Obama urges action on Gaza borders

Barack Obama, the US president, has called on Israel to open its borders with Gaza to humanitarian aid and commerce in his first public remarks on the crisis there since becoming president.

Obama, who said he was deeply concerned about the loss of life in Gaza, also reiterated the US view that Israel had a right to defend itself from Palestinian rocket attacks.

"Now we must extend a hand of opportunity to those who seek peace, as part of a lasting ceasefire, Gaza's border crossings should be open to allow the flow of aid and commerce," Obama said.

The US leader was speaking at the state department as he named George Mitchell, former peace negotiator in Northern Ireland, as US special envoy for the Middle East.

Obama also reiterated the US backing for international demands made of the Hamas movement - that it recognise Israel, end violence and agree to recognise previous peace agreements with Israel.

He said the US would support efforts to end weapons smuggling across the Gaza border from Egypt.

However, he called for a complete withdrawal of Israeli forces from Gaza following its offensive, and said the US would provide humanitarian and economic assistance to the millions of Palestinians living in the Gaza Strip.

Osama Hamdan, a Hamas spokesman, told Al Jazeera Obama's remarks seemed to show that the US viewed the situation through "Israeli eyes".

Veteran negotiator
Mitchell, 75, acknowledged there were "many reasons to be sceptical" about the prospects for peace between Israelis and Palestinians.

"The key is the mutual commitment of the parties, and the active participation of the United States government," he said.

He is best known for helping to broker Northern Ireland's historic Good Friday agreement in 1998 which ended decades of bloody conflict.

In 2000, he also presided over a committee investigating the ongoing violence of the Middle East conflict, which recommended Palestinians do more to stop attacks on Israel and an end to Israeli settlement building on occupied land.

Obama also named Richard Holbrooke, a former UN ambassador, as his special envoy to Afghanistan and Pakistan.

Source: Aljazeera and Agencies

India's Financial Tech to launch new boarse in Bahrain

MANAMA, Jan 22 (Reuters) - India's Financial Technologies Ltd (FITE.BO) will launch a new bourse in Bahrain that will provide a secondary market for Islamic bonds, a company executive said.

The new exchange, called Bahrain Financial Exchange, has been licensed by the Gulf state's central bank and plans to start operations in the first quarter of next year, Financial Technologies' director Arshad Khan told Reuters.

Unlike conventional bonds the Islamic bond market, or sukuk, lacks a strong secondary market and most buyers hold the asset to maturity.

"This will be an opportunity to establish a secondary market where the transfer of ownership can keep happening, from buyer to seller," Khan, a director for business development in the Middle East and North Africa, said in an interview late Thursday.

"When a sukuk comes onto the market (today), banks will try to absorb it in their own portfolio, or sell it to their customers", he said.

The exchange will provide a trading platform for both Islamic and conventional products in equities, derivatives, commodities and currencies.

A strong secondary sukuk market could attract other important institutional investors such as pension funds to the sukuk market, Khan said.

"In so far, sukuk has gone to big financial players or high-end individuals, it has not gone to the retail market," he said.

Sukuk volumes dropped dramatically in 2008, hit by the global liquidity crunch. Total sukuk issuance stood at $14.9 billion, down 56 percent from 2007, according to ratings agency Standard & Poors.

Khan said he still sees fundamental demand for sukuk despite the current financial crisis. He said sovereign sukuk issuers, in particular, would be a key driver in reviving the market.

Singapore on Monday announced its first sukuk programme with a volume of $134 million to promote the growth of Islamic finance in the South East Asian city-state.

Islamic banks cater to investors who want to avoid earning or paying interest.

"There's a lot of money being aggregated or collected in Bahrain, but because local investment (opportunities) don't exist, it goes out," he said.

The small island kingdom of Bahrain has established itself as a regional banking centre on the back of Saudi oil wealth that uses Bahraini banks to invest on international markets. (Reporting by Frederik Richter; Editing by Kazunori Takada) (For Reuters content on Islamic finance, click on ISLAMIC)

Obama stimulus plan 'on target'

Barack Obama, the US president, has said a new $825bn economic stimulus plan is "on target" to be approved by the middle of February.

"We are experiencing an unprecedented economic crisis that has to be dealt with, and dealt with rapidly," Obama said as he met leaders from both major US parties at the White House on Friday.

Obama also said that he had been receiving bad news about the state of the economy during his new in-depth daily economic briefing, which he instituted after taking office on Tuesday.

"Frankly the news has not been good - each day brings, I think, a greater focus on the problems that we are having, not only in terms of job loss but also in terms of some of the instabilities in the financial system."
Obama has been hoping to secure a large bipartisan majority for the stimulus package in congress to register a major political success in the symbolic first 100 days of his administration.

But some Republicans have doubts over the size and focus of the package.

"I recognise that there are still some differences around the table and between the administration and members of congress about particular details on the plan," Obama said.

Accountability questions

Obama also warned that the second half of a $700bn bailout of financial firms being debated in congress must ensure more accountability than that implemented by the Bush administration.

He mentioned recent press reports which said some Wall Street executives at companies that had received public bailout money had recently upgraded offices and private bathrooms.

He said politicians must "put in place the kinds of reform elements, oversight, transparency, accountability, that's going to be required in order for the American people to have confidence in what we're doing".

Obama was flanked as he spoke by Nancy Pelosi, the speaker of the House of Representatives, John Boehner, the senior Republican in the House, Harry Reid, the Senate Democratic leader and Mitch McConnell, his Republican counterpart.

Obama's comments came a day after Timothy Geithner, the US Treasury secretary-designate, vowed to reform the US financial system to make it stronger and more able to withstand world market turmoil.
Source: Agencies

Shari'ah compliance issues hit sukuk - Moody's

by Rebecca Bundhun

Shari’ah compliance was a factor in the downturn of Islamic bond (sukuk) issuance in 2008, Moody’s said on Thursday.

Global sukuk issuance slumped by more than 50 percent in 2008, which is largely attributable to the international financial crisis.

But Moody’s said that debates over the Shari’ah compliance of some Sukuk structures, ignited by the Accounting Auditing Organisation for Islamic Financial Institutions (AAOIFI), also had a part to play in the slowdown.

“Early in 2008, the AAOIFI recommended that Islamic finance market participants should refrain from issuing sukuk structures that have a purchase undertaking or a guarantee from the sukuk issuer to repurchase at a specific price at a future date,” said Faisal Hijazi, Moody’s business development manager for Islamic finance.

“This is because AAOIFI believed that this structural mechanism is not compliant with a fundamental principle of Shari’ah, namely profit and risk-sharing,” he explained.

Ijarah sukuk, a form of capital leasing, became the dominant Sukuk structure in terms of issuance volumes in 2008, replacing Mudarabah, which was the dominant structure in 2007, Moody’s said.

A recent report by Kuwait Financial Centre (Markaz) revealed that while both conventional and sukuk markets plunged in the GCC in 2008, sukuk actually managed to grow its market share.

Sukuk’s market share grew to 45 percent of total the value issued by GCC bond markets, from 40 percent in 2007.

Source: arabianbusiness.com

President Yudhoyono calls on businessmen to remain steadfast

Batam (ANTARA News) - President Susilo Bambang Yudhoyono called on business companies operating in the free trade zones in Batam, Bintan and Karimun to remain steadfast in the current global economic crisis.

He made the appeal during a dialogue with Indonesian and Singaporean businessmen at Turi Beach Resort here on Monday evening.

"While the storm is not yet over, it is certain that exports will drop whereas Batam, Bintan and Karimun are relying on exports. So I ask for your understanding that the world market is indeed weakening and shrinking. Well this year we have to struggle to survive, so that in time later we could rise again," he said.

To ease the burden of businessmen, the President said, the government has since September 2008 cooperated with the central bank and some businessmen to issue special policies such as government regulations in lieu of laws, incentives, stimulus and others.

"They are all aimed at calming the market and reducing the burden of businessmen to maintain the real sector," he said.

To maintain the people`s buying power, the business community needs to give their contribution by reducing prices if possible, he said.

"If there is an opportunity to maintain prices or even lowering them, demands will be maintain, and there will also be buyers," he said.

The head of state said the essence of economic recession is declining demands and therefore the only way to solve the problem would be safeguarding demands.

President Yudhoyono also called on the people not to cut their spendings. "Those who can afford to buy things need to keep buying so that products from the real sector are maintained. Let us act like business is as usual in a positive sense," he said.

The President said the general elections Indonesia would hold in the near future would be one of the forms of economic movement.

"Indonesia will conduct general elections. A lot of colourful flags have been raised and in the not too distant future campaigning will be done and in April voting for legislative candidates will take place which will be followed later by presidential elections. They are business. I appeal to parties to raise as many flags as possible, make as many campaign T-shirt as possible and hold as many music performances as possible so that singers get a fortune and economy is moving," he said.

He said the government was ready to lose or to see the foreign exchange reserve to drop so long as people did not lose.

Regarding the country`s economic condition President Yudhoyono said quoting "The Economist" that it was so far so good.

"I think it was issued last week. There was a small article about Indonesia there titled "So far so good". Articles written by the Economist or the Times must have no political motives," he said.

It was said Indonesia`s economy grew 6.3 percent in 2007 and 6.1 percent in 2008. He said it showed that the real economy in 2008 still moved and so if Indonesia could withstand in 2008 it would certainly be able to do it too in 2009.

"Last year we could withstand so I hope the economic growth target that we have already revised could be achieved and I ask for your cooperation for it," he said.

The government has corrected the country`s economic growth to 4.5 and 5.5 percent.