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Egypt Delays Sukuk, Africa Lures Muslim Funds

April 11, 2011

Egypt may lose out to Nigeria, South Africa and Kenya in attracting Muslim wealth after political unrest forced the North African country to postpone plans to introduce Islamic bond regulation.

Egypt delayed the release of a timeline for the guidelines of corporate Islamic bonds sales to May from the first quarter, following protests that led to the removal of former President Hosni Mubarak, said Ashraf El Sharkawy, chairman of the Cairo- based Egyptian Financial Supervisory Authority. Nigeria plans to license at least two Shariah-compliant institutions by year-end and Mauritius set minimum disclosure standards for financial statements from banks offering Islamic services.

“Egypt is one of the biggest markets in the region, but the problem so far has been the lack of regulation,” Abdel Hamid Abou Mousa, the chief executive officer of Cairo-based Faisal Islamic Bank of Egypt, one of three Shariah-complaint lenders in the country, said by phone April 6. “When we have sukuk no doubt they will have a market among Gulf investors who are looking for places for their money.” Faisal Islamic may issue sukuk once regulations are in place, he said.

African nations, where Muslims make up about 40 percent of the population according to a study published by the International Journal of Environmental Science and Development in June 2010, are seeking to benefit from growing interest in Islamic finance. Global assets held by Islamic financial institutions may climb to $1.6 trillion in 2012 from about $1 trillion, the Islamic Financial Services Board said last year.


Iranian President Ahmadinejad Calls for Economic Jihad

Shariah Finance Watch
April 10, 2011
Tehran, Iran

Iranian President Mahmoud Ahmadinejad has highlighted the importance of naming the current Iranian calendar year as “The Year of Economic Jihad.”

Ahmadinejad said on Sunday that economic jihad should be realized in every aspect of all Iranian’s lives, the president’s official website reported.

SFW readers may recall that in November of 2009, Ahmadinejad addressed the 57-nation Organization of the Islamic Conference (OIC) economic summit and called for the replacement of free market capitalism with a system of Islamic economics:


Business Standstill Hits Bahrain Economy

The National
April 10, 2011
Manama, Bahrain

Billions of dollars have been wiped off the value of Bahrain's economy in the month of protests that brought business there to a virtual standstill, top banking executives in Manama say.

"Definitely there is an impact on growth … but the impact cannot be more than 10 to 15 per cent impact of Bahrain's GDP," said Yousif Taqi, the chief executive of the sharia-compliant Al Salam Bank in Manama.

"As a financial centre there will be challenges for the government. I'd be surprised if it was more than 15 per cent."

Mr Taqi estimated losses of at least US$3 billion (Dh11.01bn) from Bahrain's GDP of $22.9bn last year. The Bahraini economy accelerated in the final quarter of last year from the previous three months, and grew 4.5 per cent for the whole year, data from the government showed.


Recap of CAIR's Terror Finance Role

Money Jihad
April 4, 2011

In a letter from writer Alyssa Lappen to Abe Foxman defending attorney David Yerushalmi, Alyssa Lappen summarizes the factual case against CAIR, the Council on American Islamic Relations. Here’s the relevant portion of her letter, which you can read in its entirety at Gates of Vienna on Mar. 30:

…Perhaps you are unaware that the national leadership of the Council on American-Islamic Relations (CAIR), on the other hand, has repeatedly been identified by federal law-enforcement officials to have had links with terrorist organizations. This occurred in Nov. 2008 with the Holy Land Foundation Hamas and terror-financing case. The government obtained 108 unanimous verdicts on ALL 108 terror-financing, money laundering and tax fraud charges leveled against five HLF officers. Some of the funds they sent to Hamas had washed through CAIR accounts, proven by canceled check copies.

Federal evidence was again cited in the civil suit by the family of David Boim in the Chicago 7th Circuit Court of Appeals against the Islamic Association for Palestine (IAP) — CAIR’s predecessor and co-founder — in Dec. 2008. The federal judge in that case ruled that the CAIR predecessor — namely the IAP — was indeed inseparable from the Muslim Brotherhood and the Muslim American Society and he held their agents responsible, fully and finally, for the $156 million judgment in the Boim’s case against them. Thus $156 million less is now available to fund Hamas terrorism.

Then in October 2010, the 5th Circuit Court of Appeals in New Orleans ruled that hundreds of individuals and organizations named as unindicted co-conspirators in the Holy Land Foundation case — including CAIR — would not be delisted as unindicted co-conspirators, due to the preponderance of evidence against them. CAIR knew and knows that the evidence against its leadership and several CAIR chapters is indeed so strong that it could never have won an appeal, and did not even try. An appeal was filed by another North American Muslim Brotherhood organization with which you may not be familiar, the North American Islamic Trust (NAIT), a subsidiary of the Islamic Society of North America (ISNA).

It is a travesty that you brand as a hatemonger a man legitimately attempting — via the U.S. courts — to legally defeat efforts of the above groups, among others, to increasingly impose Islamic law through secular U.S. civil courts and institutions…


Bailout Revelation: Fed Lent Billions to Save Libyan Bank

The Curious Capitalist
April 4, 2011
By Stephen Gandel

Last week, when the Federal Reserve finally released the names of the banks that tapped the central bank's most secret lending program in the wake of the financial crisis many of the expect names were there. Citigroup got over $50 billion in loans. Bank of America was a big borrower, too. Goldman borrowed five times, though the amounts were relatively small. But among the names of banks that got tens of billions in loans from the Fed in order to stay afloat was at least one few expected: The Central Bank of Libya.

In the 18 months following the collapse of Lehman Brothers, a foreign subsidiary of the bank of the government of Muammar Gaddafi received a cumulative $35 billion in short-term loans from the Fed. Libya's Central bank received the loans through a foreign subsidiary called the Arab Banking Corp., which has a branch in New York. At the time of the financial crisis, the bank was 29% owned by the Libyan government. But since then the Libyan government has upped its stake in ABC, as it is known, to 59%. So the main beneficiary of the Fed's help is the Libyan government.

And like the rest of Wall Street, ABC's profits have snapped back sharply since getting assistance from the US federal government. In 2008, ABC lost $880 million, mostly due to the fact that it held over a billion in structured bonds known as collaterlized debt obligations, which were in general plummeted with the value of US homes. But ABC's profits have soared since. The bank has posted a combined $265 million in earnings in 2009 and 2010.

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