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Islamic Development Bank Plans Sukuk Offering to Raise $850m

The Islamic Development Bank, the financial arm of Wahhabi dawa’h operations, issues yet another sukuk to raise $850 million in funds.



Kaleej Times
September 18, 2010
Jeddah, Saudi Arabia

The Islamic Development Bank (IDB) based in Jeddah is gearing up for its latest sukuk offering under its Medium Term Note (MTN), or Trust Certificate Issuance Programme, which was officially increased this month from $1.5 billion to $3.5 billion.

Mohamed Tariq, senior adviser to the IDB President Ahmad Mohammed Ali, said the bank was poised to go to the international financial markets this month to raise funds in excess of $850 million in a sukuk issuance under its $3.5 billion MTN Programme.

In Kuala Lumpur Abdul Aziz Al-Hinai, vice-president, finance, IDB, confirmed that the bank plans to go to the market in the last quarter of 2010 to raise $1 billion through a sukuk issuance of 5, 7 and 10-year tenors and which would be listed on the London Stock Exchange and the Bursa Malaysia.

Another sign that the IDB is gearing up to an issuance is the reaffirmation on August 25 by international ratings agency Fitch Ratings of its ‘AAA’, the rating of the IDB Trust Service Limited’s $3.5 billion MTN Programme which benefits from a liquidity facility provided by the IDB.

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Bank Targets Japan in Asian Push

"The Malaysian bank is negotiating with institutions in Japan regarding a strategic alliance to finalise Islamic banking deals in Hong Kong, Thailand, India and Indonesia," Kuwaiti daily Al Anbaa said.



Islamic Finance Expert
September 14, 2010
Kuala Lumpur, Malaysia

The Malaysian unit of Kuwait Finance House (KFH) is having “strategic alliance” negotiations in Japan, a newspaper said yesterday.

“The Malaysian bank is negotiating with institutions in Japan regarding a strategic alliance to finalise Islamic banking deals in Hong Kong, Thailand, India and Indonesia,” Kuwaiti daily Al Anbaa said.

It said that KFH Malaysia is interested in China, particularly after making profits from investing $275 million in a real estate project last year.

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Malaysia Aims to Be Islamic Finance Hub


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You Web News
September 8, 2010
Kuala Lumpur, Malaysia

Malaysia, the world’s largest market for sukuk, plans to improve its legal system to become an alternative location to the U.K. for resolving international Islamic finance disputes.

The goal is to position Malaysian “laws as the law of choice for Islamic finance transactions globally,” the central bank said in a statement Aug. 30. Disputes about compliance with Shariah principles are a risk to the industry’s expansion, it said. Persian Gulf companies have traditionally based cross- border contracts on U.K. law to take advantage of the country’s developed legal system and neutrality, according to Unicorn Investment Bank BSC in Bahrain.

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Turkey Moves Closer to Middle East Through Shariah Finance

Shariah Finance is growing industry in Turkey. "The emergence of sukuk in Turkey is a socio-political issue," law firm Norton Rose senior debt capital markets attorney Rizwan Kanji said.



Shariah Finance Watch
September 8, 2010
Istanbul, Turkey

Interest in Shariah finance is on the rise in Turkey, bolstering its ties with the Middle East and paving the way for a new growth market for Islamic bonds.

“The emergence of sukuk in Turkey is a socio-political issue,” law firm Norton Rose senior debt capital markets attorney Rizwan Kanji said.

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Tax Exemptions to Doing Islamic Banking

South Africa is now offering tax exemptions as an incentive for those that want to engage in Shariah Finance.



Moneywebtax
September 7, 2010
Johannesburg, South Africa

In May this year the National Treasury issued proposed tax amendments as part its stated intention of putting Islamic banks in South Africa on an equal footing with traditional conventional finance. National Treasury also stated that, "The development of Islamic finance in South Africa is critical to the expansion of National Treasury's strategy to position South Africa as a gateway into Africa. The Treasury envisages South Africa being a central hub for Islamic product development and ensuring the rollout of such products into African markets.'

The Proposed Tax Amendments address the Mudarabah (investment), Murabaha (mark-up financing transaction) and Diminishing Musharaka (partnership arrangements generally used for project or home financing) financial structures. The proposed Tax Amendment document acknowledges that, "Tax has become a hindrance to the vibrant and growing Islamic financial market" in South Africa.

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