Capital.

National Bank of KuwaitKUWAIT: Ibrahim Dabdoub is set to retire as the group CEO of National Bank of Kuwait aft er 30 years of service with the bank.

AMANUAE: Jihad Faitrouni has been reappointed as general manager of Dubai Islamic Insurance & Reinsurance (AMAN). He assumes the role from Musa Al Shawahin who has been named advisor to the board of directors.

National Bank of Adu DhabiUAE: Bernard Shum has been confi rmed as the head of corporate and institutional banking, Hong Kong by National Bank of Abu Dhabi (NBAD). Shum moves to NBAD Hong Kong from Hang Seng Bank, where he was deputy head of syndicated fi nance, commercial real estate and corporate advisory.

SHUAA CapitalUAE: SHUAA Capital has announced the departure of CEO Colin Macdonald as well as the appointment of chief fi nancial offi cer Houssem Ben Haj Amor as its general manager, Karim Schoeib as the chief executive of investment banking, Jennifer Adams as the director of operations and Michael Hewitt as the head of the executive offi ce. SHUAA

Capital is the parent company of Shariah compliant Gulf Instalments.

Al Hilal Banking ServicesOMAN: Professor Ali Muhyealdin Al Quradaghi has tendered his resignation from the Shariah Supervisory Board of Al Hilal Islamic Banking Services (the Islamic window of Ahli Bank).

KPMGOMAN: Ashok Hariharan has been appointed as the head of tax in the Middle East and South Asia at KPMG. His former role at KPMG was that of head of tax in Oman and the UAE, and the company’s regional quality performance and liaison partner for the region.

Astro Malaysia HoldingsMALAYSIA: Former director of Hong Leong Islamic Bank and Hong Leong Financial Group, Yvonne Chia, has been appointed as a non-executive director of pay-TV operator Astro Malaysia Holdings.

EFG HermesEGYPT: EFG Hermes has announced the appointment of Khalid Ellaicy as the company’s new chief fi nancial offi cer. Khalid joins EFG Hermes from Orascom Telecom.

Affin Holdings MALAYSIA: Zulkifl ee Abbas, who led the alignment of Affi n Bank, Affi n Islamic Bank and Affi n Investment Bank as managing director of Affi n Bank, has been appointed as group CEO of Affi n Holdings. Zulkifl ee will continue to serve as managing director of Affi n Bank in addition to his new role.

Deutsche BankMALAYSIA: Yusof Yaacob, formerly Goldman Sachs’ Malaysia head of corporate fi nance, has been hired by Deutsche Bank to head its corporate banking and securities operations in Malaysia. In addition to that, Yusof will act as Deutsche’s chief country offi cer for Malaysia.


SHARIAHPRONOUNCEMENT

This Fatwa is brought to you exclusively by IFN in collaboration with Dar Al Sharia Legal & Financial Consultancy-Dubai. The Fatwa appearing in this space was obtained by Dar Al Sharia for issues faced by their clients and the documents stated in the Fatwa were developed at Dar Al Sharia. This Fatwa was compiled by Dr Muhiuddin Ghazi

www.daralsharia.com

SHARIAH PRONOUNCEMENT

Query:

The owner of a plot of land agreed with a contractor on the construction of a villa on the said land. The construction was to be done in fi ve stages, and upon completion of each stage the land owner was to sett le the running bill representing the proportional construction cost aft er it was verifi ed by the architect appointed by the owner.

Upon completion of the fourth stage and the sett lement of contractor’s running bill, the land owner approached an Islamic bank requesting a fi nancing facility to complete the fi ft h and fi nal stage (which had not yet started) as he had run out of cash. The owner off ered a mortgage over property and the assignment of rental on completion of the villa beside placing the property insurance in the bank’s name. The bank is willing to help the owner and is seeking guidance from its Shariah board as to whether it can fi nance a partially completed property.

Pronouncement:

In order to complete the remaining construction work, i.e. the fi ft h stage in the above-mentioned situation, the Islamic bank may enter into an Istisnah contract with the land owner. However, this will require the termination of the existing contract between the land owner and the contractor.

Although the owner has sett led contractor’s bill relating to the fourth stage and the contractor has not yet started the fi ft h stage, any liability resulting from premature termination of the agreement shall be borne by the land owner.

Pursuant to the termination of the existing contract, the bank will sign an Istisnah agreement with the land owner for the construction of the fi ft h stage (the remaining portion of the villa). In terms of the Istisnah agreement, the bank will be the seller and the land owner will be the purchaser of the fi ft h stage.

At the same time the bank will enter into a parallel Istisnah contract with any contractor (including the existing contractor), whereas the bank will be the purchaser and the contractor will be the seller.

The amount of the fi rst Istisnah contract signed by the bank with the land owner shall be higher than the amount of the parallel Istisnah contract the bank will sign with the contractor, the diff erence being the bank’s profi t. The amount of each contract will be payable as per the agreed payment schedule and all specifi cations and terms and conditions of both contracts shall be the same, except the delivery date which can be earlier in the parallel Istisnah contract compared to the main Istisnah contract signed by the bank with the owner in order to ensure timely delivery to the owner.

The following documents are needed to execute such a transaction:1. Istisnah agreement (to be signed between the bank and the land owner);2. Parallel Istisnah agreement (to be signed between the bank and the contractor).

Dr Hussain Hamed Hassan Chairman of the DIB Shariah Board, Managing director, Dar Al Sharia Legal & Financial Consultancy, Dubai, UAE


IFN REPORTS

The Malaysian Sukuk market had a challenging year in 2013, with a subdued fi rst quarter and a cautious stance from investors in the fi rst half moving into more serious volatility from June following the revision of the country’s sovereign rating to ‘negative’ from ‘stable’ by Fitch Ratings due to concerns over public fi nance and fears over US tapering of its quantitative easing (QE) program.

However, with the election jitt ers past, a stable political climate, a focus on reducing fi scal defi cit and the 2014 Budget reforms receiving a generally positive response from the investment community, the market looks to be once more on the up: refl ected in Moody’s upgrade of Malaysia’s sovereign outlook to ‘positive’ in November.

Hanifah Hashim, the executive director and head of Malaysia fi xed income and Sukuk for Franklin Templeton Investments, nevertheless warns that continued volatility should be expected as the market adjusts to the new fi nancial climate. “Looking ahead, we are at a stage where risk on-risk off trend becomes a norm in the fi xed income market as the world adjusts to the prospect that QE will not continue perpetually. Within this time frame, the bond market will be dott ed with volatility along the way as it fi nds a comfortable level through this adjustment period.”

In its 2014 Local Fixed Income Market Outlook, Franklin Templeton notes in addition that the high foreign holding of government bonds (currently standing above 40% despite an adjustment in mid-2013) indicates that foreign infl ows have been driven predominantly by the “easy money” policies in developed countries including the US, as they att empt to stimulate their way out of recession. This is a precarious position for Malaysia as the situation has the potential to rapidly reverse which could hold serious implications for the local bond market.

However, Hanifah confi rms that: “Bond yields have moved higher in 2013 and have partially priced-in QE tapering risk already. We believe should our domestic economic fundamentals perform well and surprise on the upside, this will help to mitigate the risk of bond yields from rising further in 2014, even with QE in store, as foreign investors will continue to invest in the Malaysian bond market to seek higher return.”

Ringgit-denominated Sukuk and corporate bonds are in fact expected to perform bett er during this period of high volatility, due to the ample domestic liquidity levels able to support new issuances and short-term outfl ows. “We are keeping the local currency fi xed income duration short and looking at selected fi ve-year corporate credits as it provides the best combination of yields

with minimum duration risk in this market condition,” confi rms Hanifah.

The overall default rate for Malaysian corporate credit as well as Sukuk remained low last year at below 5%, with most issuers fi nancially sound, making the market an att ractive prospect. “As such, we believe that good quality corporate credit is a good investment option in 2014 within the fi xed income space,” she concludes.

In its 2014 Sukuk Outlook HSBC Holdings, the biggest arranger of 2013, also highlights that issuances from corporates seeking to cut fi nancing costs could contribute to record Sukuk sales this year. “In 2014, we will see a shift to new issuers,” commented Mohammed Dawood, the managing director of global capital fi nancing at HSBC Amanah. “We will see a lot more coming out of Asia and a lot more issuance from outside of the traditional markets.”

Sukuk sales fell by approximately 9.5% in 2013 to US$42 billion according to Bloomberg; compared to a record US$46.4 billion in 2012. In a December 2013 report Moody’s estimated that 2014 could see sales hit a record US$60 billion, driven by GCC and Malaysian issuance. – LM

Malaysian Sukuk outlook positive for 2014: Corporates to drive growth

Malaysia’s telecommunications provider, Maxis Communications, ended 2013 by announcing its plans to raise approximately RM10 billion (US$3.04 billion) via Sukuk. Expected to carry a tenor of up to 30 years, proceeds from the issuance will be used to refi nance the group’s current borrowings and for working capital. The certifi cates will be issued by Maxis’ unit, BGSM Management.

RAM has assigned a preliminary rating of ‘AA3/stable’ to BGSM’s proposed Sukuk Musharakah program. RAM’s analysis is focused on Maxis (its sole operating subsidiary) as it is the BGSM’s only source of cashfl ow for the fulfi lment

of all the fi nancial obligations on the proposed Sukuk. Underpinned by strong profi tability, RAM is confi dent of the robust cashfl ow-generating ability of Maxis.

For the fi nancial period ending 30th September 2013, Maxis’ earnings rose 6.7% to RM474 million (US$144.18 million) from RM442 million last year. This was achieved on a revenue of RM2.24 billion (US$134.45 million), a 1% accretion from RM2.21 billion (US$672.26 million) previously. The company’s profi t before tax increased 5.53% to RM667 million (US$202.89 million). In spite of the high mobile penetration rate of 146.1%, telecommunication companies

in Malaysia are facing a deceleration in subscriber growth, moderate price competition and heft y marketing expenses that are compressing their margins. Maxis recently appointed Vodafone’s Morten Lundal as its new CEO in a bid to improve its sluggish performance.

Maxis is one of three major telecommunications providers in Malaysia. It last tapped the Sukuk market in February 2012, issuing a RM2.45 billion (US$745.27 million) Sukuk Musharakah under an unrated Islamic medium-term notes program. – NA

Maxis’ proposed Sukuk receives preliminary ratings


IFN REPORTS

Sett ing up a fi nancial institution requires considerable eff ort from many fronts: from establishing the framework of the entity to recruiting the right people and procuring suffi cient funds as well as meeting regulatory requirements. However, several bankers have recently conveyed to Islamic Finance news that the main challenge in sett ing up a new institution is the actual implementation of Islamic banking products on the ground: maintaining business viability and customer approachability without compromising on Shariah principles.

This is the challenge that Meezan Bank foresees for the fi rst dedicated Islamic retail bank in Mauritius, which the Pakistan-based bank has been commissioned to assist in establishing.

Pending a license from the central bank and expected to launch within the next six months, the proposed private Islamic bank will be a culmination of strategic cross-border eff orts between Mauritius-based Ethical Finance (EFL) and Meezan Bank. Following an MoU in November last year, the latt er will provide EFL with the necessary guidance on product development, Shariah-related technical services and training.

Cross-jurisdiction partnerships and collaboration in terms of exchanging skills and knowledge to propagate the industry forward have been prevalent within the relatively nascent Shariah fi nancial landscape, as demonstrated by Meezan Bank (which provided similar services to Amana Bank, Sri Lanka’s fi rst commercial Islamic bank), and are

predicted to chart an upward trend in the coming years.

“We are observing a cross-pollination of skills and knowledge that has started to benefi t the industry, and we expect this trend to grow in the future,” said an offi cial from the product development and Shariah compliance department at Meezan Bank to Islamic Finance news.

Poised for a positive trajectory in 2014 with estimates reaching the US$2 trillion mark, the Islamic fi nance industry can anticipate new entrants this year as well as stronger synergy between players from diff erent sectors across borders. – VT

Cross-border skills and knowledge exchange: On the increase

Over the fi nal quarter of 2013 a fl urry of regulatory updates were announced across multiple Islamic fi nance jurisdictions. Islamic Finance news brings you a run-down of the key changes across the global markets.

North Africa: At the start of December Libya’s national assembly, the General National Congress, voted to install Shariah law as the basis for all legislation. While the reason for the decision is believed to have been political – an att empt by the moderate temporary Libyan government to out-maneuver those in the country trying to accuse the government of being ‘un-Islamic’ – Islamic fi nance is nevertheless likely to benefi t from the decision, as a special committ ee has been convened to examine the Shariah compliance of Libya’s existing laws. This could lead to the instigation of more stringent regulations for the Libyan Islamic fi nancal sector – much like Egypt, which in December also announced impending plans for regulatory changes. The country’s fi nancial regulator plans to submit a proposal for a new capital market law that will also facilitate the issuance of Sukuk. Egypt’s previous plans to introduce laws regulating the issuance of Sukuk were held up due to concern from the country’s politicians and Islamic scholars regarding the seizure of sovereign assets by foreign investors in the event of a default.

GCC: Across the GCC, regulatory announcements have been made aiming at increasing the transparency of fi nancial systems across its markets. Bahrain has introduced a new banking regulation requiring the public disclosure of the risk profi le, risk management and capital adequacy and other specifi cs of fi nancial institutions, as a step towards the incorporation of Basel III measures to the country’s fi nancial regulatory framework. This has been followed by new regulations issued by the Bahrain central bank in the new year regarding the off ering of securities and Sukuk. The regulator aims to facilitate the integration of GCC securities markets by accepting applications from issuers in other GCC countries, prepared in accordance with GCC Unifi ed Standards.

In October, the Central Bank of Bahrain introduced improved regulations on the operational and solvency framework for Takaful and re-Takaful and distributed the framework to the industry for consultation and review. Feedback was requested for November and the new regulations were scheduled to be implemented by the end of 2013. At the same time, the Securities and Commodities Authority (SCA) in the UAE distributed draft regulations dealing with the separate treatment of Sukuk and conventional bonds to the industry and requested feedback, as the fi nal stage of consultation on new debt issuance and listings regulations for the UAE. The SCA

hopes the regulations, which treat Sukuk and conventional bonds separately for the fi rst time, will encourage the growth of the domestic credit market and the sale of Sukuk; and aims to have the new framework enacted in early 2014.

Asia: In Indonesia, the authorities announced new policies to be introduced in 2014 in an att empt to boost the country’s fl agging Islamic fi nancial sector. Shariah compliant assets in the republic are estimated to grow between 19-29% in 2014, almost half of the 34.1% growth of 2012. Initiatives include the regulation of foreign exchange markets, introduction of Islamic repurchase agreements and education and awareness programs.

In December, the Malaysia-based Islamic Financial Services Board (IFSB) also published guidelines on capital adequacy for Islamic fi nancial institutions and Takaful risk management detailing the criteria for using Sukuk as Tier 1 and Tier 2 regulatory capital; followed by the issuance of new guidelines for Islamic securities by Labuan Financial Services Authority. The guidelines issued by the regulator deal with both Islamic and conventional securities and came into force on the 1st January 2014. The new year should also bring guidelines from the Shariah Advisory Council of Bank Negara Malaysia, which has announced plans to issue a Shariah standard on Ijarah within the fi rst quarter of the year. – RS

Regulatory revisions for the new year


IFN COUNTRY ANALYSISNIGERIA

Legal and regulatory The establishment of Islamic banks in Syria via Legislative Decree 35 in 2005 was a government response to the demand for Islamic fi nancing by Syrian businesses and was followed by the introduction of private banks and the opening of the Damascus Securities Exchange in March 2009. The government established a requirement for Islamic banks to have a Shariah Supervisory Council to oversee the operations of the banks and ensure their adherence to Shariah law. The banking laws in Syria as they relate to Islamic fi nance broadly follow the laws as established in countries with a functioning Islamic fi nance market, such as Malaysia, and take on board the regulatory edicts of AAOIFI and the IFSB.

Banking and finance There are 12 privately owned banks in Syria, of which three are Islamic banks: Cham Bank, which opened in 2006; Syria International Islamic Bank, which opened in 2007; and Al Baraka Bank, which opened in 2008. In addition to retail services, following case-by-case approval from the central bank, Islamic banks in Syria are permitt ed to participate in syndicated loans with conventional banks, as long as Shariah principles are adhered to in all aspects of the deal.

The banks in Syria have had to prepare for worst-case scenarios, with profi ts falling by 40-90% in 2012 as the shockwaves from the country’s civil war reverberated through the fi nancial sector. Banking transactions such as trade fi nance and corporate lending have particularly suff ered, although basic banking services have been maintained despite the diffi cult environment. In September 2012, Syria International Islamic Bank reported a robbery in Homs, resulting in the loss of SYP75.2 million (US$532,201). Businesses have been aff ected as international sanctions have been implemented against those believed to be affi liated with the government’s regime. The IMF has not provided fi gures on the Syrian economy since the start of the civil unrest.

Takaful operations exist in Syria: with Damascus-based Al-Aqeelah Takaful practicing with two offi ces in Syria as the fi rst and largest Takaful company. Al-Aqeelah is joined by Aman Syria, Noor Takaful and Syrian Islamic Insurance Company.

International sanctionsIn May 2012, sanctions were imposed against the Syria International Islamic Bank (SIIB), banning the bank from fi nancial and commercial systems as a result of providing services and acting on behalf of the Commercial Bank of Syria and the Syrian Lebanese Commercial Bank, both of which were subject to sanctions imposed by the international community including the US government, the EU and the Arab League. Between 2011-12, the SIIB facilitated fi nancing worth approximately US$150 million on behalf of the Commercial Bank of Syria. The original sanctions against the two non-Shariah compliant banks were imposed due to their support of entities related to the propagation of weapons of mass destruction in Syria and North Korea.

Syria’s membership to the Organization of Islamic Cooperation (OIC) was suspended in August 2012, and the Arab Nations also suspended Syria’s membership and imposed sanctions against the country including the halt of fi nancial dealings and trade agreements, the freezing of the Syrian government’s bank assets and a suspension of fi nancing to new projects in Syria. In 2011, Turkey also ended its relationship with the central bank of Syria, stopping all credit to the government and freezing a prior credit agreement to provide support for Syrian infrastructure projects.

International aidSyria’s Islamic neighbors have been campaigning and providing aid. At the start of 2014, Turkey launched a campaign led by the prime ministry’s Disaster and Emergency Management Directorate (AFAD) to aid Syrian refugees; Turkey is currently hosting 210,000 Syrian refugees, and has spent

US$2 billion on aid. In December 2013, a telethon for the Emirates Red Crescent’s Our Hearts Are With the Syrian People campaign raised over AED120 million (US$32.66 million) including AED10 million (US$2.72 million) donated by the Dubai Islamic Bank Humanitarian Foundation and AED1 million each (US$272,183) from Al Ansari Exchange and Al Hilal Bank. Syria’s membership of the IDB has been temporarily suspended, but the bank has agreed to provide aid to Syrian refugees within the limits of its humanitarian fund. The Syrian National Coalition, a collaboration of opposition groups founded in November 2012, has been recognized by 20 countries including the GCC, the Arab League, and Turkey as the representative of the Syrian people; and several countries, including Kuwait, Qatar, Saudi Arabia and the UAE have provided funding and aid through the coalition.

Challenges Independent think tank, Atlantic Council, estimates that the real GDP of Syria fell between 50-80% in 2012, with the Syrian pound (SYP) at one-sixth of its value against the dollar since 2011 and foreign currency reserves estimated to be between US$2-5 billion, down from US$18 billion in 2011. The government is now receiving credit from Iran, Russia, and China — countries that have remained allies of the current embatt led political regime. The country’s economy has contracted due to the imposed international sanctions resulting in reduced domestic consumption and production: with a sharp growth in infl ation and the loss of over 2.3 million jobs.

OutlookMany countries and multilateral organizations have voiced their concern for the situation in Syria and shown support for the Syrian National Coalition, but the confl ict has yet to be resolved meaning that the outlook for the country’s Islamic banking sector is also uncertain.

Syria: A country in crisis Islamic banking was introduced in Syria in 2005, but the positive developments seen in its fi nance sector have been largely undone as a repercussion of the civil war and subsequent unrest that has aff ected the country since 2011. REBECCA SIMMONDS examines the state of the Islamic fi nance industry in a country that continues to struggle with severe political and social troubles.

IFN COUNTRY ANALYSISSYRIA


IFN COUNTRY ANALYSISNIGERIA

Key marketsThe total number of Sukuk and Islamic loans issued in 2013 according to data provided by dealogic is 119. Domestic issuances still make up almost 90% of the Sukuk market, reportedly at a total of US$66.6 billion for the fi rst nine months of 2013, but countries that have been highlighted as key markets such as Malaysia, Saudi Arabia and Dubai are increasingly aiming to issue more international Sukuk. Malaysia’s position as the global leader in the Sukuk market was confi rmed, with the country accounting for US$54.33 billion of the US$75 billion of new Sukuk issued globally over the course of the fi rst nine months of 2013 and 63.6% of the total Sukuk outstanding globally, as at the end of August 2013, to the value of US$275.20 billion.

Sukuk issued in 2013 in the GCC totalled US$21.1 billion, including market drivers Saudi Arabia (which issued US$8.69 billion in the fi rst nine months of the year) and the UAE (which issued US$5.17 billion over the same period). Oman approved the fi rst Sukuk issuance in the country in June 2013, for OMR50 million (US$129.45 million). The GCC outperformed other countries in the 2013 syndicated fi nance market, with eight of the ten top deals of the year occurring in either Saudi Arabia or the UAE; leading the fi eld with over US$7 billion worth of fi nancing. This included a US$1.75 billion equivalent dual currency syndication for Dubai Duty Free and a US$2.55 billion equivalent dual currency syndication for the Investment Corporation of Dubai, facilitated by Dubai Islamic Bank.

Up and coming asset classes include Islamic repurchase agreements (repos), currently a small but growing market, with more transactions in the 2011 than in the whole of the past decade. Asset backed aviation fi nancing is an area that is also set to grow in 2014 as banks in the Middle East prepare to fi nance the region’s airlines, following a spate of plane orders at the Dubai airshow last year. Shariah compliant fi nancing is expected to play a large role in covering the orders worth US$160 billion.

Significant dealsOne of the most anticipated issuances of 2013 was the fi rst Sukuk issued by the Kuala Lumpur-based International Islamic Liquidity Management Corporation (IILM), an international institution to create and issue short-term Shariahcompliant fi nancial instruments to facilitate eff ective cross-border Islamic liquidity management. The Sukuk was issued at US$490 million with a three month tenor and an ‘A-1’ rating from S&P. A deal that captured the headlines in the second half of 2013 was Qatari telecommunications provider Ooredoo’s US$1.25 billion fi ve-year Sukuk.

The company’s fi rst foray into the Sukuk market, the deal was part of a US$2 billion program, and was signifi cant as the fi rst globally issued US dollar-denominated Sukuk using airtime as its underlying profi t asset. Industry professionals predict that new issuers will be encouraged by the potential presented in the Sukuk market if non-traditional assets can be utilized in this fashion. The GCC led in syndicated loans in 2013, with deals such as the ACWA Power SAR1.77 billion (US$471.84 million) corporate facility funded by Banque Saudi Fransi, National Commercial Bank, Saudi British Bank

and Samba Financial Group and the syndicated fi nancing deal for Emirates Aluminium which was the biggest of the year, at US$3.40 billion. The best-performing Islamic syndicated fi nance deal of 2013 in the GCC was the Jebel Ali Free Zone FZE Sukuk, which gained a 4.3% return: beating the regional average return of 9bps by over four times.

New marketsWhilst the established markets engage in competition to see who will become the undisputed global hub for Islamic fi nance, there is a level of interest in discerning where the next emerging markets will be. Expert opinion has identifi ed frontrunners in Turkey, Indonesia and Nigeria. With its debut sovereign Sukuk issuance in 2012 and a follow up of US$1.25 million which was 6.2 times oversubscribed, Turkey has entered onto the scene with confi dence. North African countries such as Morocco and Tunisia have been tipped as prospects to watch by industry heavyweights - the IDB off ered to subscribe to Morocco’s fi rst sovereign Sukuk rather than arrange a loan in 2013 and Tunisia has been mooted as an Islamic fi nance hub for Francophones. Of the Sub-Saharan African countries, Nigeria’s Osun state has beaten the Nigerian government to the issuance of the fi rst Sukuk in the country, raising NGN10 billion (US$62 million) with its deal.

OutlookThe Sukuk market in 2013 was subject to more caution in the market – primarily due to uncertainty regarding the timetable for the US Federal Reserve’s decision on tapering of its stimulus program. Data suggests that 2014 will see signifi cant quantities of Sukuk maturing, which experts have predicted will lead to new issuances with longer tenors - moving up from fi ve years to seven years and encouraging entry to the market from new issuers, with the gap between Sukuk supply and demand expected to peak this year. Given that a timetable has been set for the tapering of the US Federal Reserve stimulus, new issuers from Asia and outside of traditional Sukuk markets are expected to add to the growth in sector.

A new year for Islamic debt capital markets The Islamic debt capital market covers multiple asset classes including asset-backed fi nancing, capital loans, repos, term fi nancing, Sukuk and syndicated fi nance. While some areas (such as asset-backed fi nancing and repos) are still small, sectors such as Sukuk and syndicated fi nancing have found a keen and growing audience around the world. REBECCA SIMMONDS explores the current state of the market.

IFN SECTOR ANALYSISISLAMIC DEBT CAPITAL MARKET

Industry professionals

predict that new issuers will be encouraged by the potential presented in the Sukuk market if non-traditional assets can be utilized in this fashion


SPECIAL REPORT

A subsidiary of McGraw Hill Companies, Dow Jones established its fi rst Islamic Index way back in the 1990s with the aim of providing a list of investible equities that pass screens for Shariah compliance. Islamic indices also serve to provide a defi nitive standard for measuring stock market performance for Islamic investors on the global basis in accordance with the established index methodology.

As of today, numerous Shariah screening methodologies have been developed by index providers around the world to construct, maintain and market ‘Islamic indices’ based on business and fi nancial screenings.

Recently two hot IPOs of technology stocks have taken place: Facebook and Twitt er. Many investors were surprised that both stocks are considered Shariah compliant based on several screening methodologies adopted around the world. Twitt er fulfi lled all the requirements of renowned Shariah stock screening methodologies, while other technology giants including Facebook and Google are also considered Shariah compliant and are included in diff erent Shariah indices. Stocks from Apple were also considered Shariah compliant until revenue from the music segment (iTunes — which is prohibited as a part of entertainment) exceeded the 5% threshold limit.

Before gett ing into details of the underlying factors of Shariah screening methodologies, one should understand that technology stocks in the bourses of the US are frequently traded and essentially allow Muslim investors to earn Halal income while enabling investors to understand the basis of being Shariah compliant and explore the available opportunities to earn legitimate income according to the teachings of Islam.

Several companies have established Shariah screening methodologies: including the Dow Jones Islamic Index (DJIM) family, FTSE, MSCI, Russell Jadwa, KMI etc, mainly based on the guidelines of AAOIFI.

There are two screens employed by Shariah screening companies — business and fi nancial screening. The fi rst ensures that the overall business of a fi rm is not in contradiction with the Shariah rulings. The business screens only consider those businesses that are considered to be in line with the teachings of Islam, therefore exclude all the stocks that lie in impermissible sectors like fi nancials (except Islamic banks and other fi nancial institutions such as Takaful companies and Islamic asset management companies etc.), alcohol, weapons manufacturing, gambling and gaming, entertainment (including but not limited to pornography), Halal foods such as pork, tobacco, insurance brokers, hotels etc.

The fi nancial screens employ several fi nancial ratios which can vary across individual indices. However the basis is usually similar.

The fi nancial screens are based on a number of fi nancial ratios. The most frequently used fi nancial ratios are the following:• Gearing ratio: Total interest-bearing

debt divided by market capitalization of the company

• Liquidity ratio: Cash plus interest bearing securities divided by market capitalization

• Cash fl ow ratio: Receivables divided by market capitalization

• Income ratio: Impermissible income divided by total income

The DJIM is considered to be the premiere Islamic index, and considers all the above fi nancial ratios including gearing ratio, liquidity ratio and cash fl ow ratio. It is recommended that the resultant of above ratios should be within 33% to be deemed Shariah compliant. DJIM considers 24 months average market capitalization in the denominator. However, investors are suggested to apply an income ratio of 5% incase of above stated companies.

FTSE has also established Shariah screening criteria in collaboration with

Yasaar Company, which employs similar business screen but is quite diff erent in the fi nancial aspect. Total assets are used in the denominator instead of average market capitalization in the gearing ratio; while in the cash fl ow ratio, receivables are also included with the threshold mark of 50%. While using total assets instead of market capitalization in the FTSE screening formula is the primary diff erence, FTSE also does not allow screening tests to be based on market expectation rather than on true worth of assets, therefore considered in the denominator. In case of DJIM, higher market capitalization resulting from bett er performances would lead to lower fi nancial ratios and eff ectively become an expectation factor in the screening tests.

There are other leading Shariah screening methodologies including Malaysia’s Shariah screening methodology, the recently launched NASDAQ 100 Shariah Index. Moreover, Russell Investment Group and Jadwa Investment of Saudi Arabia launched an Islamic index in 2009; with business screens mostly similar in each methodology but with certain exceptions in fi nancial ratios.

In Pakistan Al Meezan, the largest Islamic asset management company in the country, established KSE-Meezan Index (KMI-30) — a collaboration between Al Meezan Investment Management and the Karachi Stock Exchange, in consultation with the parent company which saw the development of detailed guidance on fi nancial ratios and business screens. However, the latt er remains the same in most Shariah screening methodologies.

It is important to conclude that the responsibility rests with the traders/brokers to provide information to retail investors and institutional investors about the 5% limit on income ratio to ensure that non-compliant income does not become part of the income.

Saad Naqi Khan is the audit offi cer at Meezan Bank. He can be contacted at [email protected].

Shariah compliant technology stocks The demand for Shariah compliant stocks has increased tremendously since the inception of the Islamic fi nance industry, both from retail and institutional investors. Although in the early days it was diffi cult for investors to determine how to invest in Shariah compliant stocks and earn Halal income, the AAOIFI Shariah standards for stock exchanges have since allowed the construction of Islamic indices. SAAD NAQI KHAN questions how technology stocks are now screened to be Shariah compliant?


IFN SECTORCORRESPONDENTS

IFN COUNTRYCORRESPONDENTS

IFN Country CorrespondentsAFGHANISTAN: Zulfi qar Ali Khanhead of Islamic banking division, fi nancial supervision department, Da Afghanistan BankAUSTRALIATalal Yassine, managing director, Crescent WealthBAHRAIN: Dr Hatim El-Tahirdirector, Islamic Finance Knowledge Centre, Deloitt e & ToucheBANGLADESH: Md Shamsuzzamanexecutive vice president, Islami Bank BangladeshBELGIUM: Prof Laurent Marliere CEO, ISFIN BERMUDA: Belaid A Jheengoordirector of asset management, PwCBRUNEI: James Chiew Siew Huasenior partner, Abrahams Davidson & CoCANADA: Jeff rey S Grahampartner, Borden Ladner GervaisCZECH REPUBLIC: JUDr Ivana Hrdlickova,judge, Judiciary, Appelate Court PardubiceEGYPT: Dr Walid Hegazymanaging partner, Hegazy & AssociatesFRANCE: Kader Merbouhco head of the Executive Master of the Islamic Finance,Paris-Dauphine UniversityHONG KONG & CHINA: Anthony ChanNew Line Capital Investment LimitedINDIA: H Jayeshfounder partner, Juris CorpINDONESIA: Farouk A Alwynichairman, Center for Islamic Studies in Finance, Economics, and DevelopmentIRAN: Majid PirehIslamic fi nance expert, SEOIRAQ: Khaled Saqqafpartner and head of Jordan & Iraq offi ces, Al Tamimi & CoIRELAND: Ken OwensShariah funds assurance partner, PwC IrelandJAPAN: Serdar A. Basarapresident, Japan Islamic FinanceJORDAN: Khaled Saqqafpartner and head of Jordan & Iraq offi ces, Al Tamimi & CoKENYA: Bilal AbdulAziz Laving head of product development and Shariah compliance, Gulf African BankKOREA: Yong-Jae Changpartner, Lee & KoKUWAIT: Alex Salehpartner, Al Tamimi & CompanyLUXEMBOURG: Marc Theisenpartner, Theisen LawMALDIVES: Aishath Muneezahead of Islamic fi nance, Capital Market Development AuthorityMALTA: Reuben Butt igiegpresident, Malta Institute of ManagementMAURITIUS: Sameer K Tegallyassociate, Conyers Dill & PearmanMOROCCOAhmed Tahiri Jouti, senior consultant, Al Maali Islamic Finance Training and ConsultancyNEW ZEALAND: Dr Mustafa Faroukcounsel member for Islamic fi nancial institutions, FIANZNIGERIA: Auwalu AdoShariah auditor, Jaiz BankOMAN: Riza Ismail,senior associate, Trowers & HamlinsPAKISTAN: Muhammad Shoaib Ibrahim managing director & CEO, First Habib ModarabaPHILIPPINES: Rafael A Moralesmanaging partner, SyCip Salazar Hernandez & GatmaitanQATAR: Amjad Hussainpartner, K&L GatesRUSSIA: Roustam Vakhitovmanaging partner, International Tax AssociatesSAUDI ARABIA: Nabil Issapartner, King & SpaldingSENEGAL: Abdoulaye MbowIslamic fi nance advisor, Africa Islamic Finance CorporationSOUTH AFRICA: Amman MuhammadCEO, First National Bank — Islamic FinanceSINGAPORE: Yeo Wicopartner, Allen & GledhillSRI LANKA: Roshan Madewaladirector/CEO, Research Intelligence UnitSWITZERLAND: Khadra Abdullahiassociate of investment banking, Faisal Private Bank TANZANIA: Khalfan Abdallahhead of product development and Sharia compliance, Amana BankTHAILAND: Shah Fahad Yousufzai, vice-president and head of strategic marketing and product development, Islamic Bank of ThailandTUNISIA: Karim AmousManaging partner, SmartecoTURKEY: Ali Ceylanpartner, Baspinar & PartnersUAE: Moinuddin MalimCEO, Mashreq Al IslamiUK: Siraj Ibrahimcorporate fi nance manager, QIB UKUS: Joshua Brockwell, investment communications director, Azzad Asset Management YEMEN: Moneer Saifhead of Islamic banking, CAC Bank

IFN Correspondents are experts in their respective fi elds and are selected by Islamic Finance news to contribute designated short country reports. For more information about becoming an IFN Correspondent please contact [email protected]

QATAR

By Amjad Hussein

In order to further the goals of Qatar's Vision 2030, the Qatar Central Bank (QCB) announced earlier this month its program until 2016 to consolidate regulatory oversight over the banking sector, the fi nancial markets and the insurance sector. The plan highlights Islamic fi nancial institutions as a crucial component of the growth of Qatar's economy and seeks to enhance their role and contribution to its development.

The QCB also announced that it is developing rules for the listing of exchange-traded funds (ETFs) on the Qatar Exchange (QE) and has also hinted at plans to improve the sharing of credit rating information by widening access to information from its credit bureau to entities such as the QE and telecommunications companies. The credit bureau is a division of the QCB responsible for assessing borrower creditworthiness and for providing creditworthiness reports on customers to banks. The QCB said it will launch the second phase of the credit bureau project for telecommunications companies and connect the banking risks system to the Ministry of Justice’s real estate registration department and QE to allow for easier verifi cation of guarantees provided by borrowers.

The QCB in December issued government bonds and Sukuk for national banks for a period of three years and fi ve years with a total value of QAR4billion (US$1.09 billion).The government has signaled however that Qatar is unlikely to issue debt on international markets in 2014 and that any issued debt in 2014 will only be

intended for monetary and liquidity management. Masraf Al Rayan (MAR), Qatar's largest Islamic bank by market value, has made inroads into the UK by recently agreeing with the Islamic Bank of Britain (IBB) the terms of a cash off er for IBB's entire capital. MAR reportedly off ered GBP24.1million (US$39.56 million) in cash for the acquisition of IBB’s shares.

Moody’s has assigned a fi rst-time ‘Baa2’ insurance fi nancial strength rating to Qatar-based Damaan Islamic Insurance Company (Beema) with a stable outlook. Established in 2009, Beema is a Shariah compliant insurance service provider. It writes a mix of non-life, health and Takaful life insurance. Qatar Insurance Company, Qatar Islamic Bank and MAR, Barwa Real Estate and QInvest are the major stakeholders of the company.

QInvest, a leading Islamic investment bank in Qatar, expects 2014 to be another busy year. In 2013 QInvest acted on Sukuk transactions totaling US$3.5 billion including acting as joint lead manager and bookrunner for Ooredoo’s fi rst ever Sukuk, worth US$1.25 billion, which was also the fi rst US dollar Sukuk issued globally using an innovative airtime structure. QInvest acted for Turkey as joint lead manager and bookrunner on the sovereign’s second Sukuk worth US$1.25 billion. In May, QInvest was also one of the joint lead managers for Saudi Arabia-based developer Dar Al Arkan’s US$450 million Sukuk, an off ering from an issuer that provides diversity to Sukuk investors being a rare sub-investment grade Sukuk. Finally, according to a report by Global Investment House, Qatari banks reported the highest year-on-year growth in net interest income (NII) in the GCC at 25.3%. Notably MAR's NII rose 35.3% due to a 26bps year-on-year improvement in its net interest margins and Qatar National Bank also saw robust growth of 28.1% in NII driven by consolidation of its Egypt-based subsidiary National Societe Generale Bank-Egypt.

Amjad Hussain is a partner at law fi rm K&L Gates’ corporate and fi nance practices. He can be contacted at [email protected].

Ending 2013 on a strong note

Qatari banks reported the

highest year-on-year growth in net interest income (NII) in the GCC at 25.3%


IFN COUNTRYCORRESPONDENTS

TURKEY

By Ali Ceylan

Turkey has introduced limits on debit and credit card installments and bank loan amounts for the purposes of avoiding redundant consumer spending. The changes on credit cards were published in the last Offi cial Gazett e of 2013, dated the 31st December 2013 and numbered 28868. As per the amendment made on the communiqué regarding debit and credit cards, the maximum installment quantity is nine while purchasing goods or services. This limitation is also applicable for the cash withdrawals made by using credit cards.

While the installment quantity is limited to nine for ordinary good or service purchases, consumptions for telecommunication, jewellery, food and oil are completely prohibited.

In addition to the above-mentioned limitation on credit cards, another regulation change is made on the communiqué regarding bank loan transactions. The change is published on the same Offi cial Gazett e mentioned above. As per the amendment: credit percentage shall not exceed 70% for

the vehicles valued at TRY50,000 (US$22,930.5) or less concerning the vehicle loans granted to the customers for automobile purchases and loans granted against vehicle pledge or at the fi nancial leasing transactions. This percentage shall be applied as 70% to the fi rst TRY50,000 for vehicles valued at more than TRY50,000; and as 50% for the exceeding amount.

Limitations on consumer loans have also been introduced through the amendments made on the communiqué regarding bank loan transactions. According to the new form of the communiqué, consumer loan maturity term cannot exceed 36 months, and cannot exceed 48 months for the loans granted for vehicle purchases. However, these limitations are not applicable for the loans granted for real estate purchases.

It should be noted that all of the above-mentioned changes on the credit card installments and bank loans will become eff ective as of 1st February 2014.

In addition to the changes made concerning credit cards and bank loans; a considerable number of tax amounts are increased through general communiqués

published on the Offi cial Gazett e dated the 30th December 2013 and numbered 28867. The increased taxes are in a wide range from valuable papers to motor vehicle tax. Most of the taxes are increased by 3.93%, named as the “revaluation rate” determined in the Tax Procedure Law.

One of most recent developments in the fi nancial sector is the communiqué on real estate investment funds published in the Offi cial Gazett e dated the 3rd January 2014 and numbered 28871. According to the communiqué, real estate investment funds are not authorized to deal with any other transaction except than the management of the portfolio consisted of the assets and transactions stated in the communiqué. It is another requirement for the fund to have real estate investments equal to at least 80% of the fund’s total value. The fund value shall reach at least TRY10 million (US$4.59 million) within one year following the date when sale of the participation shares to the qualifi ed investors begin. It should be noted that the communiqué will enter into force as of the 1st July 2014.

Ali Ceylan is a partner at Baspinar & Partners. He can be contacted at [email protected].

Limitations introduced on credit card installments and loan amounts

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IFN Sector CorrespondentsASSET MANAGEMENTSean Daykin, head of investment funds, Emirates NBD Asset Management CROSS-BORDER FINANCING:Fara Mohammad, senior lawyer and consultant in Islamic fi nanceDEBT CAPITAL MARKETS: Muhammad Shoaib Ibrahim, managing director & CEO, First Habib Modaraba LAW: Bishr Shiblaq, head of Dubai offi ce, Arendt & MedernachLEASING: Professor Dr Shahinaz Rashad, chairperson & CEO, Egyptian Leasing AssociationMICROFINANCE (ASIA):Dr Mahmood Ahmed, executive vice president and director training, Islami Bank Training and Research AcademyMICROFINANCE (AFRICA): Mansour Ndiaye, director of microfi nance, Assistance and Consulting for DevelopmentPRIVATE BANKING & WEALTH MANAGEMENTKhadra Abdullahi, associate, investment banking, Faisal Private BankPRIVATE EQUITY & VENTURE CAPITAL: Arshad Ahmed, partner, Elixir CapitalREAL ESTATE (EUROPE) Philip Churchill, founder partner, 90 North Real Estate PartnersREAL ESTATE (MIDDLE EAST): Yahya Abdulla, head of capital markets — Middle East, Cushman & Wakefi eldREGULATORY ISSUES (ASIA)Intan Syah Ichsan , chief operating offi cer, Samuel Aset ManajemenREGULATORY ISSUES (MIDDLE EAST): Mohammad Abdullah Malik Dewaya, head of Shariah compliance and audit, Maisarah Islamic Banking ServicesRETAIL BANKING: Ris Rizqullah, lecturer, Trisakti UniversityRISK MANAGEMENT: Abu Bakr Abdel Rahman, relationship manager, NBD-ADIBSECURITIES & SECURITIZATION: Nidhi Bothra, executive vice president, Vinod Kothari ConsultantsSTOCK BROKING & TRADING: Athif Shukri, research analyst, Adl CapitalSUKUK Marco Mauri, senior director of asset management, Alkhair Capital Saudi Arabia TAKAFUL (UAE)Rima Mrad, Partner, Bin Shabib & AssociatesTAKAFUL & RE-TAKAFUL: Dr Sutan Emir Hidayat, senior lecturer, University College of BahrainTREASURY PRODUCTS: Nafi th ALHersh Nazzal, certifi ed fi nancial & investment advisorTECHNOLOGY: Syed Mohammad Ali, Islamic fi nance consultant, Miraipod IncIFN Correspondents are experts in their respective fi elds and are selected by Islamic Finance news to contribute designated short sector reports. For more information about becoming an IFN Correspondent, please contact [email protected]

TAKAFUL

By Rima Mrad

The end of 2013 witnessed the announcement of a groundbreaking decree by Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, regarding the creation of the Dubai Islamic Economy Development Center. This center constitutes a part of Dubai’s overall ambition to establish itself as a global hub for the Islamic economy.

This announcement will have a direct impact on the diff erent sectors of the Islamic fi nance industry, including Takaful. It is a commitment from the

government of Dubai to enhance the operational and legal conditions relating to the industry and making it more competitive and reliable.

We are looking forward to witnessing the development of the Shariah compliant fi nance sector during the course of 2014 in the UAE due to this unprecedented commitment from the ruler of Dubai to further focus on this sector of the fi nancial industry and support Dubai to grow and compete with the international Islamic capitals such as London and Kuala Lumpur.

Apart from the above and in terms of the particular legal changes relating to the Takaful industry, we are expecting the UAE Insurance Authority to issue in the fi rst half of 2014 the new prudential regulations tailored for Takaful, including capital adequacy calculation, technical provisions, solvency margins and investments parameters. These regulations are expected to enhance the foundation of the stable and strong Takaful operators with sound fi nancial abilities. They will also fi ll a huge gap in the existing overall insurance laws and regulations that are considered one of the main reasons behind the diff erent shortfalls in the performance of the Takaful operators in the UAE.

On another note, preparations have now started for the next World Takaful Conference, due to take place in April 2014, which will gather a number of major Takaful and conventional companies. Topics of discussions during this event will include major critical challenges and prospects facing the Takaful industry and the ways to address such challenges with more effi ciency.

Rima Mrad is a partner at Bin Shabib & Associates. She can be contacted at [email protected].

2014: The year for Takaful?

We are expecting

the UAE Insurance Authority to issue in the first half of 2014 the new prudential regulations tailored for Takaful, including capital adequacy calculation, technical provisions, solvency margins and investments parameters


ASSET MANAGEMENT FEATURE

The Chit fund system, with numerous in-built advantages including easy accessibility, user friendly services etc., and which is also free of latent cost and periodic interest hikes or exorbitant pre-closure charges, is the preferred option for those who plan to save small amounts. Chit funds are a saving cum borrowing instrument, which are unique when compared to other fi nancial products.

Cash fl ows are the lifeline of business — big or small. Usually big businesses manage to meet their capital requirements with the help of banks and other formal fi nancial channels. Banks extend timely support to big enterprises and it is a win-win situation for both parties. Small businesses are traditionally avoided by banks and formal financial institutions because of their accounting procedures, lack of proper record-keeping and inability to provide satisfactory security. They have been historically wedged between the moneylenders, with their exorbitant cost of loans; and banks, with their stringent procedures. Chit funds are a more suitable financing model for small businesses mainly because they do not require rigorous documentation; and are thus able to help small businesses overcome their financial constraints. As and when the need arises, SMEs receive the loan out of their own funds by lots. Once they receive the loan, they continue to pay the monthly contributions.

Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA), which are popular in many countries such as the US, Cambodia, Korea, Malaysia and Indonesia. Chits are an important fi nancial tool, providing access to fi nance for both 8MEs and individuals with pressing cash requirements in India. According to ‘Malabar Kuri’, a book writt en by Edith Jemima Simcox, the chit fund system existed even during ancient Dravidian Times and is somewhat similar to the systems that existed in China. In Japan it is called the ‘Mujin-ko’ or ‘Tanomoshi-ko’ and in Korea it is

known as ‘Kye’. In Zimbabwe, 76% of urban market traders participate in chit funds while in Egypt they also seem to be very popular among bank employees.

The earliest systems of chits made use of lots. Currently, the systems of auctioning and tendering are also in practice. Following the chits based on the lot system makes it permissible in the light of Shariah.

The ‘foreman’ or the company or person conducting the chit fund brings people together and conducts the chit fund. The foreman is also the person responsible for collecting the money from subscribers, presiding over the lots and keeping records of subscribers. He is compensated a fi xed amount (generally 5% of the gross chit amount) monthly for his eff orts. Other than that the foreman does not have any specifi c privileges.

The foreman has to deposit 100% of the chit value before the start of the new chit as fi xed deposit with the bank as per the Chit Funds Law. The commission that can be charged by the foreman is 5% of the chit value for the subscribers.

Let us take an example of a chit valuing US$100,000 = 10 subscribers = 10 months:

With 5% as the commission or service charges for subscribers when s/he is winning the lot will be charged US$5,000 so the rest of the US$95,000 will be paid to him/her at once. In this group of 10 subscribers, the company is gett ing US$50,000 as commission. To avoid defaults we have adopted the social pressure system among the group which is helping to conduct the activities smoothly; and until now we have not faced any defaults.

Other normal chit fund companies practice by bidding process. For example in a scheme of 25 members contributing US$100 each per month, for 25 months:

The total amount collected per month would be US$2,500. In the auction meeting, bidders can bid only up to this

total amount. The successful bidder is one who gives the highest bid amount, not exceeding the maximum limit, within the specifi ed auction time. Suppose the winning bidder bids for US$2,000, he would get this amount and the rest of the amount (i.e. US$500) is divided among the 25 members. This discount of US$20 (i.e. 500/25) is then returned back to each member. So the next month’s contribution would be US$100- US$20 =US$80.

This process gets repeated for all months till the end of the scheme, giving each member a chance of receiving the money. If in a particular month there is more than one person willing to take the sum, a lot is taken to declare the person who would get the sum.

A major drawback is that chit funds do not off er any pre-determined or fi xed returns. Higher returns are earned when there are more members in the group or if the duration of the scheme is longer. One would earn more when more members need emergency funds. Thus returns cannot be calculated and decided when one joins the scheme.

With the plethora of chit fund companies around, the safety of a chit fund lies in choosing the right one. In a registered chit fund company, under legal binding, the activities are regulated and institutionalized by the Chit Fund Act and hence could be considered safe. However, other unregistered companies operating informally do exist. Investors need to exercise caution when choosing where they desire to invest.

Chit funds defi nitely are an att ractive option for regular saving. They inculcate a disciplined approach to fi nancial planning. They also have the added advantage of bringing a combination of savings as well as hassle-free borrowing. This dual purpose investment tool could be a friend in need at times of unexpected fi nancial emergencies..

Asif Ulla Khan is the managing director of Amana Chits India. He can be contacted at asifk [email protected].

Asset management and Chit funds Chit funds are classifi ed as ‘miscellaneous non-banking fi nancial institutions’ under the Reserve Bank of India Act 1934, and played a major role in the National Financial Inclusion Program even before the evolution of the country’s banking sector. ASIF ULLA KHAN discusses the unique role they continue to play in the Indian fi nancial system.


DEAL TRACKER

ISSUER SIZE DATE ANNOUNCED

Government of Luxembourg EUR200 million 7th January 2014

Government of Oman OMR200 million 6th January 2014

Vallianz Capital US$500 million 26th December 2013

Bank Asya US$500 million 23rd December 2013

Ahmad Zaki Resources RM1 billion 19th December 2013

1Malaysia Development RM1.5 billion 19th December 2013

Tenaga Nasional RM4 billion 12th December 2013

Bank Rakyat RM9 billion 10th December 2014

BIMB Holdings RM1.7 billion 10th December 2014

State Bank of Pakistan PKR50 billion 9th December 2013

SP Setia RM700 million 6th December 2013

Central Bank of Qatar QAR1 billion 6th December 2013

Kuwait Airways TBA 4th December 2013

Hong Kong Government TBA 28th November 2013

Binariang GSM RM6 billion 28th November 2013

Perusahaan Listrik Negara IDR2 trillion 27th November 2013

South African Government TBA 26th November 2013

Dubai Investments US$300 million 19th November 2013

Mudajaya Group RM1 billion 19th November 2013

Emirates US$4.5 billion 18th November 2013

Saudi Electricity Company TBA 15th November 2013

Federal Government of Nigeria TBA 13th November 2013

KPJ Healthcare RM1 billion 7th November 2013

Asian Development Bank TBA 6th November 2013

Jordanian Government TBA 30th October 2013

UK Treasury GBP200 million 29th October 2013

Malaysia Building Society RM3 billion 29th October 2013

Jana Kapital RM4 billion 29th October 2013

Tunisian Government TND1 billion 29th October 2013

Moroccan Government TBA 25th October 2013

National Enforcement and Registration System RM595 million 25th October 2013

Turk Telekomunikasyon US$1 billion 25th October 2013

National Commercial Bank SAR4 billion 11th October 2013

Islamic Development Bank US$10 billion 7th October 2013

ACWA Power International US$800 million 4th October 2013

Government of Yemen YER50 billion 30th September 2013

Emirates Airline US$22 billion 25th September 2013

Government of Pakistan INR7 billion 20th September 2013

Government of South Africa US$700 million 20th September 2013

TH Heavy Engineering RM51.54 million 6th September 2013

Albaraka Turk Katilim Bankasi US$200 million 4th September 2013

Kumpulan Wang Persaraan US$100 million 2nd September 2013

Malaysian Treasury RM2.5 billion 30th August 2013

Societe Generale RM1 billion 26th August 2013

Malaysia Airports Holdings RM2.5 billion 16th August 2013

Dar Al Arkan US$450 million 14th August 2013

OCK Group RM150 million 12th August 2013

Genting Plantations RM1.5 billion 26th July 2013

Republic of Senegal US$200 million 25th July 2013

training

www.REDmoneyTraining.com

JANUARY 2014

IFB: IFSA 2013 and the Takaful Industry21 January, KUALA LUMPUR

MIFT: Shariah Audit for Islamic Business Banking23-24 January, KUALA LUMPUR

FEBRUARY 2014

IFT: Structuring Islamic Trade Finance Solution16-18 February, RIYADH

MIFT: Structuring Shariah Based Financial Products18-20 February, DUBAI

MARCH 2014

MIFT: Structuring and Shariah Issues for Islamic Capital Markets10-11 March, KUALA LUMPUR

MIFT: Islamic Treasury Principles, Products and Operations13-14 March, KUALA LUMPUR

MIFT: Structuring Sukuk and Islamic Capital Markets Products 16-18 March, DUBAI


SHARIAH INDEXES

SAMI Halal Food Participation (All Cap) 6 months

REDmoney Asia ex. Japan 6 Months REDmoney Europe 6 Months

REDmoney GCC 6 Months REDmoney Global 6 Months

REDmoney MENA 6 Months REDmoney US 6 Months

1700

1760

1820

1880

1940

2000

Jan-2014Dec-2013Nov-2013Oct-2013Sep-2013Aug-2013

All Cap Large Cap Medium Cap Small Cap

650

760

870

980

1090

1200

JanDecNovOctSepAug800

870

940

1010

1080

1150

JanDecNovOctSepAug


500

600

700

800

900

1000

JanDecNovOctSepAug


680

814

948

1082

1216

1350

JanDecNovOctSepAug


500

580

660

740

820

900

JanDecNovOctSepAug


800

1060

1320

1580

1840

2100

JanDecNovOctSepAug



SHARIAH INDEXES

For further information regarding REDmoney Indexes contact:

Andrew MorganManaging Director, REDmoney Group

Email: [email protected] +603 2162 7800

RED

REDmoney Global Shariah Index Series

REDmoney Global Shariah Index Series (All Cap) 6 Months REDmoney Global Shariah Index Series (Large Cap) 6 Months

REDmoney Global Shariah Index Series (Medium Cap) 6 Months REDmoney Global Shariah Index Series (Small Cap) 6 Months

Utilities2%Telecomunication Services

2%

Technology14%

Basis Materials15%

Non-CyclicalConsumer Goods Services

7%

Energy8%

Financials4%

Healthcare11%

Industrials22%

Consumer Goods Services15%

REDmoney Global Shariah

Equities are considered eligible for inclusion into the REDmoney Global Shariah Index Series only if they pass a series of market related guidelines related to minimum market capitalization and liquidity as well as country restrictions.

Once the index eligible universe is determined the underlying constituents are screened using a set of business and fi nancial Shariah guidelines.

The REDmoney Global Shariah Index Series powered by IdealRatings consists of a rich subset of global listed equities that adhere to clearly defi ned and transparent Shariah guidelines defi ned by Shariyah Review Bureau in Jeddah, Saudi Arabia.

The REDmoney Shariah Indexes provides Islamic investors with an accurate and Shariah-specifi c equity performance benchmark with optimized compliance credibility due to the intensive research conducted to ensure that index constituents do not confl ict with the defi ned Shariah requirements.

IdealRatings™ is the leading provider of Shariah investment decision support tools to investors globally, including asset managers, brokers, index providers, and banks to empower them to develop, manage and monitor Shariah investment products and Shariah compliant funds. IdealRatings is headquartered in San Francisco, California. For more information about IdealRatings visit: www.idealratings.com

REDmoney Asia ex. Japan REDmoney Europe REDmoney GCC

REDmoney Global REDmoney MENA REDmoney US

550

700

850

1000

1150

1300

JanDecNovOctSepAug450

600

750

900

1050

1200

JanDecNovOctSepAug



500

820

1140

1460

1780

2100

JanDecNovOctSepAug



500

780

1060

1340

1620

1900

JanDecNovOctSepAug




FUNDS TABLES

Comprehensive data from Eurekahedge will now feature the overall top 10 global and regional funds based on a specifi c duration (yield to date, annualized returns, monthly returns), Sharpe ratio as well as delve into specifi c asset classes in the global arena – equity, fi xed income, money market, commodity, global investing (which would focus on funds investing with global mandate instead of a specifi c country or geographical region), fund of funds, real estate as well as the Sortino ratio. Each table covering the duration, region, asset class and ratio will be featured on a fi ve-week rotational basis.

Eurekahedge Islamic Fund Index

Top 10 Yield-to-Date Returns for ALL Islamic Funds

Fund Fund Manager Performance Measure Fund Domicile

1 Meezan Tahaff uz Pension - Equity Sub Al Meezan Investment Management 46.27 Pakistan

2 Jadwa Saudi Equity Jadwa Investment 46.12 Saudi Arabia

3 Jadwa GCC Equity Jadwa Investment 45.34 Saudi Arabia

4 Atlas Pension Islamic - Equity Sub Atlas Asset Management 44.24 Pakistan

5 Jadwa Arab Markets Equity Jadwa Investment 41.75 Saudi Arabia

6 Atlas Islamic Stock Atlas Asset Management 39.91 Pakistan

7 CIMB Islamic Small Cap CIMB-Principal Asset Management 39.03 Malaysia

8 Al Rajhi Local Shares Al Rajhi Bank 30.48 Saudi Arabia

9 The Iman Allied Asset Advisors 29.91 US

10 Public Islamic Opportunites Public Mutual 28.70 Malaysia

Eurekahedge Islamic Fund Index 10.38

Top 10 Sharpe Ratio for ALL Islamic Funds since Inception


1 Meezan Tahaff uz Pension - Money Market Sub Al Meezan Investment Management 10.09 Pakistan

2 Meezan Tahaff uz Pension - Debt Sub Al Meezan Investment Management 5.27 Pakistan

3 Atlas Pension Islamic - Debt Sub Atlas Asset Management 5.18 Pakistan

4 Public Islamic Money Market Public Mutual 4.40 Malaysia

5 PB Islamic Cash Management Public Mutual 3.38 Malaysia

6 Al Rajhi Commodity Mudarabah - USD Al Rajhi Bank 2.67 Saudi Arabia

7 PB Islamic Bond Public Mutual 1.97 Malaysia

8 Public Islamic Income Public Mutual 1.92 Malaysia

9 Public Islamic Bond Public Mutual 1.82 Malaysia

10 PB Islamic Cash Plus Public Mutual 1.75 Malaysia


Based on 31.91% of funds which have reported December 2013 returns as at the 6th January 2014

For funds having a track record of at least 12 months as at the end of December 2013

Inde

x Va

lues

60

80

100

120

140

160

180

Dec

-99

Mar

-01

May

-02

Jul-0

3

Aug

-04

Oct

-05

Dec

-06

Mar

-08

May

-09

Jul-1

0

Aug

-11

Oct

-12

Dec

-13


FUNDS TABLES

Contact EurekahedgeTo list your fund or update your fund information: [email protected] further details on Eurekahedge: [email protected] Tel: +65 6212 0900

DisclaimerCopyright Eurekahedge 2007, All Rights Reserved. You, the user, may freely use the data for internal purposes and may reproduce the index data provided that reference to Eurekahedge is provided in your dissemination and/or reproduction. The information is provided on an “as is” basis and you assume and will bear all risk or associated costs in its use, and neither Islamic Finance news, Eurekahedge nor its affi liates provide any express or implied warranty or representations as to originality, accuracy, completeness, timeliness, non-infringement, merchantability and fi tness for any purpose.

Eurekahedge Islamic Fund Equity Index over the last 3 years Eurekahedge Islamic Fund Equity Index over the last 1 year

Perc

enta

ge

Perc

enta

ge


Top 10 Islamic Equity Funds by 3 Month Returns


1 Meezan Tahaff uz Pension - Equity Sub Al Meezan Investment Management 15.50 Pakistan

2 Meezan Islamic Al Meezan Investment Management 14.21 Pakistan

3 Al Meezan Mutual Al Meezan Investment Management 13.51 Pakistan

4 Atlas Pension Islamic - Equity Sub Atlas Asset Management 12.01 Pakistan

5 Al Baraka Hermes Fund Management 11.58 Egypt

6 Amanah Saudi Industrial SABB 11.38 Saudi Arabia

7 Al Rajhi Petrochemical and Cement Equity Al Rajhi Bank 10.12 Saudi Arabia

8 Atlas Islamic Stock Atlas Asset Management 10.07 Pakistan

9 Faisal Islamic Bank of Egypt Mutual Hermes Fund Management 9.77 Egypt

10 The Iman Allied Asset Advisors 9.75 US


Top 10 Monthy Returns for Globally Investing Islamic Funds


1 CIMB Islamic Global Equity CIMB-Principal Asset Management 4.47 Malaysia

2 WSF Global Equity - USD I Reliance Asset Management (Malaysia) 3.10 Guernsey

3 Al-Mubarak Global Equity Arab National Bank 2.27 Saudi Arabia

4 AmOasis Global Islamic Equity AmInvestment Management 2.26 Malaysia

5 HSBC Amanah Global Equity Index HSBC Amanah Central Shariah Committ ee 2.19 Saudi Arabia

6 Al Rajhi Global Equity UBS 2.10 Saudi Arabia

7 JPM Islamic Global Dynamic Equity (USD) A (acc) JPMorgan International Bank 2.05 Luxembourg

8 Al-Mubarak Balanced Arab National Bank 0.98 Saudi Arabia

9 Emirates Islamic Global Balanced EIS Asset Management 0.97 Channel Islands

10 Jadwa Global Sukuk Jadwa Investment 0.25 Saudi Arabia



98100102104106108110112114116118

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Dec

-13

80859095

100105110115120125130

Jan-

11

Oct

-11

Jul-1

2

Apr

-13

Dec

-13


LEAGUE TABLES

Global Sukuk Volume by Month Global Sukuk Volume by Quarter

020040060080010001200

02468

1012

1 2 76 12111098543

2013

US$mUS$bn

Value (US$bn)Avg Size (US$m)

0100200300400500600

02468

1012141618

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 4Q3Q2Q2009 2010 2011 2012 2013

US$mUS$bn Value (US$bn) Avg Size (US$m)

Most Recent Global Sukuk

Priced Issuer Nationality Instrument Market US$ (mln) Managers23rd Dec 2013 BGSM

ManagementMalaysia Sukuk Murabahah Domestic market

public issue2,091 RHB Capital, CIMB Group, AmInvestment

Bank

23rd Dec 2013 Boustead Holdings Malaysia Sukuk Domestic market public issue

208 Affi n Investment Bank

18th Dec 2013 Jana Kapital Malaysia Sukuk Murabahah Domestic market public issue

192 RHB Capital

18th Dec 2013 Malaysia Building Society

Malaysia Sukuk Murabahah Domestic market public issue

152 RHB Capital

12th Dec 2013 Malakoff Malaysia Sukuk Domestic market public issue

1,677 CIMB Group, Maybank Investment Bank

12th Dec 2013 Imtiaz Sukuk II Malaysia Sukuk Musharakah Domestic market public issue

156 CIMB Group, Maybank Investment Bank

5th Dec 2013 SABB Saudi Arabia

Sukuk Domestic market private placement

400 HSBC

3rd Dec 2013 UEM Sunrise Malaysia Sukuk Domestic market public issue

217 CIMB Group, Maybank Investment Bank

26th Nov 2013 Sukuk Funding (No 3)

UAE Sukuk Musatahah Euro market public issue

750 Standard Chartered Bank, Goldman Sachs, National Bank of Abu Dhabi, First Gulf Bank, Dubai Islamic Bank

26th Nov 2013 Ooredoo Tamweel Qatar Sukuk Euro market public issue

1,250 Deutsche Bank, HSBC, DBS, Qatar National Bank, QInvest

22nd Nov 2013 Konsortium Lebuhraya Utara-Timur (KL)

Malaysia Sukuk Musharakah Domestic market public issue

718 CIMB Group

21st Nov 2013 Dar Al-Arkan International Sukuk

Saudi Arabia

Sukuk Wakalah Euro market public issue

300 Goldman Sachs, Deutsche Bank, Emirates NBD, Bank of America Merrill Lynch, Bank Alkhair

14th Nov 2013 GEMS MENASA (Cayman)

UAE Sukuk Mudarabah Euro market public issue

200 Mashreqbank, Morgan Stanley, Abu Dhabi Islamic Bank, Credit Suisse

7th Nov 2013 Alpha Circle Malaysia Sukuk Musharakah Domestic market public issue

187 RHB Capital

30th Oct 2013 Syarikat Prasarana Negara

Malaysia Sukuk Ijarah Domestic market public issue

318 HSBC, RHB Capital, CIMB Group, AmInvestment Bank

22nd Oct 2013 Gamuda Malaysia Sukuk Murabahah Domestic market private placement

126 CIMB Group, AmInvestment Bank

22nd Oct 2013 DanaInfra Nasional Malaysia Sukuk Murabahah Domestic market public issue

789 RHB Capital, CIMB Group, Affi n Investment Bank, AmInvestment Bank, Maybank Investment Bank

17th Oct 2013 Cagamas Malaysia Sukuk Domestic market public issue

1,198 RHB Capital, CIMB Group, AmInvestment Bank, Maybank Investment Bank

8th Oct 2013 Government of Ras Al Khaimah

UAE Sukuk Euro market public issue

500 Mashreqbank, Standard Chartered Bank, National Bank of Abu Dhabi, Citigroup, Al Hilal Bank

3rd Oct 2013 Republic of Turkey Turkey Sukuk Euro market public issue

1,250 Standard Chartered Bank, HSBC, QInvest


LEAGUE TABLES

Top 30 Issuers of Global Sukuk 12 MonthsIssuer Nationality Instrument Market US$ (mln) Iss Managers

1 General Authority for Civil Aviation

Saudi Arabia

Sukuk Domestic market public issue

4,056 10.6 Saudi National Commercial Bank, HSBC

2 Saudi Electricity Global SUKUK Company 2

Saudi Arabia

Sukuk Euro market public issue

2,000 5.2 Deutsche Bank, HSBC

3 Sadara Chemical Company

Saudi Arabia

Sukuk Musharakah

Domestic market public issue

2,000 5.2 Deutsche Bank, Riyad Bank, Al-Bilad Bank, Alinma Bank

4 Malakoff Malaysia Sukuk Domestic market public issue

1,521 4.0 CIMB Group, Maybank Investment Bank

5 Perusahaan Penerbit SBSN Indonesia III

Indonesia Sukuk Euro market public issue

1,500 3.9 Standard Chartered Bank, Deutsche Bank, Citigroup

6 Cagamas Malaysia Sukuk Domestic market public issue

1,432 3.7 AmInvestment Bank, RHB Capital, CIMB Group, Maybank Investment Bank

7 DanaInfra Nasional Malaysia Sukuk Murabahah


1,310 3.4 RHB Capital, CIMB Group, AmInvestment Bank, Maybank Investment Bank, Hong Leong Financial Group, Affi n Investment Bank

8 Republic of Turkey Turkey Sukuk Euro market public issue

1,250 3.3 Standard Chartered Bank, HSBC, QInvest

8 Ooredoo Tamweel Qatar Sukuk Euro market public issue

1,250 3.3 Deutsche Bank, HSBC, DBS, Qatar National Bank, QInvest

10 IDB Trust Services Saudi Arabia

Sukuk Wakalah

Euro market public issue

1,000 2.6 Standard Chartered Bank, National Consumer Cooperative Bank, RBS, National Bank of Abu Dhabi, Natixis, CIMB Group, Credit Agricole, Barwa Bank

10 Dubai Electricity & Water Authority

UAE Sukuk Ijarah Euro market public issue

1,000 2.6 Standard Chartered Bank, RBS, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Citigroup, Emirates NBD

10 DIB Tier 1 Sukuk UAE Sukuk Euro market public issue

1,000 2.6 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, Dubai Islamic Bank, Emirates NBD

13 Medjool UAE Sukuk Wakalah


993 2.6 Standard Chartered Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Citigroup, Emirates NBD

14 National Higher Education Fund

Malaysia Sukuk Domestic market public issue

806 2.1 RHB Capital, AmInvestment Bank

15 Sime Darby Global Malaysia Sukuk Ijarah Euro market public issue

800 2.1 Standard Chartered Bank, HSBC, Citigroup, Maybank Investment Bank

16 Sukuk Funding (No 3)

UAE Sukuk Musatahah


750 2.0 Standard Chartered Bank, Goldman Sachs, National Bank of Abu Dhabi, First Gulf Bank, Dubai Islamic Bank

16 Dubai DOF Sukuk UAE Sukuk Euro market public issue

750 2.0 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, Dubai Islamic Bank, Emirates NBD

18 Dar Al-Arkan International Sukuk

Saudi Arabia

Sukuk Wakalah


746 1.9 Goldman Sachs, Deutsche Bank, Masraf Al Rayan, Emirates NBD, QInvest, Bank Alkhair

19 Konsortium Lebuhraya Utara-Timur (KL)

Malaysia Sukuk Musharakah


718 1.9 CIMB Group

20 Power & Water Utility Co for Jubail & Yabbu - Marafi q

Saudi Arabia


667 1.7 HSBC

21 Turus Pesawat Malaysia Sukuk Murabahah


624 1.6 RHB Capital, Bank Islam Malaysia, CIMB Group, AmInvestment Bank, Maybank Investment Bank

22 Syarikat Prasarana Negara


623 1.6 HSBC, RHB Capital, CIMB Group, AmInvestment Bank

23 Kapar Energy Ventures


581 1.5 AmInvestment Bank

24 TNB Northern Energy

Malaysia Sukuk Ijarah and Wakalah


543 1.4 HSBC, KAF Investment Bank

25 Turkiye Finans Katilim Bankasi

Turkey Sukuk Euro market public issue

500 1.3 Saudi National Commercial Bank, HSBC, Citigroup, Noor Islamic Bank

25 SIB Sukuk Co III UAE Sukuk Euro market public issue

500 1.3 Standard Chartered Bank, HSBC, Kuwait Finance House, Al Hilal Bank

25 Government of Ras Al Khaimah

UAE Sukuk Euro market public issue

500 1.3 Mashreqbank, Standard Chartered Bank, National Bank of Abu Dhabi, Citigroup, Al Hilal Bank

25 Al Hilal Bank UAE Sukuk Mudarabah / Wakalah


500 1.3 Standard Chartered Bank, HSBC, National Bank of Abu Dhabi, Citigroup, Al Hilal Bank

29 Almarai Saudi Arabia


453 1.2 Banque Saudi Fransi, Standard Chartered Bank, BNP Paribas, HSBC

30 Savola Group Saudi Arabia


400 1.0 HSBC

38,415 100


LEAGUE TABLES

Top Managers of Sukuk 12 Months

Manager US$ (mln) Iss %1 HSBC 6,996 26 18.2

2 CIMB Group 4,036 38 10.5

3 Maybank Investment Bank 2,872 29 7.5

4 RHB Capital 2,817 38 7.3

5 Standard Chartered Bank 2,804 21 7.3

6 AmInvestment Bank 2,669 26 7.0

7 Deutsche Bank 2,384 6 6.2

8 Saudi National Commercial Bank 2,153 2 5.6

9 Citigroup 1,395 8 3.6

10 Emirates NBD 919 8 2.4

11 National Bank of Abu Dhabi 906 8 2.4

12 Dubai Islamic Bank 832 5 2.2

13 QInvest 741 3 1.9

14 Riyad Bank 500 1 1.3

14 Alinma Bank 500 1 1.3

14 Al-Bilad Bank 500 1 1.3

17 Affi n Investment Bank 484 5 1.3

18 Abu Dhabi Islamic Bank 382 3 1.0

19 Al Hilal Bank 381 5 1.0

20 DBS 309 2 0.8

21 RBS 292 2 0.8

22 Goldman Sachs 284 3 0.7

23 KAF Investment Bank 271 1 0.7

24 Qatar National Bank 250 1 0.7

25 Hong Leong Financial Group 209 8 0.5

26 OCBC 196 6 0.5

27 Kuwait Finance House 181 3 0.5

28 Abu Dhabi Commercial Bank 166 1 0.4

29 Barwa Bank 165 2 0.4

30 BNP Paribas 153 2 0.4

Total 38,415 119 100

Top Islamic Finance Related Project Financing Legal Advisors Ranking 12 Months

Legal Advisor US$ (million) No %

1 Cliff ord Chance 3,794 3 33.7

2 Allen & Overy 3,062 4 27.2

3 Sullivan & Cromwell 1,494 1 13.3

3 White & Case 1,494 1 13.3

5 Baker Bott s 666 1 5.9

5 Chadbourne & Parke 666 1 5.9

7 Mohammed Al Zamil & Emad Al Kharashi Law Firm

97 1 0.9

Top Islamic Finance Related Project Finance Mandated Lead Arrangers 12 Months

Mandated Lead Arranger US$ (million) No %1 Public Investment Fund 673 3 8.8

2 Samba Financial Group 605 3 7.9


4 HSBC Holdings 483 3 6.3

5 Arab Petroleum Investments 363 3 4.7

6 Standard Chartered 338 3 4.4

7 Riyad Bank 291 2 3.8

8 Sumitomo Mitsui Financial Group 283 2 3.7

9 Banque Saudi Fransi 282 1 3.7

10 Alinma Bank 280 2 3.6

Sukuk Volume by Currency US$ (billion) 12 Months

Sukuk Volume by Issuer Nation US$ (billion) 12 Months

Global Sukuk Volume by Sector 12 Months

Global Sukuk Volume - US$ Analysis

15.7

14.4

8.0

0.3

Malaysian ringgit

US dollar

Saudi riyal

Singapore dollar

Qatar

14.5

1.3

1.8

2.2

6.2

11.8

0.5

Malaysia

UAE

Saudi Arabia

Indonesia

Singapore

Turkey

Government

TransportationReal Estate/Property

FinanceUtility & Energy

Other7%

19%

6%

24%24%

20%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 4Q3Q2Q2009 2010 2011 2012 2013

0100200300400500600

02468

1012141618

US$mUS$bnNon-US$ US$


LEAGUE TABLES

Top Islamic Finance Related Loans Mandated Lead Arrangers Ranking 12 Months

Mandated Lead Arranger US$ (mln) No %1 HSBC 778 4 6.7

2 Abu Dhabi Islamic Bank 725 7 6.2

3 Standard Chartered Bank 611 5 5.2


5 Saudi National Commercial Bank 536 4 4.6

6 Abu Dhabi Commercial Bank 525 3 4.5

7 Arab Petroleum Investments 519 4 4.4

8 Emirates NBD 511 4 4.4

9 Riyad Bank 447 3 3.8

10 Sumitomo Mitsui Financial Group 439 3 3.8

11 Citigroup 411 2 3.5

12 Gulf International Bank 367 2 3.1

13 First Gulf Bank 363 4 3.1

14 Dubai Islamic Bank 348 2 3.0

15 National Bank of Kuwait 347 3 3.0

16 Samba Capital 341 3 2.9

17 Credit Agricole 332 2 2.9

18 Arab Bank 267 2 2.3

19 Islamic Development Bank 258 3 2.2

20 Noor Islamic Bank 246 4 2.1

21 Barwa Bank 189 3 1.6

22 Al Hilal Bank 186 2 1.6

23 Union National Bank 172 1 1.5

23 SG Corporate & Investment Banking 172 1 1.5

23 Mitsubishi UFJ Financial Group 172 1 1.5

23 Export Development Canada 172 1 1.5

23 BNP Paribas 172 1 1.5

23 Al Khalĳ i Commercial Bank 172 1 1.5

29 Deutsche Bank 160 1 1.4

30 United Arab Bank 146 2 1.3

Top Islamic Finance Related Loans Mandated Lead Arrangers12 Months

Bookrunner US$ (mln) No %1 Emirates NBD 568 3 16.12 HSBC 519 2 14.73 Citigroup 419 1 11.93 Abu Dhabi Commercial Bank 419 1 11.95 Noor Islamic Bank 299 3 8.56 Abu Dhabi Islamic Bank 224 2 6.47 Standard Chartered Bank 149 2 4.27 Barwa Bank 149 2 4.27 Arab Banking Corporation 149 2 4.210 Saudi National Commercial Bank 100 1 2.810 Riyad Bank 100 1 2.810 Gulf International Bank 100 1 2.8

Top Islamic Finance Related Loans by Country 12 Months

Nationality US$ (mln) No %1 UAE 6,501 8 55.6

2 Saudi Arabia 3,987 5 34.1

3 Turkey 809 2 6.9

4 Qatar 271 1 2.3

5 Malaysia 116 2 1.0

Are your deals listed here?If you feel that the information within these tables is inaccurate, you may contact the following directly: Mandy Leung (Media Relations) Email: [email protected] Tel: +852 2804 1223

Top Islamic Finance Related Loans by Sector 12 Months

0US$ bln 1 32 654

Finance

Chemicals

Transportation

Metal & Steel

Oil & Gas

Global Islamic Loans - Years to Maturity (YTD Comparison)

0% 20% 40% 60% 80% 100%2007200820092010

201120122013

0-3yrs 3-5yrs 5-7yrs 7-10yrs 10+yrs

Top Islamic Finance Related Loans Deal List 12 Months

Credit Date Borrower Nationality US$ (mln)

28th Mar 2013 Emirates Aluminium UAE 3,400

10th Jun 2013 ICD UAE 1,675

5th May 2013 Saudi Aramco Saudi Arabia 1,400

5th May 2013 SAMREF Saudi Arabia 1,400

17th Jul 2013 Al Jubail Petrochemical (Kemya)

Saudi Arabia 800

26th Mar 2013 GEMS Education UAE 545

18th Jul 2013 Albaraka Turk Katilim Bankasi

Turkey 427

2nd May 2013 Bank Asya Turkey 383

5th Jun 2013 Gulf Marine Services UAE 340

1st Jun 2013 Mobily Saudi Arabia 321


EVENTS DIARY

Managing Lauren McaughtryEditor [email protected]

Contributions Sasikala ThiagarajaEditor [email protected]

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Journalist Rebecca [email protected]

Contributing Ellina BadriEditor [email protected]

Correspondents Kamal Bairamov, Shabbir Kazmi, Shirene Shan

Production Hasnani AspariManager [email protected]

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Web Siti NoorSafura bt Abd Mutalib Designer [email protected]>

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Tel: +603 2162 7800 x 24

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Tel: +603 2162 7800 x 63

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Tel: +971 4 427 3638

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Tel: +603 2162 7800 x 68

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Managing Director Andrew Morgan& Publisher [email protected]

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FEBRUARY 2014

25th — 26th The 8th International Takaful Summit Abu Dhabi Afk ar Consulting

APRIL 2014

15th IFN Indonesia Forum Jakarta REDmoney Events

21st IFN Iran Forum Tehran REDmoney Events

MAY 2014

12th — 13th IFN Asia Forum 2014 Kuala Lumpur, Malaysia REDmoney Events

26th — 27th IFN Europe Forum Luxembourg REDmoney Events

JUNE 2014

IFN Islamic Investor Forum 2014 Doha, Qatar REDmoney Events

8th IFN Halal Financing Forum Dubai REDmoney Events

10th IFN Kuwait Forum Kuwait REDmoney Events

SEPTEMBER 2014

IFN Global Forum Dubai REDmoney Events

30th IFN Africa Forum Cairo REDmoney Events

OCTOBER 2014

14th IFN Bangladesh Forum Dhaka REDmoney Events

16th IFN Sri Lanka Forum Colombo REDmoney Events

IFN Saudi Forum Riyadh REDmoney Events

NOVEMBER 2014

6th IFN Turkey Forum Istanbul REDmoney Events

COMPANY INDEX

1Malaysia Development (1MDB) 23AAOIFI 34,42,44A’ayan Leasing and Investment Company 4,13ABC Islamic Bank 28Abdullah AM Al-Khodari Sons Company 31ABL Asset Management 34Ableace Raakin 30Ableace Raakin-Amanie 30Abraaj Capital 17,18Abraaj Group 33ABS Logistics 36Absa Islamic Bank 5,21,22Abu Dhabi Commercial Bank 5,28,31Abu Dhabi Equity Partners 5,9,11,Abu Dhabi Exchange (ADX) 30Abu Dhabi Islamic Bank 3,6,8,17,21,22,30,32Abu Dhabi National Oil Company 25ACR ReTakaful Holdings 36ACWA Power 43ADIB Egypt 8,18,22Adnan Sundra and Low 13Affi n Bank 38Affi n Holdings 38Affi n Investment Bank 23,38Affi n Islamic Bank 38Agusto & Co 12Ahli Bank 38Ahli United Bank 29,30,36Ahmad Zaki Resources 23AIG Malaysia Insurance 35Ajman Bank 5,31Akhuwat 27Al Ansari Exchange 42Al Arafah Islamic Bank 19Al Baraka Bank 18,42Al Baraka Bank Egypt 17Al Baraka Bank South Africa 21Al Baraka Bank Sudan 21,22Al Baraka Islamic Bank 19,20,22Al Baraka Islamic Bank Egypt 19Al Baraka Lebanon 20,22Al Baraka Syria Bank 21Al Baraka Turk 3,6Al Hilal Bank 5,16,34,42Al Hilal Islamic Banking Services 38Al Kharafi Group 5Al Madina Insurance Company 35Al Madina Takaful 35Al Marai Company 10,15Al Meezan Investment Management 33,44Al Noor Hospitals Group 5,6,7,16Al Rajhi Bank 17,18,20,22,32,33Al Rajhi Banking & Investment Corporation 17Al-Aqeelah Takaful 42Albaraka Türk Katılım Bankası 10,16,22AlBilad Investment Company 7,15Al-Falaah 17,18,21,27Alinma Bank 31Alinma Investment Company 7,15Alinma Tokio Marine Company 34Al-Jadaan & Partners Law Firm 4,33Alkhabeer’s Express Publishing & Investment 6,Allen & Overy 3,4,6,7,9,10,11,15,16Almarai 27Al-Mourjan For Electricity Production Company (Rabigh 2 IPP) 11Al-Muthanna 31AM Best Europe – Rating Services 34Aman Syria 42Amana Bank 21,22,24,41Amana Chits India 48AmanahRaya Trustees 17,18Amanie Advisors 11,12Amanie Group 30AmInsurance 27AmInvestment Bank 13AMMB Holdings 27,34AmTakaful 27Apple 44Arab Banking Corp 31Arab Finance House 20Arab Insurance Group 34Arab Islamic Bank 21Arabian Centers Company 10Arcapita 4,5Arcapita Investment Holdings 8ASAR Al Ruwayeh & Partners 4ASBIF 26Asian Institute of Finance 28Astra Internasional 11Astra Sedaya Finance 5,11,13Astro Malaysia Holdings 38Atlantic Council 42Atlanticlux Lebensversicherung 5,12,16Australian Center for Islamic Financal Studies 26Australian Center for Islamic Finance 34Azmi & Associates 26Bahra Advanced Cable Manufacturing Co 9,11Bahrain Islamic Bank 19Bait Al Mashura 30Baker & Mckenzie 11,16Bangladesh Petroleum Corporation 25Bank Al Jazira 20Bank Alkhair 33Bank Asya 6,16,24Bank Dhofar 30Bank Indonesia 18Bank Islam 27Bank Islam Brunei Darussalam 19,22Bank Islam Malaysia 6,18,32Bank Melli Iran 20,22Bank Muamalat Indonesia 17,18,19,22Bank Muamalat Malaysia 20Bank Muscat 20,32Bank Negara Malaysia 17,18,41Bank Nizwa 20,22,32Bank of Bahrain and Kuwait 31Bank of London and The Middle East (BLME) 12Bank of Tokyo-Mitsubishi UFJ 19,22Bank of Tokyo-Mitsubishi UFJ Malaysia 11Bank Rakyat 23Bank Simpanan Nasional 28Banka Kombëtare Tregtare 28Banque Misr 25Banque Saudi Fransi 24,43Barwa Bank 5,10,16,20,31Barwa Bank Group 10Barwa Real Estate 45Baspinar & Partners 46Bedell, Christian Guernsey Partnership 12BGSM Management 26,36,40BIMB Holdings 4,6,10,13,27Bin Shabib & Associates 47Binariang GSM 26,27BLME 21,22,29BNP Paribas Malaysia 11Borsa Istanbul 28Boubyan Bank 19,20Boustead Holdings 23British Gas 10Business Custodians 26Cagamas 10,24Capital Markets Authority (Oman) 35Cass Business School of City University (London) 31Cekap Mentari 36Central 384 24Central Bank of Bahrain 23,31,32,41Central Bank of Bangladesh 25Central Bank of Egypt 8Central Bank of Libya 25Central Bank of Qatar 45Central Bank of the UAE 17,31Cham Bank 42Chapel Hill Advisory Partners 12Cheraman Financial Services 33CIMB 18,22CIMB Bank 3,6,11CIMB Group 29CIMB Investment Bank 3,9,10,13CIMB Islamic 27CIMB Islamic Bank 9,13,17,18,20,21,22,27CIMB Niaga Syariah 19Citi 4Citi Islamic Investment Bank 4Citibank 28CityCentreDC 3,5,7,10Cliff ord Chance 4,8,14,33,38Commercial Bank International 16Commercial Bank of Qatar 33Commercial Bank of Syria 42Commerzbank Aktiengesellschaft 28Continental Rail 25Crédit Agricole Corporate and Investment Bank 9,11

Creditor Steering Committ ee 4Crescent Investment Cooperative 34Dabbagh 4Dagong Global Credit Rating Company 32DAMAC Real Estate Development 8Damascus Securities Exchange 42Dana Gas 4,8DanaInfra Nasional 3,6,13Dar Al Arkan 23,45Dar Al Arkan Real Estate Development Company 23Dar Al Sharia Legal & Financial Consultancy 13,16,39DBS Bank 14Deutsche Bank 8,9,11,14,17,24Deutsche Bank Malaysia 38Deutsche Securities Saudi Arabia 7,15Devon Bank 22DEWA 4Deyar Al Balad 7,10DLA Piper 4,10Doha Bank 33Doha Insurance 35Doha Takaful 35Dow Jones 44DRB-HICOM 36Dubai DOF Sukuk 16Dubai Duty Free 43Dubai Group 32Dubai Holdings 32Dubai Investments 32Dubai Islamic Bank 8,10,13,16,17,19,21,25, 28,30,42,43Dubai Islamic Bank Humanitarian Foundation 42Dubai Islamic Bank Pakistan 14Dubai Islamic Insurance & Reinsurance (AMAN) 38East Delta Electricity Production Company 1,3,12EFG-Hermes 32,34,38Egyptian Electricity Holding Company 8,Emirates Airlines 1,3,11,16,30Emirates Aluminium 43Emirates NBD 16,34Emirates NBD Capital 5,28Emirates REIT 34Ericsson AB 9Essel Finance 34Essel Group 34Ethical Finance (EFL) 41Etihad Airways 30European Islamic Investment Bank (EIIB) 12,29F.O. Fagbohungbe & Co 12Fajr Capital 17,18FBN Capital 12FCMB Capital Markets 12Fidelity Securities 12First Community Bank 20First Guardian 33First Gulf Bank 5,31Fitch 4,5,12,19,27,36,37,40Franklin Templeton Investments 40FWU 12Gatehouse Bank 22GEMS Education 8,10,16,24GFH Capital 29,30Gibson, Dunn & Crutcher 5Global Investment House 45Golden Agri-Resources 13Goldman Sachs International 8Goldman Sachs Malaysia 38Greenwich Trust 12Gulf African Bank 20,22Gulf Finance House 30,38Gulf International Bank 17Gulf Marine Services 4,5,16Hadiputranto, Hadinoto & Partners 11Hatem Abbas Ghazzawi & Co 7,15Hong Leong Financial Group 38Hong Leong Investment Bank 9,10Hong Leong Islamic Bank 38HSBC 4,8,14,16,24HSBC Amanah 16,40HSBC Amanah Malaysia 4,11,28HSBC Holdings 40HSBC Saudi Arabia 4,14,24ICB Islamic Bank 25IDB 16,19,24,25,26,28,29,42IFC 29IFSB 31,42IIRA Bahrain 19,32,42INCEIF 28International Bank of Azerbaĳ an 5International Islamic Financial Market 32International Islamic Liquidity Management Corporation (IILM) 1,3,6,11,43International Islamic Trade Finance Corporation (ITFC) 16,25Investment Corporation of Dubai 43Irish Stock Exchange 14iSfi n 26Islami Bank Bangladesh 19,22,25Islamic Bank of Asia 14,18,21Islamic Bank of Britain (IBB) 29Islamic Bank of Thailand 18,21Islamic Corporation for the Development of the Private Sector (ICD) 26Islamic Council of Victoria 34Istanbul Stock Exchange 24Jadwa Investment of Saudi Arabia 44Jammu and Kasmir Bank 27Jati Cakerawala 37Jordan Dubai Islamic Bank 20,22Jordan Islamic Bank 20,37JP Morgan 5,19JP Morgan Chase 10,24K&L Gates 45Kadir, Andri & Partners 11Karachi Stock Exchange 44KBL Private Bankers 3,6KDU University College 11,24Kemya 15Key Bank 10KFH Australia 19KFH Capital Investment Company 31Khaleeji Commercial Bank 32,33Khazanah Nasional 4Kimanis Power 7King & Spalding 8Kola Awodein & Co 12Konsortium Logistik 28Kotak Mahindra Bank 31KPMG 38Kuveyt Turk 28Kuwait Finance House 3,6,19,20,22,30,31Kuwait Finance House Bahrain 28,31Kuwait International Bank 28Kwantas Corporation 37Labuan Financial Services Authority 28,41Lanka ORIX Finance 17,18,21Lariba American Finance House 22Latham & Watkins 8,9,10,11,14,16Lead Capital 12Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang 37Lembaga Tabung Haji (LTH) 12,16,28Linklaters 4,8,11London Stock Exchange 30LTH Property Holdings 16MAA Takaful 35Maisarah 30Malakoff Power 36Malayan Banking (Maybank) 3,4,6,19,29,36Malaysia Airports Holdings 9,13Malaysia Building Society 1,3,6,11,13,33MAR 45Maran Nakilat 5,10,14MARC 37Marina Securities 12Mashreq 5Masraf Al Rayan 29,32,45Maxis Communications 40Maybank Investment Bank 3,13,36Maybank Islamic 3,4,16,36,37McGraw Hill Companies 44Meethaq Bank 32Meezan Bank 7,13,14,20,22,26,40,44Mesaieed Petrochemical Holding Company 32MetLife 34Meydan Sobha Group 31Milbank, Tweed, Hadley & McCloy 7,15Mobily 8,11,15Mochtar Karuwin Komar 11Mohamed Ridza & Co. 13Mohammed Abdul Mohsin Al Kharafi & Sons Co 13Moody’s 4,5,29,32,36,37,40,45Morgan, Lewis & Bockius 12MRCB Southern Link 36Mubadalah GE Capital 5

Muscat Securities Market 35Muslim Community Cooperative of Australia 19,22,34Musteq Hydro 37Mydin Mohamed Holdings 36Nakheel 30,33NASDAQ OMX Group 28National Bank for Development 19National Bank of Abu Dhabi 3,6,16,31National Bank of Abu Dhabi Hong Kong 38National Bank of Kuwait 38National Bank of Pakistan 26National Bank of Umm al-Qaiwain 31National Commercial Bank 18,20,31,43NBAD Asset Management Group 29NBK Capital 38NCB Capital 27,32NCB Capital Company 4NCBC Research 32Nokia Siemens Tietoliikenne Oy 9Noor Financial Investment Company 26Noor Hospitals 4Noor Investment Bank 13Noor Islamic Bank 5Noor Takaful 42Norton Rose Fulbright 5OCBC Al-Amin Bank 16Oceanic Capital Company 12Omni Law Firm 5Ooredoo 6,11,14,30,43Oracle Financial Services Soft ware 27Osun Sukuk 6,7,12Pakistan International Airlines 3,11,14Pakistan Mobile Telecommunications 14Palestine Islamic Bank 21,22PanAfrican Capital 12Pandu Logistics 9,13Paramount Corp 24Park 10 10Perbadanan Tabung Pendidikan Tinggi Nasional 10Petromin 4Phoenix Global Capital Market 12Projek Lintasan Shah Alam 36,37Public Bank 29Public Mutual 29Qasim International Container Terminal 14Qatar Development Bank 31Qatar Exchange 45Qatar First Investment Bank 18Qatar Insurance Company 45Qatar International Islamic Bank 32,45Qatar Investment Authority (QIA) 31Qatar Islamic Bank 5,10,14,20,22,33Qatar National Bank 3,6,45QInvest 14,30,38,45QNB Capital 14RAM 11,36,37,40Ras Gas 10Rasmala Group 12Rasmala Holdings 29RHB Investment Bank 9,10,11,13,24RHB Islamic Bank 9,10Riyad Bank 32Riyad Capital 7,15Russell Investment Group 44S P Setia 4,9,10,13S&P 4,33,36,37S&P Middle East 38Saba Islamic Bank 22Sadara 6,9Sadara Basic Services Company 7,15Sadara Chemical Company 7,15Samba Financial Group 43SapuraKencana 36SATORP 7Saudi Arabian General Authority of Civil Aviation (GACA) 1,3,4,15,33Saudi Arabian Monetary Agency 34Saudi Aramco 7,25Saudi ARAMCO Mobile Refi nery 5Saudi British Bank (SABB) 23,21,32,36,43Saudi Electricity Company (SEC) 6,7,24,37Saudi Investment Bank 33Savola 27Securities and Commodities Authority (UAE) 30,32Securities Commission (Malaysia) 13,23SEDCO Group 19Senai-Desaru Expressway 37Sharjah Islamic Bank 16Shearman & Sterling 7,15SHUAA Capital 36,38SICO Investment Bank 33Siemens Pakistan Engineering Company 7,14Sime Darby 4,6Skye Financial Services 12Somerset Place 12,16Stanbic IBTC Capital 12Standard Chartered Bank 3,4,6,16,28,29,38Standard Chartered Bank Pakistan 14Standard Chartered Saadiq 11,16,17,18State Bank of Pakistan 14,26Sterling Capital Markets 12Sumitomo-Mitsui Banking Corporation 19Swber Holdings 24Swiss Re International 29Syria International Islamic Bank 21,22,42Syrian Islamic Insurance Company 42Syrian Lebanese Commercial Bank 42Tadawul 7Takaful Ikhlas 34Takaful Insurance of Africa Group 34Takaful International Company 34Takaful Oman 35Takaful Re 34Taqwaa Advisory and Shariah Investment Solutions 34Taylor-DeJongh 25Teknologi Tenaga Perlis Consortium 36Telekom Malaysia 3,7,11Tenaga Nasional 37The Dow Chemical Company 7,15The First Investor 10Tilal Development Company 7,28TKSB 28TNB Western Energy 37Tope Adebayo 12Total E&P Congo 31Tradewinds Plantation Capital 37Trading Corporation of Pakistan 9,11Trowers & Hamlins 16Tun Razak Exchange (TRX) 25Turk-Eximbank 9,11,16Turkiye Finans Katilim Bankasi 22UAE Insurance Authority 47UMW Holdings 9UMW Oil & Gas Corporation 8Uni Capitial 12Union Capital Markets 12Union National Bank 31,36United Arab Bank 5,31United Overseas Bank Malaysia 23Univers Acier 11,12Upper Egypt Electricity Production Company 25US Federal Reserve 33,43Vallianz 24Vallianz Capital 24Vision Financial Holding 26Vodafone 40Walkers 16West Coast Expressway (WCE) 24Weststar Aviation Services 6White & Case 5,7,14Widam Food Company 31Wong & Leow 11,16Wong & Partners 16World Bank 30World Bank Group 29Zaid Ibrahim & Co 4Zenith Securities 12Zul Rafi que & Partners 4

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8th january 2014 deals of the year 2013: results v11i1.pdfthe world’s leading islamic finance news...

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