Islamitisch is in financieren tipping point?

By Christopher Watts

Sharia is compatible with the bank quickly move from niche to mainstream, "says Christopher Watts. But while growth seems certain, challenges remain.

In January this year at Sharjah in the United Arab Emirates Electricity and Water Authority (Sewa) need money to build a power and desalination plant in the city Hamriyah, Islamic finance provided Answer: The value of U.S. $ 350 m by the publication of its first sukuk - backed bonds that comply with sharia, the Islamic code, which prohibits interest.

In no way Sewa than venture into the Islamic capital markets. Corporate sukuk issue jump from 0.4 billion in 2000 to $ 24.5 billion in 2006, according to the International Islamic Financial Market (IIFM), an industry association. Completed 122% growth in 2006. "The Islamic finance is no longer a niche market," said David Pace, Chief Financial Officer of Bahrain-based Unicorn Investment Bank (UIB), a house conform to the Shariah. "It is increasingly a mainstream component of the global banking system."
To be sure, the first Islamic bank was founded in 1975, only the last five years, or Islamic finance has increased. Sniffing opportunity banks are now scrambling to activities in accordance with the Sharia, and there is a flurry of al-Islamic business, full-service investment banks to consultants. The products are in the form of loans, insurance and investment funds to take sukuk, hedge funds, swaps and more.

Despite this boom - largely concentrated in the Middle East and Southeast Asia - just the Islamic financial sector is not yet on a global scale. Rodney Wilson, professor of the Institute for Middle East and Islamic Studies at Durham University in the UK, estimates of Islamic banking assets speak for less than 0.5% of the world total. Sukuk and the stock of total debt amounted to 100 billion dollars perhaps - just 0.1% of the global bond market.

But signs of a continuous increase in Islamic finance. Take economic growth: The Middle East and Asia are the two regions with the fastest-growing in the world. Kuwait Finance House in 2007 GDP increased by 6.1% in the GCC countries and 6.2% in Southeast Asia - in contrast to 2.4% in the EU and 2.2% in the U.S. . Oil revenues are behind the boom in the GCC countries and South-East Asia is the "financial discipline in the wake of the Asian currency crisis," said Douglas Clark Johnson, Chief Financial Officer of chalice, another investment consultant in New York.

Sustained growth in the GCC countries and South-East Asia is rapidly creating a prosperous middle class between the regions' combined 410 million strong Muslim population. As the ranks of the "new rich snap up credit to buy houses and cars, and invest in savings and retirement, the demand for Sharia-compliant retail financial services is accelerating. Behind it is consumer demand for Islamic finance institutions.

Consider also the large cash flows in the GCC region and the South-East Asia: The IMF expects that Indonesia and Malaysia just a current account surplus accumulated $ 132 billion for the period five years until the end of 2008, against a deficit of 32 billion dollars in the same period of ten years earlier. And in the GCC countries, the surplus should reach U.S. $ 680 billion, compared to an initial deficit of $ 8 billion.

Encouraged by this money, regional governments are planning ambitious infrastructure programs: Indonesia hopes that USD 110 billion of expenditure in the five years until the end of 2010, and the consultant McKinsey estimates that the GCC will invest 200 billion over the same period. Many of these expenditures are already financed by sukuk - and the volume of the bubble: After the success of sukuk issue Sewa hopes for another U.S. $ 2.7 billion. And in neighboring Dubai, electricity and water authority are considering a first sukuk issue with the plans of USD 2.5 billion.

With foundations increasingly in the Middle East and Asia, Islamic finance is now taking root in London. Prime standalone Sharia-compliant bank opened its doors in 2004 and two others followed, the other is on the road. (Everything is supported by the Middle East settings.) And in April this year, the London Stock Exchange listed her maiden name sukuk should add a lot of depth and liquidity in the market. Another step is for the British government is mulling its sovereign sukuk issue first, perhaps early in 2008.

But problems remain. If Islamic finance is to plunge into the mainstream of global finance, industry needs to improve transparency and strengthen the credibility of the harmonization of standards and practices. Finally, the Sharia interpretation varies according to region and even institutions. Regulation should be strong. These measures - and others - can play a crucial role in broadening the appeal of Islamic finance and bridge the gap between Muslims and conventional financial systems.

The Islamic financial sector needs to work in the field of innovation, too. Shari's products conform May be more complex than conventional ones because each transaction is favorable to a non-negotiation. Many tools are still missing, including corporate treasury and derivatives. As UIB Pace says, "We [the industry] need to change our perception of R & D, and seen as a basic ingredient for success." But at the same time, innovation is hampered by the limited number of Islamic scholars to approve the financial products of Shariah compliance.

For some, industry practitioners are making progress. Earlier this year, the International Capital Market Association and the IIFM agreed to develop standards and best practices for the secondary market for Sukuk and other Islamic instruments. And that can help the global banking giants have their weight in Islamic finance. (Deutsche Bank, Barclays Capital and BNP Paribas are among the top five global sukuk issuers.)

The question whether Islamic finance has reached the critical mass to remain open, of course. But Johnson Calyx Financial is optimistic: "The Tipping Point May already happened," he enterprises. Although Johnson is wrong in his optimism, it seems unlikely the history to prove that it is very wide of the mark.
Source: Economist.com

BEST Islamic financial institutions in Pakistan (Global Finance 2008): Meezan Bank

Meezan Bank Limited, a publicly traded company was founded on January 27, 1997 and began operations of an investment bank, in August this year. In January 2002 in a historic initiative, Meezan Bank obtained the first full commercial bank license as the Islamic Bank by the State Bank of Pakistan.

Meezan Bank has clearly demonstrated that the largest Islamic bank in Pakistan, with an extensive network of offices in all major cities. The banking sector shows a paradigm shift from traditional ways of the business and the restoration is becoming increasingly astute and demanding financial consumer who is always very aware of the Islamic banks. Meezan Bank, the primary responsibility for the road to creating a stable and dynamic Islamic banking is full of dynamism and advanced products and services.

During the first five years of its operation as an Islamic commercial bank (2002 to 2007), the bank providing services to customers, Meezan Bank was one of the fastest growing banks in the history of the banking sector. The average growth in deposits was 60% per year during this period, while the branch network has grown from 4 to 100. The bank has a strong and credible management team consists of experienced professionals who have a strong balance sheet with excellent performance and a strong profitabilitya ratios, which the Bank at the beginning of the industry. The Bank has been allocated in the long term rating of the entity A + and short term rating of A-1 entity.

The banks are the major shareholders of large financial institutions in the region, namely Noor Financial Investment Company, Kuwait, a leading investment bank in Kuwait, Pak-Kuwait Investment Company, a AAA-rated financial institution in the country, the Islamic Development Bank in Jeddah and Shamil Bank of Bahrain. A leading Islamic bank in Bahrain. The established position, reputation, strength and stability of these institutions add significant value to the Bank through the representation and applied synergies.

The Bank has an international reputation, a high caliber and pro-active Shariah Supervisory Board is chaired by Justice (Retd.) Maulana Muhammad Taqi Usmani, internationally recognized in the field of Shariah, particularly Islamic Finance. He is Vice-President of the Islamic Fiqh Academy, Jeddah and in his long and illustrious career also served as a Judge of the Shariat Appellate Bench, Supreme Court of Pakistan. The Board of Directors also Sheikh Essam M. Ishaq (Bahrain), Dr Abdul Sattar Abu Ghuddah (Saudi Arabia) and Dr Imran Usmani, who is also advisor to the Shariah of the Bank. Dr Imran is assisted by a team of professionals (also known as product development and closely supervise the operations of the Bank.

At Meezan Bank, we seek common ground with the banking system with no compromise on the decisions of the Sharia. The bank has an extraordinary capacity for research and development by combining the investment banks, commercial banks, the Sharia legal experts and researchers to develop innovative, viable and competitive and the value of the proposals not only meet the requirements of the today's complex financial world, but with the world-class service to our customers who demand high quality, all within the limits of the Shariah.

Meezan Bank has a solid customer base and information technology, based on knowledge, that the emphasis continues to use advanced technologies and systems. The Bank Corporate and Investment Banking is focused on development and the development of a long-term relationship with customers by understanding their needs for financing and providing financing solutions compatible with the Shariah banking and corporate structured finance.

By implementing a strong and aggressive strategic initiatives and tactics on the part of banking services, Meezan Bank to meet the main objective to offer its customers the accessibility and comfort in an atmosphere and culture of service and recognition of their needs. The Bank has a network of agencies that the growth in all major cities in the country.

At Meezan Bank, we believe in adding value to our customers and business life, dynamic and competitive products and services that meet their needs, while fully consistent with the precepts of the Shariah. At the same time, we strive to minimize the risk-adjusted returns can compete with our stakeholders.

Death toll in Gaza exceeds 800

The Palestinian death toll in the Gaza Strip has risen to 831 people and more than 3,350 injured as the Israeli offensive enters its third week.

The attacks continued on Saturday with Israeli aircraft bombarding smuggling tunnels near the Rafah border crossing and ground forces advancing further into the outskirts of Gaza City.

Eight members of one family were among the latest fatalities, killed by an Israeli tank shell in Jabalya.

"We were at home when the bombing started," Umm Mohammed, one of the survivors of the attack, said. "We fled towards another house and the tanks started firing. Several of us were hit."

Israel dropped leaflets on Gaza City warning residents that the military was about to "escalate" the offensive and begin a "new phase in the war on terror".

The notices told residents not to approach Hamas members, the group's fighters or weapons depots.

Ayman Mohyeldin, Al Jazeera's correspondent in Gaza City, said there had been a lot of intense fighting.

"The most significant development was the advance of the Israeli military," he said.

"We understand now they are on the outskirts of Gaza City, still trying to avoid going in through major population centres, but navigating their way around those urban areas on the periphery."

Gazans 'locked in'

Mads Gilbert, a Norwegian doctor working at Shifa hospital in Gaza City, told Al Jazeera: "We have been to many war zones, but the special thing is that the 1.5 Gaza population are completely locked in.

"The civilian population has no way to hide. The population density is so high you can not do attacks like this without knowing that you are attacking the civilians.
"Also, the injuries must come from extremely explosive devices. We suspect that Israel is using a new type of high explosive called Dime [dense inert metal explosive].

"We urge the world, stop the bombing of Gaza. Please stop it."

Since Israel launched its offensive 15 days ago, 13 Israelis have died, including three civilians.

Palestinian fighters fired at least 10 rockets into Israel on Saturday, slightly wounding two people.

Al Jazeera's Alan Fisher, reporting from the Gaza-Israel border, said that number was down significantly over the past two days, from about 30-40 daily since Israel's assault began.

"It may well be that's because the Israeli army is taking over more of the land where these rockets are fired from," he said. "But it also may be that Hamas is running out of rockets to fire into Israel."

"From that point of view, I'm sure the Israeli public believe that this has been a successful operation because it is reducing the capacity of Hamas to fire rockets into southern Israel."

The Israeli military also said on Saturday that it had killed a senior Hamas fighter, who it claimed had supervised rocket launchings.

Amir Mansi was the "leading Hamas authority with regard to the long-range Grad missile launching programme" and commanded a cell in Gaza City that had fired dozens of rockets on southern Israel, the military said in a statement.

A Hamas spokesman confirmed that Mansi was a member of the movement's armed wing but refused to give his rank. He is the son of Yusef Mansi, the minister of telecommunications in Gaza's Hamas-run government.

Diplomatic efforts

A senior Hamas delegation was in the Egyptian capital to make their remarks on the Egyptian plan aimed at ending the fighting.

A binding resolution passed by the UN security council late on Thursday failed to bring peace to the Gaza Strip, with Israel arguing that it has the right to self-defence.

Egypt's plan includes an immediate cessation of hostilities for a specified period, the opening of Gaza's crossings, curtailment of arms smuggling into the Strip and attempts at reconciliation talks between the Palestinian factions.
Mahmoud Abbas, the Palestinian president, also in Cairo, said the Egyptian plan would facilitate progress on a ceasefire.

The UN, meanwhile, has said that it will resume its work in the Gaza Strip after receiving safety assurances from Israeli authorities.

A UN statement said that Israel had given "credible assurances that the security of UN personnel installations and humanitarian operations would be fully respected".

The UN stopped aid shipments after one of its lorries was shot at by Israeli forces, killing the driver, two days ago.

The majority of the 1.5 million people living in the Gaza Strip depend on foreign aid for survival and the humanitarian situation has worsened as the offensive has continued.

"We are receiving reports that some people are starting to burn their furniture to bake bread and to cook," Christopher Gunness, UN relief and works agency spokesman, said on Saturday.

Source: Al Jazeera and agencies

$90mn collected during TV Gaza fundraisers

By Andy Sambidge

TV fundraising campaigns in the UAE and Bahrain have raised a total of $90 million to help the Palestinian people in Gaza strip.

The nationwide fundraisers, aired through all TV and radio stations on Friday, saw $86 milllion raised in the UAE and $4 million in Bahrain, while solidarity marches also took place simultaneously in four of the emirates.

Sheikh Hamdan bin Zayed Al Nahyan, Deputy Prime Minister, Chairman of UAE Red Crescent Authority (RCA) and Head of the Office of Coordination of Foreign Aid, thanked UAE residents for their generosity, saying that the donations received had exceeded expectations, news agency WAM reported.
Sheikh Hamdan said the RCA, in association with the humanitarian relief and charity organisations in the UAE, would coordinate with international aid organisations to ensure the aid bought by donations would be distributed as soon as possible.

The rulers of Abu Dhabi and Dubai pledged to rebuild 1,200 homes in Gaza, while Sheikh Saif bin Zayed, the Minister of the Interior, pledged to rebuild 100 houses.

The NMC Hospital also gave 1.4 million dirhams of medical equipment as part of the fundraising initiative.

Sheikh Mansour bin Zayed, Minister of Presidential Affairs, also pledged to build an extension to al Shafaa Hospital in Gaza while the Western Region donated 150,000 dirhams and 110 grammes of gold.

In Bahrain, the main contributors were Bahrain National Committee for the Support of Palestinians in Gaza chairman Shaikh Nasser bin Hamad Al Khalifa and leading businessman YBA Kanoo, who donated 100,000 dinars ($265,000) each. BBK donated $300,000 while NBB, Batelco, Alba and Bapco contributed 100,000 dinars each.

Meanwhile, more than 10,000 men, woman and children turned out in four emirates to make sure the people of Palestine were not forgotten.

In Sharjah, an estimated 5,000 gathered along Khaled Lagoon draped in Palestinian flags and wearing traditional black and white scarves, or kaffiyeh.

In Abu Dhabi, about 4,000 demonstrated along the Corniche Road while in Dubai, supporters gathered in Greek Park, waving flags and placards.

Hundreds donned the kaffiyeh in Ras al Khaimah to demonstrate outside Manar Mall.

Source. ArabianBusiness.com

Israel sends reservists into Gaza

Israel has begun sending reserve units into the Gaza Strip as the military continues to pound the territory for the 16th consecutive day.

The move came amid some of the most intense fighting since the ground offensive began on January 3, with Palestinian fighters putting up stiff resistance to the Israeli advance around Gaza City.

Israel has not specified how many extra troops it is sending in, but it called up tens of thousands of reservists two weeks ago after it launched the air, naval, and land bombardment of the territory.

"I can confirm that a few reserve units have entered Gaza to participate in the operation," major Avital Leibovich, an Israeli military spokeswoman, told Al Jazeera.

"We are not talking about a massive amount of forces, rather a limited one to join in the fighting."

Al Jazeera's Alan Fisher, reporting from the Israel-Gaza border, said: "I think what we are seeing here is preparations for what the media, according to the Israelis, is calling stage three, which is moving troops into the towns and cities of Gaza.

"They have called up a number of reservists, but by no means all the reservists that have been put on standby, and moved them into Gaza.

"They are there, ready for if the word comes that stage three is to begin. If there is to be this massive push then the soldiers are there ready to act," he said.

Palestinian fears

Medical sources said that dozens of Palestinian fighters were killed in clashes on Sunday, taking the total number of Palestinian deaths since Israel began its war on the territory to 890, many of them women and children.
Almost 4,000 Palestinians have also been wounded since the beginning of the offensive.

Al Jazeera's Ayman Mohyeldin, reporting from Gaza City, said that the Israeli manouevres had raised speculation that a full attack on targets in the city was being planned for the coming days.

Israeli tanks were positioned on the edge of the city to the north and east, while a column of tanks to the south advanced only to later pull back.

Ehud Olmert, the Israeli prime minister, told an Israeli cabinet meeting on Sunday that the military had nearly completed the goals set for the war on Gaza.

"Israel is getting close to achieving the goals it set for itself," he said.

He told ministers that Israel had "dealt Hamas an unprecedented blow ... It will never be the same Hamas," Oved Yehezkel, the Israeli cabinet secretary, said.

The cabinet meeting had been expected to include discussion of a possible "third stage" of the offensive in which the military would enter Gaza's urban areas.

However, several Israeli officials suggested that the offensive could be drawing to a close after last week's UN Security Council resolution calling for an immediate ceasefire.

"The decision of the security council doesn't give us much leeway," Matan Vilnai, the deputy defence minister, told public radio.

"Thus it would seem that we are close to ending the ground operation and ending the operation altogether."

Military goals

Giroa Eiland, a former Israeli national security adviser, told Al Jazeera that there was a debate within the Israeli government and security establishment about what the goals of the operation should be at this stage.

"The main question is how to conclude and accomplish the missions," he said.
"As far as I can understand one of the reasons the military option might be expended is in order to give an Israeli solution to the situation."

Amos Gilad, a senior Israeli official, was expected to travel to Cairo in the coming days to discuss a plan to end the fighting after Hamas officials met Egyptian officials on Sunday.

The Israeli military onslaught has, so far, failed to achieve the stated aim of stopping Palestinian fighters from firing rockets into southern Israel.

At least 17 rockets had been fired across the border by mid-afternoon on Sunday, but failed to cause any casualties.

Thirteen Israelis have been killed since the military offensive began, including three civilians hit by rockets fired from the Gaza Strip into Israel.

Khaled Meshaal, the exiled political chief of Hamas, said Hamas would not accept any truce initiative while "we are still under attack".

"I address the Israelis and say to them; 'What have you achieved through this war you have supported? And you supported your leaders to conduct it,'" he said.

"You have achieved nothing but killing innocent children and leaving Gaza in a sea of blood."

Source: Al Jazeera and agencies