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Dubai's Malaysia Sukuk Sale Plan Hampered by Rating Doubt

Dubai is trying to issue sukuk without a credit rating, because if rated, it would be below investment grade. Global investors are not buying the claim that Abu Dhabi will stand behind Dubai if they default. Dubai is working with investors to re-structure $24.9B of Sukuk that are in default.



Bloomberg
November 29, 2010
Dubai, United Arab Emirates

Dubai’s proposed sale of as much as $1.5 billion of Islamic bonds in Malaysia won’t appeal to most local funds unless the emirate obtains a rating, Mashreq Capital DIFC Ltd. and Nomura Asset Management Malaysia Sdn Bhd. said.

The government hired CIMB Investment Bank Bhd., a Kuala Lumpur-based unit of CIMB Group Holdings Bhd., the world’s top sukuk arranger this year, as a lead manager to sell between $1 billion and $1.5 billion of the securities, a person with knowledge of the plan said Nov. 24. Malaysian Prime Minister Najib Razak said Oct. 26 the Dubai Department of Finance is proposing a multi-currency sukuk program.

“I doubt they can get it done in any sort of size without a rating,” Abdul Kadir Hussain, who manages $2 billion of mainly Persian Gulf assets as chief executive officer of Mashreq Capital in Dubai, said in a response to e-mailed questions Nov. 25. “Normally Malaysian investors are relatively conservative and invest in very high grade type issuers.”

Dubai is tapping international debt markets to raise funds as the government and state-controlled companies grapple to service borrowings that Barclays Capital estimated in a September report at about $112 billion. The Persian Gulf’s financial hub may sell shares in some of its large businesses, Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said in the emirate yesterday.

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Palestine Authority, Nakheel, Dubai, Sabah: Islamic Bond Alert

A list of governments and government-controlled corporations planning on issuing Shariah sukuk in 2011. Note that many of these issuers are working with Citicorp.

Here’s an interesting new issuer:

“PALESTINE MONETARY AUTHORITY: The central bank of Palestine may sell as much as $50 million of Islamic notes in 2011 to jumpstart the territory’s Shariah-compliant finance industry and raise funds to construct its headquarters, Governor Jihad al- Wazir said in an interview in Ramallah on Nov. 25.”



Bloomberg BusinessWeek
November 29, 2010
By Khalid Qayum

The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.

Global sales of sukuk fell 31 percent to $13.7 billion so far this year from the same period in 2009, according to data compiled by Bloomberg. Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008.

PALESTINE MONETARY AUTHORITY: The central bank of Palestine may sell as much as $50 million of Islamic notes in 2011 to jumpstart the territory’s Shariah-compliant finance industry and raise funds to construct its headquarters, Governor Jihad al- Wazir said in an interview in Ramallah on Nov. 25.

(Added Nov. 28. News. NI PALESTINE BN .

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Sama Under Fire Over Islamic Banking

Important Shariah scholar says that the Saudi Government has not done enough to promote Islamic Banking in Saudi Arabia. The Central Bank of Saudi Arabia is not Shariah-compliant. Saudi Arabia was one of the last countries to legalize Shariah banking in 2004. The Saudi Government does not want Shariah Imams having control of their money, and it is only by pressure from other Arab countries that Saudi Arabia allows Islamic Banking at all. Saudi Arabia refused to allow the Islamic Finance House to open a branch in Saudi Arabia. The Islamic Finance House has links to terror funding.



Emirates 24/7
November 29, 2010
Riyadh, Saudi Arabia

A senior Islamic scholar in Saudi Arabia has launched a rare attack on the Kingdom’s central bank, accusing it of stifling Islamic banking services.

Sheikh Abdullah bin Suleiman Al Manee, a member of the Supreme Islamic Scholars Authority, said most of the Islamic banking services in the world had originated from Saudi Arabia but added they were all individual initiatives.

Addressing an Islamic banking seminar in Riyadh on Sunday night, he said the Saudi Arabian Monetary Agency (Sama), the Gulf Kingdom’s central bank, had not done enough to promote Shariah-compliant banking services.

“Sama is one of the main obstacles that are blocking the Kingdom’s efforts to become the world’s Islamic banking centre,” he said in his address, carried by Saudi newspapers on Monday.

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Dow Jones Indexes Named Best Islamic Index Provider in IFN Award Poll




Dow Jones Indexes
November 1, 2010
New York, NY

Dow Jones Indexes, a leading global index provider, today announced that it has been named “Best Islamic Index Provider” in the Islamic Finance News (IFN) award poll for the 4th consecutive year.

The Best Service Providers award poll is conducted annually by the Malaysia-based weekly e-newsletter Islamic Finance News. For this 2010 edition, more than 1,900 votes from Islamic finance institutions, issuers, investors and government bodies from around the world determined the leaders in 13 categories.

“We are honored to receive this prestigious award for the fourth year in a row. The Dow Jones Islamic Market index series is one of our finest achievements in terms of innovation, design and market acceptance,” said Michael A. Petronella, president, Dow Jones Indexes. “As Islamic finance grows and evolves worldwide, we are committed to continue providing meaningful, new Islamic indexes.”

Launched in 1999, the Dow Jones Islamic Market Indexes were the first indexes intended to measure the global universe of investable equities that pass screens for Shari’ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.

In the past 6 years, the Dow Jones Islamic Market index series has won 21 industry awards by organizations, research institutions and magazines around the world; amongst them are the International Islamic Finance Forum, the Kuala Lumpur Islamic Finance Forum, the Islamic Center of Southern California, Global Finance Magazine, Islamic Business & Finance Magazine and Incisive Media.

There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes. For more information on the Dow Jones Islamic Market Indexes, please visit www.djindexes.com.


 

Sukuk Roadblocks May Rise With National Shariah Boards: Islamic Finance




Islamic Finance News Portal
October 28, 2010
Kuala Lumpar, Malaysia

The plan to create national Shariah boards to oversee sukuk sales is drawing criticism from bankers and lawyers who say the groups would increase bureaucracy in the $1 trillion Islamic finance industry.

The Accounting & Auditing Organization for Islamic Financial Institutions, a leading global regulator, is in the final stages of a plan recommending governments appoint panels of scholars and experts at the national level to rule whether products comply with the religion’s tenets, Mohamad Nedal Alchaar, secretary-general of the Manama, Bahrain-based body, said in an interview in Kuala Lumpur on Oct. 26. The proposal will be submitted early next year, he said.

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