Saudi Arabia has left the International Islamic Liquidity Management Corp (IILM), which is preparing to launch its first long-delayed sukuk or Islamic bonds since its inception in 2010, the IILM said late on Wednesday.

IILM did not give a reason for Saudi Arabia's exit. The central banks of Qatar and Malaysia bought out Saudi Arabia's share.

A new type of sukuk, introduced by a British unit of a Kuwaiti firm, could make inroads in the market by offering greater security to investors through a structure similar to conventional covered bonds.

Providing recourse to a pool of assets if the originator becomes insolvent, covered bonds found a new lease of life in Europe and the United States during the global financial crisis as investors sought liquid and safe investments.

The development of Takaful regulation in the GCC varies significantly country by country, creating an uneven playing field, according to a new report from A.M. Best.

The levels of policyholder protection differ from one state to another, which has created opportunities for Takaful operators to pursue regulatory arbitrage, according to a new report from A.M. Best Co. This special report maps the provisions for Takaful regulation in the GCC and identifies the implications for policyholder protection and its impact on A.M. Best ratings.

HSBC’s decision this year to stop offering Islamic products in many of its markets has sent shock waves through the Gulf region, one of the global hubs for Islamic finance.

The move underscored the difficulties facing even the largest conventional lenders that have tried to lure new customers to bank in compliance with Muslim sharia law.

International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said.

Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments.

The Islamic finance industry has great potential for global expansion after achieving the most rapid growth among global financial services sectors, a specialized economic report showed Sunday.

"The total value of Islamic financial assets is expected to reach USD 1.6 trillion this year, and the financial sector is expected to continue its robust growth in 2013," reads a report released by Kuwait Finance House Research (KFHR) Sunday. 

Global takaful contributions are forecast to reach $12 billion by the end of 2012, after expanding by an annual average growth rate of 19 percent in the past two years.

Takaful is an Islamic insurance concept, which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law, otherwise known as Shari’ah.
There are an estimated 230 takaful companies and another takaful re-insurer with an estimated $11 billion in volume.

The investment sector has not recovered from the 2008 global financial crisis and investors have found themselves in difficulties to refinance the debt they borrowed on short term bases during the boom years because of the rise in borrowing cost. Investors such as Investment Dar, co-owner of luxury carmaker Aston Martin, International Investment Group, International Leasing and Investment Co. and Global Investment House all had a bad experience. 

S&P Indices announced Friday the launch of the S&P/OIC COMCEC 50 Shariah Index, which is designed to measure the performance of 50 leading Shariah-compliant companies from the member states of the Organization of Islamic Cooperation (OIC). The Index has been designed in partnership with the OIC.

The rapid international expansion of Islamic finance reflects its ability to remain competitive and to increasingly meet the complex requirements of the global financial community.

With various countries now intensifying efforts to develop their respective Islamic financial capabilities, it is becoming increasingly vital to build deeper relationships between the key markets for Islamic finance and also between the leading industry players in each of these jurisdictions.